Revenues increased 1% as higher recurring revenues and contributions from acquisitions were partly offset by the impact of foreign currency.


increased 20% primarily due to higher revenues and lower expenses, which reflected continued simplification initiatives. which includes discontinued operations, decreased 2% to $1.13 as higher operating profit and lower interest expense were more than offset by non-cash foreign currency fluctuations on intercompany loans and the loss of earnings from IP & Science following its sale. declined 36% primarily due to a $500 million pension plan contribution in the first quarter of 2017, $137 million of payments related to 2016 severance charges, and the loss of cash flow from IP & Science following its sale ($237 million year-on-year variance).

Highlights by Business Unit

Nine Months Ended September 30
(Millions of U.S. dollars, except for adjusted EBITDA margins)
(unaudited)

Nine Months Ended September 30, Change
2017 2016 Total Foreign Currency Constant Currency
Revenues
Financial & Risk $4,561 $4,549 0% -1% 1%
Legal 2,509 2,503 0% -1% 1%
Tax & Accounting 1,108 1,036 7% 1% 6%
Corporate & Other (Reuters News) 221 227 -3% -1% -2%
Eliminations (10) (9)
Revenues $8,389 $8,306 1% -1% 2%
Adjusted EBITDA
Financial & Risk $1,435 $1,340 7% 0% 7%
Legal 965 936 3% 0% 3%
Tax & Accounting 339 283 20% 1% 19%
Corporate & Other (includes Reuters News) (176) (240) n/a n/a n/a
Adjusted EBITDA $2,563 $2,319 11% 1% 10%
Adjusted EBITDA Margin
Financial & Risk 31.5% 29.5% 200bp 40bp 160bp
Legal 38.5% 37.4% 110bp 20bp 90bp
Tax & Accounting 30.6% 27.3% 330bp 0bp 330bp
Corporate & Other (includes Reuters News) n/a n/a n/a n/a n/a
Adjusted EBITDA margin 30.6% 27.9% 270bp 30bp 240bp
n/a - not applicable

Dividend

In February 2017, the Thomson Reuters board of directors approved a $0.02 per share annualized increase in the dividend to $1.38 per common share. A quarterly dividend of $0.345 per share is payable on December 15, 2017 to common shareholders of record as of November 16, 2017.

Business Outlook 2017 (At Constant Currency)

Based on the results of the first nine months of the year, the company reaffirmed its full-year outlook, as communicated in August 2017:

  • Low single-digit revenue growth
  • Adjusted EBITDA margin to range between 29.3% - 30.3%
  • Free cash flow to range between $0.9 billion and $1.2 billion, which reflects cash payments in 2017 relating to fourth-quarter 2016 severance charges, the $500 million pension plan contribution made in the first quarter of 2017 and the loss of free cash flow from the sale of the IP & Science business
  • Adjusted EPS target of $2.40 - $2.45, which is now forecast to be at the top of this range.

The company's 2017 outlook does not factor in the impact of acquisitions or divestitures that may occur during the year.

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.'

Thomson Reuters

Thomson Reuters is the world's leading source of news and information for professional markets. Our customers rely on us to deliver the intelligence, technology and expertise they need to find trusted answers. The business has operated in more than 100 countries for more than 100 years. Thomson Reuters shares are listed on the Toronto and New York Stock Exchanges (symbol: TRI). For more information, visit www.thomsonreuters.com.

NON-IFRS FINANCIAL MEASURES

Thomson Reuters prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).

This news release includes certain non-IFRS financial measures, such as adjusted EBITDA and the related margin (other than at the business unit or segment level), free cash flow, adjusted EPS, and selected measures excluding the impact of foreign currency. Thomson Reuters uses these non-IFRS financial measures as supplemental indicators of its operating performance and financial position. These measures do not have any standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to the calculation of similar measures used by other companies, and should not be viewed as alternatives to measures of financial performance calculated in accordance with IFRS. Non-IFRS financial measures are defined and reconciled to the most directly comparable IFRS measures in the appended tables. The term 'organic' refers to Thomson Reuters' existing businesses before the impact of acquisitions.

The company's business outlook contains various non-IFRS financial measures. For outlook purposes only, the company is unable to reconcile these non-IFRS measures to the most comparable IFRS measures because it cannot predict, with reasonable certainty, the 2017 impact of changes in foreign exchange rates which impact (i) the translation of its results reported at average foreign currency rates for the year, (ii) fair value adjustments associated with foreign currency derivatives embedded in certain customer contracts, and (iii) other finance income or expense related to foreign exchange contracts and intercompany financing arrangements. Additionally, the company cannot reasonably predict the occurrence or amount of other operating gains and losses, which generally arise from business transactions that it does not anticipate.

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 2017 (At Constant Currency)' section, Mr. Smith's comments and statements regarding corporate costs, are forward-looking. 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 2017. 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 2017 business outlook is based on various external and internal assumptions. Economic and market assumptions include, but are not limited to, GDP growth in most of the countries where Thomson Reuters operates, a continued increase in demand for high quality information and workflow solutions and a continued need for trusted products and services that help customers navigate changing geopolitical, economic and regulatory environments. Internal financial and operational assumptions include, but are not limited to, the successful execution of sales initiatives, ongoing product release programs, our globalization strategy and other growth and efficiency initiatives.

Some of the material risk factors that could cause actual results or events to differ materially from those expressed in or implied by forward-looking statements in this news release include, but are not limited to, changes in the general economy; actions of competitors; failure to develop new products, services, applications and functionalities to meet customers' needs, attract new customers and retain existing ones, or expand into new geographic markets and identify areas of higher growth; fraudulent or unpermitted data access or other cyber-security or privacy breaches; failures or disruptions of telecommunications, data centers, network systems or the Internet; increased accessibility to free or relatively inexpensive information sources; failure to meet the challenges involved in operating globally; failure to maintain a high renewal rate for recurring, subscription-based services; dependency on third parties for data, information and other services; changes to law and regulations; tax matters, including changes to tax laws, regulations and treaties; fluctuations in foreign currency exchange and interest rates; failure to adapt to organizational changes and effectively implement strategic initiatives; failure to attract, motivate and retain high quality management and key employees; failure to protect the brands and reputation of Thomson Reuters; inadequate protection of intellectual property rights; threat of legal actions and claims; failure to derive fully the anticipated benefits from existing or future acquisitions, joint ventures, investments or dispositions; risk of antitrust/competition-related claims or investigations; impairment of goodwill and other identifiable intangible assets; downgrading of credit ratings and adverse conditions in the credit markets; the effect of factors outside of the control of Thomson Reuters on funding obligations in respect of pension and post-retirement benefit arrangements; and actions or potential actions that could be taken by the company's principal shareholder, The Woodbridge Company Limited. These and other factors are discussed in materials that Thomson Reuters from time to time files with, or furnishes to, the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission. Thomson Reuters annual and quarterly reports are also available in the 'Investor Relations ' section of www.thomsonreuters.com.

Thomson Reuters will webcast a discussion of its third-quarter 2017 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.

CONTACTS

MEDIA
David Crundwell

Senior Vice President, Corporate Affairs
Tel: +1 416 649 9904
Email: david.crundwell@tr.com

INVESTORS
Frank J. Golden
Senior Vice President, Investor Relations
Tel: +1 646 223 5288
Email: frank.golden@tr.com

Thomson Reuters Corporation published this content on 01 November 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 01 November 2017 12:12:03 UTC.

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