Thomson Reuters is a multimedia company that provides information for financial, legal, tax and accounting, healthcare and science and media businesses and professionals. Thomson Reuters is a dual listed company consisting of the Thomson Reuters Corporation (Canada), and Thomson Reuters PLC (U.K.). The professional publisher is comprised of four divisions: Financial & Risk, Legal, Tax & Accounting, and Intellectual Property & Science.
Analysis & Key Developments
Profits decreased in 2013 after significant gains in 2012 from the sale of Healthcare.
Revenues from existing businesses were also down, with a 6% decrease in US print and a decrease in Latin American business. The company paid severance-related charges of approximately 395 million USD and pension contributions of 500 million USD, which also reduce the adjusted EBITDA. Declines were offset by contributions from Legal, yet US print business shrunk from 24% of divisional revenues in 2008 to 16%.
Tax & Accounting achieved strong growth across each line of business except for Government. This revenue growth reflected the strength of Tax & Accounting’s product offerings and demand in the global tax and accounting market. Recurring revenues, which comprise approximately 80% of the Tax & Accounting business, increased 10% (7% from existing businesses).
Intellectual Property & Science experienced contributions from existing businesses and the acquisition of MarkMonitor. Subscription revenues, which represent approximately 75% of Intellectual Property & Science’s business, increased 12%.
Ownership, Mergers & Acquisition, Internal Organization
In 2013, Thomson Reuters spent approximately 1.2b billion USD on acquisition, including Practical Law Company in February 2013, which provides legal know-how information and tools. In return, the company received 600 million USD from sales of Financial & Risk’s Corporate Services business and its 50% interest in the Omgeo joint venture.
Thomson Reuter’s Global Growth & Operations organization works with Financial & Risk, Legal, Tax & Accounting and Intellectual Property & Science businesses to combine global capabilities and to expand local presence and development in higher growth markets including Latin America, China, India, the Middle East, Africa, Southeast Asian Nations/North Asia, Russia and Turkey.
Throughout fiscal 2013, Thomson Reuters made several smaller acquisitions in Asia and Latin America.
2012 sales were in line with expectations, based on earlier investments in fast-growing emerging markets and higher-growth market segments. While total corporate revenues decreased from 13.81 billion USD in 2011 to 13.278 billion USD, revenues from ongoing business grew 3% in constant currencies. The latter exclude the alienated other businesses, which account for 379 million USD against 1.06 billion USD in 2011, including the Healthcare business and others. Operating profit increased in 2012 principally due to a 3 billion USD goodwill impairment charge in 2011 “due to weaker than expected performance by our former Markets division which consisted largely of businesses now in our Financial & Risk segment,” according to the 2012 annual report. The divisions experienced revenue growth across all segments.
Ownership, Mergers & Acquisition,Internal Organization
Thomson Reuters made 29 acquisitions (compared to 39 in 2011), which should support higher growing market segments and adjacent market segments, as acquisitions are key to the company’s strategy. While the majority of acquired brands and products are located the U.S., global presence was expanded through smaller acquisitions. Newly acquired businesses increased 2012 revenues by 3%.The Healthcare business, three Financial & Risk businesses and a Tax & Accounting business were sold. Legal acquired Practical Law Company in February 2013, which provides workflow tools to law firms and corporate legal departments in the U.S. and the U.K. Legal disposed of the Law School Publishing business in the first quarter of 2013. In 2012, Tax & Accounting continued its growth and global expansion with new products and an increased presence in Latin America by acquiring FISCOSoft and Dofiscal. Intellectual Property & Science acquired online brand protection MarkMonitor. In February 2013, Thomson Reuters announced roughly 2,500 job cuts, hitting employees in the Financial & Risk business and GGO organization.
Fifty-seven percent of 2012 revenues were generated in the U.S.; 31% came from Europe, the Middle East and Africa; and 12% from Asia.
The Global Growth & Operations organization was formed in 2012 to act across units and expand Thomson Reuters’s presence in new regions such as Latin America, China, India, the Middle East, Africa, the Association of Southeast Asian Nations/North Asia, Russia and CIS countries, and Turkey. In its first year, the organization completed nine acquisitions.
Ninety-one percent of 2012 revenues came from electronic content delivery, software, and digital services. Legal’s major brand, the online platform WestlawNext, became available as iPad application and mobile site.