Thomson Reuters resilient in tough times - James Smith

The $3 billion write-down – “a non-cash charge for goodwill impairment” – does not reflect lack of confidence and the financial foundation of the business remains strong, he told the group’s 55,000 staff.

Smith, who took over from Tom Glocer on 1 January, said he looked forward to the year ahead with confidence, both because of the company’s time-tested resilience and because of the dramatic steps taken in recent months.

“Our management team is stronger and we are taking steps to make our organization simpler. We are putting the customers back where they belong – at the heart of everything we do – and we’ve got important product and service improvements planned for 2012…

“I am realistic about the turbulent markets we will face this year. But I also know that dramatic change presents dramatic opportunity.” The more dynamic and challenging the environment for the world’s professionals, the more complex the regulations, the more value Thomson Reuters could provide.

Smith said the $3 billion “accounting adjustment” reflected the fact that the external world – and market valuations – had changed since Thomson completed the Reuters acquisition in 2008. It also reflected the fact that the company had yet to achieve the performance expected from some of the businesses in the former markets division.

“It is important to note that this non-cash charge will not impact the company’s normal business operations nor will it affect liquidity or cash flow from operations. Nor does it reflect a lack of confidence: I am fully confident that our Financial & Risk business can achieve organic revenue growth in the mid-single digits. The financial foundation of our business remains strong.

“Today’s action puts the past behind us and sets our focus squarely on the future,” Smith said. Across the organisation work was well under way on key priorities for this year. He enumerated these as 

• kick-start the growth engine in Financial & Risk
• invest in higher growing segments and adjacent businesses
• exploit the strengths of Thomson Reuters’ global franchises
• accelerate development of the business in fast-growing geographies.

Smith said news and insight would become part of the basic fabric of all the group’s flagship products. “We have the biggest and best news organization in the world and no one is better positioned as THE source for market-moving news.” ■