The Thomson Transformation: Remaking a Global 500 Company

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The Thomson Transformation Remaking a Global 500
Company

• David TurnerSenior Vice President, FinanceThe
  Thomson Corporation
• February 28 2006

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Snapshop - The Thomson Corporation
Learning 2.3 Billion
Financial 1.9 Billion
Scientific Healthcare 1.0 Billion
Legal Regulatory 3.5 Billion

• 8,200 Employees
• 22 Countries

• 17,250 Employees
• 22 Countries

• 4,300 Employees
• 19 Countries

• 9,800 Employees
• 40 Countries

• Operate in 4 Key Markets
• Serve an Estimated 80 Billion Global Market and
  Growing
• 8.7 Billion Revenue in 2005
• 22 Billion Market Capitalization

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Agenda

• Confronting Reality - catalyst for change
• Transforming an industry leader
• Maintaining the edge

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Confronting Reality Aviation
Eclipse
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Confronting Reality Telephone
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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

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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

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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

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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

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

• Confronting Reality - catalyst for change
• Transforming an industry leader
• Maintaining the edge

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Where Was the Value in 1997?

• Content was King

Content
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Wheres the Value Today?
Workflow Solutions Analytics
From informing decisions to enabling actions
Platform
Content
Components of a Workflow Solution
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Thomson Vision
Information Publishing Industry
Information Services Industry
Must Have Content
Must-Have Applications and Efficient Technology
Supporting Services


Workflow Solutions
Better Decisions, Faster, Anywhere, and Anytime
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Thomsons 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

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Priorities During Transformation

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

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Organizational AlignmentOperating Mechanism for
Change
Senior Executive Conference (January)
Growth Strategy (April)
3-Year Plan (November)
Talent Management (June)
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Front-End Customer Strategy
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Looking back -

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

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

• Confronting Reality - catalyst for change
• Transforming an industry leader
• Maintaining the edge

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Competitive Landscape
Workflow Solutions Analytics
Platform
Content
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Maintaining the edge

• Avoid complacency
• Anticipate market dynamics
• Customer-driven innovation

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Innovate Across the Business
Finance
Process
Offering
Delivery
Business Model
Networking
EnablingProcess
Core Process
ProductPerformance
Product System
Service
Channel
Brand
CustomerExperience
Source DOBLIN Inc.
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Most Companies Invest in Product Innovation
Finance
Process
Offering
Delivery
Business Model
Networking
Core Process
ProductPerformance
Product System
Service
Channel
Brand
CustomerExperience
EnablingProcess
Source DOBLIN Inc.
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Shift in Source of Value Creation
Finance
Process
Offering
Delivery
Business Model
Networking
EnablingProcess
Core Process
ProductPerformance
Product System
Service
Channel
Brand
CustomerExperience
Source DOBLIN Inc.
27
Key Success Factors Going Forward
Reframing markets, front-end customer strategy,
innovation, and the ability to re-invent
business models must be core competencies.
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The Thomson Transformation Remaking a Global 500
Company

• David TurnerSenior Vice President, FinanceThe
  Thomson Corporation
• February 28 2006