TurnerNFAIS06

The Thomson Transformation: Remaking a Global 500 Company: 

The Thomson Transformation: Remaking a Global 500 Company David Turner Senior Vice President, Finance The Thomson Corporation February 28 2006

Slide2: 

Learning $2.3 Billion Snapshop - The Thomson Corporation 8,200 Employees 22 Countries 17,250 Employees 22 Countries 4,300 Employees 19 Countries 9,800 Employees 40 Countries Financial $1.9 Billion Legal & Regulatory $3.5 Billion Scientific & Healthcare $1.0 Billion Operate in 4 Key Markets Serve an Estimated $80+ Billion Global Market and Growing $8.7 Billion Revenue in 2005 $22 Billion Market Capitalization

Agenda: 

Agenda “Confronting Reality” - catalyst for change Transforming an industry leader Maintaining the edge

Confronting Reality – Aviation: 

Confronting Reality – Aviation Eclipse

Confronting Reality – Telephone: 

Confronting Reality – Telephone

Confronting Reality - Thomson: 

Confronting Reality - Thomson The Time: 1997 The Parent Company: $8.8 billion Canada-based holding company 3 major holdings in late ’90s Newspapers Leisure Travel Professional Publishing

Thomson Newspapers: 

Thomson Newspapers Revenues of $1 billion Primarily regional newspapers Fastest growing chain in North America 2nd most profitable Revenues primarily from advertising Category killers and the Internet emerging as threats

Thomson Travel: 

Thomson Travel Approx. 1/3 of parent company revenues Holiday packages, airline, travel shops Market leader in the UK Low margin, high volume business People-intense Price inelastic

Thomson Professional Publishing: 

Thomson Professional Publishing Approx. 1/2 of parent company revenues Mixed bag of print publications, with some electronic add-ons Wide range of products Textbooks Industrial publications Journals for legal, healthcare and education professionals Market trends Knowledge worker economy Shift from print to electronic

1997 Portfolio: 

1997 Portfolio Revenues $8.8B EBITDA $1.6B Margin 18.5% Thomson Newspapers 10% Thomson Travel Group 33% Legal & Regulatory 23% Learning 13% Financial 13% Scientific & Healthcare 8%

Agenda: 

Agenda “Confronting Reality” - catalyst for change Transforming an industry leader Maintaining the edge

Where Was the Value in 1997?: 

Where Was the Value in 1997? Content was King Content

Where’s the Value Today?: 

Where’s the Value Today? Content Platform Components of a Workflow Solution Workflow Solutions & Analytics From informing decisions to enabling actions

Thomson Vision: 

Thomson Vision Workflow Solutions + + Information Publishing Industry Information Services Industry

Slide15: 

Thomson’s Response Divested $8B in non-strategic operations Sold Thomson Travel and Thomson Newspapers Spent $12B in acquisitions to build scale in information publishing Accelerated shift from print to electronic to solutions

Priorities During Transformation: 

Priorities During Transformation Redefine business models Align to create four strategic market groups Integrate acquisitions Build infrastructure (back-office) Reframe markets Manage talent

Organizational Alignment:Operating Mechanism for Change: 

Organizational Alignment: Operating Mechanism for Change

Front-End Customer Strategy: 

Front-End Customer Strategy

Looking back -: 

Looking back - Talent management Identifying skillset required Education and re-training across the organization Common systems / platforms Identifying change fatigue Correcting your mistakes

Transformation of Portfolio: 

Transformation of Portfolio 1997 2005 Legal & Regulatory 40% Learning 26% Financial 22% Revenues $8.7B EBITDA $2.4B Margin 27.5% Revenues $8.8B EBITDA $1.6B Margin 18.5% Thomson Newspapers 10% Scientific & Healthcare 12% Thomson Travel Group 33% Legal & Regulatory 23% Learning 13% Financial 13% Scientific & Healthcare 8%

Agenda: 

Agenda “Confronting Reality” - catalyst for change Transforming an industry leader Maintaining the edge

Competitive Landscape: 

Competitive Landscape Content Platform Workflow Solutions & Analytics

Maintaining the edge: 

Maintaining the edge Avoid complacency Anticipate market dynamics Customer-driven innovation

Innovate Across the Business: 

Innovate Across the Business Finance Process Offering Delivery Business Model Networking Enabling Process Core Process Product Performance Product System Service Channel Brand Customer Experience Source: DOBLIN Inc.

Most Companies Invest in Product Innovation: 

Most Companies Invest in Product Innovation Finance Process Offering Delivery Business Model Networking Core Process Product Performance Product System Service Channel Brand Customer Experience Source: DOBLIN Inc. Enabling Process

Shift in Source of Value Creation: 

Shift in Source of Value Creation Finance Process Offering Delivery Business Model Networking Enabling Process Core Process Product Performance Product System Service Channel Brand Customer Experience Source: DOBLIN Inc.

Key Success Factors Going Forward: 

Key Success Factors Going Forward Reframing markets, front-end customer strategy, innovation, and the ability to re-invent business models must be core competencies.

The Thomson Transformation: Remaking a Global 500 Company: 

The Thomson Transformation: Remaking a Global 500 Company David Turner Senior Vice President, Finance The Thomson Corporation February 28 2006