REUTERS / Benoit Tessier
Thomson Reuters Summer 2021
Investor Booklet
August 2021 Special Note
Special Note Regarding Forward-Looking Statements, Material Risks and Material Assumptions
This presentation consists of these slides and the associated remarks and comments, which are related and intended to be presented and understood together.
Certain statements in this presentation and discussion are forward-looking, including, but not limited to, statements regarding the potential or expected impact of the COVID-19 pandemic on Thomson Reuters, its customers and the general economy, statements about the company’s third-quarter 2021 and full-year 2021-2023 outlook and other expectations regarding the future financial and operational performance of the company and its individual business segments, the company’s strategic priorities, initiatives and opportunities and the company’s expectations regarding its Change Program and share repurchases. While the company believes that it has a reasonable basis for making forward-looking statements in this presentation, they are not a guarantee of future performance or outcomes and there is no assurance that any of the events described in any forward-looking statement will materialize. Forward-looking statements, including those related to the COVID-19 pandemic, are subject to a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from current expectations. Many of these risks, uncertainties and assumptions are beyond our company’s control and the effects of them can be difficult to predict. In particular, the full extent of the impact of the COVID-19 pandemic on our business, operations and financial results will depend on numerous evolving factors that we may not be able to accurately predict. Some of the factors that could cause actual results to differ materially from current expectations are discussed in the “Risk Factors” section of our annual report and in other materials that we from time to time file with, or furnish to, the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission. Many of those risks are, and could be, exacerbated by the COVID-19 pandemic and any worsening of the global business and economic environment as a result.
Our company has provided a business outlook for the purpose of presenting information about current expectations for the third quarter of 2021 and full-year 2021-2023. 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 presentation. Except as may be required by applicable law, Thomson Reuters disclaims any obligation to update or revise any forward-looking statements.
The company’s business outlook is based on information currently available to the company and is based on various external and internal assumptions made by the company in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that the company believes are appropriate under the circumstances. Please refer to our first quarter 2021 management’s discussion and analysis, which is available on www.tr.com, for a discussion of material assumptions and material risks related to our business outlook. Material assumptions and material risks related to our business outlook will also be reflected in our second-quarter 2021 management’s discussion and analysis for the period ended June 30, 2021, expected to be filed shortly.
Non-IFRS Financial Measures
This presentation contains disclosures of certain non-IFRS financial measures. These measures include adjusted EBITDA and the related margin, free cash flow, adjusted earnings, adjusted EPS and net debt to adjusted EBITDA leverage ratio, selected measures before the impact of currency and changes in revenues computed on an organic basis.
Please see our earnings release dated August 5, 2021, which is available on www.tr.com, for a reconciliation of each of Thomson Reuters’ measures to the most directly comparable IFRS financial measure. You can also find IFRS reconciliations in the “Investor Relations” section of our website.
2 BUSINESS & MARKET OVERVIEW
3 Thomson Reuters - Investment Highlights
1 • Currently operate in an est. $28B market segment growing at 6% - 8% (5 yr. CAGR) • Potential market segment of ~$47B growing at 7% - 9% through multiple adjacent Attractive Industry expansion opportunities (5 yr. CAGR) • Legal, Tax & Government market segments prime for content-driven innovation
2 • #1 or #2 positions in key Legal, Corporates, Tax & Accounting and Government market segments Balanced & Diversified • Resilient businesses, historically stable - Affirmed by performance during COVID-19 • ~500,000 customers / Largest customer, excl. Refinitiv, accounts for ~2% of revenues 3 • ~80% of total revenue is recurring Attractive Business Model • 90% of total revenue delivered electronically or as software & services • Strong & consistent cash generation capabilities 4 • Proprietary content + data + human expertise combined with AI key differentiators Strong Competitive Positioning • Products deeply embedded in customers’ daily workflow • ~90% retention rates
5 • Focused & Incentivized on Organic Revenue & Free Cash Flow Per Share growth • Balance investing in business & returning capital to shareholders Disciplined Financial Policies • 2021 $0.10 (7%) dividend increase (28 consecutive years of dividend increases) • Committed to maintaining investment grade rating with stable capital structure • Forecasting $15B Capital Capacity over next 4 years affords significant optionality Market segment size and growth rates based on TRI internal estimates and excludes Reuters News and Global Print 4 Powerful Businesses Built with Proprietary Content, AI & Experts
LEGAL TAX CORPORATES NEWS (Incl. Government – Risk, Fraud & Compliance)
KEY PROPRIETARY CONTENT ASSETS
• ~2,400 journalists, • ~1,500 experienced • Global team of EDITORIAL • TRSS experts with • ~200 qualified Tax photographers, CAPABILITIES attorney editors tax/legal experts specialist Attorneys (CPAs & editors operating in COMBINED WITH • Adding tax law • 50+ locations government compliance specialists) 40+ languages AI/ML knowledge and interpretation, • Adding analysis, • Adding treatises, ARE A experience compliance • 74 news bureaus FOUNDATIONAL commentary, proprietary audit expertise, analysis • 6 Pulitzer Prizes STRENGTH & headnotes, • Public Records methodology, and guidance and 8 finalists since DIFFERENTIATOR synopses professionals analysis summaries. 2015
Trusted, Authoritative Content - Difficult to Replicate
5 Thomson Reuters Leadership Positions in Historically Stable & Attractive Markets Segments
Legal Professionals Corporates Tax & Accounting Professionals $2.5B – 42% of Revenues $1.4B – 23% of Revenues $0.8B – 14% of Revenues • 3% organic revenue growth - 2020 • 5% organic revenue growth - 2020 • 4% organic revenue growth - 2020 • #1 position in global legal market segment • #1 provider of Corporate Legal & • #1 position in U.S. & Latin America tax Corporate Tax solutions in U.S. market segment • 93% recurring revenue • 84% recurring revenue • 82% recurring revenue • ~90% retention / 94% U.S. Westlaw alone • ~88% retention • ~90% retention • 99 of AmLaw 100 firms use TR legal • ALL of the Fortune 100 firms are TR research customers • 75% software revenue • ~115,000 customers • ALL of the Global 100 firms are TR • ALL of the top 100 U.S. CPA firms are customers TR customers
• ~235,000 customers • ~145,000 customers
Reimagining & Streamlining Workflows More Essential for Our ~500,000 Customers Given COVID-19 & Work From Home Total customer count includes 5,000 Reuters News customers
6 Thomson Reuters - 2020 Revenues Reuters News 11% of Global revenues Print 10% of $0.6B -5% revenues $0.6B Legal -10% Professionals $2.5B 42% of $6.0 Billion +3% revenues +1% Organic Corporates $1.4B 23% of +5% revenues “Big 3” $0.8B +4% 79% of revenues +4% organically Tax & Accounting Professionals 14% of revenues
Notes: Individual segments do not sum to total due to rounding All growth rates organic
7 Full-Year 2020 - Results by Segment
Reported Revenues up 1% to $6.0 billion Organic revenues up 1% Organic recurring revenues up 4%
Tax Corporates Reuters News Global Print Professionals
Legal Tax & Accounting Corporates Reuters News Global Print Professionals Professionals
$2.5B $1.4B $0.8B $0.6B $0.6B Reported +4% +5% -1% +0% -11% Revenues (+3% organic) (+5% organic) (+4% organic) (-5% organic) (-10% organic)
“Big 3” grew 4% organically
8 Thomson Reuters - 2020 Results by Segment
Revenues: $6.0B Adjusted EBITDA: $2.0B(1)
23% 22%
14% 48% 16% 42% 11% 3% 10% 11%
Legal Professionals Corporates Tax & Accounting Reuters News Global Print Professionals 80% Recurring Revenues / 90% Electronic, Software & Services
9 (1) Percentage of total based on $2.1B of adjusted EBITDA, which excludes corporate costs Thomson Reuters - 2020 Revenues by Region
Tax & Accounting Legal Professionals Corporates Professionals Consolidated $2.5B $1.4B $0.8B $6.0B 80% 83% 84%
3% 12% 4% 12% 79% 5% 2% 11% 1%2%
U.S. U.S. U.S. Other Americas Other Americas Other Americas 6% EMEA EMEA EMEA 11% Asia Pacific Asia Pacific Asia Pacific 4% Reuters News Global Print $0.6B $0.6B
67% U.S. 2% 70% Other Americas 22% 16% 9% EMEA 9% 5% Asia Pacific U.S. U.S. Other Americas Other Americas EMEA EMEA 10 Notes: Individual segments do not sum to total due to rounding Asia Pacific Asia Pacific Accelerating To 3.0 Change Program
11 Key Takeaways
Our Businesses are Well Positioned for a Post-COVID World
1. Robust & Growing Legal, Tax, and Government (Risk, Fraud & Compliance) Businesses
• Demand for TR’s advanced, trusted & branded “how-to” products is increasing • Deep, long-term customer relationships provide advantaged position
2. Strong Prevailing Tailwinds Play to Our Strengths & Contribute to Growth
3. The Change Program Will Drive Both Growth & Efficiencies
• Lever #1 - Holding Company to Operating Company • Lever #2 - Content Provider to Content-Driven Technology Company
4. This is an Organic Growth Plan Led by a Seasoned Team
5. LSEG Ownership Interest Provides Substantial Optionality
12 Professional Services Markets in Transition Prevailing Tailwinds Provide New Growth Opportunities Growth Drivers 1 • Shift to virtual working environments & dispersed teams Customers Seeing • Significant shifts in customer spend away from real estate & headcount into information & Fundamental Shifts in Ways of technology Working • Accelerating demand for real time, 24/7, digital, always-on actionable information – combining unique data, AI/ML & software
2 • SMBs migrating to higher quality Legal, Tax & Accounting, and Risk, Fraud & Compliance TR has Opportunity to Better solutions Serve Customers & Access New Customer Groups • Self-serve & omnichannel customer access technologies are enabling TR to cost effectively access smaller customer groups (smaller professional service firms/SMBs)
3 • TR has advantaged positions in high growth areas within & beyond the Big 3. Examples: TR has Advantaged Exposure - Direct & Indirect Tax, Audit to High Growth Verticals - Legal How-To & workflow software - Risk, Fraud & Compliance prevention, detection & investigation
Our Customers Are Looking For More Ways To Seamlessly Work With Us &
13 Extract More Value From Our Information for Commercial & Competitive Advantage Thomson Reuters Change Program Lever #1 - Holding Company Structure to an Operating Company Structure
Holding Company Operating Company
Big 3 Global Reuters Big 3 Customer Global Reuters Customer Print News Print News Segments* Segments*
Go to Go to Market Go to Market Go to Market Achieving Go to Go to Market Market Market Benefit of Scale Product Product Product Customer Product Dev. Experience Operations & Product & Operations Operations Operations Technology Portfolio Operations & Talent Talent Talent Technology Talent & Culture
A Streamlined, Integrated & Agile Operating Company is Expected to Drive Strong Operating & Financial Performance & Value for Shareholders
* Big 3 Customer Segments include Legal Professionals, Corporates and Tax & Accounting Professionals 14 TR Markets & Customers Seeing Thomson Reuters Change Program Fundamental Shifts in Ways of Working Lever #2 - Content Company to a Content-Driven Technology Company Adding essential capabilities to serve customers Building on our traditional strengths… how, when & where they want to be served
Unique Content Unique Content Examples:
World class AI/ML Cases, codes, rules, procedures
Editorial enhancements, practice notes, commentary, summaries Best of Breed Software
Categorizations & taxonomies
Rates, qualifying rules, calculators Native Cloud capabilities, SaaS business models, sales & support skills
15 TR has Opportunity to Better Serve Customers & Access New Customer Thomson Reuters Change Program Groups We Will Transform the Customer Experience 2021 EXECUTION 2023 – End Result 4 Focus Areas Priority Work Streams Operating Company
• Modern digital self-serve approach for the long-tail enabling greater Reimagine the Digital a significant contributor to penetration of SMB market sales & renewals Customer • Standardized commercial terms, billing process & customer support Improved Customer Experience & Experience • Data-driven & AI-powered sales & marketing Higher NPS
• Simplify product suite around main franchises & focus on a smaller More targeted, integrated set of number of higher-growth product categories products Optimize Products • World class product proposition, development, pricing, delivery & Modular entitlement & single & Portfolio management customer ID that drive valuable • Omnichannel approach - Channels aligned to meet customers’ needs outcomes for customers
Simplify • Create shared technology platforms that support agile product Secure, modernized & simplified development & significantly enhance customer experience technology architecture & Operations & operations Leverage • Scale up Machine Learning & re-engineer underlying processes 90% of revenue available on • Finish shift to the Cloud in 2023 & support simplification across TR Technology Cloud
• Right roles in the right locations allowing us to attract & retain world- Create Inclusive class talent Self-replenishing pipeline of Culture of World • Increase investment in training & development world-class internal talent Class Talent • Foster inclusive purpose-driven culture that reflects our core values
16 TR has Advantaged Exposure to High 7 Strategic Investment Priorities Growth Verticals Strong Growth Verticals Accelerating Organic Growth Strategic Priorities Key Focus Areas Unique content – Fast growing Legal & Corporates “How-To” 1 product
Legal(1) 2 Firms investing in productivity & efficiency solutions
Trusted, proprietary, unique content - strong market presence 3 WL Edge 2.0 in development
(2) Strong position & unique content Government 4 (Risk, Fraud & Compliance) Expert backed AI in rapidly growing market
Strong market presence in sector 5 Migrating to next generation cloud-based suite Tax & Accounting THOMSON REUTERS Strong content combined with global scale & comprehensive 6(3) Cloud Audit Suite cloud-based AI & software (incl. Confirmation) Direct Tax - Large footprint, very reliable solution, loyal THOMSON REUTERS THOMSON REUTERS Corporate Tax & Trade 7 Direct Tax Indirect Tax customer base Indirect Tax – Fast-growing scalable solution & market + SMB Opportunity Access to new customer groups (1) Products reported in Legal Professionals and Corporates Segments (2) Government reported in Legal Professionals Segment (3) Products reported in Tax & Accounting Professionals and Corporates Segments 17 TR has Advantaged Exposure to High 7 Strategic Investment Priorities Growth Verticals Strong Growth Verticals Accelerating Organic Growth
Strategic Priorities 2020 Revenue
1 ~$400M
Legal(1) 2 ~$200M
3 ~$1,500M(4) 7 Priorities
(2) Est. Revenue CAGR Government 4 ~$400M (Risk, Fraud & Compliance) Upper Single-Digit 5 ~$500M Tax & Accounting 2020 – 2023 THOMSON REUTERS (3) 6 Cloud Audit Suite ~$100M + SMB Opportunity
THOMSON REUTERS THOMSON REUTERS Corporate Tax & Trade 7 Direct Tax Indirect Tax ~$400M
(1) Products reported in Legal Professionals and Corporates Segments (2) Government is reported within the Legal Professionals Segment ~$3.4B (3) Products reported in Tax & Accounting Professionals and Corporates Segments (4) Includes $100M of revenue recorded in Government
18 Thomson Reuters Change Program Have Begun to Implement a 24-month Program
1. Estimated investment of $500 - $600 million (2021 & 2022)
• Will accelerate organic revenue growth, reduce operating costs, significantly increase margins, lower Capex intensity & increase free cash flow
2. Estimated to generate additional annual revenues of $100 million in 2023
3. Estimated to achieve annual Operating Expense savings of $600M by 2023
• $200M of operating expense savings to be reinvested in growth initiatives • $400M operating expense savings net of investment (10% reduction)
19 Legal Professionals Change Program Will Improve Customer Experience & Accelerate Growth
Organic Revenue Growth Drivers Benefits of Transition to Operating Company
Drive penetration of Westlaw Edge & launch Edge Digital as a significant contributor to sales & renewals Westlaw + extensions to reinforce competitive differentiation & Improved Customer Experience
P More targeted, integrated set of products, modular Scale Practical Law, leveraging AI & global content Practical Law to drive up-sells & retention while expanding into entitlement & single customer ID that drive valuable compliance use cases L outcomes for customers Deliver next phase of legal workflow solutions to Legal unify customer experience, maximize new sales Secure, modernized & simplified technology architecture Workflow opportunities & increase retention & upsell with & operations existing clients U
Build on strong position with CLEAR, TRSS & Government Self-replenishing pipeline of world-class internal talent Pondera in a rapidly growing market S
Targeting Revenue Growth of 5% - 6% by 2023 with Significant Margin Expansion
20 Tax & Accounting Professionals Change Program Will Improve Customer Experience & Accelerate Growth
Organic Revenue Growth Drivers Benefits of Transition to Operating Company
Grow our premium tax solutions & launch Onvio / Onvio + Digital as a significant contributor to sales & renewals UltraTax • Will drive cross-sell migration & new customer & Improved Customer Experience acquisition
Cloud Audit Drive integration & client collaboration P More targeted, integrated set of products, modular Suite / • Will bring increased value to audit customers entitlement & single customer ID that drive valuable Confirmation • Further accelerate Confirmation adoption L outcomes for customers Accelerate Onvio localization in Brazil • Will drive new sales & up-sell Secure, modernized & simplified technology architecture Dominio • Will expand capabilities through partnerships & & operations integrations U
Checkpoint Continue to add-value & differentiate with Self-replenishing pipeline of world-class internal talent Edge premium content driven by AI S
Targeting Revenue Growth of 6-8% by 2023 with Significant Margin Expansion
21 Corporates Change Program Will Improve Customer Experience & Accelerate Growth
Organic Revenue Growth Drivers Benefits of Transition to Operating Company
Make ONESOURCE the preferred end-to-end solution at global accounting firms and Digital as a significant contributor to sales & renewals corporations + ONESOURCE & Improved Customer Experience • Evolve offering by providing best in class cloud platform; expand content & reporting capabilities
Scale Practical Law P More targeted, integrated set of products, modular Practical Law • Leverage AI & global content to drive up-sells & entitlement & single customer ID that drive valuable retention while expanding into compliance use cases outcomes for customers
Best-in-class Client spend & matter management L HighQ & solution to control costs Secure, modernized & simplified technology architecture • Address contract & doc management use case & operations Legal Tracker • Drive effectiveness & mitigate risks in corporate legal departments U
Enhance APIs & CLEAR data & features Risk • To address Investigative, Fraud Protection and Risk Self-replenishing pipeline of world-class internal talent Management workflows S
Targeting Revenue Growth of 7% - 9% by 2023 with Significant Margin Expansion
22 Tech Modernization, Product Integration & Focused Capital Agenda Will Improve Capital Efficiency
Targeting to Reduce Capex to 6% - 6.5% of Revenues in 2023
Capital Efficiency Evolution Capital Efficiency Drivers (Capital Expenditures as % of Revenue) 1 >10% Technology Modernization • Modernized & simplified technology architecture 8.4% • Completing shift to the Cloud Integration & Shared Capabilities 6.0% - 6.5% 2 • Reducing the number of product versions while increasing the adoption of cross-product capabilities
3 Value-Based Provisioning Process • Placing fewer bets • Channel investment toward growth acceleration 2018 2020 2023 projects • Reducing KTLO & infrastructure project spend across the business
23 Thomson Reuters in 2023 A Leading Content-Driven Technology Company
1. Leader in Each Market Where We Operate
2. Acknowledged by Customers as a Product Innovator & Builder
3. Delivering a Seamless Customer Experience
4. LSEG Interest Provides Substantial Optionality to Further Strengthen Our Positions
24 2021 - 2023 Outlook
25 Thomson Reuters & Big 3 Outlook 2021 - 2023 Targeting Higher Organic Revenue Growth Forecasting 2021 Total TR and Big 3 Organic Revenue Growth to exceed 2019 levels Forecasting Consistent Revenue Growth – 2023 TR Revenue Growth of 5% to 6% & Big 3 Growth of 6% to 7% 5% - 6% 4.0% - 4.5% 4% - 5% 3.7% Total TR Organic Revenue Growth 1.2%
2019 2020 2021 2022 2023
6% - 7% 5.5% - 6.0% 5.5% - 6.5% 5.1% Big 3 3.8% Organic Revenue Growth (~80% of Total Revenues)
2019 2020 2021 2022 2023
*2019 included the permanent acceleration of the release date of UltraTax state tax software from Q1 2020 to Q4 2019. 26 Excluding this acceleration, Total TR organic growth was 3.4% and Big 3 organic growth was 4.8%. Thomson Reuters – Outlook 2021- 2023 Targeting Higher Adj. EBITDA Margin & Free Cash Flow
Strong Adj. EBITDA Margin Improvement & Free Cash Flow Growth
38% - 40% 34% - 35% 33.0% 31% - 32% 25.3% Total TR Adj. EBITDA Margin
20191 2020 2021 2022 2023
$1.8B - $2.0B
$1.3B $1.1B - $1.2B $1.2B - $1.3B Total TR Free Cash Flow $0.2B
2 2019 2020 2021 2022 2023
Note: 2021 – 2023 before currency 27 1) Excluding Stranded and Separation costs Total TR EBITDA margin was 31.5% 2) Excluding Separation costs, one-time Cash taxes and one-time Pension Plan contributions Total TR FCF was $1.1B Thomson Reuters – 2023 Outlook Free Cash Flow per Share
Higher Revenue Growth + Higher Adjusted EBITDA = Record Free Cash Flow per Share
~ $0.70 - $0.90
~ $0.15 - $0.25 ~ $0.05 - $0.10 ~ ($0.45) – ($0.50) ~ $0.50 - $0.60
$3.60 - $4.00
$2.67
2020 Actual Revenue Growth BAU Adj. EBITDA Lower Capex Interest & Taxes Change Program 2023 Target Growth Savings
28 2021 - 2023 Outlook Faster Growth, Higher Margins, Record Free Cash Flow & FCF per Share
2020 2021 2022 2023
Organic Growth • Total TR 1.2% 4.0% - 45% 4% - 5% 5% - 6% • Big 3 Segments 3.8% 5.5% - 6.0% 5.5% - 6.5% 6% - 7%
Adj. EBITDA 33.0% 31% - 32% 34% - 35% 38% - 40% Margin
$1.3B $1.1B - $1.2B $1.2B - $1.3B $1.8B - $2.0B Free Cash Flow • FCF per Share $2.67 $2.20 - $2.40 $2.40 - $2.60 $3.60 - $4.00 per share per share per share per share
29 Note: 2021 – 2023 reflected before the impact of currency Updated FY 2021 - 2023 Outlook 2021 2022 2023 Total Thomson Reuters 2020 Reported Outlook(1) Outlook(1) Outlook(1) (2) Total Revenue Growth 1.3% 4.0% - 4.5% 4.0% - 5.0% 5.0% - 6.0%
(2) Organic Revenue Growth 1.2% 4.0% - 4.5% 4.0% - 5.0% 5.0% - 6.0%
(2) Adjusted EBITDA Margin 33.0% 31% - 32% 34% - 35% 38% – 40%
Corporate Costs $131 million $305 - $340 million $245 - $280 million $110 - $120 million Core Corporate Costs $130 - $140 million $120 - $130 million $110 - $120 million Change Program OpEx $175 - $200 million $125 - $150 million $0
(2) Free Cash Flow $1.3 billion $1.1 - $1.2 billion $1.2 - $1.3 billion $1.8 - $2.0 billion Capital Expenditures as % of Revenue 8.4% 9.0% - 9.5% 7.5% - 8.0% 6.0% - 6.5% Change Program Capex $125 - $150 million $75 - $100 million $0 Depreciation & Amortization of computer software $669 million $650 - $675 million $620 - $645 million $580 - $605 million
Interest Expense (P&L) $195 million $190 - $210 million $190 - $210 million $190 - $210 million
Effective Tax Rate on Adjusted Earnings 16.9% 16% - 18% n/a n/a
2021 2022 2023 Big 3 2020 Reported Outlook(1) Outlook(1) Outlook(1) (2) Total Revenue Growth 3.4% 5.5% - 6.0% 5.5% - 6.5% 6.0% - 7.0% (2) Organic Revenue Growth 3.8% 5.5% - 6.0% 5.5% - 6.5% 6.0% - 7.0% (2) Adjusted EBITDA Margin 37.8% ~ 39% 41% - 42% 43% - 45%
(1) Before currency, includes Change Program impact and excludes the impact of future acquisitions / dispositions (2) Updated on August 2021 Q2 Earnings Call 30 REFINITIV ACQUISITION BY LSEG
31 Thomson Reuters’ Ownership Stake in London Stock Exchange Group Significant Store of Value – Provides Substantial Optionality
• TRI ownership interest in LSEG = ~72.4 million shares as of March 23, 2021
̶ Current LSEG Value = ~$8.1B / ~$16 value within TRI stock price [LSEG 08/11/21 closing price]
̶ Refinitiv/LSEG transaction closed January 29, 2021
̶ Tax of ~$700 million payable on gain on sale of Refinitiv
̶ On March 19, 2021, sold ~$1 billion of LSEG shares (net proceeds of ~$750 million) to pay $700 million
̶ Estimate TR will receive dividends = ~$75 million per year (after sale of $1B of LSEG shares) • Will be assessing optimal uses of proceeds ̶ TR is currently subject to a lock-up until late January 2023
32 2025 Capital Capacity Forecast
Total Capital Capacity as much as ~ $15 billion by 2025 (final 1/3 of LSEG shares exercisable)
Est. ~$15B Potential Allocation Options
$7.4B 1• Acquisitions LSEG After Tax Proceeds (Pre-tax $9.8B / $20 per share)
2 Share Buybacks
3• Debt Reduction BAU Capacity $7.5B
4• Return of Capital / Special Dividend
Total Capital Capacity by 2025
33 RETURNING TO OUR VALUE CREATION MODEL
34 Thomson Reuters Change Program Key Financial Takeaways
Change Program is Operationally & Financially Structured to Execute Successfully
1 2 3 4 Designed to Will Rapidly Deliver Sustained Execute Against Rigorously Higher Organic Clear Timetable & This is an Organic Designed Value Growth – Nearing Clear Operational Growth Plan Creation Agenda 40% Margins & & Financial FCF Per Share of Metrics $4.00
• Robust & Growing Legal, Tax and Risk, Fraud & Compliance Businesses • Strong Prevailing Tailwinds in Our Markets Play to Our Strengths & Contribute to Growth • Two Powerful Levers to Drive Both Growth & Efficiencies • This is an Organic Growth Plan Led by a Seasoned Team • LSEG Ownership Interest Provides Substantial Optionality to Strengthen Our Position 35 Success = Sustainable Value Creation
Revenue Growth FCF Growth ‒ Prioritize capital to highest growth opportunities ‒ FCF = Lifeblood of future success/growth ‒ Balance organic (~2/3) and acquisition (~1/3) ‒ Margins are an outcome, not a goal growth
Organic: 4%-6% 5%-8% 8%-12% Acquisitions: 1%-2% revenue growth FCF growth
~2.5x ~ 50-60% Net Debt to Dividend Payout Adj. EBITDA
Strong Capital Structure Balance re-investment / returns Conservative given stable recurring revenue model 50-60% dividend payout target (Net debt/Adj. EBITDA 12/31/20 = ~1.1x)
36 Note: FCF growth and dividend payout ratios will be distorted by effects of the Change Program and non-recurring cash tax payments – will be normalized by 2024 Substantial Return of Capital 2012 – 2021
~$27 billion of Capital Returned to Shareholders since 2012 including $1.4B Share Repurchases in 2021 ($1.2B share repurchase program announced in August 2021)
10.9
2.7 2.4 2.1 2.0 2.2 1.4 1.2 1.2 0.9
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021* Dividends Share Repurchases
37 * Assumes $1.2B share repurchase program is completed in FY 2021 CAPITAL STRATEGY
38 Capital Strategy Principles
Thomson Reuters approaches capital management and balance sheet strength in a consistent and disciplined manner • Capital Strategy is as critical as the business strategy • Key element in supporting and growing our businesses • Disciplined approach is consistent with how we drive and operate the business Maintain a Strong / Stable Capital Structure with Ample Liquidity
Target Solid Investment Grade Credit Rating
Balance Investing in Business and Returning Capital to Shareholders
Maintain Financial Flexibility
Relentless Focus on FCF per Share
39 Significant Financial Capacity - Ready to Put to Work
• Capital structure and liquidity position remain strong • Principal sources of liquidity: Cash on hand, cash from operations, $1.8B syndicated credit facility and $1.8B CP program • Current Net Debt / Adjusted EBITDA Ratio of 0.8x vs. Target of 2.5x (0.6x calculated under credit facility below max. covenant of 4.5x) • No debt maturities until November 2023
Debt Maturity $1,200
$1,000 • Debt Outstanding @ 06/30/21 = $3.7B $800 • Cash on Balance Sheet @ 06/30/21 = $2.3B $600 • Credit Revolver @ 06/30/21 = ~$1.8B (undrawn) 2.25% $400
• Avg. Interest Cost for term debt = 4.1% (US$) Millions 4.30% 3.35% 5.85% 5.65% • Average term debt maturity = ~9 years $200 5.50% 3.85% 4.50% $0 2020 2021 2022 2023 2024 2025 2026 2035 2040 2043 Existing Term Debt
40 Highly Free Cash Flow Generative
Consistent free cash flow has enabled investment through cycles & steady dividend increases
(U.S.$ billions)
1.7 1.7 1.7 1.6 0.3 0.5 1.3 0.7 0.5 1.0 2.0 1.8 1.8 1.6 1.6 1.6 1.7 1.4 1.2 1.3 1.0 1.1 0.8
0.2 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Reported Free Cash Flow Adds Back One-Time Items*
*One-Time Items related to: • Pension contributions and severance related payments in 2013 and 2017 • Severance related payments in 2014 and 2018 41 • 1x deal charges and separation costs, including taxes in 2019 Long History of Returning Cash to Shareholders
28 Consecutive Years of Annual Dividend Increases 2021 Annualized Dividend Increase of $0.10 (+7%) – Largest Increase Since 2008
Annualized Dividend per Common Share $1.80 $1.62 $1.60
$1.40
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$0.00
2004 2014 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2005 2006 2007 2008 2009 2010 2011 2012 2013 2015 2016 2017 2018 2019 2020 2021
42 Consistent Improvement Return on Invested Capital
10.3%
10.6% 9.8% 7.7% 6.7% 6.7% 7.3% 5.8% 5.3% 5.1%
2013 2014 2015 2016 2017 2018 2019 * 2020 WACC
* Excludes the impact of stranded & separation costs, 1x cash taxes paid, and discontinued operations
43 SECOND-QUARTER 2021 FINANCIAL RESULTS
44 Strong Second-Quarter & First-Half 2021 Results Prevailing Tailwinds Play to Our Strengths Contributing to Strong Revenue & Sales Growth
1. Second-Quarter Organic Revenue Growth Highest in Over a Decade • Total TR organic revenue growth = 7% • Big 3 organic revenue growth = 7% 2. Second-Quarter & First-Half Sales – Highest since Refinitiv Separation 3. Change Program Tracking to Plan with H1 Run-Rate Savings = $90 million 4. Raised Full-Year 2021 Guidance • Total TR organic revenue growth increased to 4.0% - 4.5% • Big 3 organic revenue growth increased to 5.5% - 6.0% • Total TR Adjusted EBITDA margin increased to 31% - 32% • Big 3 Adjusted EBITDA margin increased to ~ 39% • Free Cash Flow increased to $1.1B - $1.2B 5. New $1.2 billion Share Buyback Program Announced
45 Second-Quarter & Six-Months 2021 “Big 3” - Legal, Corporates, and Tax & Accounting Revenues
($ millions) Second Quarter Six Months
Constant Constant Revenues 2021 2020 Total Currency Organic 2021 2020 Total Currency Organic Legal Professionals 673 620 +9% +7% +6% 1,341 1,246 +8% +6% +6%
Corporates 348 329 +6% +4% +4% 732 696 +5% +4% +4%
Tax & Accounting Professionals 197 168 +17% +15% +15% 422 386 +9% +9% +9%
Big 3 Revenues 1,218 1,117 +9% +7% +7% 2,495 2,328 +7% +6% +6%
46 Second-Quarter & Six-Months 2021 Consolidated Revenues
($ millions) Second Quarter Six Months
Constant Constant Revenues 2021 2020 Total Currency Organic 2021 2020 Total Currency Organic
Reuters News 168 155 +9% +6% +6% 328 310 +6% +4% +4%
Global Print 147 134 +9% +6% +6% 290 289 0% -2% -2%
Eliminations / Rounding (1) (1) (1) (2)
Total Revenues 1,532 1,405 +9% +7% +7% 3,112 2,925 +6% +5% +5%
47 Second-Quarter 2021 vs. Second-Quarter 2020 Recurring Revenue Recurring up 210 bps Organic Revenue Growth organically 9% Big 3 Total TR Organic Revenue Organic Revenue 7% 6% 6% up 500 bps up 870 bps 5% 5% 4% Total 4% 3% 3%
15%
Legal Prof. Corporates Tax & Acct. Big 3 Total TR Prof. 6% 7% 7% 5% 4% % of Total 93% 86% 76% 88% 79% 2% 1% Transactions 43% 0% -2% 22% Legal Corporates Tax & Big 3 Total TR 14% 17% Professionals Accounting 1% Professionals Q2 2020 -2% -14% -12% Q2 2021 -19% -19% Legal Prof. Corporates Tax & Acct. Big 3 Total TR Prof. % of Total 7% 14% 24% 12% 11% 48 Thomson Reuters Third-Quarter 2021 Forecast
2020 FY 2020 FY Total Thomson Reuters Organic = 1.2% Big 3 Segments Organic = 3.8% 7% 7% 3.5% - 4% 4% - 4.5% 5% - 5.5% 5.5% - 6% 3% 3% 3% 7% 7% 2% 5% 5% 5% 5% 0% 3.5% - 4% 4% - 4.5% 5.5% - 6% 3% 3% 5% - 5.5% 2% 2% 2% 5% 5% 5% 4% (2%) 2%
Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021 FY 2021 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021 FY 2021 Forecast Forecast Forecast Forecast Total Growth Organic Growth Total Growth Organic Growth
2020 FY 2020 FY Reuters News Organic = (5%) Global Print Organic = (10%)
6% 6% 2% 2% - 3% 2% - 3% 0% 0% (1%) (1%) 6% 2% - 3% 2% 2% - 3% (5%) (4%) – (7%) (2%) (3%) (7%) (4%) (10%) (9%) (11%) (5%) – (8%) (17%)
Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021 FY 2021 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021 FY 2021 Forecast Forecast Forecast Forecast
49 Total Growth Organic Growth Note: Before currency Total & Organic Growth Second-Quarter & Six-Months 2021 “Big 3” - Legal, Corporates, Tax & Accounting Adjusted EBITDA
($ millions) Second Quarter Six Months
Constant Constant Adjusted EBITDA 2021 2020 Total Currency 2021 2020 Total Currency Legal Professionals 285 254 +12% +10% 564 484 +17% +14% Margin 42.3% 40.9% 42.1% 38.8%
Corporates 130 118 +10% +9% 276 235 +17% +17% Margin 37.2% 35.9% 37.7% 33.8%
Tax & Accounting Professionals 72 54 +32% +32% 170 138 +23% +23% Margin 36.2% 31.9% 40.2% 35.7% Big 3 Adjusted EBITDA 487 426 +14% +13% 1,010 857 +18% +16% Margin 39.9% 38.1% 40.5% 36.8%
50 Second-Quarter & Six-Months 2021 Consolidated Adjusted EBITDA
($ millions) Second Quarter Six Months
Constant Constant Adjusted EBITDA 2021 2020 Total Currency 2021 2020 Total Currency
Reuters News 35 25 +45% +66% 63 44 +45% +65% Margin 20.8% 15.6% 19.2% 14.1%
Global Print 56 54 +2% -1% 113 117 -4% -6% Margin 37.9% 40.5% 38.9% 40.5%
Corporate Costs (76) (26) (126) (59) Total Adjusted EBITDA 502 479 +5% +5% 1,060 959 +11% +10% Margin 32.7% 34.1% 34.1% 32.8%
51 H1 2021 Actuals to FY 2021 Updated Guidance Adjusted EBITDA Margin
(1.5%) – (2.5%) (1.5%) – (2.0%) 1.0% - 1.5%
34.1% Total TR 31% - 32% Underlying Underlying 35.7% 34% - 35%
H1 2021 Actuals Change Program Incremental BAU Change Program FY 2021 Investments Investments Savings Updated Guidance
(2.0%) - (2.5%) 1.0% - 1.5%
Big 3 40.5% ~39% Segments
H1 2021 Actuals Incremental BAU Change Program FY 2021 Investments Savings Updated Guidance
52 ADJUSTED EARNINGS PER SHARE
FREE CASH FLOW
CHANGE PROGRAM SAVINGS
53 Adjusted Earnings Per Share (EPS)
($ millions except per share amounts & share count) Second Quarter Six Months % % 2021 Change 2021 Change Change Change Adjusted EBITDA $502 $23 $1,060 $101
Depreciation & Amortization ($164) ($3) ($325) ($13)
Interest Expense ($49) $3 ($100) ($3)
Income Tax ($49) ($4) ($106) ($17)
Dividend declared on preference shares - - ($1) -
Adjusted Earnings $240 $19 $528 $68
Adjusted EPS $0.48 $0.04 +9% $1.06 $0.14 +15%
Foreign Currency Impact - -
Diluted Weighted Average Common Shares 497.3M 497.1M
54 Consolidated Free Cash Flow
($ millions) Second Quarter Six Months
2021 2020 Change 2021 2020 Change
Comparable Free Cash Flow (Continuing Operations) $404 $268 $136 $692 $381 $311
Other Items (Refinitiv separation costs & Change Program costs) ($16) $32 ($48) ($28) ($31) $3
Free Cash Flow (Continuing Operations) $388 $300 $88 $664 $350 $314
Free Cash Flow – Discontinued Operations ($9) $5 ($14) ($46) ($10) ($36)
Free Cash Flow $379 $305 $74 $618 $340 $278
55 Change Program Investments
Forecast More Than 50% of Change Program Costs Will Be Incurred in 2021
2021 Phasing ~$300M - $350M
~$210M - $260M ~60%
~60%
$91M $71M OpEx $52M ~40% $41M $20M ~40% Capital $11M $29M $39M $9M Q1-2021 Q2-2021 H1-2021 H2-2021 FY 2021
56 Note: Capital spend on accrual basis Change Program Run-Rate Savings
Achieved Run-Rate Operating Expense Savings of $90M in H1 2021
$90M
$71M
$19M
Q1-2021 Q2-2021 H1-2021 57 Increased FY 2021 Outlook for Total Company & Big 3
Q3 2021 Feb. 23, 2021 May 4, 2021 August 5, 2021 Total Thomson Reuters Outlook FY Outlook(1) FY Outlook(1) FY Outlook(1) Total Revenue Growth 3.5% - 4.0% 3.0% - 4.0% 3.5% - 4.0% 4.0% - 4.5% Organic Revenue Growth 3.5% - 4.0% 3.0% - 4.0% 3.5% - 4.0% 4.0% - 4.5% Adjusted EBITDA Margin 30% - 31% Unchanged 31% - 32% Corporate Costs $305 - $340 million Core Corporate Costs $130 - $140 million Unchanged Unchanged Change Program OpEx $175 - $200 million Free Cash Flow $1.0 - $1.1 billion Unchanged $1.1 - $1.2 billion Capital Expenditures as % of Revenue 9.0% - 9.5% Unchanged Unchanged Change Program Capex $125 - $150 million Depreciation & Amortization of computer $650 - $675 million Unchanged Unchanged software Interest Expense (P&L) $190 - $210 million Unchanged Unchanged Effective Tax Rate on Adjusted Earnings 16% - 18% Unchanged Unchanged
Q3 2021 Feb. 23, 2021 May 4, 2021 August 5, 2021 Big 3 Outlook FY Outlook(1) FY Outlook(1) FY Outlook(1) Total Revenue Growth 5.0% - 5.5% 4.5% - 5.5% 5.0% - 5.5% 5.5% - 6.0% Organic Revenue Growth 5.0% - 5.5% 4.5% - 5.5% 5.0% - 5.5% 5.5% - 6.0% Adjusted EBITDA Margin 38% - 39% Unchanged ~ 39%
(1) Before currency, includes Change Program impact and excludes the impact of future acquisitions / dispositions 58 PRODUCTS, CUSTOMERS & COMPETITION
59 Products, Customers & Competition Tax & Legal Brand Type of Product / Service Target Customer Position Competition Corporates Accounting Professionals Professionals Westlaw / • Primary online legal research • Law firms, students, Westlaw delivery platform law librarians • Offers authoritative content, search, • Government LexisNexis Edge research organization & team agencies #1 collaboration • Trademark ✔ ✔ • Finds & shares specific points of professionals Wolters Kluwer law & analytical commentary • General counsels Bloomberg Practical • Practice notes, standard • Law firms Law documents, checklists & What’s • Government Market tools agencies Clio #1 • Areas include commercial, • General counsels ✔ ✔ corporate, labor, employment, IP, Kira finance & litigation CLEAR • Public & proprietary records about • Government eBrevia individuals & companies • Law enforcement #2 • Tools for immediately usable • Law firms Avvo ✔ ✔ results
Findlaw • Online legal directory, website • Law firm Luminance creation & hosting services professionals #1 • Law firm marketing solutions & peer • Marketers ✔ rating services • Consumers Rocket Lawyer • Integrated software applications • Law firm & Elite Aderant that assist with business professional management services • Covers financial, practice, matter, • Legal, finance & #1 Tech start-ups document & email, accounting, technology ✔ billing, timekeeping & records professionals
60 Products, Customers & Competition Continued
Target Legal Tax Brand Type of Product / Service Position Competition Corporates Customer Professionals Professionals HighQ • Cloud-based collaboration platform • Law firms InTapp for the legal and regulatory market • General Aderant segment counsels #1 Litera ✔ ✔ Mitratech Confirmation • Cloud-based platform to automate • Audit firms the workflow of the confirmations • Banks process of an audit used to increase • Law firms #1 N/A efficiency and reduce risk. ✔ ✔
Pondera • Cloud-based platform that provides • Government Solutions technology and analytics to combat • Health plan / fraud, waste and abuse in large Corporate #2 N/A government programs ✔ ✔
Digital • Cloud-based court exhibit and • Courts Evidence evidence sharing platform for sharing • Prosecutors documents and multimedia between • Public #1 N/A Center / justice agencies and legal teams for defenders ✔ CaseLines case preparation and courtroom • Law firms presentation
61 Products, Customers & Competition Continued
Target Legal Tax Brand Type of Product / Service Position Competition Corporates Customer Professionals Professionals
Checkpoint / • Integrated information solution • Accounting firms Wolters Kluwer Checkpoint – Tax research • Corporations – Editorial insight • International Edge – Workflow productivity tools trade #1 RELX Group – Online learning professionals ✔ ✔ ✔ – News updates • Law firms • Governments Bloomberg Legal Tracker • Solution for Corp Legal Ops: • General – Ext counsel spend, counsels Avalara performance • Legal Operations #2 – Matter intake ✔ ✔ – Document storage, search, Mitratech retrieval
ONESOURCE • Global tax solution for: • Corporate Tax SAP ONESOURCE – Tax compliance Departments – Tax provision • Global Global Trade – Transfer pricing Accounting Oracle – Trade and customers Firms #1 supporting global supply ✔ ✔ chain Deloitte – Trust taxation – Information reporting – Property tax EY
62 Products, Customers & Competition Continued
Target Legal Tax Brand Type of Product / Service Position Competition Corporates Customer Professionals Professionals Regulatory • Information & software products that • Banks Reed Elsevier Intelligence / provide a single source of regulatory • Financial news, analysis, rules & Institutions Wolters Kluwer Compliance developments • Insurance N/A Learning • Training programs that assist in companies SAI Global ✔ changing behavior and supporting a GRC Catalogues culture of Integrity & compliance Onvio / CS • Most comprehensive line of tax, • Accounting Intuit Professional accounting & audit solutions firms available Suite • Includes UltraTax CS, the leading Drake Software tax preparation & compliance software relied on by tax #2 Sage professionals ✔ • Our next generation cloud solution, Onvio, brings cloud benefits to our Xero customers, improving efficiency with advanced client collaboration and CaseWare centralized data
63