Q4 2021 Thomson Reuters Corp Earnings Call

Speaker 1: Welcome everyone to the Q4 2021 earnings call. My name is Sue, I'm your consent manager. During the presentation your lines will remain unlisteningly. We will conduct a question and answer session towards the end of the call. Please keep star then one on your telephone to queue for a question.

Welcome everyone to the Q4 2021 earnings call. My name is Sue I'm yours, and my nature. During the presentation. Your lines will remain on listen only we will conduct a question and answer session towards the end of the call. Please key Star then one on your telephone.

Turning to queue for a question.

Speaker 1: If you need assistance at any time, please key star zero and operator will be happy to assist you.

If you need assistance at any time, please key star zero and operator, we'll be happy to assist you I would.

Speaker 1: I would like to advise all parties that this conference has been recorded. And now I'll hand over to Frank Golden, Head of Investor Relations. Please go ahead.

Like to advise all participants this conference is being recorded.

Now I'll hand, it over to Frank Colton head of Investor Relations. Please go ahead.

Speaker 2: Good morning, thank you for joining us today for our fourth quarter and full year 2021 earnings.

Good morning, and thank you for joining us today for our fourth quarter and full year 2021 earnings call.

Speaker 2: joined today by our CEO Steve Hasker and our CFO Mike Deist with each of whom will report our results and take your questions following their remarks.

I'm joined today by our CEO , Steve <unk>, and our CFO , Mike Eastwood, who will report our results and take your questions following their remarks.

Speaker 2: Today marks my final earnings call as head of investor relations for prompts and lawyers.

Today marks my final earnings call as head of Investor Relations for Thomson Reuters.

Speaker 2: Pleased to announce that we're also joined by Gary Bigby, who will assume the role of Head of Investor Relations for Thomson Reuters on March 1st in advance of my retirement in July . I couldn't be more pleased to place the baton in the very capable hands of Gary than many of you already know.

You announced we're also joined by Gary Bisbee, who assumed the role of head of Investor Relations for Thomson Reuters on March 1st.

Turning to my retirement in July I.

I couldnt be more pleased replacement, but not in the very capable hands with Gary and many of you already know.

Speaker 2: Gary has covered Thompson's orders on the sell side of Bank of America Securities for the past three years and I know it will be a terrific job.

Gary has covered Thomson Reuters on the sell side with Banc of America Securities for the past three years, and then there will be a terrific job.

Speaker 2: After 18 years at Thomson Reuters, including 71 earnings calls and 8 investor days, it's time for my next adventure and to spend more time with my wife and family. I truly enjoyed my time at TUR having worked with 4 CEOs, 3 CFOs and hundreds of very talented colleagues over that time.

After 18 years at Thomson Reuters, including 71 earnings call. We made Investor days, It's time for my next adventure.

Spend more time with my wife and family.

I truly enjoyed my time at T or have you worked with four Ceos cfos and hundreds of very talented colleagues over that time.

Speaker 2: also means miss speaking with many of you. You've challenged me, informed me, and even entertained a bit of times. You helped me do this job better and for that I am grateful.

Also means you're.

Speaking with many of you.

The challenge for me and even entertaining a bit at times.

Do its job better and for that I am grateful.

Speaker 2: Lastly, I've watched Thomson Reuters evolve to become one of the preeminent business information services companies in the world. Under Steve and Mike's leadership, I'm confident TR will continue to build on its progress, further strengthening its position for the benefit of our investors, customers and employees.

Lastly, I've watched Thomson Reuters evolved to become one of the preeminent business information services companies in the world.

And then Steve in Mike's leadership I'm confident you are and will continue to build on this progress.

To strengthen your position for the benefit of our investors customers and employees.

Now to the results.

Speaker 2: We have a lot to share today, so to enable us to get through as many questions as possible, we'd appreciate it if you would limit yourselves to one question each and one follow-up, and open the phone now.

But lots of share today, so to enable us to get through as many questions as possible. We would appreciate it if you would limit yourself to one question each and one follow up and then open the phone lines.

Speaker 2: Throughout today's presentation, when we compare performance period on period, we discuss revenue growth rates before currency as well as on an organic basis.

Throughout today's presentation, when we compare performance period on period, we discuss revenue growth rates before currency as well as on an organic basis.

Speaker 2: This provides the best basis to making the underlying performance of the business.

We believe this provides the best stages to measure the underlying performance of the business.

Before I turn it over to Steve Let me note that.

Speaker 2: I want to note that we're flipping how we currently manage revenue across our segments. We are making two changes effective January 1, 2022.

Let me note that flipped me how we currently manage revenue across our segments. We are making two changes effective January one 2022.

Speaker 2: For comparability, we will revise our 2021 results, beginning when we report our first quarter 2022 results in May.

For comparability, we will revise our 2021 results.

When we report our first quarter 2022.

Speaker 2: These changes will not have any impact on our consolidated results.

These changes will not have any impact on our consolidated results.

Speaker 2: First, we will record intercompany revenues for Reuters News for content-related services that it provides to our legal professionals, corporates, and tax and accounting professionals.

Firstly, we will record intercompany revenues from Reuters needs for content related services that it provides to our legal professionals corporates and tax <unk> accounting professionals businesses.

Speaker 2: Previously, these services have been reported as a transfer of expense from lawyers to these businesses. So there is no impact on any segment of adjusted evidence.

Previously these services have been reported as a transfer of expense from Reuters to these businesses. So there was no impact on any segments adjusted EBITDA.

Speaker 2: Two, we will transfer $9 million of revenue from the corporates business to our tax and accounting business where it will be managed and where it fits better.

To Google trends for $9 million of revenue from the corporates business to our tax and accounting business.

It will be managed and where it fits better.

Speaker 2: I'd like to direct you to the investor relations section of our website, where we've posted a schedule that reflects our revised full year 2019, 2020, and 2021 results, as well as our revised 2021 quarterly results in the manner we will begin reporting in 2022.

I'd like to direct you to the Investor Relations section of our website.

A schedule that reflects our revised full year 2019 2020.

2021 results as well as our revised 2021 quarterly quarterly results in the manner, we will begin reporting in 2022.

Speaker 2: Today's presentation contains forward-to-date statements and non-IFRS financial measures. Actual results may differ materially due to a number of risks and uncertainties related to the COVID impact and other risks discussed in reports and filings that we provide from time to time to regulatory agents.

Today's presentation contains forward looking statements and non <unk> financial measures.

Actual results may differ materially due to a number of risks and uncertainties related to the COVID-19 impact and other risks discussed in reports and filings that we provide from time to time to regulatory agencies.

Speaker 2: You may access these documents on our website or by contacting our Investor Relations Department.

You may access these documents on our website or by contacting our Investor Relations Department.

Let me now turn it over to Steve <unk>.

Speaker 2: Thank you Frank for the introduction and thank you for all you have done for Thomson Reuters over 18 years and welcome to Gary. Thanks to all of you for joining us today. I'm pleased to report the momentum we saw in the first nine months of the year continued in the fourth quarter. Thank you and sales growth.

Thank you Frank for the introduction and thank you for all you've done for Thomson Reuters.

And welcome to Gary.

Thanks to all of you for joining us today I'm pleased to report the momentum we saw in the first nine months of the year continued in the fourth quarter.

Revenue and sales growth were again strong exceeded our expectations and we closed out the year on a solid footing.

Speaker 3: exceeded our expectations and we closed out the year on a solid footing.

Speaker 3: This performance has created momentum as we started 2022.

This performance has created mentioned this we started 2022.

Speaker 3: And it has helped build our confidence as we work to achieve our 2022 and 2023 targets. They're increasingly...

And he has helped build our confidence as we work to achieve our 2022 and 2023 targets.

They are increasingly in a position of strength.

Speaker 3: Since March 2020, when COVID began to negatively impact the global economy, professional markets have...

Since March 2020, when Covid began to negatively impact the global economy.

Professional market was that.

<unk> resilient and continue to grow helped by a significant global shaped by our <unk>.

Speaker 3: continue to grow helped by significant global shift.

Speaker 3: by our customers to upgrade legal, tax and risk-forwarding compliance products.

Customers drop Greg legal.

Cash and risk for Dupont products.

Speaker 3: customers also continue to exhibit more confidence in their own future prospects.

Customers also continued to exhibit more confidence in their own future prospects.

Speaker 3: and our products are proving well suited to enable our customers to effectively serve their clients.

Our products are proving well suited to enable our customers to effectively serve clients.

Speaker 3: targeting investment products that are driving faster growth and where we have strong positions in growing markets.

Targeting investing in products that are driving faster growth and where we have strong positions in growing markets.

Speaker 3: This dynamic enabled us to achieve 5% organic revenue growth for the full year 2021, the highest growth rate in over a decade.

This dynamic enabled us to achieve 5% organic revenue growth for the full year 2021, the highest growth rate in over a decade.

Speaker 3: while also improving our underlying profitability and free cash flow.

While also improving our underlying profitability and free cash flow.

Speaker 3: Our fourth quarter results reflect an improving performance. Four of our five business segments again recorded organic revenue growth of 6% or greater, and total company organic revenues grew 6%. We continue to make steady progress with our change program.

Our fourth quarter results reflect an improving performance for the fog business segments again recorded organic revenue growth of 6% or greater and total company organic revenues grew 6%.

We continue to make steady progress without change program.

We transform to a content driven technology company and we have achieved a $200 million of savings thus far.

Speaker 3: And we have achieved over $200 million in savings thus far, one third of our $600 million rate built cows.

<unk> about $600 million Congress.

Speaker 3: We also achieved all of our 2021 guidance targets that we increased throughout the year. in…

We also achieved all about 2021 guidance targets that we increased throughout the year.

Given the momentum in the business and that growing confidence.

Speaker 3: Today we increased our 2022 and 2023 guidance from what we provided.

Today, we increased our 2022 and 2023 guidance.

From what we provided at this time last year.

Speaker 3: And finally, this morning we announced a 10% increase in our annual dividend to $1.78 per share, the 29th consecutive annual increase and the largest increase since 2008.

And finally this morning, we announced a 10% increase in our annual dividend to $1 78.

Sure the 29th consecutive annual increase and the largest increase since 2008.

Now to the results for the quarter.

Speaker 3: Fourth quarter reported and organic revenues were up 6%, attributable to strong results from the big three businesses and rural areas.

Fourth quarter reported and organic revenues were up 6% attributable to strong results from our big three businesses <unk> and similar to the last quarter. This performance included strong organic growth of more than 20%.

Speaker 3: Similar to the last quarter, this performance included strong organic growth of more than 20% from our Latin American businesses and nearly 10% growth from our Asian and emerging markets.

Our Latin American businesses, and nearly 10% growth from Asia and emerging markets businesses adjusted EBITA declined 14%.

Speaker 3: adjusted EBITDA declined 14% for $452 million due to costs related to the change program, higher performance bonus expense, and a discretionary investment of $25 million to better position the business for 2022, which Mike will discuss. This resulted in a margin of.

$452 million due to costs related to the change program higher performance bonus expense and a discretionary investment of $25 million to better position the business for 2022, which mark will discuss.

Resulted in a margin of 26, 4%.

Speaker 3: Excluding change programming costs, adjusted EBITDA margin was 31.1.

Excluding change program costs adjusted EBITDA margin was 31, 1%.

Speaker 3: Adjusted earnings per share for the quarter was 43 cents compared to 54 cents.

Adjusted earnings per share for the quarter was 43 compared to 54.

Speaker 3: per share in prior year period. The additional $25 million we invested in quarter lowered adjusted EPS by four.

Per share prior year period, the additional $25 million, we invested in the quarter lowered adjusted EPS by <unk> <unk>.

Speaker 3: Turning to fourth quarter results by segment, the big three businesses achieved organic revenue growth of 7%, reflecting strength across each of the businesses.

Turning to fourth quarter results by segment.

Our big three businesses achieved organic revenue growth of 7%, reflecting strength across each of the businesses.

Speaker 3: US legal market is very healthy throughout 2021 and our performance benefited from that.

U S legal market is very healthy throughout 2021 and outperformance benefited from net dynamic.

Speaker 3: Legal sport quarter performance was again impressive with organic revenue growth of 6%, the third consecutive quarter of 6% growth.

<unk> fourth quarter performance was again impressive with organic revenue growth of 6%.

A third consecutive quarter of 6% growth full.

Speaker 3: Full year revenue growth was also 6%, the highest annual growth rate since 2000.

Full year revenue growth was also 6% the highest annual growth rate since 2008.

Speaker 3: Sales were strong throughout the year, including Q4. We exited the year in a good position, recording double-digit recurring sales growth in Q4, reflecting customers' willingness to invest in productivity-enhancing products.

Sales were strong throughout the year, including Q4, we exited the year in a good position recording double digit recurring sales growth in Q4, reflecting customers' willingness to invest in productivity enhancing products.

For example.

Speaker 3: Westlaw Edge continued to achieve strong sales growth and ended the quarter with an annual contract value, or ACV, penetration of 65%, achieving the top end of our guidance with more opportunity in 2022, with a target of 75% penetration and the expected launch of Edge 2.0.

<unk> continued to achieve strong sales growth and ended the quarter with an annual contract value or ICB penetration of 65% achieving the top end of that guidance with more opportunities in 2022, with a target of 70% to 75% penetration and the expected launch of edge to people know.

Speaker 3: Second, practical law, as reported in the legal segment, had a terrific quarter and year, growing mid-teens in both periods. We forecast another strong performance in 2022 for practical law as we continue to invest in this key legal workflow initiative.

Second practical law as reported in our legal segment had a terrific quarter and year growing mid teens in both periods. We forecast another strong performance in 2022 perpetual more as we continue to invest in the street legal.

Speaker 3: Third, our government business, which is managed within our legal segment, grew 7% organically in Q4 and 9% for the year and achieved strong sales in Q4, setting it up well for strong growth in 2020.

Initiatives.

Our government business, which is manage within our legal segment grew 7% organically in Q4, and 9% for the year and achieved strong sales in Q4, setting it up well for strong growth in 2022.

Speaker 3: And four, illegal businesses in Canada and Asia grew double-digit in the quarter, while Europe grew mid-single-digit in the quarter.

For our legal business is in Canada, and Asia grew double digit in the quarter, while Europe grew mid single digits.

Speaker 3: Going into the corporates business, organic revenue growth continued to accelerate and was up 7%, from 6% in Q3 to 4% in the first half.

Turning to the corporate business organic revenue growth continued to accelerate and was up 7% from 6% in Q3, 4% in the first half of the year.

Speaker 3: This improvement came from increasing demand for customers for our legal, tax and risk products.

This improvement came from increasing demand for customers for our legal tax and rooster product.

Speaker 3: The tax on accounting had a terrific quarter and year with organic revenue growth of 9% for both periods and strong Q4 sales. This performance was stronger than expected thanks to UltraTax, our audit solutions products and a strong performance by a Latin American tax business, Domenio, that grew more than 20% for the year.

And tax and accounting had a terrific quarter and year with organic revenue growth of 9% for both periods and strong Q4 sales performance was stronger than expected thanks to ultra tax.

Audit solutions products and a strong performance by our Latin American tax business Dominion.

Grew more than 20% for the year.

Speaker 3: Reuters news organic revenues increased 12% in Q4, with growth across all of the business lines, particularly the professional business, which includes digital advertising, custom content, and Reuters events, which continues to recover from the negative impact of COVID-19 in 2020. And finally, global print organic revenues declined 4% more than expected due to a continued gradual return to office by our customers and higher third-party...

Reuters news organic revenues increased 12% in Q4 with growth across all of the different plants, particularly the professional business, which includes digital advertising custom content and Reuters events, which continues to recover from the negative impact of Covid.

Pain in 2020, and finally global print organic revenues declined 4% expected due to a continued gradual return to work with small customers and high up third party print revenues. So in summary, we're very pleased with our results and we're very excited about the momentum we.

Speaker 3: So in summary, we're very pleased with our results and we're very excited about the momentum.

Speaker 3: We expect further improvement throughout performance this year as we invest to further strengthen our positions across the business.

We expect further improvement to our performance this year as we invest to further strengthen our positions across our business segments.

Speaker 3: Full view reported revenues were up 6% and organic revenues were up 5% thanks to strong results from the big three businesses.

Full year reported revenues were up 6% and organic revenues were up 5%. Thanks to strong results from our big three businesses and voices.

Speaker 3: just as EBITDA declined slightly and was just shy of $2 billion due to costs related to the change program and higher performance bonus expense, resulting in a market-based

Adjusted EBITDA declined slightly and was just shy of $2 billion due to costs related to the change program and higher performance bonus expense, resulting in a margin of 31%.

Speaker 3: Excluding change program costs, adjusted EBITDA margin was 33.9%, about 100 basis points higher than 2020. Adjusted earnings per share for the year was $1.95, compared with $1.85 per share in the prior year.

Excluding change program costs adjusted EBITDA margin was 33, 9% about 100 basis points higher from 2020 <unk>.

Adjusted earnings per share for the year was $1 95.

With $1 85 per share in the prior year.

Speaker 3: Let me discuss several of the key contributors to our accelerating growth and improving process.

Let me discuss several of the key contributors to accelerating growth and improving prospects here.

Speaker 3: During our investor day in March last year, I shared with you that we're investing in seven strategic growth priorities, moving into the big three sectors.

During our Investor day in March last year I shared with you that we are investing seven strategic growth priorities, we did the big three segments.

Speaker 3: These businesses grew 6.5% on a combined basis in 2021.

These businesses grew six 5% on a combined basis in 2021.

Speaker 3: several growing double digits in our foundational Westworld product up for

Several growing double digits, and our foundational westworld product up 4%.

Speaker 3: We continue to believe that our opportunity is about powering the world's most informed professional...

We continue to believe that our opportunities about powering the world's most informed professionals and we're hoping for the future through digital automation augmentation and collaborations powered.

Speaker 3: and we're helping force their future through digital automation, augmentation and collaboration.

Speaker 3: powered by a combination of unique content, world-class AI machine learning, and best-of-breed workflow software.

Powered by a combination of unique content World class.

And machine learning and best of breed workflow software.

These products do precisely that.

Speaker 3: The game to this frame will continue to be invested heavily in these strategic priorities and will continue to shift the proportion of capital investment.

Against this Brian will continue and invested heavily in these strategic priorities and will continue to shift the proportion of capital investment.

Sure.

Speaker 3: These investments are expected to continue to help accelerate organic growth and enable us to achieve our revenue growth target of 5.5 to 6% in 2023.

These investments are expected to continue to accept help accelerate organic growth and.

And enable us to achieve our revenue growth target of five 5% to 6% in 2023.

Speaker 3: M&A is also expected to play an important role in accelerating our organic growth and priorities and we have an active pipeline of potential future acquisitions across our core segments. Additionally, we recently launched our new Thomson Royce Venture Fund, which will invest up to $100 million of seed funding for start-up companies to cultivate innovation and expand our M&A pipeline. In Dino, users of ever-facing devices together will gain an opportunity to meet the promises

<unk> is also expected to play an important role in accelerating our organic growth priorities and we have an active pipeline of potential future acquisitions across our core segments.

Additionally, we recently launched a new Thomson Reuters pension fund.

Which will invest up to $100 million of state funding startup companies to cultivate innovation and expand our M&A pipeline.

Speaker 3: Let me finish on the financials for the full year by noting that we met or exceeded each of our 2021 guidance metrics.

Let me finish on the financials for the full year by noticing that we met or exceeded each of our 2021 guidance metrics, which reflects the resilience of the business and the visibility we have businesses to markets.

Speaker 3: which reflects the resilience of the business and the visibility we have in our businesses.

Speaker 3: I would now like to update you on the progress related to our change program, including highlighting the progress from our product innovation.

I would now like to update you on the progress related to our change program.

Including highlight highlighting the progress from our product and innovation teams.

Speaker 3: You recall I presented this slide in our investor day last year, and it's as relevant today as it was.

You will recall I presented this slide at our Investor day last year, and it's as relevant today as it was bad.

Speaker 3: We continue to benefit from fundamental and prevailing tailwinds due to increasing legal, tax and regulatory complexity, which favours business information services markets and provides...

We continue to benefit from fundamental and prevailing tiles due to increasing legal tax and regulatory complexity, which favors business information services markets and providers.

Speaker 3: And as we get into the third year of the pandemic, its lasting impact on the market segments we serve is becoming clear.

And as we enter the third year of dependent.

It's lasting impact on the market segments, we serve has become clearer.

Speaker 3: Digital transformation has accelerated, driven by virtual working and client demands to engage digitally with the firms and departments that serve them.

Digital transformation has accelerated.

Given by virtual working client demands to engage digitally with the firms and departments that soup.

It's unlikely to be a passing fad hybrid and virtual working is here to stay which is increasing customer expectations, a digital experiences and demand for content enabled cloud based AI powered solutions that drive professional efficiency and effectiveness continues to grow.

Speaker 3: Hybrid and virtual working is here to stay, which is increasing customer expectations and digital experience.

Speaker 3: and demand for content-enabled, cloud-based, AI-powered solutions.

Speaker 3: drive professional efficiency and effectiveness continues to grow.

Speaker 3: hesitation to embrace new technologies in our more traditional customer segments.

Hesitation to embrace new technologies in our core in our more traditional customer segments is giving way to.

Speaker 3: giving way to an appreciation of the benefits to be gained from doing so.

So an appreciation of the benefits to be gained from doing so.

Speaker 3: And our goal of becoming a content-driven technology company includes excelling at product innovation.

And our goal of becoming a content driven technology company includes accelerated product innovation.

Speaker 3: and successfully integrating our products to provide customers with a seamless offering while delivering an excellent customer experience.

And successfully integrating our products to provide customers with a seamless offering while delivering an excellent customer experience.

Speaker 3: We believe this approach will further improve customer loyalty and increase retention as we continually enhance our products adding to organic growth. Our change program is targeted at achieving these objectives and we're making good progress. Let me share several examples of that program.

Believe this approach will further improve customer loyalty and increase retention as we continually enhance our products added to organic growth.

At Schein programs target in achieving these objectives and we're making good progress let me share several examples of that progress.

Speaker 3: I won't take you through each of the items on this slide. Rather, I want to highlight the progress we've made last year in transforming to a more integrated symbol.

I won't take you through each of the items on this slide rather I want to highlight the progress we've made last year in transforming to a more integrated simple.

Yeah.

Speaker 3: We are reducing complexity in our operations and technology group, which is critical for us to achieve the change program goals and margin targets. We've made significant progress, which you can see on this slide, including 37% of our revenue is now on a cloud solution. And we're on track to achieve that target of 90% of our revenue available in the cloud by the end of 2023. SMB digital sales increased to 29% as a percentage of total sales.

We are reducing complexity in our operations and technology group, which is critical for us to achieve the change program goals and margin targets.

Made significant progress, which you can see on this slide including 35, 37% of our revenue is now on a cloud solution and we are on track to achieve our target of 90% of our revenue available in the cloud by the end of 2023 <unk>.

<unk> digital sales increased to 29% as a percentage of total sales.

Speaker 3: Improving our internal process within Border2Cash has reduced customer-facing incidents, invoice rework, and have brought together our product, content, and editorial strategies to improve customer delivery and drive efficiency.

Improving our internal process, we did order to cash is reduced customer facing incidents invoice reworked and a fourth together our product content and editorial strategies to improve customer delivery and drive efficiencies. Each of these achievements are critical to simplify and improve the customer experience we provide.

Speaker 3: Each of these achievements are critical in which we simplify and improve the customer experience we provide.

Speaker 3: We also reduced our global footprint of office locations from 102 to 46 and our call centers from 99 to 77.

We also reduced our global footprint of office locations from 102% to 46 now coal Santos from $99 70.

77.

Speaker 3: And one additional point here, talent is key to completing our initiatives. And our goal is to build the best team in business information services by developing a track...

And one additional point here talent is key to completing our initiatives and our goal is to build the best team and business information services by developing and attracting.

Speaker 3: top global talent and delivering a differentiated employee experience. Over the past two years, we have brought in new key talent into our organization within product, engineering, marketing, data analytics, design, operations and technology, amongst other key areas. The visiting talent has brought different perspectives and approaches which have complemented the skills and experiences of existing leadership. I'm very, very pleased with the progress we're making.

Top global talent and delivering differentiated employee experiences over the past two years, we have 14, new key talent into our organization within product engineering marketing data analytics design operations and technology.

<unk> other key areas the distinct talent.

Different perspectives and approaches which are complementary skills and experiences of existing leadership.

Very very pleased with the progress with Mike.

A few additional points regarding the change program.

Speaker 3: We made progress towards shifting customers to a more digital, automated experience with the launch of self-serve capabilities and automated tools for...

We made progress towards shifting customers to a more digital automated experience with the launch of self serve capabilities and automated tools to support.

Speaker 3: Delivery of the customer experience of the future is underway and our goal remains to create fast, frictionless, connected, transparent and personalized customer experiences.

Delivery of the customer experience of the future is underway and our goal remains to create fast frictionless connected transparent and personalized customer experiences.

Speaker 3: Our key areas of focus continue to be, first, a digital first approach for small customers. Second, a 360 degree view of the customer.

Key areas of focus continue to be first.

A digital first approach to small customers second to 360 degree view of the customer.

Speaker 3: Third, simplified and standardized commercial terms, billing processes and customer support. Four, seamless digital product trials and digital purchasing. And fifth, data-driven and AI-powered sales and marketing. We expect these changes to redefine our customer experience to match their expectations by the end of 2023, by which time a large portion of customer facing sales will be on claim- Changing their

Third simplified and standardized commercial terms billing processes and customer support for seamless digital product trial digital purchasing and data driven and AI powered sales and marketing. We expect these changes to redefine the customer experience to match their expectations by the end of 2023 by which time.

A large portion of the customer facing sales sales operations and support.

Speaker 3: Sales operations and support could be digitized in order.

Digitize and automate them.

Speaker 3: The impact of this should be twofold. First, we believe delighting our customers will translate to improve, that promote a score leading to improved retention and new sales opportunities.

Impact of this should be truthful.

We believe delighting our customers will translate to improved net promoter score leading to improved retention and new sales opportunities and second decreasing the cost to serve.

Speaker 3: Decreasing the cost to customers enables us to reallocate funds to pursue new organic Bahama pointing at No. 1 in the global markets from the Theory of Beligraph.

Customers enables us to reallocate funds.

Pursue new organic growth opportunities, improving our agility to test new product ideas quickly with customers, which we believe will lead to further improvements in the top and bottom lines.

Speaker 3: improving our agility to test new product ideas quickly with customers, which we believe would lead to further improvements in the top and bottom line.

Speaker 3: So let me now turn to product innovation. Last year we ramped up our focus and our investment in product innovation and we will continue to do so. We expect new products and product enhancements will be a key lever to accelerate revenue going forward.

So let me now turn to product innovation.

Last year, we ramped up our focus and our investments in product innovation and we will continue to do so.

We expect new products and product enhancements will be a key lever to accelerate revenue going forward.

Speaker 3: and our product development teams are making good progress.

And our product development teams are making good progress.

Speaker 3: Entering 2022, the product organization is prioritizing resources where we can build and maintain leadership positions and support for your products, a shift from our historical approach of making small investments in many...

Entering 2022, the product organization is prioritizing resources, where we can build and maintain leadership positions and support fewer products.

From a historical approach of making small investments to many products.

Speaker 3: The organizational design model enables us to work as a better integrated, more effective team moving from an organization with data to a data-driven organization.

Organizational design model enables us to work as a better integrated more effective team moving from an organization with Dana to a data driven organization.

Speaker 3: Our content is a significant competitive advantage and differentiates us against our key competitors.

Our content is a significant competitive advantage and differentiates us.

Thanks to our key competitors.

Speaker 3: The new product organisation structure we formed last year positions us to achieve greater success by leveraging that valuable content, enriching it with world-class AI and machine learning, investable software and delivering it in the cloud.

The new product organizational structure, we formed last year positions us to achieve greater success by leveraging that valuable content enriching it with world class AI and machine learning and best of breed software and delivering it in the cloud.

Speaker 3: Investing in an improved user experience across our products is another important priority so that our customers can interact with our content with minimal points.

Investing in an improved user experience across our products is another important priority so that our customers can interact with our content with minimal points of friction.

Speaker 3: And we're increasing investments in our people as well as technology and product organizations to expand and accelerate.

And we are increasing investments in our people as well as technology and product organizations.

Expand and accelerate innovation and speed to market.

Speaker 3: We believe this will enable us to continue to be leaders within our core market segments and allow us to expand into adjacent markets.

We believe this will enable us to continue to be leaders within our core market segments and allow us to expand into adjacent market opportunities.

Speaker 3: And lastly, here are some examples of products and initiatives in which we're investing in contributing to higher community.

And lastly, here's some examples of products and initiatives in which we're investing in are contributing to higher <unk>.

Extra lower indirect tax two of our strategic initiatives released new and enhanced product modules last year, which were well received by customers and we expect they will again contribute to higher organic revenue growth in 2022 and beyond.

Speaker 3: released new and enhanced product modules last year, which were well received by customers.

Speaker 3: And we expect they will again contribute to higher organic revenue growth in 2022.

Speaker 3: We also made good progress last year forming a centralised partnership team led by our corporate...

We also made good progress last year formed a centralized partnership team led by our corporate group.

Speaker 3: which we are seeing good traction having signed partnership agreements with Oracle, SAP, AWS,

Which we are seeing good traction having signed partnership agreements with Oracle.

Asap.

W. S Ultra books.

Speaker 3: In 2021, we accelerate the work we're doing to provide our content and workforce solutions to customers by...

And in 2021, we accelerated the work we're doing to provide our content of workforce solutions to customers by our API.

Speaker 3: For 2022, we'll accelerate and expand our API ecosystem, where we can improve the experience for both existing and new customers.

For 2020 to accelerate and expand our API ecosystem, where we can improve the experience for both existing and new customers. We are confident this will open up new channels and new business models, and new product offerings and will help grow our partner ecosystem.

Speaker 3: We're confident this will open up new channels, new business models, and new product offerings and will help grow our partner economy.

Speaker 3: And as our capabilities surrounding APIs continue to grow, it will enable us to further integrate our best and fast content and solutions into our customers' workflows, contributing to our growth.

And as our capabilities surrounding Apis continue to grow it will enable us to further integrate.

Our best in class content and solutions into our customers workflows contributing to our growth.

Speaker 3: Before I turn it over to Mike, let me discuss our updated guidance for 2022 and 2023.

Before I turn it over to Mike let.

Let me discuss our updated guidance for 2022 and 2023.

Speaker 3: I'm very pleased to report that given the positive trajectory of the business, we're increasing our revenue, adjusted EBITDA margin and free cash flow guidance from that which we provided yesterday, March 2021.

I'm very pleased to report given the positive trajectory of the business. We are increasing our revenue adjusted EBITA margin and free cash flow guidance from that which we provided in investor day in March 2021.

Speaker 3: Now forecast total company organic revenue growth of approximately 5%

Now forecast total company organic revenue growth of approximately 5% for <unk>.

Speaker 3: 2022 and 5.5 to 6% for 2023. Let me remind you that 2021's organic revenue growth of 5% included about 100 basis points benefit from easier year-over-year comps related to COVID-19 items in 2020.

<unk> thousand 22, and five 5% to 6% for 2023.

Let me remind you that 2021 organic revenue growth of 5% included about 100 basis point benefit from easier year over year comps related to COVID-19 items in 2020.

Speaker 3: Big three organic revenue growth is forecast between 6 and 6.5 percent in 2022 and 6.5 to 7 percent in 2023. We forecast an adjusted EBITDA margin of 35 percent for 2022 and between 39 and 40 percent for 2023.

Big three organic revenue growth is forecast between six and six 5% in 2022 and six 5% to 7% in 2023, we forecast an adjusted adjusted EBITDA margin of 35% for 2020.

And between 39 and 40% for 2023.

Speaker 3: And free cash flow is now forecast at about $1.3 billion for 2022 and between $1.9 to $2 billion with free cash flow per share between $3.90 and $4.10 for 2023.

Free cash flow is now forecast at about one $3 billion for 2022 and between $1 $9 2 billion with free cash flow per share between $3 90, and $4 10 for 2023.

Speaker 3: I'm confident we'll achieve these high targets. Let me now turn it over to Mike. Thank you Steve and thanks for joining us.

I am confident we'll achieve these high targets and let me now turn it over to Mike.

Thank you, Steve and thanks for joining us today.

Speaker 2: As a reminder, I will talk to revenue growth before currency and on an organic basis.

As a reminder, I will talk to revenue growth before currency and on an organic basis let.

Speaker 2: Let me start by discussing the fourth quarter revenue performance of our Big Three segment.

Let me start by discussing our fourth quarter revenue performance of our big three segments.

Speaker 2: Revenues were up 7% organically and at constant currency for the quarter. This marks the sixth consecutive quarter of day three segments have grown at least 5%.

Revenues were up 7% organically and at constant currency for the quarter.

This marks the sixth consecutive quarter of day three segments have grown at least 5%.

Speaker 2: Legal professionals' total revenues increased 5% and organic revenues increased 6% in the April .

Legal professionals total revenues increased 5% and organic revenues increased 6% in the fourth quarter.

Speaker 2: recurring organic revenue grew 6% and transaction revenues increased 6%.

Recurring organic revenue grew 6% and transaction revenues increased 6%.

Speaker 2: Fourth quarter organic revenue growth was driven by practical law, elite, fine law, and our government business.

Fourth quarter organic revenue growth was driven by practical law.

ALLETE bind.

By law and our government business.

Speaker 2: Westlaw Edge added about 100 basis points to Legal's organic growth rate, is maintaining a healthy premium, and is expected to continue to contribute at a similar level going forward, supported by the planned release of Edge 2.0 during the second half of this year.

<unk> added about 100 basis points to Legals organic growth rate.

Maintaining a healthy premium and is expected to continue to contribute at a similar level going forward supported by the planned release of edge to <unk> during the second half of this year.

Speaker 2: Our government business, which is reported to have been legal and includes much of our risk, fraud, and compliance businesses, through 7% for the quarter and 9% for the year, and exited Q4, which drawn sales and good momentum, entering 2022.

Our government business, which is reported within legal and includes much of our risk and compliance businesses grew 7% for the quarter and 9% for the year and exited Q4 with strong sales and good momentum entering 2022.

Speaker 2: quarter to quarter performance compared to this business given the government contracting process.

Quarter to quarter performance can vary for this business given the government contracting process.

Speaker 2: project work, and fiscal year funding from the various agencies.

<unk> four and fiscal year funding from the various agencies.

Speaker 2: We believe 2022 will be another year of healthy revenue growth supported by strong Q4 2021 sales.

<unk> 2022 will be another year of healthy revenue growth supported by strong Q4 2021 sales.

Speaker 2: In our corporate segment, total and organic revenues increased 7% per quarter due to recurring organic revenue growth of 7% and transactions organic revenue growth of 4%.

In our corporate segment.

Total and organic revenues increased 7% for the quarter due to recurring organic revenue growth of 7% and transactions organic revenue growth of 4%.

Speaker 2: Our current revenue is driven by clear, practical law, indirect tax, and legal software, as well as our businesses in Latin America.

Current revenue was driven by clear.

Practical law indoor.

Indirect tax and legal software.

As well as our businesses in Latin America.

Speaker 2: And finally, Taxim Accountants' total and organic fourth quarter revenues grew 9%, driven by 9% recurring organic revenue growth thanks to strong performance in our audit solutions and Latin America businesses.

And finally tax <unk> accounting total and organic fourth quarter revenues grew 9% driven by 9% recurring organic revenue growth. Thanks to a strong performance on our audit solutions and Latin America businesses.

Speaker 2: And transactions organic revenue increased 10%.

And transactions organic revenue increased 10%.

Speaker 2: Moving to Reuters news, fourth quarter performance is very strong with total and organic revenue growth of 12%.

Moving to Reuters news.

Fourth quarter performance was very strong with total and organic revenue growth of 12%.

Speaker 2: Waters achieved growth across all business lines, including the bounce back in the events business, as it continues to recover from the negative impact from COVID in 2020.

Water has achieved growth across all business lines, including the bounce back in the events business as it continues to recover from the negative impact from Covid and 2020.

Speaker 2: In global print, total and organic revenue is declining 4%, better than expected.

And global print total and organic revenues declined 4%.

Better than expected.

Speaker 2: On a consolidated basis, fourth quarter total and organic revenues each increased 6%.

On a consolidated basis fourth quarter total and organic revenues each increased 6%.

Speaker 2: Before turning to profitability, let's look closer at recurring and transaction revenue results for the fourth quarter.

Before turning to profitability, let's look closer at recurring and transaction revenue results for the fourth quarter.

Speaker 2: Starting on the left side, total company organic revenue for the fourth quarter 2021 was up 6%, compared to 2% in the prior year period which was impacted by COVID.

Starting on the left side total company organic revenue for the fourth quarter 2021 was up 6%.

Care to 2% in the prior year period, which was impacted by Covid.

Speaker 2: Fourth quarter 2021 performance for the gate three was strong with organic revenues up 7% compared to 5% in the same period last year.

Fourth quarter 2021 performance for the Big three was strong with organic revenues up 7% compared to 5% in the same period last year.

Speaker 2: which was partly driven by strong performance in the corporate segment, which grew 7% organically compared to 3% in Q4 2020.

This was partly driven by strong performance in the corporate segment, which grew 7% organically compared to 3% in Q4 2020.

Speaker 2: Total company recurring organic revenues grew 6% in Q4.

Total company recurring organic revenues grew 6% in Q4.

Speaker 2: 110 basis points above Q4 2020, with Big Three recurring organic revenues up 7%, above last year's fourth quarter growth at 6%.

110 basis points above Q4, 2020 with Fig.

Big three recurring organic revenues up 7% above last year's fourth quarter growth of 6%.

Speaker 2: According to the graph in the bottom right of the slide, transaction revenues in Q4 were up 16% compared to the prior year period when COVID affected our implementation services and the voters against businesses.

Turning to the graph in the bottom right of the slide transaction revenues in Q4 were up 16% compared to the prior year period.

Covid affected our implementation services and enrolled as events business.

Speaker 2: We continue to remain encouraged by momentum in 2021, especially for recurring revenues. This gives us confidence in the Director of the Business and our ability to achieve our 2022 target.

We continue to remain encouraged our momentum in 2021, especially for recurring revenues.

This gives us confidence in the trajectory of the business and our ability to achieve our 2022 targets.

Speaker 2: Turning to our profitability performance in the fourth quarter, adjusted EBITDA to the big three segments was $488 million, down 2% from the prior year period, driven by higher performance bonuses spent.

Turning to our profitability performance.

Fourth quarter adjusted EBITDA for the Big three segments was $488 million.

Down 2% from the prior year period, driven by higher performance bonus expense.

Speaker 2: Fourth quarter costs also included a discretionary investment of $25 million related to go-to-market initiative.

Fourth quarter cost also included a discretionary investment of $25 million related to go to market initiatives.

Speaker 2: product development initiatives, and data and analytics tools to support the customer experience to better position us for 2022.

Product development initiatives and data and analytics tools to support the customer experience to better position us for 2022.

Speaker 2: I will remind you the change program operating costs are recorded at the corporate level.

I will remind you of the change program operating cost are recorded at the corporate level.

Speaker 2: Moving to Reuters news, adjusted EBITDA is $15 million.

Moving to Reuters news adjusted EBITDA was $15 million.

Speaker 2: 9 million more than the prior year period driven by revenue growth.

9 million more than the prior year period, driven by revenue growth.

Speaker 2: Noble Prince suggested either that I was flat at $61 million with a margin of 35.9%.

Global Print's adjusted EBITDA was flat at $61 million with a margin of 35, 9%.

Speaker 2: 130 basis points higher in Q4 2020.

130 basis points higher than Q4 2020.

Speaker 2: So in aggregate, total company adjusted EBITDA for the quarter is 452 million, a 14% decrease versus Q4 2020.

So in aggregate total company adjusted EBITDA for the quarter was $452 million.

A 14% decrease versus Q4 2020.

Speaker 2: excluding costs related to the change program, adjusted EBITDA increased 1%.

Excluding costs related to the change program adjusted EBITDA increased 1%.

Speaker 2: Fourth quarter's adjusted EBITDA margin is 26.4% and is 31.1% on an underlying basis.

Fourth quarter adjusted EBITDA margin was 26, 4% and was 31, 1% on an underlying basis.

Speaker 2: excluding costs related to the change program.

Excluding cost related to the change program.

Speaker 2: For the full year, Total Company adjusted EBITDA margin just 31%. Excluding costs related to the...

For the full year.

Total company adjusted EBITDA margin was 31%.

Excluding costs related to the change program.

Speaker 2: Full year adjusted EBITDA margin is 33.9%.

Full year adjusted EBITDA margin was 33, 9%.

Speaker 2: Let me turn to our earnings per share and free cash flow performance.

Now, let me turn to our earnings per share and free cash flow performance.

Speaker 2: Starting with earnings per share, adjusted EPS was 43 cents per share, closest 54 cents per share in the prior year period.

Starting with earnings per share adjusted EPS was <unk> 43 per share versus 54 per share in the prior year period.

Speaker 2: Full note, fourth quarter adjusted EPS was reduced by approximately four cents due to the additional 25 million investments received for.

Fourth quarter adjusted EPS was reduced by approximately four cents due to the additional $25 million investment in Q4.

Speaker 2: Let me now turn to our pre-cashflow performance for the full year 2021.

Let me now turn to our free cash flow performance for the full year of 2021.

Speaker 2: finished the year on a strong footing and exceeded our guidance thanks to strong task collections in Q4.

Finished the year on a strong footing and exceeded our guidance thanks to strong cash collections in Q4.

Speaker 2: This performance reflects the momentum of our businesses as we transition into 2022 and continue to execute on the change program initiatives.

This performance reflects the momentum of our businesses as we transition into 2022 and continue to execute on the change program initiatives.

Speaker 2: The recorded pre-cash flow was $1.3 billion, $74 million lower.

Reported free cash flow was $1 3 billion.

$74 million lower than in 2020.

Speaker 2: Consistent with previous quarters, this slide removes the distorting factors impacting pre-cashflow performance.

Consistent with previous quarters. This slide removes the distorting factors impacting free cash flow performance.

Speaker 2: Working from the bottom of the slide upwards, the cash outflows from the discontinued operations component of our pre-cash flow is 51 million more than the prior year.

Working from the bottom of the slide upwards, the cash outflows from the discontinued operations component of our free cash flow.

$51 million more than the prior year.

Speaker 2: This was primarily due to payments to the UK tax authority related to our former definitive business.

This was primarily due to payments to the UK tax authority related to our former definitive business.

Speaker 2: For the full year, we made 166 million of CHANGE program payments as compared to the representative related separation cost of 95 million in the prior year.

For the full year, we made $166 million of change program payments as compare to refinance it related separation costs of $95 million in the prior year.

Speaker 2: So if you adjust for these items, comparable pre-cash flow from continuing operations was just shy of $1.5 billion.

So if you adjust for these items comparable free cash flow from continuing operations was just shy of one 5 billion.

Speaker 2: 189 million better than the prior year.

$189 million better than the prior year.

Speaker 2: This increase was primarily due to higher adjusted EBITDA and dividends from our interest In indication of internalall

This increase was primarily due to higher adjusted EBITDA and dividends from our interest in <unk>.

Speaker 2: We'll now provide an update on our changed program progress.

I will now provide an update on our change program progress.

Speaker 2: In the fourth quarter, we achieved 85 million annual run rate operating expense savings.

In the fourth quarter, we achieved $85 million annual run rate operating expense savings.

Speaker 2: This brings the cumulative annual run rate operating expense savings to $217 million for the change program, which exceeds our target of $200 million.

This brings the cumulative annual run rate operating expense savings of $217 million for the change program, which.

Which exceeded our target of $200 million.

Speaker 2: This puts us more than one third of the way toward achieving our goal of 600 million of gross savings by 2023.

This puts us more than one third of the way toward achieving our goal of $600 million of gross savings by 2023.

Speaker 2: As a reminder, we anticipate reinvesting $200 million of the projected $600 million savings back into the business for a net savings of $400 million.

As a reminder, we anticipate reinvesting $200 million of the projected $600 million savings back into the business for a net savings of $400 million.

Speaker 2: Now, an update on our exchange program costs for the fourth quarter and full year 2021.

Now an update on our change program costs for the fourth quarter and full year 2021.

Speaker 2: danger in the fourth quarter was $125 million.

Spend during the fourth quarter was $125 million.

Speaker 2: with 78 million of OPEX and 47 million of CAPEX.

Price of $78 million of Opex from $47 million of Capex.

Speaker 2: For the full year, Change Program OPEX and CAPEX can total $295 million.

For the full year change program, Opex, and Capex spend totaled $295 million.

Speaker 2: at the lower end of the range of $290 million to $320 million we had forecast last year.

At the lower end of the range of 290 million to $320 million of forecast last year.

Speaker 2: The end of this forecast is stepped up in 2022 related to cloud migration, streamlining internal systems, and product engineering.

Dennis forecast the step up in 2022 related to cloud migration.

Streamlining internal systems and product engineering.

Speaker 2: We are still expecting to incur approximately $600 million over the course of the program, and there is no change in the anticipated split at about 60% OpEx and 40% CapEx.

We are still expecting to incur approximately $600 million over the course of the program and there is no change in the anticipated sport at about 60% Opex and 40% Capex.

Speaker 2: The NASA guidance update on our capital structure at year end.

I will now provide an update on our capital structure at year end.

Speaker 2: As you can see, our capital structure and the liquidity position remain strong as we exited 2021.

As you can see our capital structure and liquidity position remains strong as we exited 2021.

Speaker 2: We generated $1.3 billion in free cash flow last year.

We generated $1 3 billion of free cash flow last year.

Speaker 2: We had $0.8 billion cash on hand on December 31st.

We had <unk> 8 billion of cash on hand at December 31.

Speaker 2: We have an undrawn 1.8 billion revolving credit facility, and we also have a 1.8 billion commercial paper program.

We have an undrawn $1 8 billion revolving credit facility and we'll also have a $1 8 billion commercial paper program.

Speaker 2: From a liquidity and capital structure standpoint, we enter 2022 in a very strong position.

From a liquidity and capital structure standpoint, we enter 2022 and a very strong position.

Speaker 2: And we would like to put that capital to work to further accelerate our growth.

And we would like to put that capital to work to further accelerate our growth.

Speaker 2: We continue to evaluate potential acquisitions within our core markets and have the ability and desire to move quickly if an opportunity presents itself this year.

We continue to evaluate potential acquisitions within our core markets and have the ability and desire to move quickly if an opportunity presents itself this year.

One final point.

Speaker 2: We received notices from the UK tax authorities requiring us to pay about $80 million in March related to an ongoing tax matter.

We received notices from the UK tax authorities, requiring us to pay about $80 million in March related to an ongoing tax matter.

Speaker 2: While we believe we will prevail on these issues and be refunded substantially all the payments, including those made last year, we are required to pay the amount upfront while contesting them.

While we believe we will prevail on these issues and be refunded substantially all the payments.

Clothing, those made last year, we are required to pay the amount upfront whilst and testing them.

Speaker 2: Any payment would not reflect our view of the merits of the case, as we believe our position is supported by the weight of law.

Any payment would not reflect our view of the merits of the case as we believe our position is supported other way of law.

Speaker 2: Regarding our investment in the London Stock Exchange Group, the pre-tax value of our 72.4 million shares is currently $7 billion, or an estimated $14 per share in TR stock price.

Regarding our investment in the London stock Exchange group.

Pre tax value of our 72 4 million shares is currently 7 billion or an estimated $14 per share and <unk> stock price.

Speaker 2: In March 2021, we sold 10.1 million shares to pay taxes related to the transaction.

In March 2021, we sold $10 1 million shares to pay taxes related to the transaction.

Speaker 2: We expect to receive dividends from LSAC of more than $75 million in 2022, based on LSAC's current annual dividend payout.

We expect to receive dividends from outside of more than $75 million in 2022 based on <unk> current annual dividend payout.

Speaker 2: I will remind you dividends from the investment are part of our pre-cash flow.

I will remind you dividends from the investments are part of our free cash flow.

Speaker 2: We remain subject to a lockup for our L-SUCK shares until January 30th, 2023, at which time we can sell approximately one-third of the shares.

We remain subject to a lockup for altra shares until January 32023 at which time, we can sell approximately one third of the shares.

Speaker 2: The remaining two tranches can be sold in January 2024 and 2025.

The remaining two tranches can be sold in January 2024, and 2025.

Speaker 2: We view our equity interest in LSAG as a store of value, which we expect to continue to monetize over time, which provides us with a significant level of financial flexibility related to the use of proceeds.

We see our equity interest in <unk> as a store of value, which we expect to continue to monetize over time.

Which provides us with a significant level of financial flexibility related to the use of proceeds.

Speaker 2: Finally, today, we announce a 10% annualized dividend increase.

Finally, today, we announced a 10% annualized dividend increase.

Speaker 2: the largest percentage increase since 2008, taking our annual dividend to $1.78 per share up 16 cents per share, and then $1.62.

The largest percentage increase since 2008.

Taking our annual dividend to $1 78 per share up <unk> 16 per share from $1 62.

Speaker 2: It also marks the 29th consecutive year of annual dividend increases for the company.

This also marks the 29th consecutive year of annual dividend increases for the company.

Speaker 2: Increase will be effective with our Q1 dividend payable next month.

The increase will be effective with our Q1 dividend payable next month.

Speaker 2: These annual dividend increases speak to the solidity of our business and consistent in growing free cash flow generation.

These annual dividend increases speak to the solidity of our business and consistent and growing free cash flow generation.

Speaker 2: So now turn to our outlook for 2022 and 2023.

I will now turn to our outlook for 2022 and 2023.

Speaker 2: As Steve mentioned, we're increasing our guidance for both years since we expect to continue the positive trajectory for all key metrics.

As Steve mentioned, we are increasing our guidance for both years since we expect to continue the positive trajectory for all key metrics.

Speaker 2: Organic revenue is expected to continue its upward trajectory as we work to become a consistent and sustainable bits and digits grower.

Organic revenue is expected to continue its upward trajectory as we work to become a consistent and sustainable mid single digit grower.

Speaker 2: We forecast organic revenue growth at about 5% in 2022 and 5.5% to 6% in 2023.

We forecast organic revenue growth of about 5% in 2022, and five 5% to 6% in 2023.

Speaker 2: D drivers include continued investment in our seven strategic priorities and delivering on our digital and sales effectiveness work streams in the change program.

Key drivers include continued investment in our seven strategic priorities.

And delivering on our digital and sales effectiveness work streams and the change program.

Speaker 2: We forecast the big three organic revenues to grow between 6% and 6.5% in 2022, and between 6.5% and 7% in 2023.

We forecast the big three organic revenues to grow between 6% and six 5% in 2022 and between six 5% and 7% in 2023.

Speaker 2: We also believe our legal business can grow 5% to 7% over the cycle, versus the 5% to 6%, we mentioned at investor day last year, with continued margin expansion.

We also believe our legal business can grow 5% to 7% over the cycle versus the 5%, 6%. We mentioned at Investor Day last year with continued margin expansion.

Speaker 2: Turning to adjusted EBITDA margin pre-tach flow, our guidance in 2022 reflects the deluded impact of the change program investment.

Turning to adjusted EBITDA margin free cash flow guidance in 2022 reflects the dilutive impact of the change program investments.

Speaker 2: We forecast adjusted EBITDA margin in 2022 will increase to about 35%, with an underlying margin of over 37%, putting us on a path to achieve our 2023 margin target of 39% to 40%.

We forecast adjusted EBITDA margin in 2022 will increase to about 35%.

Some underlying margin of over 37%, putting us on a path to achieve our 2023 margin target of 39% to 40%.

Speaker 2: Recash flow is expected to be approximately $1.3 billion in 2022 and includes change program spend of over $300 million.

Free cash flow is expected to be approximately $1 3 billion in 2022 and includes change program stem of over $300 million.

Speaker 2: Recash flow is expected to increase to between $1.9 billion and $2 billion in 2023, driven by higher revenue growth and savings and efficiencies from the change program.

Free cash flow is expected to increase to between $1 9 billion and $2 billion in 2023, driven by higher revenue growth and savings and efficiencies from the change program.

Speaker 2: Let me conclude with our updated and detailed guidance for 2022 and 2023.

Let me conclude with our updated and detailed guidance for 2022 and 2023.

Speaker 2: This slide includes the guidance we provided in February 2021, enabling you to compare the changes and raised guidance.

This slide includes the guidance we provided in February 2021, enabling you to compare the changes and raised guidance.

Speaker 2: I'll also note we expect our first quarter revenue growth rate and adjusted EBITDA margin to be comparable to our full year 2022 guidance target.

I'll also note, we expect our first quarter revenue growth rate and adjusted EBITDA margin to be comparable to our full year 2022 guidance targets.

Speaker 2: Now, the guidance metrics on this slide are self-explanatory, but I would like to address the outlook for our effective, our bill tax rate, and our cash tax rate for 2022 and 2023 based on current tax law.

Now to guidance metrics on the slide are self explanatory, but I would like to address the outlook for our effective book tax rate and our cash tax rate for 2022 and 2023 based on current tax law.

Speaker 2: In 2021, our effective book tax rate was 14% and included a 200 basis point benefit from the reversal of reserves for the prior tax year.

In 2021, our effective book tax rate was 14% and included a 200 basis point benefit from the reversal of reserves for prior tax year.

Speaker 2: This benefit will not reoccur in 2022.

This benefit will not reoccur in 2022.

Speaker 2: We also forecast in 2022 minimum taxes this year, which bumps the expected ETR up to between 19% and 21%.

We also forecast from 2022 minimum taxes, this year, which bumps the expected ETR ought to between 19% and 21%.

Speaker 2: Looking to 2023, we expect our ETR to decline to the upper teens, and as a rule of thumb, our cash tax rate is forecast to be approximately 5% below our book or effective tax rate.

Looking to 2023, we expect our ETR to decline to the upper teens and as a rule of thumb, our cash tax rate is forecast to be approximately 5% below our book our effective tax rate.

Speaker 2: This is fully reflected in our 2023 free cash flow guidance of $1.9 billion to $2 billion.

This is fully reflected in our 2023 free cash flow guidance of $1 9 billion to $2 billion.

It's employed.

Speaker 2: Our confidence in achieving our 2022 and 2023 guidance has only increased from one year ago.

Our confidence in achieving our 2022 and 2023 guidance is only increase from one year ago.

Speaker 2: We continue to believe we can achieve faster revenue growth.

We continue to believe we can achieve faster revenue growth.

Speaker 2: higher profitability, lower capital intensity, and significantly higher pre-task flow as we benefit from transitioning to a content-enabled technology company.

Higher profitability.

Lower capital intensity and significantly higher free cash flow as we benefit from transitioning to a content enabled technology company.

Speaker 2: Let me ask Steve to wrap up before we turn to your questions.

Paul Let me ask Steve to wrap up before we turn to your questions.

Speaker 3: Thank you, Mike. I will conclude by saying that we're very pleased with our 2021 performance, but we still have much more work ahead.

Thank you Mike I will conclude by saying, we're very pleased with that 2021 performance, but we still have much more work ahead.

Speaker 3: Our competence is strengthened by 2021 organic revenue, and we have good momentum entering 2022.

Competence is strengthened by 2021 organic revenue and we have good momentum entering 2022.

Speaker 3: The change program is progressing well and we're confident in achieving our $600 million savings target and our $100 million incremental revenue target.

The change program is progressing well and are confident in achieving our $600 million savings target.

$100 million of incremental revenue target.

Speaker 3: We have numerous levers to pull that should help us accelerate our growth.

We have numerous levers to pull that should help us accelerate our growth and we're building a strong leadership team with new talent that supports different perspectives.

Speaker 3: And we're building a strong leadership team with new talent that's got different perspectives.

Speaker 3: complemented the skills of existing leadership and energized our teams.

Complemented the skills of the existing leadership and is energized teams.

Lastly.

Speaker 3: elevate our ambition we kicked off the year with confidence by announcing a new company purpose which is to inform the way forward. This unites our commercial

To elevate our ambition, we kicked off the year with confidence by announcing a new company purpose.

Choose to inform the way forward.

This unites our commercial strengths.

The critical role we play in Society.

Speaker 3: Customers and employees have responded very positively to this.

Customers and employees have responded very positively to this reader.

Speaker 3: We doubled commitment to serve professionals, advance critical institutions, and to build trust through our products and with our actions.

Redoubled commitment to serve professionals advanced critical institutions and to build trust through our products and the actions.

Let me now turn it back over to Frank.

Speaker 2: Thanks very much Steve and Mike and that concludes our prepared remarks. I'd now like to open the call for questions operators. So if we could have the first question please.

Thanks, very much Steve and Mike and that concludes our prepared remarks now I'd like to open the call for questions. Operator, So if we could have the first question. Please.

Speaker 1: Thank you. So your first question is from the line of Drew McReynolds of RBC Capital Markets.

Thank you. So your first question is from the line of.

Drew mcreynolds of RBC capital markets. Please go ahead.

Speaker 4: Yeah, thanks very much and good morning and Frank, I want to wish you all the best. You've been just great to work with over the years. So all the best and of course welcome Gary as well.

Yeah. Thanks, Thanks, very much and good morning, Frank want to wish you all the best you have been great to work with over the years. So all the best and of course, welcome Gary as well.

Speaker 4: Just with respect to the 2022 and 2023 outlooks, that may be a question for you, Steve.

Just with respect to the.

2022, and 2023 outlook, maybe a question for you Steve.

Speaker 4: Obviously coming off a upwardly revised 2021, so good to see the upwardly revised on the upwardly revised. Just wondering, you know, from your perspective, if you go back a year from now, you provided 2021 guidance and you upwardly revised through the year. Is it kind of a similar setup here when you look at 2022? Because it certainly sounds like the net sales.

Obviously coming off a upwardly revised 2021, so so good to see the upwardly revised on the upwardly revised just wondering.

From your perspective, if you go back a year from now you provided 2021 guidance and the upwardly revised through the year is it kind of a similar setup here. When you look at 2022, because it certainly sounds like the net sales environment is still quite strong and of course, you have very good visibility on how that flows through and then just a SEC.

Speaker 4: environment is still quite strong and of course you have very good visibility on how that flows through.

Speaker 4: And then just a second quick question for you, I guess, Mike, just on the buyback, just your latest thinking there. Good to see the buyback in Q4. Just wondering what your thoughts are for 2022. Thank you.

Quick question for you I guess, Mike just on the buyback.

Latest thinking there good to see the buyback in Q4, just wondering what your thoughts are for 2022. Thank you.

Speaker 3: Thanks Drew. With your right, sales performance is strong, it's building momentum and it's giving us confidence. And you're also correct in sort of pointing to the visibility that that provides us into our business. So, you know, as I said in my remarks, we're entering 2022 with real confidence.

Thanks.

Thanks drew.

Look you're right.

Sales performance.

It is strong and building momentum and it's giving us confidence.

And Youre also correct in sort of pointing to the visibility that that provides us.

Each of our business so.

As I said in my remarks.

We're entering 2022 with real confidence.

Speaker 3: We've also got a lot of work to do. So we're halfway through the change program. We are on track for all workstreams ahead with a couple of workstreams. But we're yet to really see it translate to the customer experience.

We've also got a lot of work to do so we're halfway through the change program.

We are on track for all work streams.

A couple of two extremes, but we're yet to really see it translate to the customer experience.

Speaker 3: And of course, we're still navigating virtual and hybrid working environments and entering the third year of the pandemic. Sorry

And of course, we're still navigating.

Virtual and hybrid working environments.

Entering the third year of the pandemic.

Speaker 3: You know, we believe that the change program is going to engender Thompson Waters with the capabilities required to provide a fundamentally improved customer experience, and that will fuel our growth. And we're very excited about that future. But we're also contending with a number of the macro challenges. We believe the change of growth will help defeat the challenges that were Kampfer CP who and the difficulties that Eric

We believe that the change program, she's going to engender Thomson Reuters with the capabilities required to provide a fundamentally improved customer experience.

That will fuel our growth.

And we're very excited about the future, but we're also contending with with with a number of the <unk>.

Macro challenges.

And as I said.

Speaker 2: I'll hand over to Mike for the buyback question. Drew, in regards to the buyback, I'll start. We're certainly in a highly advantaged position because of the strength of our balance sheet. As you mentioned, we completed the $1.2 billion buyback in Q4 2021. Our focus currently today is certainly...

I'll hand over to Mark for the buyback question Jerry in regards to the buyback I'll start we're certainly in a highly advantaged position because of the strength of our balance sheet. As you mentioned, we completed the $1 $2 billion buyback in Q4 of 2021, our focus currently today. It certainly completing the change program in 2022.

Speaker 2: completing the change program in 2022 by continuing to accelerate organic growth on a sustained basis.

Continuing to accelerate our organic growth on a sustained basis and we'd like to use our capital capacity to further accelerate or supplement our organic growth. So as we look at 2022.

Speaker 2: And we'd like to use our capital capacity to further accelerate or supplement our organic growth. So if we look at 2022, Drew, we're looking to put the capital to work in regards to acquisitions to supplement our growth. Buybacks are currently not contemplated at this point. Certainly we have a lot of flexibility and options, but we'll remain focused on accelerating our growth via acquisitions.

We're looking to put the capital to work in regards to acquisitions to supplement our growth buybacks are currently not contemplated at this point certainly we have a lot of flexibility and options, but we'll remain focused on accelerating our growth via acquisitions.

Understood. Thank you very much.

Sure.

Yeah.

Speaker 1: Thank you and your next question is from the line of Vince Valentini of TD Securities. Please go ahead.

Thank you.

Your next question is from the line of Vince Valentini.

TD Securities. Please go ahead.

Speaker 5: Thanks very much, Mike. Congrats to Frank as well, and all the best to you. The strong cover you some.

Thanks, very much Mike.

Congrats to Frank as well.

And all the best to you.

The strength of it.

Speaker 5: Yeah, you're welcome. Your stock's off like 4-5% today, which may surprise you. It surprises me a little bit given the strength of the revenue and the increased guidance. I think there may be a bit of concern about these extra costs in the fourth quarter.

You're welcome can you just talk about like 4% to 5% today, which may surprise, you that surprises me a little bit given the strength of the revenue and the increase.

Increased guidance I think there may be a bit of concern about these extra costs in the fourth quarter. So Mike I'm, hoping you can flesh that out a bit more detail. Both the extra compensation cost should talk about is this sort of one off or is this a new a new run rate and then the $25 million I am not sure I fully get it it's not part of the <unk>.

Speaker 5: flush that out in a bit more detail, both the extra compensation costs you talk about, is this some sort of one-off or is this a new run rate, and then the $25 million, I'm not sure I fully get it. It's not part of the change program, but it's related to go-forward improvements in sort of sales and service capabilities, and technically was that in the corporate knowing or was that spread across the other three or five divisions? Thanks.

<unk> program, but it's related to go forward improvements and sort of sales and service capabilities and technically was that in the corporate line or was that spread across the.

The other three or five divisions.

Speaker 2: Yeah, Vince, multiple good points there. Let me just break those down one by one and if I missed one, keep me honest here, Vince, as we go through. Let me start with the performance bonus expense through Vince. That relates to our 2021 Annual Incentive Plan upon which there are three levers.

Yeah, Vince multiple good points, though let me just break those down one by one in if I Miss one I keep me honest here events as we go through let me start with the performance bonus expense.

That relates to our 2021 annual incentive plan upon which there are three levers.

Speaker 2: equally weighted organic revenue, book of business, and cash AY, which is Ibarra's capital expenditures.

Equity weighted organic revenue book of business and cash NOI, which is EBITDA less capital expenditures. If you go back a year ago, our organic growth rate guidance was 3% to 4% we ended at five two.

Speaker 2: If you go back a year ago, our organic growth rate guidance was 3 to 4%. We ended at 5.2.

Speaker 2: Our pre-tax flow, which is a key lever for our long-term incentive, that target was $1 billion to $1.1 billion. We ended up at $1.3 billion. So if you look at our performance bonus expense for full year 2021, that diluted our full year margin by about 100 basis points. So that's truly a result of our performance.

Our free cash flow, which is a key lever for our long term incentive that target was $1 billion to $1. One we ended up at one three so if you look at our performance bonus expense for full year 2021 that the mood at our full year margin by about 100 basis points. So that's truly a result.

So as a result of our performance in 2021, whereby we exceeded our management plan, which governs our annual incentive plan and also governs our long term incentive plan. So that's truly based on the results that we incurred in 2021.

Speaker 2: in 2021, whereby we exceeded our management plan, which governs our annual incentive plan and also governs our long-term incentive plan. So that's truly based on the results that we incurred in 2021.

Speaker 2: Second, in regards to the change program, we still remain committed to investing $600 million in aggregate for 2021 and 2022. We spent less in 2021 than originally forecasted. That favorability will shift to 2022 to ensure that we do as much as we can to continue to improve the underlying customer experience which should accelerate our organic growth.

Second pointed in regards to the change program, we still remain committed to investing $600 million in aggregate for 2021 and 2022, we spent less in 2021 and originally forecasted that favorability will shift to 2022 to ensure that we do as much as we can.

To continue to improve the underlying customer experience, which should accelerate our organic growth.

Speaker 2: Thirdly, in regards to the $25 million, that was truly opportunistic on our part, Vince, in partnership with Brian Pecorale and our segment leaders. And by the way, this $25 million is within our respective segments and functions. It's not part of corporate.

Thirdly in regards to the $25 million that was truly opportunistic on our part to dance.

<unk> with Brian Peck of rally and our segment leaders and by the way this $25 million is within our respective segments and functions thats not part of core corporate we viewed it as an opportunity to start 2022 strong we didn't have to do it but it enabled us to invest more in ourselves.

Speaker 2: We viewed it as an opportunity to start 2022 strong. We didn't have to do it.

Speaker 2: but it enabled us to invest more in our sales resources, our marketing resources.

Resources and marketing resources, and also with David <unk>, Our Chief product Officer, Some ultra who leads engineering and also with Kirstie dropped one to Chris on the data and analytics. So the additional investment.

Speaker 2: and also with David Lying, our Chief Product Officer, John Mulhulter, who leads engineering, and also with Kirsty Grof, Linda Christ, on the data and analytics. So the additional investment events in Q4 was truly discretionary, was very optimistic in our standpoint.

In Q4, which truly discretionary was very optimistic in our standpoint to help us continue our momentum and progress in 2022.

Speaker 2: to help us continue our momentum and progress in 2022.

Speaker 2: I, in my perspective, I'm not concerned about that. I think there's too much of a pivot.

From my perspective, that's not concerned about that I think there is too much of a pivot.

Speaker 2: We have a clear line of sight to achieving our 2022 EBITDA margin of approximately 35% and also we have equal confidence in achieving our 2023 EBITDA margin of 39% to 40%. It certainly has been held a lot of focus on us accelerating our organic growth. We did that in Q4. We had an opportunity to do investments to sustain that growth and not apologetic.

Have a clear line of sight to achieving our 2022.

EBITDA margin of approximately 35% and also we have equal confidence in achieving our 2023 EBITDA margin of 39% to 40.

Certainly it's been a hell of a lot of focus on us accelerating our organic growth. We did that in Q4, we had an opportunity to build investments to sustain that growth and not apologetic.

Speaker 5: Thanks for that. Can I just clarify on the compensation impact of 100 basis points? Is that a bit of a timing issue because the targets weren't fully met in 2020 for reasons that may have been beyond management's control, but you're sort of snapping back to a full year of all those performance bonuses being paid. So if I look forward to 2022, even if you meet all your targets, there won't be another 100 basis point drag. It'll be more of a plateau.

Thanks for that and can I, just clarify on the compensation impact of a 100 basis points is that a bit of a timing issue because the targets werent fully met in 2020 for.

The reasons that may or may not be on management's control, but you're sort of shopping back to a full year of of all of those performance bonuses being paid so if I look forward to 'twenty two even if you meet all your targets there won't be another 100 basis point drag it'll be more of a plateau.

Speaker 2: That's correct. Since 2021 is more of a plateau there, and we will get back more to that traditional in 2022. Excellent. Thank you.

That's correct Vince 2021 is more of a plateau, there and we will get back more to that traditional <unk> and.

In 2022.

Excellent. Thank you.

Make sure event that I addressed all your points.

I think you did.

Okay, Okay great.

Speaker 1: Thank you. And your next question is from the line of Tony Kaplan of Morgan Stanley . Please go ahead.

Thank you.

Your next question is from the line of Toni Kaplan.

Morgan Stanley . Please go ahead.

Hey, This is Greg Harrison on for Tony Thanks for taking my question.

Speaker 6: I just want to get your thoughts on the legal market going into 2022. Demand seems strong, but there's some wage inflation at law firms. How are you seeing the puts and takes there? I guess on one side you're helping them manage costs. I think you called out Elite as doing well in the quarter, but maybe there's some pressure. I just want to get your thoughts.

Just wanted to get your thoughts on the legal market going into 'twenty, two demand seems strong, but some wage inflation and law firms.

How are you seeing the puts and takes there I guess on one side, you're helping them manage costs I think you called out a lead is doing well in the quarter, but maybe there is some pressure just wanted to get your thoughts there. Thanks.

Speaker 3: There is indeed pressure. We're seeing across our legal customer base and the law firms, whether they're the largest global firms or mid-tier or smaller living sole practitioners, there's inflationary pressure across.

There is indeed pressure.

We're seeing across.

Across our customer legal customer base and the more firms.

The largest global firms or materially smaller giving sole practitioners.

As inflationary pressure across.

Speaker 7: But for us, this is simply

But.

For us.

Speaker 3: is a catalyst for providing additional value to our customers and future growth. Let me explain why.

<unk>.

As a catalyst for providing.

Additional value to our customers.

Future growth, let me explain why.

Tom.

<unk>.

Speaker 3: improve the efficiency and effectiveness of existing legal staff.

Improve the efficiency and effectiveness of existing legal staff.

Speaker 3: And I think it's fair to say the single biggest pressure that the law firms face is that wage inflation. And the second biggest is burnout of lawyers and our tools in open market.

And I think it's fair to say between the biggest biggest pressure that the lithium space deals is that wage inflation in the second biggest has been out of lawyers.

And our tools to enable them to.

Speaker 3: to get more productivity and more output from existing staff and enable the burnout to be managed. And there just aren't many ways to do that. And that's, we're starting to see that increased demand come through for our tools, particularly tools like high-Q and practical law, and particularly the integrations that we pointed to last quarter between high-Q, track al ministeriate it.

To get more productivity.

And more output from existing staff and enable the turn out to be managed and there just aren't many ways to do that.

We're starting to see that increased demand come through for our tools, particularly.

Particularly tools like <unk>, and practical law, and particularly the integrations that we pointed to last quarter between high Q track only three so a long way of saying.

Speaker 3: So a long way of saying this is a positive trend for us.

This is a positive trend for us.

Speaker 3: And if we continue to innovate around our product sets provided for law firms, we'll be facing a..

We continue to innovate.

Around the product ships provide for law firms.

See significant advantage from it.

Speaker 6: That's great color, thank you. And then just a quick follow up and just stick with legal. So EDGE 2.0, if you can give any color on sort of what the go-to-market strategy is going to be, is it going to replace one, is it going to be modular? And then also 1.0 has been pretty consistent, 100 basis points uplift to growth. I mean, do you have sort of any expectations going forward? If you could just help us kind of walk through what EDGE momentum and sort of life going forward will be.

That's great color. Thank you and then just a quick follow up and just stick with legal.

So I had to point out if you can give any color on sort of what the go to market strategy is going to be is it going to be is it going to replace one is it going to be modular.

And then also one point that has been pretty consistent of 100 basis points uplift to growth I mean, do you have sort of any expectations going forward. If you could just help us kind of walk through what the <unk> momentum and sort of life going forward will be.

Speaker 2: Yeah, I'll just do a special call out to David Bline, Andy Martins, Mike Daines, who have been leading EDGE, and now EDGE 2.0. As we go into 2022, we expect the penetration for the ACV, as we mentioned, 65% at the end of 2021. That increases to 75% based on our forecast as we go through 2022.

Yes, I'll just do a special callout to David Blaine, Andy Martin's Mike Dana we have been leading edge now etch two point.

As we go into 2022, we expect the penetration for the ACD as we mentioned, 65% at the end of 'twenty, one that increases to 75% based on our forecast as we go through 2022.

Speaker 2: We plan to launch EDGE 2.0 in the second half of this year.

We plan to launch <unk> in the second half of this year. So we believe.

Speaker 2: So we believe the 100 basis points of organic growth that we've now been incurring for several quarters and years.

100 basis points organic growth lift that we've now been incurring for several quarters and years that continues throughout 'twenty, two and 'twenty three we have no concern with that I hope you can respect we're a little early to expand too much from a competitive standpoint, two that are at this time I would add.

Speaker 2: That continues throughout 22 and 23. We have no concern with that. I hope you can respect that we are a little early to expand too much from a competitive standpoint on 2.0 at this time.

Speaker 2: I would anticipate at the second half of the year Paul Fisher, our president.

Dissipate at the second half of the year, Paul Fischer, our president of legal professionals.

Speaker 2: of legal professionals will provide a host of external events.

We'll provide a host of external events to expand more on to Brian's headed there tomorrow on the speed to spend some time with the group.

Speaker 2: to expand more on 2.0 that I intended there tomorrow to spend some time with the group. But a short closing comment there would be we're very optimistic on our ability to sustain legal organic growth. As I mentioned in the prepared remarks, we're very optimistic on our ability to sustain

Short closing comment there would be we are very optimistic on our ability to sustain legals organic growth as I mentioned in the prepared remarks back in a year ago. We set in 2023, we estimated 5% to 6%. We have now increased that range to 5% to 7% and Thats based on close.

Speaker 2: Back in a year ago, we said in 2023, we estimated 5 to 6%. We have now increased that range to 5 to 7%. And that's based on close partnership with Paul Fisher in this legal team aligned with Steve Rubely, who runs the government business.

Partnership with Paul Fischer and his legal team aligned with Steve <unk>, who runs the government business.

Great. Thanks, so much and all the best to Frank.

Yes.

Speaker 1: Thank you. Your next question comes from Andrew Steineman, JP Morgan. Please go ahead.

Thank you.

Your next question comes from Andrew Steinman J P. Morgan. Please go ahead.

Speaker 8: Hi, good morning. This is Stephanie sitting in for Andrew. I just had a question on the margin trajectory, I guess, from...

Hi, Good morning, this is Seth <unk> on for Andrew.

Follow up question on.

Margins for January I guess from.

Speaker 8: 31% in 2021 to 35% in 2022, it looks like you'll already be at kind of that 35% level in the first quarter. And I know you talked about a lot of different drivers, but I just wanted to get a little bit more color on what that step up.

1% in 2021, 5% in 2020 here it looks like.

I think <unk> comment that 35% on first quarter.

And I know you've talked about a lot of different drivers, but I just wanted to get a little more color on what that step up.

Speaker 8: what's driving that step up? Because as we look to 2023, it looks like the margin set's up from 22 to 23 is really just taking out the change costs. You know, it's a 470 basis point drag. In the fourth quarter, you're still investing in 22. So 23, we don't have those costs anymore. So kind of that step up from 22 to 23 is...

Whats driving that snapback, because as we look to 2023, Sir it looks like the margin stack from 'twenty to 'twenty three Israelis are picking out the teens comp.

470 basis point drag in the fourth quarter.

We're still investing in 'twenty two 'twenty three we don't have to constantly why so kind of that step up from 22 to 23 years.

Speaker 2: I feel like more visible. So if you can just kind of comment on kind of going to 35% and then the next year in the first quarter. Thank you. Yeah, Stephanie, let me approach it from two vectors. First from a report, as you mentioned, 2021, if I focus on reported, either that looks to change program, it goes 31 35 and then 39 40.

I feel like my visit also if you can just kind of comment on kind of going to a 35% came from.

And the first quarter.

Yes.

Let me approach it from two factors first from a report as you mentioned 2021.

On a reported EBITDA, what's the change program at those 31, 35, and 39% to 40% on an underlying basis in 2021 with $33 nine approximately 37 five up to the 39 40. If you look at the increase in 2022 and key component Stephanie is to <unk>.

Speaker 2: on an underlying basis in 2021 with 33.9%

Speaker 2: approximately 37.5 up to the 39.40. If you look at the increase in 2022, a key component, Stephanie, is the continued acceleration in achieving the annual run rate operating expense savings from the change program.

<unk> acceleration in achieving the annual run rate operating expense savings from the change program. We ended 2021 at $217 million, we will approach $500 million.

Speaker 2: We ended 2021 at $217 million. We will approach $500 million by the end of 2022.

By the end of 2022, so we will get margin expansion in 2022.

Speaker 2: So we will get margin expansion in 2022 as we ramp up the operating savings led by Kirsty Roth, Andrew Pierce, and the change program. Second component that I would mention there, Stephanie, is the operating leverage. And that about 65% of our costs are fixed in nature.

We ramp up the operating savings led by Steve, Rob, Andrew Paris, and the change program.

Second component that I would mention there Stephanie is the operating leverage given that about 65% of our cost are fixed in nature as our revenue continues to excel sustain and accelerate.

Speaker 2: as our revenue continues to sustain and accelerate.

Speaker 2: given that operating leverage, you'll get additional flow through there. So those are two of the key drivers, Stephanie, for both 22 and 23.

Given that operating leverage will get additional flow through there. So those are two of the key drivers Stephanie for both 'twenty, two and 'twenty three.

Speaker 2: Part of the question now in 23, Stephanie, as a reminder of the $600 million of operating expense savings, which we were confident we will achieve, we will begin to reinvest a portion of those in 2023 to help us accelerate growth beyond 23.

The question down 23, Stephanie as a reminder of the $600 million of operating expense savings, which we can't we're confident we will achieve we will began to reinvest a portion of those in 2023 to help us accelerate growth beyond 2003.

Speaker 8: Okay, great. That's super helpful. And if I can just ask a follow-up question. So you guys talked about additional interest in M&A this year. Is legal contract management solutions an area that Thomson might be interested in pursuing?

Okay, Great that's super helpful and I can just ask.

Bob a question so you guys talked about.

Additional interest on the MLR.

Legal contract management solution is an area that thomson might be interested in pursuing.

Speaker 3: Stephanie, we look at a number of areas that are core to the Big Three segments.

Stephanie we look at a number of areas.

Core to the big three segments.

Speaker 3: and additive to the change program and additive to our playbook of becoming the leading content-driven technology company. So certainly the tools and solutions that improve…

And attitude to the change program and attitude.

<unk> playbook of becoming a <unk>.

Leading content driven technology company.

Certainly.

Tools and solutions that improve.

Speaker 3: the workflow within our legal customers, whether that's a law firm or a general counsel, or in that solution space. And that would certainly include the contract lifecycle management, amongst a number of other things, yes.

The.

The workflow within our legal customers, whether that's a law firm or a general counsel or in that solution space and that would certainly include.

The contract lifecycle management amongst amongst a number of other things yes.

Okay, great. Thank you very much.

Speaker 1: Thank you. Your next question is from the line of Paul Steep, Scotiabank. Please go ahead.

Thank you.

First question is from the line of Paul steep Scotia Bank. Please go ahead.

Speaker 6: Great, good morning and congratulations Frank. Welcome Gary. Steve, could you just give maybe a higher level view of M&A, there's more discussion around it in terms of the approach. Should we think of it more as the Pondera net master like or is this larger acquisitions you're thinking of more transformative or are we thinking more incremental technologies to drive growth? And then I've got one quick follow up.

Great Good morning, and congratulations Frank welcome Gary.

Steve could you just give us maybe a higher level view of M&A. There is more discussion around it in terms of the approach should we think of it more.

As to PON Dara net master Lake or is this larger <unk>.

Acquisitions, Youre thinking of more transformative or are we thinking more incremental technologies to drive growth and then I've got one quick follow up.

Speaker 3: Thanks Paul. I would say it's It'll be very focused on the big three and it'll be more additive or incremental in nature than transformative.

Thanks, Paul I would say it's.

It will be very focused on the big three and it will be more additive or incremental in nature than transformative.

Speaker 3: But my life backdrop, Mike and I took these roles to start at 2020.

But by way of backdrop.

Mike, Mike and I took visuals.

2020.

Speaker 3: We spent 2020 studying the business and with our colleagues, new and pre-existing, designing the change program. Last year was all about the change program execution. And here we are halfway through the building confidence in that program and in our abilities as a team.

We spent 2020 starting the business.

With our colleagues.

And pre existing zoning tank program last year was all about what change program execution and here we are halfway through.

We're building confidence in that program and abilities as a team.

Speaker 3: And we're very focused this year on finishing the change program. And we will not get distracted. Because that's the key to a bit of customer experience. And that's the key to accelerating organic growth.

We are very focused this year on finishing the change program when we grow market distracted because that's the that's the key to a better customer experience and that's the key to accelerating organic growth, having said that there's a couple of things.

Speaker 3: There's a couple of things in our favour. Our confidence is building. Our underlying capabilities are improving. And our capital position can be improved.

Our confidence is building our underlying capabilities are improving and our capital position continues to strengthen and perhaps perhaps even later to see valuations may be a little bit more reasonable who knows.

Speaker 3: And perhaps, perhaps even later this year, valuations may be a little bit more reasonable. Who knows? That last part's hard to predict and we're certainly not going to bank on that. But I would say we don't need transformational action.

It was hard to predict certainly not going to bank on that.

But I would say, we don't need transformational acquisitions.

Speaker 3: What we're looking for is acquisitions where we are an advantaged owner that are added to the change program or accelerates to the change program and help us provide a better customer experience to our existing customers and provide access to new customers.

What we're looking for is <unk>.

Acquisitions, where we earn advantage to honor that are additive to the change program are accelerants to the China program.

Help us provide a better customer experience to our existing customers and provide X system to new customers next a laser like focus and we'll continue that focus through this year.

Speaker 3: That's the laser-like focus, and we'll continue that focus.

Speaker 6: Great, thanks. And then the follow-up would just be, could you remind us a little bit on the size of the GRC business today and maybe the opportunity set that it's looking at in terms of growth potential relative to the rest of the group, obviously, reflecting the toughest model.

Great. Thanks, and then the follow up would just be could you remind us on the size of the DRC business today, and maybe the opportunity set that it's looking at.

In terms of growth potential relative to the rest of the group, obviously, reflecting its off a smaller base.

Speaker 3: Yeah, our DRC business is around about 500 million, gross, circa double digits, and it's very, very government focused on the Steve Rubely's leadership.

Yes.

<unk> business.

Around about $500 million.

Gross circa double digits.

It's very Tonight very government focused on the steeper.

Leadership with Steve do Greg team and just as a reminder.

Speaker 3: Steve do a great team and just as a reminder, you do a great job, just a reminder there is the clear asset, which is a unique unique risk-forwarding compliance data set.

We do a great job just a reminder, there is the clear asset which is a unique.

A unique risk fraud and compliance data set.

Speaker 3: There is the Thomson Royal Special Services elite analyst.

There is the Thomson Reuters special services.

Analysts.

Speaker 3: who have extraordinary capabilities and extraordinary relationships with a multitude of government agencies. And this point there are.

We have extraordinary capabilities and extraordinary relationships with a multitude of government agencies at this point Dara.

Speaker 3: which is, which prevents and detects and prevents benefits forward. And then of course there's caselines, which is around...

Which is which prevents.

Detects and prevents bench.

Benefits forward and then of course, this case lines, which is around.

Speaker 3: digital and virtual court systems. That is a real constellation of our business today. We do apply those tools to the corporate sector, but it's relatively early days and we're making some good progress there. We do this as an enormous opportunity.

Digital and virtual core.

What systems.

Great.

That is the real constellation of out of our business today, we do apply those tunes to the corporate sector, but its relatively relatively early days and we're making some good progress there.

We view this as an enormous opportunity we think we're one of the few companies that has.

Speaker 3: We think we're one of the few companies that has the capabilities and the trust of customers and other stakeholders to handle these sensitive questions. We think there's a very significant opportunity to extend into corporates. And so that's something that we're hopefully pursuing.

Capabilities and the trust.

Customers and other stakeholders.

To handle the sensitive questions.

There is a very significant opportunity to extend into corporates and so thats something that were pursuing.

Pursuing.

Great. Thanks for the color.

Speaker 1: Thank you. Your next question is from the line of Tim Casey. Please go ahead.

Thank you. Your next question is from the line of Tim Casey. Please go ahead.

Speaker 5: Thanks, good morning. Steve, you've consistently talked about the customer experience being one of the end games of the change program, and you've noted that you're not there yet. Can you maybe flesh out a bit what milestones you're looking for and when you think you'll get there, given you're halfway through the change program, and what the impact will be, what the financial impact of those changes will be? Thanks.

Thanks, Good morning, Steve you've you've consistently talked about the customer experience being the.

What are the end game. So the change program and you've noted that you are not there yet can you maybe flesh out a bit what milestones you are looking for and when you think you'll get there given you're halfway through the change program.

What the.

What the impact will be.

To put the financial impact of those changes will be.

Speaker 3: Yeah Tim, I'm happy to expand upon that. So what it isn't is just hoping that our customer service and support people get a little better at their jobs. We're not sort of relying on better sort of human interactions. What we are doing is fundamentally building and rebuilding all of the component parts and the technologies that support.

Yeah Tim.

Happy to expand upon that.

So what it isn't is.

Just hoping that al.

Customer service and support people get a little better at retailers.

We're not sort of relying on.

On better sort of human interactions. What we are doing is fundamentally building and rebuilding all of the component costs and the technologies that support.

Speaker 3: our customer experience. So that's everything from our initial marketing through to the digital and automated presentation of product materials and trials to sign up some authentication enablement all the way through to billing and renewal. So there's a very heavy component of all digital and self serve that we're building and we think that will better enable us.

Our customer our customer experience. So that's that's everything from our initial marketing grew.

Through too.

Digital and automated presentation of <unk>.

Materials and trials.

Two to sign up some of the indications enablement, all the way through drilling and with Juul. So there's a very heavy component of digital and so soon.

Yes.

If you think that will better enable us to serve existing customers who are increasingly expecting.

Speaker 3: serve existing customers who are increasingly expecting those frictionless, personalized experiences and we think it will enable us to access new customers.

Was frictionless personalized experiences and we think that enable us to access new customers. So there is an element of.

Speaker 3: So there's an element of addressable market growth there. In addition to that, we need better customer.

The addressable market growth there.

In addition to that we think that a customer.

Speaker 3: experience will provide us with additional firepower around price, if we decide to exercise that. And then clearly something Mike's talked a lot about.

The experience, we provide us additional firepower around price.

Slide <unk> two.

To exercise that in.

And then clearly something <unk> talked a lot about.

Speaker 3: for the past 18 months or so, which is improved retention.

Over the past 18 months or so.

Which is improved retention.

Speaker 3: And the way we think about retention is it's about customer engagement. And this is where data and analytics comes into play. The better we understand how customers are using our products today, individual products and groups of products.

And the way, we think about retention because it's about customer engagement and this is with data and analytics comes into play the better we understand how customers are using our products today individual products and groups of products.

Speaker 3: the better insights we'll have into the degree of engagement. We think we can fundamentally improve our teaching rights through that data-driven approach.

The better insights, we will have and to the degree of engagement and we think we can fundamentally improve our retention rates through that data driven approach.

Speaker 3: So, you know, I hope, Tim, that gives you a sense of why we are so focused on this. You know, I think if you look at our company, we've had some very, very compelling products and we've got some great people, but the experience we've provided them hasn't been where it needs to be. And I think when we get it right, it's going to have some significant financial upside for us.

So.

I hope that gives you a sense of why we are so focused on this.

I think if you look at our company.

We've had some very very compelling products and we've got some great people with the experience we provide provided that hasnt been where it needs to be and I think when we get it right, it's going to have significant potential upside for us.

Thank you.

Speaker 1: Thank you. Your next question is from the line of George Tong. Please go ahead.

Thank you. Your next question is from the line of George Tony. Please go ahead.

Speaker 6: Hi, thanks. Good morning. I'll also offer my congrats to Frank and welcome to Gary. You've increased your outlook for 2022 and 2023 organic revenue growth. As you look across legal, tax and accounting and corporate, where are you seeing the most upside relative to your original outlook and what would you say are the key drivers?

Hi, Thanks, Good morning, I'll also offer my congrats to Frank and welcome to dairy.

You've increased your outlook for 2022 and 2020 for your organic revenue growth as you look across legal tax and accounting and corporate where are you seeing the most upside relative to your original outlook and what would you say are the key drivers.

Speaker 2: I was happy to start there and first leave a second. As I mentioned earlier in regards to legal, with 2023, they were increasing the range from five to six to five to seven. I'm certainly encouraged there. Only by West Wall Edge and Edge 2.0 that the full breadth of the offerings that we have, including Practice of Law and the Government of the League, find all IQ.

Yes, So I was happy to start there first David supplement as I mentioned earlier in regards to legal our 2023 that were increasing the range from five five to six to five to seven certainly encouraged there not only by <unk>, but the full breadth of the offerings.

We have important practical law and the government elite Pall Mall IQ tax.

Speaker 2: Tax and accounting, 9% growth in 2021. We're very encouraged by the work that Elizabeth Beech trained president of tax and accounting professionals, she and her team and the recent talent additions there. Corporates we saw then accelerate their growth throughout 2021. It was about 4% during the first half of 21.

Tax and accounting at 9% growth in 2021, we're very encouraged by the work that Elizabeth <unk>, President and the tax <unk> accounting professionals, she and her team on the recent talent additions there.

Corporates, we saw them accelerate their growth throughout 2021, it was about 4% during the first half of 'twenty, one we accelerated 6% in Q3, 7% in Q4, and we expect to sustain that throughout.

Speaker 2: accelerated 6% in Q3, 7% in Q4, and we expect to see that throughout 2022.

2022.

Speaker 2: Within the world's business, we don't expect 12% there every quarter, but we're pleased with the rise in the world's events business there, and I think Brent will continue at kind of the mixing of the budget declines there. Legal on a good run, tax on a really good run, and corporates are showing really good momentum as we execute for and regain QM.

The mortgage business, we don't expect 12% every quarter, but very pleased with stabilizing the waters events business, there and I think print will continue at kind of the mid single digit.

Declines there.

Legal on a good run tax on a really good run and corporates is showing really good momentum as we execute for and the 10- Q1 .

Speaker 3: Just to add to that, George, one of the things that makes me excited about being here at Thomson Reuters and about our prospects over the next few years is that we're not reliant on any one particular product or any one particular segment to achieve the growth rates that we've set out to meet our long-term organic growth expectations. I think that's an exciting question to be.

Yeah, just to add to that George.

The one of the things to that.

<unk> excited about.

Same here at Thomson Reuters and about our prospects over the next few years is that we're not reliant on any one particular product or any one particular segment.

To achieve.

The growth rates that we've set out to meet our longer term organic growth expectations. So I think that's a.

And final question.

Speaker 3: you know, we see the integration of information and...

Yeah.

We see the integration of information.

Speaker 3: software, research and software in legal to fundamentally change the way lawyers do their work is a big opportunity for us and particularly coming out of COVID. I think that's nearly there. We see it mostly designed in tax accounting professionals.

Software research and software and legal to fundamentally change the way, we always do they work as a big opportunity for us.

And particularly coming out of Covid given their.

Version of the same in tax accounting professionals as they look to streamline and make more efficient the tax.

Speaker 3: able to streamline and make more efficient attacks, the tax return preparation process and enable them to serve their customers with advisory type services. And then in corporates, and I've commented a number of times before, this is pretty new for us.

<unk> retained preparation process and enable them to serve their customers with advisory type services and then incorporates commented a number of times before this is pretty new for us.

Speaker 3: It's a sizeable business but it's not one as a company that we've been focused on for many many years.

It's a software business, but it's not one company that we've been focused on for many many years, we have a very talented leadership group.

Speaker 3: We have a very talented leadership group under the leadership of Sunil and Dina in corporates and we're excited about where they'll take this.

Under the leadership of Sunil can be that incorporates and we're excited about with all types of rollouts.

Speaker 3: take this business and then Mike's comment on Reuters, you know, there's lots of opportunities for us to get more Reuters in appropriate ways, like to better serve the agency customers and abroad to professionals including Reuters, Tax Accounting and WISTA.

I'll take this business in the next coming from Reuters.

Watson.

Opportunities for stage will avoid as appropriate wise, but the base will continue to.

So the agency customers.

And a broad team professionals, including Lord is Texas economy.

<unk>.

Speaker 3: When we look across this age, we probably see the most upside in corporates, but certainly a nice, diverse applied set of growth options.

Okay.

When we look across the us and I think.

We probably see.

Most upside in corporates, but certainly.

And us diversified set of growth growth options.

Speaker 3: Got it. Very helpful. Historically, Westlaw Edge has contributed about 100 bps to organic revenue growth in legal. As you look to launch Edge 2.0, would you expect that to extend the runway of the 100 bps of organic growth contribution? Or should it drive increased contribution to legal organic growth?

Got it very helpful.

Eric where your western edges contributed about 100 bps to organic revenue growth in legal.

You look to launch edge too.

Would you expect that to extend the runway of the 100 bps of organic growth contribution or should that drive increased contribution to legal organic growth.

Speaker 2: Yeah, George, our current position is that we'll be able to sustain the 100 basis points of growth that we've now achieved for many quarters in a couple of years there. So the best assumption is that the 100 basis points of growth will continue longer term with EDS 2.0. Got it. Very helpful.

Yes, George our current position is that we'll be able to sustain the 100 basis points of growth that we've now achieved for many quarters and couple of years. There. So the best assumption is that the 100 basis points of growth will continue longer term.

At $2.

Got it very helpful. Thank you.

Speaker 1: Your next question is from the line of Aravinda Galapatay, chemical genuity. Please go ahead.

Your next question is from the line of.

Emerson the collapse.

Chemical chimney kidney Ritchie. Please go ahead.

Speaker 9: Good morning. Thanks for taking my question and all the best to Frank, my congratulations as well. I wanted to touch on the international opportunity. I mean, in most of the recent quarterly results.

Good morning, Thanks for taking my question and all the best to Frank My Congratulations as well.

I wanted to.

Just touch on the international opportunity I mean in most of the recent quarterly results.

Speaker 9: commentary, you've been talking about the contributions to each of the divisions from the various international markets, LATAM in particular. I was wondering whether you could summarize that a little bit for us as we look ahead, what's sort of the magnitude of the opportunity mid to longer term and what are the limitations, you know, given some of the jurisdictional differences. Maybe you can sort of spend a moment on that. Thank you.

Commentary, you've been talking about the contributions to each of the divisions from the various international markets. Latam in particular I was wondering whether you could sort of summarize that a little bit for us as we look ahead, what sort of the magnitude of the opportunity mid.

Mid to longer term and what are the limitations.

Given some of the jurisdictional differences.

Maybe you can spend a moment on that thank you.

Speaker 3: Yeah, thanks Aragon, that was, Steve I'll start and I'm sure Michael will add to the comments.

Yeah, Thanks, Steve I'll start and I'm sure Michael will add two comments.

Speaker 3: So, as a company, Thomson Reuters have had a lot of experience in the national markets and China, personally, have had a lot of experience in the national markets.

So.

As a company Thomson Reuters have had a lot of experience in international markets on trauma personally that a lot of experience in the national marketing fund.

Speaker 3: One observation I would make is that international is a bit of a misnomer. In businesses like ours, it is country by country and it's a question of having unique content and we never support that with AI machine learning and software to deliver those solutions to customers. As Mark has outlined in the last couple of quarters, we have a very strong position in Latin America.

What was the question I would make is that international is a bit of a bit of a mismatch.

Martin.

In businesses like ALS, Denise country by country, and it's a question of having unique content and being able to support that.

Machine learning and software to deliver those volumes.

Solutions to customers.

As Mark has outlined on the last couple of quarters, we have a very strong position in Latin America.

Speaker 3: particularly in Brazil, and particularly in Taksim County, and a very strong team there. And in pursuit of getting the

Particularly in Brazil, and particularly impaction counting very strong team there.

<unk> performed.

On the roll.

Speaker 3: They're all weather conditions in recent years and we expect them to continue to do so and we've invested behind it and we will continue to do that.

There are all weather conditions.

In recent years, and we expect them to continue to do so and we've invested behind it.

To do that.

Speaker 3: There's some interesting growth opportunities there to say the least to help our tax and accounting customers serve their clients better. We think that's a substantial growth opportunity. We think there's opportunity to expand in countries like Mexico where we have a very modest starting position, but it's in some big aspirations. We enjoy a good starting position in the emerging markets.

With some interesting growth opportunities decided the lowest to help our tax and accounting customers. So the clients' behalf.

That's a substantial growth opportunity, we think there's opportunity to expand in countries like Mexico, where we have a very modest starting position.

Some big exploration.

We enjoy it.

A good starting position.

They're in emerging markets.

Speaker 3: particularly in Australia and New Zealand where AEM business is based.

Particularly in Australia, and New Zealand businesses based.

Speaker 3: And as we look north from that base, we like to look at opportunities in a number of southeast Asian markets.

And as we look more from from that base.

Like to look at opportunities in a number of southeast Asian markets and in markets like Japan.

Speaker 3: and in markets like Japan. The strength of our solutions we think will play well with our time.

The strength of our solutions, we think will play well.

Speaker 3: And the other place where Sunil Pandita has invested in new leadership and talent is in Europe in the corporate sector and we're starting to see some promising signs in markets such as the UK and Germany.

At the time.

And the other place rational and data has invested.

Yeah.

New leadership and talent in Europe , the corporate sector, and we're starting to see some promising.

Signs in markets, such as the UK and Germany.

Speaker 3: So if we look across, we're going to be selecting in terms of the markets we go after. We want to make sure that where we invest in a market, we make our mark.

So as we look across we are going to be selective in terms of the markets. We go after.

To make sure that.

Where we invest in a market, we really making a market.

Speaker 3: and we achieve a number one or number two position in the places we play. But if you look at our starting point today, you know, 80-20, about 80% of our revenue.

And we achieved the number one and number two position in the <unk>.

Places we play.

If you look at our starting point today, 10%.

<unk> got 80% of our revenues.

Speaker 3: come from the United States. And that, I think, sort of leads you to a pretty big international growth opportunity over time. Excellent. Thank you.

Come from the United States.

That I think.

Sort of lead you to a pretty big international growth opportunity longer term.

Excellent. Thank you.

Operator, we'd like to take one final question Bruce.

Speaker 1: Your final question is from the line of Sami Kassab of BNP Paribas. Please go ahead.

Final question is from the line of Sami Kassab of BNP Paribas. Please go ahead.

Thank you very much and thank you Frank for your last question and many thanks for your support for.

Speaker 10: Thank you Frank for being your last question and many thanks for all your support for these many years. Gentlemen, good morning. I have two questions, please. The first one is on the small and medium...

For these many years gentlemen, good morning.

Two questions. Please the first one.

On the small and medium.

Speaker 10: business opportunity. It looks as if getting into the long tail of SMEs is a significant part of how you want to drive growth. Can you provide a little bit of color in terms of the share of revenues from the SME market across the big three?

<unk> opportunity it looks as if.

Getting into the long tail of some users is a significant part of how you want to address growth can you provide a little bit.

Color in terms of.

The share of revenue was from the SME market across the decrease.

Speaker 10: The second question is on label cost inflation. There is a lot of talk around some of these things and the likes. Can you comment on what type of unit label cost inflation you have assumed in the 22 and 23 margin guidance and to what extent is the difference from what you have seen in 20 and 21? Thank you gentlemen.

Divisions.

And the second question was on.

Global cost Inflations Theres, a lot of talk around.

Okay.

<unk>.

Can you comment on what type of sort of global cost inflation you have.

<unk> thousand 223 margin guidance to what extent is that difference from what you've seen in 2020 one thank you gentlemen.

Speaker 3: Yeah, thanks, thanks, Sammy. Steve, I'll start with the first S&B question and then Mark will answer that and answer the inflation question. So, um–

Yeah. Thanks, Thanks, Steve.

Steve I'll start with the first SMB.

And then.

<unk> will add to that and obviously the inflation question.

Speaker 3: The SMB opportunity, about 35% of our revenues today come from small firms, whether they're small...

The SMB opportunity.

About 35% of all.

Revenues today come from <unk>.

More firms whether they are small.

Speaker 3: law firms, small tax accounting firms, or small to medium enterprises in the conventional corporate scene.

Law firms small tax and accounting firms or for small to medium enterprises in the conventional corporate.

Speaker 3: And that's more heavily weighted toward the tax and accounting and legal side of things. So we think it's a pretty big opportunity.

Our next more heavily weighted towards the types of accounting and legal side of things. So we think that's a pretty big opportunity.

Speaker 3: to serve the corporate side in a number of different markets, including the United States.

Sure.

Sure.

On the corporate side.

Any number of different markets, including the United States.

Speaker 3: And the approach we're taking is to lead with these investments in digital themselves.

And the approach we're taking is to lead with these investments in digital and self service.

Speaker 3: customer service and support capabilities because that's the ones that best serve the SMB market. So we're starting with it. We're also looking hard at our product.

Customer service and support capabilities, because thats the day the ones that best serve.

The SMB market. So we are starting we are we're also looking hard at our products.

Speaker 3: and making investments in existing products to make them better suited to the small end of town and also generating and developing new products that are specifically dedicated to those areas.

Making investments in existing products to make them better suited to the small end of town.

I will say generating and developing new products that are specifically dedicated to those to those to those areas.

And so that's the approach we're taking in and we think that.

Speaker 3: that market segment grows, we can grow with the segment and take some shares out as our capabilities develop over time. It's also an area where we will be very opportunistic and selective in terms of M&A. If we think there's an opportunity to extend our franchise within our rental Orlando population, they have more money to pull into and then they

Because that market segment.

We can grow with the segment and take some shares out cell capabilities.

But by the time.

So an area, where we will be be very opportunistic and selective in terms of M&A.

We think there's an opportunity that to two.

To extend our franchise into diabetes inorganically that will take advantage of that market.

Speaker 2: Mike. Yeah, Sammy, in regards to cost inflation, let me address it from two standpoints. First, in regards to pricing and then labor. If you look at our guidance for 22 and 23, we have assumed a slight uptick in both our pricing and in our labor costs for both years. Those are reflected in our updated guidance that we provided today. When you think about our pricing, just as a reminder, we have a significant level of our contracts under multi-year contracts, about 60%.

Yes, Sami in regards to cost inflation, let me address it from two standpoints first in regards to pricing and then labor. If you look at our guidance for 'twenty, two and 'twenty three we have assumed a slight uptick in both our pricing and in our labor costs for both years those are reflected in our updated guidance that we.

<unk> provided today when you think about our pricing just as a reminder, we have a significant level of our contracts under multiyear contracts about 60% of legal a multiyear corporates are about.

Speaker 2: of legal or multi-year corporates or about.

Speaker 2: 40% tax, about 10%. So in regards to up-to-up-to price having realized effect in a given calendar year, you have to take the multi-years into effect, but we have reflected, Sandy, both in uptake in pricing and labor cost in our guidance.

40% tax about 10% so in regards to uplift in price having realized effects in a given calendar year you have to take the multi years and took back that we have reflected Sami both an uptick in pricing and labor costs in our guidance.

Thank you very much gentlemen.

Speaker 2: Have a good day. That will be our final question. We'd like to thank you all for joining us today. And feel free to contact myself and Gary with any follow-up questions you have. Have a good day.

Have a good day.

That will be our final question, we'd like to thank you all for joining us today.

Feel free to contact myself and dairy with any follow up questions. You have have a good day.

Speaker 1: Thank you everyone for joining. That concludes your call. Please disconnect your lines and enjoy the rest of your day.

Thank you everyone securely mean.

Please call. Please disconnect your lines I mean truly the rest of your day.

Hi.