thomson remake 07
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This is a presentation “makeover”. It is intended to give potential clients an idea of what my presentation work might look like.
The original content for this presentation belongs to The Thompson Corporation.
I have redesigned the presentation, but I have not altered the content.
The original presentation (for comparison) can be found at:
http://tinyurl.com/27nrvw
The presentation was given June 7th, 2007 at the Merrill Lynch U.S. Media Conference
I kept the show stark, clean, and a little web2.0-ish.
Thomson is a truly modern information company. The audience is primarily investors and analysts - expecting clean information, not entertainment.
Visit my websites at:
www.i3mm.com
www. linux group of rochester .com
The Thomson Corporation – Legal Segment
Merrill Lynch Conference, London, June 7th, 2007
Safe Harbor
Agenda
Introduction
Legal Segment
Overview
Market Trends
Strategy Objective and Revenue Growth Drivers
Summary
Frank Golden
Peter Warwick
Thomson-Reuters
Createsa global leader in electronic information services, trading systems and news for professionals in knowledge based industries
Meetscustomers’ growing demand for broader, faster and more deeply integrated information and solutions
Positionedfor growth in two business segments –Financial Services and Professional Services
Combinationof two strong, experienced management teams and a well capitalized industry leader ($35B market cap)
Thomson-Reuters Creates a Diversified $11B+ Company
Financial $6.7B – 59%
Professional $4.6B – 41%
Americas $6.9B – 60%
EMEA $3.5B – 31%
Asia-Pacific $1.0B – 9%
2006 Pro Forma Revenue by Division
2006 Pro Forma Revenue by Region
Source: Public filings and investor presentations. Refer to Special Note for a more detailed explanation of pro forma financial information provided throughout this presentation. Reuters results converted into US dollars at 2006 average USD/GBP exchange ratio of 1.84
88% - Electronic, Software & Services
86% - Recurring
Thomson-Reuters Pro-Forma 2006
Financial59%
Legal27%
Tax & Acct.5%
Healthcare4%
Scientific5%
Revenue $11.343B
Source: Public filings and “Thomson-Reuters” presentation 5/15/2007.Reuters results converted into US dollars at 2006 average USD/GBP exchange ratio of 1.84Assumes all Reuters 2006 EBITA is combined with Thomson Financial to form “Financial”*Percentages exclude Thomson corporate and other costs
Thomson-Reuters Pro-Forma 2006
Financial59%
Legal27%
Tax & Acct.5%
Healthcare4%
Scientific5%
Adjusted EBITA $2.144B
Source: Public filings and “Thomson-Reuters” presentation 5/15/2007.Reuters results converted into US dollars at 2006 average USD/GBP exchange ratio of 1.84Assumes all Reuters 2006 EBITA is combined with Thomson Financial to form “Financial”*Percentages exclude Thomson corporate and other costs
Agenda
Introduction
Legal Segment
Overview
Market Trends
Strategy Objective and Revenue Growth Drivers
Summary
Frank Golden
Peter Warwick
Professional Revenue Composition
Legal $3.0B – 66%
Professional Group2006 Revenue: $4.6B
Scientific$0.6B – 13%
Tax & Acct.$0.6B – 13%
Healthcare$0.4B – 8%
Legal Operating Structure
West FindLaw EliteConsulting Services
International
Thomson Legal2006 Revenue: $3.0B
• Law Firms• Corporate, Govt.
& Academic• GSI• West Education
Group• Carswell
• Elite• Hubbard One• ProLaw
• Hildebrandt• Baker Robbins
• Sweet & Maxwell (UK)
• Aranzandi(Spain)
• TLR Australia / NZ
Legal Segment Highlights
• Global Market ~$21B
• #1 in North America
• Market Growing ~5% per Year
• Key Competition: Reed Elsevier (LexisNexis) and Wolters Kluwer
• Strong Financial Results– 4 Year Revenue CAGR =
7%
– Segment Operating Profit Margin Up 170bps in 3 years
• Driving Growth through Organic Initiatives
• Major Brands
Thomson Legal 2006 Revenue Composition
North America83%
International17%
Revenue by Geography
Thomson Legal 2006 Revenue Composition
Electronic / Software / Services66%
Print34%
Revenue by Format
Legal Segment Highlights
• Westlaw ($1.2B) organic growth of at least 8.5% for eight consecutive quarters
2%5%
4%6%8%
9%6%
7%
$2.5B
$2.7B2.8B
$3.0B
$2.2B
Organic Other % Total Revenue Growth
Revenue Growth Segment Operating Profit Margin
29.6% 29.4%
30.4%
31.3%
• Past tipping point in North America – growing both print and electronic
2003 2004 2005 2006 2003 2004 2005 200628%
Changing Revenue Dynamics
2000 20061995
35%
67%
65%33%
North American Legal
$1.0B
$2.5B
$0.6
$0.4
$0.8
$1.7
Print/CDElectronic/Software/Services
• Enables rapid access to new information
• Ideal environment for researching case law
• Loading and linking facilitates usage growth
• Enables integration of content with workflow applications
• We can quickly and effectively add components that deliver additional value
• Migration from print to online has stabilized
• Younger attorneys primarily trained in online legal research
• Some areas of law are still better served by print –e.g. analytical law
• Combining online and print resources is very compelling value proposition
Online Dynamics Print Dynamics
Agenda
Introduction
Legal Segment
Overview
Market Trends
Strategy Objective and Revenue Growth Drivers
Summary
Frank Golden
Peter Warwick
Changing Revenue Dynamics
• Legal market growing at estimated 5%
• Large US law firms have healthy revenue growth of 8-10%
• Expense management becoming more important
• “Boomers” reaching retirement is increasing the pressure on talent
• LexisNexis’ growth has focused outside core legal information in public records, services and software
• Wolters Kluwer is a smaller player with niche positions
Market Trends Competitor Trends
Growth of US Law Firms
43,330
58,28368,139 66,890
75,465
104,360109,495
116,671
173233 273 268 302
386438 467
Average and Total Lawyers in NLJ 250 Firms
The size of the top 250 law firms has increased
dramatically over the last 20 years
Total Lawyers
Average Lawyers per Firm
Source: The National Law Journal
270% increase
1985 1988 1991 1994 1997 2000 2003 2005
U.S. Law School Enrollments
135,091
140,612
145,088148,169 148,273
150,603 151,414 151,042 150,870
125,000
U.S. Law School Enrollment
+ 1.6% + 0.5% - 0.2% - 0.1%
+ 0.1%+ 2.1%
+ 3.2%
+ 4.1%
+ 2.0%
The talent pool is constrained as law school enrollments
flatten
Actual
Projected
2002 2003 2004 2005 2006 2007 2008 2009 2010
• Practice of Law opportunity:
–Demand for workflow solutions that increase efficiency and success
• Business of Law opportunity:
–Client development
–Talent management
Opportunities for Thomson
• Increased emphasis on client development/client teams
• Continued “talent war”
• More aggressively managing cost structure to maintain per partner profits
Law Firms
Impact of Key Trends
• Shift to “buyer’s market” from “seller’s market”
• Clients demand cost effectiveness from law firms
• Increasing use of competitive firm assessment/selection
Client Relationships
Key Competitor Comparison (2006)
15.2%
$40
Competitive threat only in niches
1.9%
2005
4.0%
2.4%
$260
Wolters Kluwer
7.7%
2006
7.1%
2006
23.6%35.5%OI Margin
$507$878OI (MM)
Slowing growth driven by non-legal information
Strong OI and healthy growth
4.5%*14.8%6.6%
200620052005Total
12.5%8.1%Other
2.4%6.9%Legal Information
Revenue Growth
$2,147$2,476Revenue (MM)
LexisNexisThompson NA Legal
* Includes acquisition of Best Case Solutions Bankruptcy SoftwareNOTE: Data for LexisNexis and Wolters Kluwer based on publicly reportedinformation, as adjusted to reflect our assumptions for comparative purposesand conversion into US$
Agenda
Introduction
Legal Segment
Overview
Market Trends
Strategy Objective and Revenue Growth Drivers
Summary
Frank Golden
Peter Warwick
Strategic Objectives - Overview
Total Estimated USLaw Firm Billings is $200B*
Litigation65%
Transactions24%
Advisory11%
Litigation
Transaction Law
Advisory / Compliance
Practice of Law
Client Development
Talent Management
Other C-Level Solutions
Business of Law
Source: Company Estimates.
Practice of Law Growth Strategy
US Law Firm Billings$200B*
Litigation65%
Transactions24%
Advisory11%
All areas share consistent growth phases
Acquire/BuildInformation
Assets
Enable thePractitioner’s
Workflow
Enable theProcess
Phase 1Phase 2
Phase 3
ConsolidateInformation
(Load & Link)
DevelopSoftware Tools
LeveragePlatform
Source: Company Estimates.
Litigation Workflow
Value Case and Capture
ClientPlead Conduct
Discovery
Negotiate/ Prepare for
TrialConduct Trial Appeal
1 2 3 4 5 6
The litigation process follows six broad stages
Litigation Workflow – Core Assets
File & Present
Analyze, Negotiate,
DraftResearch Law / Info
Investigate & Compile Facts
Intake
$50M~$2,400M
$3,900M
~$50M ~$2,100M
Current Presence
Growth Opportunity
Strong market share in overall legal information space
Market leading comprehensive set of litigation content and workflow tools
Superior technology that will help link content to the larger litigation platform
Significant growth opportunities still ahead
Source: Company Estimates.
Westlaw Litigator Revenue Growth
$12M
$43M
$77M
$110M
2003 2004 2005 2006
Expanding share of wallet and driving organic revenue
US Law Firm Billings$200B*
Transactional Law – Market Overview
Workflow Perspective of Customers
Litigation65%
Transactions24%
Advisory11%
Low
High
HighComplexity
Value
Immigration
Family Law
PersonalBankruptcy Estates & Trusts
Labor &Employment Insurance
Antitrust & Trade
IntellectualPropertyTax
Real EstateFinance
Restructuring &Bankruptcy Business
Entities
Securities &Offerings Mergers &
AcquisitionsBusiness &
FinanceInvestment &Private Equity
Business Transactions:
Business Transactions Legal Activity
Complex, high-value business transactions and associated legal disclosures create significant legal opportunity
Source: Company Estimates.
Advisory/Compliance Customer Workflow
Litigation65%
Transactions24%
Advisory11%
Compliance Workflow
Customers work to assure corporations act in accordance with complex statutory and regulatory requirements
Lobbying Keeping Current
Assessing Risk
Setting Policy & Process
Reporting & Monitoring
Litigating & Investigating
1 2 3 4 5 6
Workflow Pain Points:
Understanding compliance requirements
Assessing greatest risk areas
Establishing appropriate policies and processes
Interpreting important changes
Assuring filings and record keeping are complete
Corporate Counsel (35% in-house activity)
US Law Firm Billings$200B*
Source: Company Estimates.
Business of Law Solutions ($250M and growing)
Assembling an array of industry leading solutions addressing the most significant C-level focus areas
Workflows: Strategy Management
Profitability Management
Client Development
Talent Management
Technology Management
Target Users:Managing Partner,
Executive Committee
CFOs, Executive Directors, Analysts
CMOs, Competitive Intelligence,
Analysts
Practice Heads, Billing Partners
Chief Technology
Officers
Thomson Solutions:
• Hildebrandt
• Peer Monitor
• Elite
• ProLaw
• Findlaw
• Hubbard One
• Litigator Monitor
• LegalEd Center
• Legalworks
• Baker Robbins
• Managed Technology Services
Agenda
Introduction
Legal Segment
Overview
Market Trends
Strategy Objective and Revenue Growth Drivers
Summary
Frank Golden
Peter Warwick
Thomson-Reuters
Strongmarket conditions with new growth opportunities
Leveragingunrivalled scale, reputation, brand power and domain expertise
Acceleratedorganic growth
Stablecapital requirements
Focused on driving organic growth, margins and free cash flow
Questions & Answers
Visit my websites at:
www.i3mm.com
www. linux group of rochester .com