Thomson Reuters Corporation is the market leader in financial data (ahead of rival information provider Bloomberg). Thomson Reuters provides electronic information and services to businesses and professionals worldwide, serving the financial services, media, legal, tax and accounting, and science markets. Key products include Westlaw, an online legal research platform and tax information software such as Checkpoint and ONESOURCE. More than 85% of revenue is generated through electronic delivery, software, and services, with the remainder through print formats. In early 2018, the company sold a majority stake in its Financial & Risk business for approximately $17 billion to Blackstone and other financial institutions. The vast majority of the company's revenue comes from the US.
The company is organized into five reportable segments: Legal Professionals, Corporates, Tax Professionals, Reuters News, and Global Print.
Thomson Reuters' Legal Professionals segment provides law firms and governments with research and workflow products focusing on intuitive legal research that combines content, tools, and analytics. The Legal unit accounts for about 45% of total net sales.
Its Corporates unit (accounts for close to 25% of sales) serves large, global accounting firms with a full suite of offerings across legal, tax, regulatory and compliance functions. The Tax Professionals segment (about 15%) sells integrated tax compliance and accounting information, software, and services to accounting firms, corporations, law firms, and governments.
The Global Print segment (close to 15%) provides legal and tax information primarily in print format to customers around the world. Reuters News (more than 5%) provides real-time, multi-media news and information services to media companies and websites around the globe, as well as to Refinitiv (Reuters' former Financial & Risk business unit now controlled by Blackstone).
Some of Thomson Reuters' key products include Westlaw Edge, an online, legal research and analytics platform; Practical Law, tools for managing practice areas like commercial, labor and employment, and intellectual property; Checkpoint, a tax information solution which includes workflow productivity tools and online learning content; Onvio, a cloud-based platform for document and project management, collaboration, and file sharing; and ONESOURCE tax and compliance software.
Based in Canada, the company operates in more than 100 countries. The US is its largest market, accounting for more than three-quarters of its total revenue. In the US, its principal offices are in New York, Michigan, Minnesota, and Texas. International offices are located in London, England, Switzerland, and India.
Sales and Marketing
Thomson Reuters sells its products and services directly to its customers, primarily online. Focusing on online sales has allowed the company to reduce sales and marketing costs. Some of its products and services are also sold through partners and authorized resellers. Its primary customers include law firms, large corporations, and accounting firms.
The company generates revenues classified by three types—Recurring, Transactions, and Global Print. Recurring revenue generates about 75% of total sales and consists of fees from subscription services delivered electronically, such as through its Westlaw and Checkpoint products. Global Print revenue (nearly 15%) represents sales from content delivered primarily in traditional paper format. Transactions revenue (about 10%) includes volume-based fees related to online searches, software licenses, and professional fees from service and consulting contracts.
Annual revenue for Thomson Reuters has been trending downward over the last several years, although it saw a modest uptick in 2018. Sales in 2018 were $5.5 billion, up almost 4% from $5.3 billion from the previous year. The increase in 2018 reflected higher recurring revenue, however, transactions and print revenues were down for the year.
Net income has fluctuated wildly in recent years. Profits in 2018 were $4.0 billion, an increase of $2.6 billion from 2017. Net income in 2018 reflects a $3.8 billion gain from the sale of 55% of the company's Financial & Risk business, now known as Refinitiv.
Cash at the end of fiscal 2018 was $2.7 billion, an increase of $1.9 billion from the prior year. Cash from operations contributed $2.1 billion to the coffers, while investing activities provided $14.7 billion, mainly from the partial sale of the company's Financial & Risk business unit. Financing activities used another $14.9 billion for loan payments, dividends to stockholders and the company's stock repurchase program.
The company's growth strategy mainly involves developing new and distinct products, services, applications, and functionalities to better meet its customers' needs. It also is investing in its digital platforms for a more robust and seamless customer experience. Thomson Reuters believes enhancements to digital platforms will help the company increase retention and reach more smaller customers.
Plans are underway to simplify its business by reducing the number of products, headcount, and physical office locations. In an effort to optimize its portfolio and reposition its business for future growth, the company sold off 55% of its Financial & Risk business unit (now operating as Refinitiv) to Blackstone. It is streamlining contracts and policies and working to exit service agreements to separate its Thomson Reuters and Refinitiv businesses. Part of the agreement allows for the Reuters News division to generate revenue by delivering news and editorial content to Refinitiv.
Mergers and Acquisitions
In late 2018, the company completed the acquisition of Integration Point, an international leader in global trade management (GTM) operations. Integration Point, which has major offices in Charlotte, NC, as well as India, Mexico and Georgia (country), will become part of the Corporates customer segment of Thomson Reuters.
The Thomson Corporation was established when Roy Thomson started a radio station in Ontario in 1930. He next began purchasing town newspapers, venturing outside Ontario in 1949 and into the US in 1952. The Thomson newspaper empire grew rapidly, and the company next entered into a North Sea oil drilling venture. Oil accounted for the bulk of Thomson's profits by 1976, when Thomson died, and the company used its oil earnings to expand and diversify its publishing interests.
Purchases included American Banker and Bond Buyer (financial publications, 1983), Gale Research (library reference materials, 1985), and several online information providers. Thomson then completed the sale of its oil and gas holdings. In 1991 it bought Maxwell's Macmillan Professional and Business Reference Publishing. It bought law and textbook publisher West Publishing in 1996. Continuing its selective divestment of newspapers, the company sold 43 daily papers in the US and Canada in 1996. In 2000 Thomson announced it would sell its newspapers to focus on the Internet.
Other Thomson purchases included a pair of tax and law publishing units from UK's Pearson; Knight-Ridder's Technimetrics financial information unit; Sylvan Learning Systems' Prometric division, which provided computer-based testing services; and Wave Technologies International, a provider of multimedia instructional products. Thomson also bought the online data services division of Dialog, and it acquired rival financial data provider Primark for $1 billion. In 2001 the company bought the higher education and corporate training businesses of Harcourt General (which later became Harcourt Education) from Reed Elsevier Group (since renamed RELX Group), and acquired business content provider NewsEdge.
Thomson started trading on the New York Stock Exchange in mid-2002. Later that year it beefed up its Internet education group with the purchase of certain e-learning assets from McGraw-Hill (later renamed S&P Global). In 2003 the company purchased Elite Information Group, a maker of law firm practice software, for more than $100 million. (The software firm later dropped the "Information Group" portion of its name to become simply Elite.)
In 2006 Thomson purchased Solucient LLC, a provider of data and advanced analytics to hospitals and health systems; Quantitative Analytics, Inc., a provider of financial database integration and analysis solutions; and LiveNote Technologies, a provider of transcript and evidence management software to litigators and court reporters. Kenneth Thomson died at the age of 82 that year.
The following year Thomson exited the educational information market when it sold Thomson Learning (now called Cengage Learning) to investment groups Apax Partners and OMERS Capital for $7.7 billion. Thomson cited a lack of growth potential as its primary rationale for selling Thomson Learning. The move was the latest in a long line of divestutures for Thomson -- the company had spent years selling nearly all of its traditional media assets, including most of its 130 newspapers and its stake in Bell Globemedia in favor of electronic products.
Thomson used the proceeds of the 2007 Thomson Learning sale to help acquire Reuters in 2008 in a $16.2 billion deal that created Thomson Reuters, the largest player in the field of financial data.
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Employer Type: Privately Owned
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