Thomson Reuters Corp at TD Securities Telecom & Media Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Vince Valentini - TD Securities Equity Research - Analyst : I'll love this or whoever wants to answer or maybe I'll have some perspective. It's -- your stock has performed quite well in the past couple of years, but I think you would agree, you still trade at a meaningful discount to some of the technology and business service peers that you think you should be comped against. What are the factors you see here, the key to justifying a narrowing of that multiple gap or potentially even concentrating at a premium to that comp group going forward?

Question: Vince Valentini - TD Securities Equity Research - Analyst : Former analysts doesn't want to tag onto that to...

Question: Vince Valentini - TD Securities Equity Research - Analyst : So let's hit on that. I mean don't know why people will be skeptical, as you've done nothing, but meet or exceed your promises that not only since Steve has been in the CEO seat, but even in the period prior to that. So track record looks good to me, but those targets for 2023 in the midst of a challenging macro environment to all the inflation and supply chain issues maybe is giving people pause for concern that you're overly optimistic. So maybe give you an opportunity to address why you're so confident in hitting those 2023 targets, no matter what the macro headwinds are?

Question: Vince Valentini - TD Securities Equity Research - Analyst : And maybe just add on that, Mike, remind the audience, your targets don't even assume the full cost saving benefit of the Change Program because you've deliberately plan to reinvest some of that in growth. So if they really needed to toggle your margins if times were tough, you could probably hit the margin target no matter what, just slightly slow...

Question: Vince Valentini - TD Securities Equity Research - Analyst : Let's shift gears to legal a bit in Westlaw. I know the same theme of how resilient and predictable your business is. Can you contrast a little bit where the Legal business is now versus the financial crisis downturn? The structure of the legal industry, if you want to touch on it, but more importantly, how embedded Westlaw 2.0 now is into -- or for Westlaw Edge is now into people's workflow? And then what 2.0 benefits coming out soon? This is not a product that lawyers can just turn off. I mean their business would stop, wouldn't it?

Question: Vince Valentini - TD Securities Equity Research - Analyst : Can't say much today, but I think there is some plan to do a demo for the investment community maybe this fall or -- 2.0 was out?

Question: Vince Valentini - TD Securities Equity Research - Analyst : Great. Moving on to the other side of the Legal division, which I know there's an equal amount of excitement about is the non-research non-Westlaw services, if we can call them that. You had some great slides in your Q1 presentation, just to remind people if they didn't see it. The non-Westlaw services grew 8% in 2021 versus 4% for Westlaw. And they now account for 45% of the total segment. So it's not trivial by any stretch. So can you talk a bit about the key drivers there and practical law and the other services that are driving that kind of substantial growth? And how resilient that is as well? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 25, 2022 / 5:00PM, TRI.TO - Thomson Reuters Corp at TD Securities Telecom & Media Conference

Question: Vince Valentini - TD Securities Equity Research - Analyst : Excellent. Not just do your thunder too much for that future call, you mentioned, Mike, and getting into tax and accounting. But in general terms, you answered this, your success in Legal, and maybe I'm oversimplifying it and saying, we have that core research relationship in the law firms to trust us. We expand into the front office and help them with marketing, we expand into the back office and help them with their efficiency and their end-to-end processes, and that's worked magically over the years. Has the same thing happened in the tax and accounting field? Have you expanded into those adjacent areas with that industry to the same extent you have in legal?

Question: Vince Valentini - TD Securities Equity Research - Analyst : The geographic growth.

Question: Vince Valentini - TD Securities Equity Research - Analyst : Sure. I don't have too much time that I want to make sure to touch on Corporate here because it's another area I'm not sure investors really understand. I get more questions about that segment than others. What is it? Who are the customers? I mean, the big 7 accounting firms are in your Corporate segment, but I don't think that's really the growth focus, correct me if I'm wrong, I think it's the general corporate market? And is it just selling the best of tax and legal or is it more specialized products?

Question: Vince Valentini - TD Securities Equity Research - Analyst : Is there a way to break down that you've put out a target of 7% to 9% revenue growth for the Corporate segment. Break that down between how much of that is just simply getting new corporate entities to say, hey, we should be using these services. They're not just for law firms and tax firms or we can make good use of this. So pure volume growth of new customers versus ones you're in with a toehold and maybe the general counsel uses some Westlaw, but you haven't penetrated the rest of the organization with all of your trade management and tax solutions. So how much is this upselling to existing customers versus brand-new customers? Is there a way to simplify that?

Question: Vince Valentini - TD Securities Equity Research - Analyst : My unfair in saying that in the legal business, you already have very high penetration in market share. But you still think you can do 6% plus revenue growth, mostly through upselling of these better products and getting into the front office, back office that we talked about a second ago. In the corporate market, it seems to me like 7% to 9% is potentially a target you could greatly exceed if you have a combination of upsell plus new logos, as I think you called it, Mike, if all your 3 subsegment targets? Or do you think -- is that the one that you're delighted on?

Question: Vince Valentini - TD Securities Equity Research - Analyst : And with the last minute or so, let's talk about acquisitions. It seems like you're starting to get into a pretty good balance sheet position with lots of cash flow generation. And I think you've talked a little bit more about having earned the right to make some acquisitions now after 2 years of good execution since Steve and Mike took over the 2 top seats. Any update on how good the M&A market is or valuations coming back to a level you'd be interested in? And can we see something this year?

Question: Vince Valentini - TD Securities Equity Research - Analyst : Great. Lots more we can talk about, but that runs us to the end of our time. So I'll thanks again to Steve, Mike and Gary for spending some time with us and sharing your insights.