NEW YORK, July 31, 2012 - (ACN Newswire) -
Thomson Reuters (TSX / NYSE: TRI), the world's leading source of intelligent
information for businesses and professionals, today reported results for the
second quarter ended June 30, 2012.
* Revenues grew 3% before currency
* Adjusted EBITDA of $892 million with a margin of 28.0%
* Underlying operating profit of $617 million with a margin of 19.3%
* Adjusted earnings per share were $0.54 vs. $0.51 in the second quarter 2011
* 2012 Outlook affirmed
The company reported revenues from ongoing businesses of $3.2 billion, a 3%
increase before currency. Adjusted EBITDA was up slightly from the prior-year
period and the corresponding margin was 28.0% versus 28.1% in the second
quarter of 2011. Underlying operating profit decreased 8% and the corresponding
margin was 19.3% versus 21.2% in the prior-year period.
Adjusted earnings per share (EPS) were $0.54 compared to $0.51 in the second
quarter of 2011.
"Our results for the quarter and first half of the year were on track," said
James C. Smith, chief executive officer of Thomson Reuters. "Growth in the
second quarter was driven by the strong performance of our Legal, Tax &
Accounting and Intellectual Property & Sciences businesses. Our Financial & Risk
year-to-date revenue performance, though tepid, has held up relatively well
despite growing headwinds in the global financial services industry. We have
been making progress across the Financial & Risk business with a more rigorous
and disciplined approach."
"I am pleased that we were able to complete the sale of our Healthcare business
for $1.25 billion and redeploy some of the proceeds to support key growth
businesses as evidenced by our recent announcements to acquire FXall and
MarkMonitor," continued Mr. Smith.
Consolidated Financial Highlights
Three Months Ended June 30,
(Millions of U.S. dollars, except EPS and margins)
IFRS Financial Measures 2012 2011 Change
Revenues $3,309 $3,447 -4%
Operating profit $1,318 $833 58%
Diluted earnings per share (EPS) $1.11 $0.67 66%
Cash flow from operations $870 $879 -1%
Change
Before
Non-IFRS Financial Measures[1] 2012 2011 Change Currency
Revenues from ongoing businesses $3,189 $3,161 1% 3%
Adjusted EBITDA $892 $888 0% 3%
Adjusted EBITDA margin 28.0% 28.1% -10bp -10bp
Underlying operating profit $617 $669 -8% -5%
Underlying operating profit
margin 19.3% 21.2% -190bp -170bp
Adjusted earnings per share (EPS) $0.54 $0.51 6%
Free cash flow $660 $633 4%
Free cash flow from ongoing
operations $641 $611 5%
[1] These and other non-IFRS financial measures are defined and reconciled to
the most directly comparable IFRS measures in the tables appended to this news
release. Additional information is provided in the explanatory note at the end
of this news release.
* Revenues from ongoing businesses were $3.2 billion, a 3% increase before
currency.
* Adjusted EBITDA was up slightly, and the corresponding margin was 28.0%
versus 28.1% in the prior-year period as the elimination of integration
expenses and higher revenues were offset by an anticipated increase in
expenses in Financial & Risk related to planned investments in customer
service and customer administration.
* Underlying operating profit decreased 8% and the corresponding margin was
19.3% versus 21.2% in the prior-year period as higher revenues were offset
by higher depreciation and amortization from investments made in prior
periods and planned increases in expenses.
* Adjusted EPS was $0.54 compared to $0.51 in the prior-year period. The
increase was primarily attributable to the elimination of integration
expenses and a lower tax rate which were partly offset by lower underlying
operating profit. Foreign exchange had a $0.01 negative impact on adjusted
EPS.
Second-Quarter Business Segment Highlights
Unless otherwise noted, all revenue growth comparisons in this news release are
before the impact of foreign currency as Thomson Reuters believes this provides
the best basis to measure the performance of its business.
Financial & Risk
* Revenues increased 1%. Growth in Marketplaces and Governance, Risk &
Compliance and from acquisitions was offset by declines in revenues from the
Trading and Investors business units.
* Recurring subscription-related revenues were flat. Transactions-related
revenues increased 4%. Recoveries revenues increased 1% and Outright
revenues declined 3%.
* By geography, revenues in Europe, Middle East and Africa (EMEA) were flat,
revenues in the Americas were up 3% while revenues in Asia declined 2%,
primarily related to Japan.
* EBITDA was $460 million, down 13%, with a related margin of 25.7%. The
related margin decreased 290 basis points from the prior-year period.
* Operating profit was $306 million, down 19%, with a related margin of
17.1%. The related margin decreased 340 basis points due to lower organic
revenues, planned investments in customer service and customer
administration and higher depreciation and amortization from product
investments made in prior periods.
* Eikon desktops totaled over 19,000 at the end of the second quarter, up
approximately 20% from the end of the first quarter of 2012.
Trading
* Revenues decreased 2% with growth in Commodities & Energy and Data Feeds
businesses offset by desktop cancellations in Exchange Traded Instruments
and Fixed Income.
* Recoveries revenues increased 2%.
Investors
* Revenues declined 1%. A 4% increase in Enterprise Content revenues was
offset by a 5% decline in Investment Management revenues due to weakness in
Europe and global banks.
* Corporate revenues were up 2%. Wealth Management and Banking & Advisory
(formerly Investment Banking) revenues were unchanged versus the prior-year
period.
Marketplaces
* Revenues increased 6% (1% organic) driven by acquisitions and Tradeweb,
which was up 24% (6% organic).
* Foreign exchange-related revenues declined 1% due to lower transaction
volumes compared to the prior-year period.
Governance, Risk & Compliance
* Revenues grew 56% (18% organic) to $52 million driven by acquisitions, new
sales and strong demand for risk and compliance solutions.
* Thomson Reuters Eikon for Compliance Management, a version of the flagship
Eikon desktop dedicated to trading floor compliance, was launched in July
2012.
Legal
* Revenues increased 3%. US Law Firm Solutions grew 2% driven by a 17%
increase in Business of Law revenues (FindLaw and Elite) while research-
related revenues declined 2%. Corporate, Government and Academic revenues
rose 5%. Global businesses grew 5%.
* EBITDA was up slightly from the prior-year period and the associated margin
decreased 60 basis points to 39.0% primarily due to a change in business
mix.
* Operating profit was flat and the associated margin was 30.7% compared to
31.1% in the prior-year period.
* WestlawNext has been sold to approximately 69% of Westlaw's revenue base as
of the end of the second quarter 2012.
Tax & Accounting
* Revenues increased 25% (5% organic) driven by acquisitions and strong growth
in revenues from the ONESOURCE platform and software sales to professional
accounting firms.
* EBITDA increased 22% and the corresponding margin decreased 40 basis points
to 29.7% due mainly to acquisition dilution.
* Operating profit increased 19% and the corresponding margin decreased 70
basis points to 19.8%.
* Tax & Accounting is a seasonal business with a significant percentage of its
operating profit traditionally generated in the fourth quarter. Small
movements in the timing of revenues and expenses can impact margins in any
given quarter for the Tax & Accounting business. Full-year margins are more
reflective of the segment's underlying performance.
Intellectual Property & Science
* Revenues were up 4% with growth across the business.
* EBITDA increased 6% with the corresponding margin increasing 110 basis
points to 34.7%.
* Operating profit increased 4% with the corresponding margin increasing 30
basis points to 27.3%.
* Small movements in the timing of revenues and expenses can impact margins in
any given quarter for the Intellectual Property & Science business. Full-
year margins are more reflective of the segment's underlying performance.
Consolidated Financial Highlights - Six Months
Six Months Ended June 30,
(Millions of U.S. dollars, except EPS and margins)
IFRS Financial Measures 2012 2011 Change
Revenues $6,663 $6,777 -2%
Operating profit $1,704 $1,229 39%
Diluted earnings per share (EPS) $1.49 $0.97 54%
Cash flow from operations $1,143 $1,079 6%
Change
Before
Non-IFRS Financial Measures[1] 2012 2011 Change Currency
Revenues from ongoing businesses $6,376 $6,238 2% 4%
Adjusted EBITDA $1,717 $1,605 7% 8%
Adjusted EBITDA margin 26.9% 25.7% 120bp 120bp
Underlying operating profit $1,162 $1,205 -4% -2%
Underlying operating profit
margin 18.2% 19.3% -110bp -100bp
Adjusted earnings per share (EPS) $0.98 $0.88 11%
Free cash flow $654 $573 14%
Free cash flow from ongoing
operations $600 $466 29%
* Revenues from ongoing businesses were $6.4 billion, a 4% increase before
currency.
* Adjusted EBITDA increased 7% and the corresponding margin was 26.9% versus
25.7% in the prior-year period as higher revenues and the elimination of
integration expenses offset planned investments in customer service and
customer administration.
* Underlying operating profit decreased 4% and the corresponding margin was
18.2% versus 19.3% in the prior-year period due to higher depreciation and
amortization expense related to new product launches and planned increases
in expenses.
* Adjusted EPS was $0.98 compared to $0.88 in the prior-year period. The
increase was primarily attributable to the elimination of integration
expenses.
* Free cash flow was $654 million, up 14% compared to the prior-year period.
Free cash flow from ongoing operations was $600 million, up 29% from the
same period in 2011.
Corporate & Other (Including Media)
Second-quarter Media revenues were $83 million, up 1% from the prior-year
period. Second-quarter Corporate & Other costs were $55 million compared to $62
million in the prior-year period. Media revenues for the first six months of
2012 were $165 million, up 1% from the prior-year period. Corporate & Other
costs for the first six months of 2012 were $135 million compared to $138
million in the same period of 2011.
Recent Developments
On July 18, 2012, the company commenced a tender offer to acquire all of the
outstanding shares of FXall, the leading independent global provider of
electronic foreign exchange trading solutions to corporations and asset
managers.
On July 26, 2012, the company announced it had signed a definitive agreement to
purchase MarkMonitor, a global leader in online brand protection.
Business Outlook (Before Currency)
Thomson Reuters today reaffirmed its business outlook for 2012 that was
previously communicated in February.
Thomson Reuters expects its revenues to grow low single-digits in 2012.
Thomson Reuters expects its adjusted EBITDA margin to range between 27% and 28%
in 2012.
The company forecasts its underlying operating profit margin to range between
18% and 19% in 2012 due to higher depreciation and amortization expense.
Thomson Reuters expects reported free cash flow to grow 5% to 10% and free cash
flow from ongoing operations to grow 15% to 20% in 2012.
The information in this section is forward-looking and should be read in
conjunction with the section below entitled "Special Note Regarding Forward-
Looking Statements, Material Assumptions and Material Risks."
Dividend and Share Repurchases
As previously announced, Thomson Reuters increased its 2012 annual dividend by
$0.04 per share to $1.28 per share. A quarterly dividend of $0.32 per share is
payable on September 17, 2012, to shareholders of record as of August 23, 2012.
Year-to-date through July 31, 2012, the company repurchased 5.9 million shares
for an aggregate cost of approximately $168 million pursuant to its Normal
Course Issuer Bid (NCIB). The company repurchased 4.3 million shares under the
current NCIB program which was renewed in May 2012 and authorizes the company to
purchase up to 15 million shares.
Thomson Reuters
Thomson Reuters is the world's leading source of intelligent information for
businesses and professionals. We combine industry expertise with innovative
technology to deliver critical information to leading decision makers in the
financial and risk, legal, tax and accounting, intellectual property and science
and media markets, powered by the world's most trusted news organization. With
headquarters in New York and major operations in London and Eagan, Minnesota,
Thomson Reuters employs approximately 60,000 people and operates in over 100
countries. Thomson Reuters shares are listed on the Toronto and New York Stock
Exchanges (symbol: TRI). For more information, go to www.thomsonreuters.com.
;
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS, MATERIAL ASSUMPTIONS AND
MATERIAL RISKS
Certain statements in this news release, including, but not limited to,
statements in the "Business Outlook (Before Currency)" section and Mr. Smith's
comments, are forward-looking. These forward-looking statements are based on
certain assumptions and reflect our company's current expectations. As a result,
forward-looking statements are subject to a number of risks and uncertainties
that could cause actual results or events to differ materially from current
expectations. There is no assurance that the events described in any forward-
looking statement will materialize. A business outlook is provided for the
purpose of presenting information about current expectations for 2012. This
information may not be appropriate for other purposes. You are cautioned not to
place undue reliance on forward-looking statements which reflect expectations
only as of the date of this news release. Except as may be required by
applicable law, Thomson Reuters disclaims any obligation to update or revise any
forward-looking statements.
The company's 2012 business outlook is based on various external and internal
assumptions. Economic and market assumptions include, but are not limited to,
positive GDP growth in the countries where Thomson Reuters operates led by
rapidly developing economies and a continued increase in the number of
professionals around the world and their demand for high quality information and
services. Internal financial and operational assumptions include, but are not
limited to, the successful execution of the company's ongoing product release
programs, globalization strategy, other growth initiatives and efficiency
initiatives. Thomson Reuters annual and quarterly reports are also available in
the "Investor Relations" section of www.thomsonreuters.com.
;
CONTACT
MEDIA INVESTORS
Calvin Mitchell Frank J. Golden
Senior Vice President, Corporate Affairs Senior Vice President, Investor
+1 646 223 5285 Relations
calvin.mitchell@thomsonreuters.com +1 646 223 5288
frank.golden@thomsonreuters.com
;
Thomson Reuters will webcast a discussion of its second-quarter 2012 results
today beginning at 8:30 a.m. Eastern Daylight Time (EDT). You can access the
webcast by visiting the "Investor Relations" section of www.thomsonreuters.com.
;
An archive of the webcast will be available following the presentation.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Thomson Reuters Corporation via Thomson Reuters ONE
Topic: Earnings
Source: Thomson Reuters
https://www.acnnewswire.com
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