Thomson Reuters is really big
Last week, Thomson Reuters reported “solid first-quarter earnings results from pre-merger operations,” according to news reports. Just three weeks ago, Thomson announced that it had completed its acquisition of Reuters, making the combined company the world’s largest provider of information to business and professionals. Thomson Reuters has more than 50,000 employees and operates in 93 countries on six continents. Its 2007 pro forma revenue was approximately US$12.4 billion.
Twelve thousand of the company’s employees are in Asia, and 1,100 of those work in the Philippines creating content and software for Thomson Reuters’ clients around the world. Two weeks ago, Devin Wenig, CEO of the company’s Markets Division – which accounted for $7.5 billion in revenues last year – visited Manila and met with Thomson Reuters employees and media. Wenig, who is 41, was COO and a board director at Reuters before the merger. (Disclosure: Thomson Reuters is a client of my firm.)
Wenig’s appointment as CEO of the company’s biggest division followed his success in implementing and managing a “Fast Forward” turnaround plan for Reuters, which tripled operating income in the first quarter. According to Thomson Reuters, Wenig “was behind a simplification program which divested more than 80 non-core businesses and reduced the company’s complex portfolio of products from 1,500 to 50.”
He has also “championed innovation in new markets and services such as electronic trading and consumer media.” Wenig’s efforts helped save the company $820 million, returning Reuters to “industry leading” revenue growth. “From February 2002 until the closing of the merger with the Thomson Corporation, Reuters’ share price increased seven fold, making it among the top performing media companies globally,” according to the company.
To understand the scale at which Thomson Reuters operates, consider that it generates more cash – $2 billion last year – than McGraw-Hill, Addidas, and Rolls Royce. Its $30 billion market capitalization is bigger than FedEx and Viacom. The combined company generates one third more revenue than Starbucks, and twice as much revenue as Yahoo and eBay.
Thomson Reuters is big. When I asked Wenig and his colleagues to name the main benefits of the company’s size, Michael Peace, Thomson Reuters Asia sales and customer service senior officer, responded with three.
The first obenefit, Peace said, is balance; more precisely, global balance. With operations in 93 countries Thomson Reuters is capable of providing global customers a true world view. No one, and no place, is left out of the picture. The second benefit is scale. The company covers local markets, and distributes this information and analyses globally. “We plug in our notebooks in any office around the world, and we have access to a global network of resources,” he said. So does the company’s customers.
The third advantage is focus. The company focuses on what it does best, avoiding the temptation to do so many things that what it truly specializes in becomes unclear. Today, that focus is on professional end users in the financial, legal, tax & accounting, scientific, healthcare, and media markets. Because of this focus, Peace said the company offers not just breadth globally, but industry-specific depth.
Wenig said that as CEO of the Markets Division his focus will be on innovation and industry leadership. Among his key responsibilities is the development of new technologies that will meet fast-evolving client requirements. He expects an increasing proportion of those clients to come from Asia, noting that the region is the fastest growing market for Thomson Reuters in the world. Wenig repeatedly noted that the Philippines itself is not just an important market for the company within the region, but one of the fastest growing as well.
Wenig began his tour of the company’s global offices in Asia because of its strategic importance, and the Philippines, he implied, was an important stop. He avoided characterizing the Philippines as primarily an investment destination for content generation and software development, although those are core processes undertaken here. Instead, he emphasized that the Philippines is an important market for the company’s services.
That’s very reassuring. Not just because a global, industry-leading company has developed an appreciation for the Philippine market. But because Philippine businesses understand the value of information – and are using it for their own competitive advantage. Services like that of Thomson Reuters help organizations of all size to operate from a global perspective while strengthening local relevance – things every growing organization today must do.