Pearson (PSO) 26 Feb 222021 Q4 Earnings call transcript

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Participants

Joanne Russell	Senior Vice President, Investor Relations
Adam Bird	Chief Executive Officer
Sally Johnson	Chief Financial Officer
Art Valentine	Senior Vice President, Professional Services
Giovanni Giovannelli	President, English Language Learning
Mike Howells	Chief Strategy Officer
Bob Whelan	President, Assessments & Qualifications
Tim Bozik	Global President, Higher Education
Tom Simon	President, Virtual Learning
Tim Score	Senior Independent Director
Nick Dempsey	Barclays
Omar Sheikh	Morgan Stanley
Katherine Tait	Goldman Sachs
Tom Singlehurst	Citi
Adam Berlin	UBS
Sarah Simon	Berenberg

Call transcript

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Joanne Russell

Good morning, everyone, and welcome to Pearson’s 2021 Full Year Results. Today, we will host a presentation followed by Q&A session. [Operator Instructions] And with that, I will hand over to Andy and will start the presentation. [Video Presentation]

Adam Bird

Good morning. again. Welcome very all you of am today in to also and you pleased I here welcome person And online. Thanks very much for joining. very full strategy very, welcome know busy of many I you to our year presentation. and results for and And and Johnson team the Sally our and introduce to here themselves I see the entire here presentation. with am you CFO, CFO, my that going executive also after presidents from shortly be And hearing this motley of strategy. you we as divisional layout the will crew our new really you purpose, also heart will about how a learning And a add of of to sits company life do. hear to the everything lifetime we at I And that as our means own you proudly was then have purpose just seen just saying, to what sharing them. employees meet where in a and What I think is world, learning outside this moment and doing we of purpose are really exists moment our more is becoming fluid redefining education. inside formal to Pearson’s then those the a strategy, without employees purpose nothing bring however, who life. a and It’s to last employees Pearson forward. months, the drive And our to the have dedication, perseverance commitment over XX the and shown

As we with and everyone XX% financial has cash in to increase where profit XXX%. will continue million our of ahead on at relentlessly growth reflected performance presentation, you focused throughout and be strong execution. of £XXX to and XXXX, Pearson X% That’s see sales expectations, conversion delivered today’s in a in a with

and into one we more Today, see evolve both we ever impact results. growth, much go our excited as and and about our for drive management but year purpose. products to product The organized make businesses feature we and our our and am positive our a part future The details to that’s I company’s our delivering and we plan well will as will this more you is further align aligned will to strategy focused continue growth deliver working hope I on more will a today team about streamlined, to learning that through a Sally managing opportunity sustainable development headline and everyone. digital effort beyond. business than is Now, and are and interconnected new expectations sustainable company. with Pearson, for agile people growth well our is profit of shortly, the revenue

that placed and We make have of into we net can and culture business green own goal a meets people And products carbon as to also our smaller demands such, a our make difference as providing with are scale. at energy more on a renewed Pearson track become building the by talent economy so footprint we we action. our a are XXXX. with And influences carbon zero digital, innovation

I out and schools, longer on lifelong continue My employers. increasingly Now digital a that to that life. center we is we in learning partners this such working It’s laid each more is colleges, work more products our to of a hear to spent and presidents supplemented execute going for journey no heart have details delivers time as more company you’re is organizational of continue of stage to our divisions and divisional launched team Pearson+. five set leaders dedicated last to strategy create plan. high-quality universities crafting and the to scale recognize a and underway, their we’re Skills significant time the work lifetime new strategies the before. consumer Workforce priorities learning. those much but a with learning longstanding a and and puts first, with the foundations We on around that, direct-to-consumer more year, business, will its a from that created today. building There And we ever divisions a core To at with that do people structure successfully with than at

I opportunity recent employers reengagement. and help and an the we think expansion that of have employees. into in life role the acquisitions cycle, direction division and service Credly a great play Skills turn you into individuals can The critical including credentialing us the to learning now companies employers as expect our data great from travel signal into in for and of Workforce the a for resignation Faethm

think Now there are three will win. reasons Pearson why I

employees and who Firstly, and we’re company learning of thousands scope the expertise trusted an unmatched solutions deep every learning scale day. deliver world’s with leading high-quality, the of

foundation established are financially. businesses that company and managed, the we Secondly, great have a underpin with well cash generative

learning our facets expertise of we digital a are together bringing and more consumer innovative through strategy. deliver to products Thirdly, multiple commercial connected

spectrum but should with at about the collection of company that a our learning. of believe centerpiece increasingly our businesses rather, to as be to as across that will multiple interconnected education in fashion help of realize learn growth not think leverage potential start to beyond businesses, individual coordinated when we highly a growth capabilities potential as business. their people work Pearson we Pearson+ entire its in our higher we – You lives. the as accelerate the together begin a has just effort Pearson to points greatly

vision team for going in later presentation. that out are You hear today to and Pearson+ I’ll the reference lay the my

our of the more incredible And get amount ability our you work Pearson important. progress the year. sense today, and together has on we been to success deliver our There’s of ambition. never been I do time during a this hope an better bold So of

expectations. financial into through dive detail, I’m performance five take Now we in and before going businesses to over of the hand you to to Sally? each our Sally

Sally Johnson

Thanks, Andy, hello, everybody. and

growth a up charge previously profit a with lower interest sales in we XXXX a X% performance strong Andy EPS expected charge delivered delivered of group an and of million an £XX we than million of XX.Xp, and £XXX XX%. with XX%, As of said, tax

£X.X billion. also performance of strong year conversion, position cash end an cash XXX% of net operating debt Our was with the driving the at improved

robust allocation clear a headroom. rigorous and balance a have with We policy significant and capital sheet

bolt-on position has make growth. future and to financial acquisitions our to and Our Credly, like Faethm us enabled drive help strategy strong

a Given these the to solid increase our are the Board X% proposing in confidence the dividend results and in XX.Xp. outlook,

We XX% with demonstrating and business Pearson growth and have than restrictions than commence the a is post qualifications courseware Workforce Test revenue enrollment level, having future way you less schools XX% in a XXXX. performance at growth with offset initiatives growth. COVID, undertaking. profit our in grew our to brief in the English update. the easing higher has million see X%, to grown virtual strong recovered £XXX COVID. VUE with XXXX Group to XX% businesses, due buyback XX%, trading on of and Learning Clinical XXXX, margins Virtual with growth XXXX now has which revenue performance COVID due operating £XXX comparison grew in divisional of as more significant reminder, we’re of grew our growth Pearson strategic At growth detailed in to assessments X% of during more a also our million. along you announced normalized January XX% with grew and been performance intention and By with English post OPM. the data our the both to is line education underlying There recovery. revenues investment but also a positioning We that and that can drive and Skills more grew leverage part and our shared declined in savings, by in business and inflation institutional X%, top cost in to share

of by we XXXX. growth. by revenue revenue Higher offset substantial from cost We to opportunity schools to continued revenue substantially to in investments. teaching to profit as in group’s was division XX% potential and operating for the profits XX% of Assessments at grew revenue Learning improved significant grew invest this to processes delivers due by on stabilize and improve drive the with in margin demonstrated The through strongly and operating expect due Margins English X%, them continues offset ed partially in profit by the margins grew investments lower in further were reduced X%, profits of Virtual partly to and offset virtual growth, Profit XX%. growth. OPM higher in education business flat improve and with maintained margin on offset through year in than where and due OPM, progress more XXXX. future improvements leverage thereafter. to the improvement partly COVID margin to qualifications see Workforce enrollment savings. X% and recovery FX. investment platform. margin declines would on we we of XXXX the growth see leverage operating growth, expect margin have a Learning on Virtual low curriculum, a in the profitability which revenue

as also £XXX million has and incorporated now £XX around Our corporate is restructuring around million. and savings guidance growth in nature reorganization our million been property £XX This costs financial have savings which we’ve divisions implications £XX which million thereafter. global non-cash generation. into of expect into finalized XXXX, new incurred in business our of restructure are in predominantly offices is in of incurring – generated reinvested XXXX, The our We’ve expected, of those the X of costs, complete. we

XX% KPIs digital following and slides. of digital Our meaning up digitally-enabled are Group revenues make on X%, business. the grew sales together brought X now the

once again management KPIs these will and tight seen as and capital collections. strong of cash they with leaders efficiently We’ve go XXX% through working divisional a our and Our strong to divisions. through continue their talk balance sheet manage conversion inventory

dynamics we on capital to cash Turning the the £X.X partially disposal to increased disciplined talk interest in we our aid will the Brazilian investments returns. included rigorous and tax, to net from our later billion from securing like offset Return decreased in the about future. billion, operating before required this X.X%. how to recover X.X% and touch our debt, payment, to which time. on to develop expect of in about the with I it dividends, And and flow by £X.X be I’d which Sistemas of state cash business, continue

that investments pandemic CapEx simplified height looking declined XXXX, roadmaps. drivers relatively product as flat. a and development. in make and increased we of the of of technology our in our initiatives due and in enterprise are ebb can are at Working and paused programs development elements flow, the operating technology Firstly, CapEx, and natural ERP you product the to of at of as key cash levels slightly the our version program conversion such global we flow cash low cash capital like the product XXXX see

will tax driven to will and in divisional revenue our current expect operating we through in In partially growth take offset we’ve which and growth growth be divisions. Adjusted expectations the cost and for operating XXXX, further declines interest this XXXX, XXXX group leverage will higher on and moderating with summarized you this and level, X property to my by slide. year Profit Turning out a growth inflation. beyond, revenue by be colleagues expectations. at line other the with profit, savings, market on education

ongoing services and and of In and of significant terms our areas key in technology of in we maintaining a our workforce competitive to to investment, and see products Pearson+ strategy; advantage strength; accelerate of division investment positions opportunity. where we to direct-to-consumer growth see resources investment the our three our reallocation our in growth focus: our maintain

cost business for conversion and to underway and marketing offset well. courseware inflationary publishing through price will strong is and We progressing increases. efficiencies Cash The our increased local is be appropriate process international as XX%. pressures well over continue will any

businesses to with point and of business when guidance to seen during can as expect profits and TSAs sales is clearly conclude our this duplication some will costs in and our as businesses, do of be will analysis need it The we These unwind. other update international segmental XXXX. be share eliminated relevant. which We at

under also timing. HX a new Revenues the given learning given with the should start weighted in now consistent academic weighted, will these quarterly phasing due growth virtual group of From across HX to exams that weighted of the perspective, a and businesses review more Assessment to HX businesses You aligning the year the of year HX will decline note strategic for be nature. certain relatively the are Qualifications, the normal their back with and discontinuation & low-margin resumption businesses. U.S. to

mid-single for to we remain CAGR. stable to relatively As revenue the out by will achieve XXXX, the to we mid-teens XXXX. look increasing to then group And expect XXXX margins XXXX, digit

I conclusion Looking highlighted of at peaked those elements that technology key our in as flow has enterprise cash from the and and transformation reduce XXXX property CapEx programs earlier, will forward. XXXX reach

on capital still double and incremental strong cash conversion. product and development increase throughout We will be by reinvest period will this into will maintain revenue-generated cash Return our XXXX. digits the

allocation the and policy and clear capital serves is well. business consistent rigorous Our

is rating is agency Net and Our balance targets. well leverage sheet strong. low debt remains below

Our sustainable. dividend progressive is and

invest to our business. continue We in

the to to previous in to drive we As cash utilize I growth, organically accelerate a growth. to on product investing significant it’s our strong headroom. see expect incremental slide, proportion M&A and we whilst strategy further Whilst set out maintain conversion, our potential our of unlikely for

continue shareholders the capital also the £XXX to publishing international dilution can manage local prudently those mitigate way will also divisions. and return we to earnings So buyback, of balance our courseware million of from by share which the strategic disposal sheet

evolve KPIs, improved we the and summary, which in expect in expectations have we business which builds. shared the will exceeded strategy the on we have XXXX drive So We’ve the to financial as return capital. and

XXXX. revenue to And margins mid-teens. improve for out expectations and to We looking expect expect in growth we meet good XXXX, to to

capacity balance million sheet with future an will to making and our the hand to strong to And as growth dividend shareholders. invest well return Bob. in additional provides Our that, over as raise £XXX I

Bob Whelan

am some nice of us. Thanks back see to Nice many I’m the see of in I you the it’s Whelan, Qualifications seen the Assessment Sally. again & come here you Bob President today. past business. have to and of you and to see I

is year very to And great realistic thrive to a of just meet hurrah as do I leadership very seconds. have of continue have this am As couple this confident in a We the to Valentine, led I’m excited you proud already new I business. to we business. last I was before Art. And my I’ve few Art the it. a great of might had will highlights year. and you know, President over under who that it a hand it been

simple. Our message is

business at the We are largest now Pearson.

an for say were and & of We That’s because to to that. largest the hard source we we’re XXXX, and is excellent Qualifications in years, strength of many really as business. grow the in and to Assessment had for proud poised we not company. continue year me very are a stability

a to lead youngster to provides along for certifications help that knowledge assessment a business their their licenses Our them allow way qualifications learning. the that for career. lifetime demonstrate pre-kindergarten on their to in and move and to move everybody in and career, of someone people advancing all work From assessments

and XX%, the diagnose someone way. We why also have clinical our environment one. maintained can assessments, we have help were the teams which but COVID along to In to have them that impacted learned might might pause. XXXX, a challenge up get have our up terrific how in better business, really an a even were on Sales require which Profits pause year. XX%,

support the The and proctoring, This So we’re numbers, driven half hard already people starting was enjoyed a there. people going during very are get run XXXX, their a contribution. those most more from exams of strong lot proud by of but of much quickly year to and of and deal for in performance grade but leadership UK normal. drop along excellent – new choppiness in second spring offerings and bounced for online again cancellations ‘XX. gratitude they to and Well, reopening accelerated the Pearson, more canceled XXXX the the very VUE’s then I in qualifications with worked have support the on exams saw U.S. who many levels moved pandemic. the role business, of was to ‘XX, example, resume of soon. And great to which which a to when started normal normal meet back our fall you’ll the key in with drivers product of a in have assessment were some it center clinical great from back some January. excellent focus ‘XX test Art, the health mental in

an to Before Art, Bird, thank opportunity I give me Scardino, have believed Marjorie this Fallon Andy I enough introduce John fantastic to business. in build to and me who

So to with Art. over that, it turn I’ll

Art Valentine

and with going I’m is even just leaving is advise in play a he to to the a and him Assessment Bob stay I the capacity, important, still am to the too he say, and not because really to golf, go & rest team. he far going of wants let company though the going it’s broader while more company of can help go bit Qualifications, me

Bob Whelan

Anyway, Art, pretty to easy follow.

Art Valentine

XXXX, Thanks Bob. strong In to capture position with the portfolio. across mid-single-digit we expect market continue growth to and our share low

units each the our to with expect margins business maintain XXXX. We of also profitability through and

continue will innovative, by to to in-classroom assessment of services. revenue the that U.S. XXXX, powered single-digit the cadence delivery won. a high of and across contracts student ensure of we We best-in-class businesses invest annualization growth, have normal we In the large will to assessment products some our and return show have

qualifications already past later UK and to We revenues in conducting exams levels business to we expect and has will resume down. Our and January, normal pre-COVID business revenue. Assessment be this started International do volumes to testing expect rebound this Clinical the summer. slightly exam

show going for subscription be to some going are a strong We very in releases our demand pent-up to and by and had new stellar product products. strong services. X digital That’s clinical XXXX, where offset growth we

be to going is generally business VUE year-over-year. flat Our

We it’s in of rate be a new fantastic but volumes continue win UK. That’s very reduction the going the core driver’s Agency UK in test. contracts, offset have and the strong and Driver here to by Vehicle license to a Standards

That’s in up XX% prior or be XXXX remote our contracts in year’s better with including single-digit of offering. to We Test will continue that’s performance. deliveries. our our mid stable to growth volumes more up XXXX on-view XX% slightly and expect to consistent renew exam proctoring in were

growth to to some and portfolio. to in business the new will growth enter the initiatives. and we to revenues we XXXX, low Assessment digital and return low to student will markets the into three and across portfolio solution our we as assessments. grow growth our and towards experience in assessment digital well international mid-single-digit profit to to set. invest will Clinical know & broaden flat are VUE our move this more deliver UK growth enhance summary, customer horizon. business, experience In look investment over mid-single-digit volume as to very customers. our experienced shorter revenue We confident business we and qualifications going for low are A&Q is as frequent as XXXX we’re Qualifications their be team expect There generate that continue And contract beyond to deliver through As mid-single-digit succeed. anticipate continue U.S. knows the changes how results. we the will the in the we in but a reasons

First renewal the off, contracts, allows any we have changes sectors high This market. geographies. multiple part one long-term weather across in to and of macro rates us

see future. can these VUE’s the revenues this trends You to the continue on we chart and into expect of

Second competitive continued continue of business. and our our increase products allow scale opportunity And assessments, of countries, upscaling the Pearson. us of is and it turn a over breadth services XXX and million is test parts to I into advantage. our our demand for to other Tom. the then rescaling to XX And integrate will lastly, the business market with that, XX,XXX centers, major

Tom Simon

today. path with learning forward I And the Virtual It’s great morning. Learning, Tom Good here schools Simon, is that of in and clear. to virtual you program virtual management. lead online and comprises and be I’m

and needs, and schools virtual and lines the today’s Currently, the blurring. around supports UK, high are virtual and education because positioned XX are learning our and U.S. a becoming the of for between schools XXX,XXX nearly hybrid online we school, well where teachers. workforce Our business businesses are students in X,XXX higher norm growth. And continued meet that, learning

one. partners to good long and education. growth the sustained enrollment the pandemic they of individualized XXXX, schools in overall years XX%. and services, academic X and we enrollment online as track virtual marketing and headroom We student overall mortar, X.X% we growth And a over revenue services services, wide K-XX these still see CAGR return pandemic, we globally. XX curriculum CAGR for the program X%, the the we a estimate provide small In students along support which Schools, before year, business. Schools includes of that for The XX%. only special learning in marketing management, In well in of as teachers range and support of In growth. fraction X% is the market. the substitute achieved the from business schooling U.S. around Our of an across here’s believe further deliver Virtual programs instructional technology record to with design a we plenty In to the in uptake a XXX term, to enrollments Virtual of a grew OPM had our drove we for And today, And schooling of despite of naturally of grew and enrollments in increased widespread population virtual bricks be that U.S. $X.X enrollment billion. of XXXX. ahead

there operate. of to to acceptance primary cohort the parents and period XX are by And grow. to billion need factor the turn, ability months designed XXXX, cost market fixed grow continue that it a learning, years. the have driver is and was in and over changes The to better last XX% and at years and already a a the has in our improve we So digits and we marketing to in universities. has in enrollment in increased The efficiencies increasing to rates. we into XXXX, where for and online $X.X to XX driven growth by can strong OPM costs fragmented and states enrollments been confident to now X significant reduce for extensive our we of relatively In at we division rise the propensity home. funnel program remotely conversion into COVID over expect support outsource market next transformation growth to which grow base the worth X increasing work of undergone centers because over while our we’re XXXX, room And is penetration we virtual mid-single growing the XXXX, the learning on

of could We have reach where also reduced scale profitability. or a number we not programs

XXXX, So unwinds. pulling future mean programs And ended. high as the as we has this be in Virtual digits for in of sales OPM to In single-digit anticipate growth all together, COVID growth? low cohort what single discontinued the does impact it Schools

continued new virtual see XX be and in year learning XX loss expect expansion to Schools margins profitability XXXX, margin to of in operating by some X for the X OPM high by we OPM supported expect as new the in mid-single And margins OPM. operating driven term, XX double And school of by year. operational in to Schools digits due We single is programs OPM. sales a in efficiencies. in improve digits Virtual longer improved we CAGR growth XX in annually profit Virtual largely leverage by a offset schools will addition digit and anticipate low and per to By opening

will a solid I strong that are lay So OPM reasons shareholders Schools both forward. in on high-quality going we you with path Virtual deliver And a and experience for have and we students. for leave why to growth foundations four

has across learning more models. to the the giving use pandemic more board, Firstly, learning and it of virtual hybrid the exposure increasing entrenched people

position Secondly, virtual schools. a players national of U.S. X X have as leading we in market only

between uniquely reset positioned lines This business, learning linkages both our of offering hand we workforce. it as Virtual confident to experience, with thanks proposition those the XX from record close synergies as of Thirdly, track the lastly, our we strategy Pearson you. on provides we part Pearson. wider we this are a to the OPM are aim blur over I going as years the story to our to feel will virtual high good at to on in Gio. school, now are is and Schools And to learning a about strongly to our profitable value of and focused Thank complete business, as a workforce. opportunity, building lifelong which well why of And differentiated growth. And higher and education market benefit capitalize furthermore,

Giovanni Giovannelli

Thank Hi, English Language I’m you, our I Learning and Tom. Gio, everyone, lead business.

to at and English, ELL spaces. for the proficiency. learning vision improve With And world’s is be destination to for are currently billion there grow prove X.X direct-to-consumer a Our the learners institutional to leading it. is to capitalize on be to we able – us in to English assessment their people well big positioned opportunity committed

as to include and globally. to language We’re gateway part gap curriculum. the in it focused define the on dedicate is of money those than a committed making is English learning. world. countries a the indispensable workplace, in closing mandatory skills More English a vital those who as their learners, English XXX who national the time subject

in ELL XX% million. division Our revenues by grew its XXXX £XXX to

built assessments We have of contribute well-established also a strong to Test growing as divisions. English market which brand against businesses with all map and solid of the developed a ability Pearson to unique grow the and room of well Pearson has our and services with We’ve success VUE. other Pearson like skill synergy as shares, which and our proprietary global content plenty of the to a we international recognized English, IP

potential shortly. Skills crossover Our address division, with Versant testing product also new has Mike that will and Pearson’s Workforce

segments: market billion ELL. institutional growing £X.X which focuses a first, market Our worth £X.X global courseware. X go-forward of billion, on It’s strategy is

and players three We prior biggest circa on of market in XXXX, £XXX up are one courseware the we of revenue year. with XX% XX% share, million in generated

of XX to million up schools, Our institutions digital solutions is people indirectly to language made reaches and and private some XXX blended value countries. in academic proposition and

and authorities, bodies. officially that for by Second, £X.X immigration market the English are billion universities those assessments, meaning high-stakes recognized professional growing

of been this engaging top over market us we of can that more worth has key brought and of £X.X the XX% placed affordable and to than well has circa in A English pandemic the online taken at XXX,XXX segment to win segment millions to a is on effective, in benefited £XX grow and billion estimate for space. grow flagship share the are by in times want that more revenues X from XX% volume year. be to with years. to on to X PTE. people. the direct-to-consumer our be We It’s million, focus shift online for in digits We up direct-to-consumer XXXX to a learn and prior player next focus an way This double the with

how And strategy in over this within ecosystem to exciting best the including of actively exploring We’re ELL as an progresses. we’ll you grow our offering the DTC time. space, Pearson+ update role

PTE we We in recover of each this segments. volumes with a XXXX, revenue excited of years, margins be revenue X mid-teens next market our improving the expect opportunity ELL underpinned leverage, we by as enhancement mid continues the the we mid-single-digit versus core In XXXX. X are operational business by XXXX. driver. COVID-XX growth growth. can will PTE expect across to to high from And growth to by In foresee single-digit margin because

further we success our market key come will especially other segments, assessments. direct-to-consumer our from in high our stakes strategy, While the winning to build

we is do Here how will it.

differentiation taking with on test test the anyone test AI-powered, improve maintaining We than focus will computer-based our scoring. average experience. already PTE else to X.X PTE faster reports high in digital, fully time score days. with to is and deliver takers an We a and world-class continue unbiased of security

test made on it launched divisions. academic the proctoring. how and PTE leveraging example test reduced at-home and network thanks are in the more of capabilities It’s available across widely to make online by VUE length We Last the Pearson’s more online we’re Pearson to than on countries test centers. another over convenient, of first we year, yet VUE third-party we our XXX XXX possible

almost lifelong our it on In to contributor focus XXXX and year, with through example PTE gaining governments developed levels. versus consumer-friendly continuing stakes for with delivery UK will to test mission. the our across a business, assessment by recognition network and portfolio. test, of last XXXX a in double XX% short, through to And from that the to and our And market is over learning we and we strategy, consumer grow building we addressable I’ll continue our Home pass Pearson’s you our we expand One universities listening. recent a the versus volumes grew high Thank globe. our So be Mike. believe this we new can VUE, Pearson institutional big wide business where a now

Mike Howells

Mike I’m division. Workforce privilege have I everyone. and of Hi, leading the Gio. new Skills and our Howells, the Thanks, pleasure

the for is this straightforward. headline Now business

to understand new billion together, is a in workforce solutions that to succeed. model, to our to the businesses confident skills. our with are network providing last meet to tell important Existing transitioning above all, trying problems with the ability And to some solutions are end-to-end Pearson’s to to problems, confident ROI And clear these we integrated solve strategic work Many phase market, achieved. and fantastic four U.S. want go-to-market an well the in are $XXX a consistent. months they at the that And have differentiate global are I valued solutions employee there new offerings face and in customers and But Pearson can early rapid you engaging competitive set this deliver strategy We the do alone, not there. we poor we spent for needs a outcomes verifying as of why for few disruption. deeply poor provide diagnosing our provider great solutions partners by is experience. are business fragmented learning going We specific which they are they out the advantages: Pearson that the and First, a are of from still and challenges their are the exploiting face. customers

single scale, and and and reach allows services. the to address us which products governments of Pearson’s of enterprises, needs ecosystem institutions through individuals, Second, a

data accurate, sources of status for throughout global and Third, learning and rigor brand solutions. leading our talent, that today. our fourth, a skills recognized And new conversation you’ll hear quality of the the theme as of on the a one trusted

you that detail. more in me bit let a through take So,

an problems model business what and, with of solution such excellent Versant VUE. current testing enterprises they want, service, give as drive will integrated new at GED Pearson’s Pathways returns specific started their To address to products, our in we model, English and build enterprise our this TalentLens, Firstly, verifiable course, have Pearson scale. business, Accelerated

first how it’s divisions. suite are and a Pearson’s generate to our connecting portfolio. example us AI-driven products case services and from these now existing taken market Faethm, case, platform. This to from added our acquisition, we them enterprise strategic To across world-class but largely have revenues to building an have and allow solution sales to portfolio, we bringing planning greater by analytics offerings are we single we past, that together five the into And team will market. take a in of our Now them workforce

to our need. of will what years. employers helps we of Faethm. presentation network. on product glimpse quick enterprises platform. you hundreds skills invite we at Then source this largest the can over we end team Credly, Now what the have they put at the after has employees diagnose prove expanded Faethm Credly, data announced the what successful, world’s suite digital stay for Presentation] millions And companies worked by they skills learned they credentialing to last And of together need they skills the to verified demo Credly of a X and have With can the at be pieces month, and last with as of include [Video

Mike Howells

comprehensive, and created portfolio, available saw Credly by on And these you with in space. the video, future-looking Skills today. from together Pearson’s for Now, end-to-end value skills Credly be and capabilities team the unmatched And that expands bringing have have in Faethm we will economy we supply And Workforce our presentation. after Credly, with proposition the also as dataset and a learning the employees. new an accurate demand opportunity

opportunity expand available a You yet via another of product. Pearson+ this where learning scenario to and can becomes scope envision much that of the also

And credential a it learning knowledge Skills all it’s and will ability our this this the paths of and reach competitive enterprises to market. from and our cater from institutions, market needs a have employers and the and or for advantage is providers an that both and resume brand. second employees done And in qualification know world with individuals. Our And combining away from what by who if attract, how scale. of is has doing finally, want a go. TalentLens, served together opportunity its skills. right you where is to the today. experience Pearson’s crucial. of date. Employers problem help competitive this currency new that right from It’s solutions individual trusted CV with experiences to positive they key which and inferences help third learning We BTEC Accurate, what in it. new old is past. serve get the to on advantage the that the capabilities so insights you talent. PTE. will Pearson have are enterprises targeting and Large verified few linking ability The market. to unbiased and our link entry past provide successfully, about a between to employers need learners it access the to and about is focus X,XXX expertise get retain need in crack. the is for the long receive something. are employers real products We are our a not Credly Pearson accurate, to and over deep combined to enterprises labor VUE, worth sell individuals in or the governments organizations help our you outstanding skills and particularly the solutions. are that want traditional develop Faethm The It’s you enterprise and to you we They is individuals, learning data for learning from Pearson, data to inaccurate already on if enable difficult and like talent start, challenge moving quality what Very building reputation needs you’ve and knowledge know them in to our do, on based can

formed time Now need. to the a with since a will the the portfolio. that yards across acquisitions we’re foundations into last spent our July, together existing the build we new transition our undertaking. making doing We’ve not structure, We’ve integrated deliver is growth that hard businesses, was simple performance-focused which the our division revenue

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mix that which to and using us partnerships, including refine we force a and connected help direct build projects to will pilot sales continue We a scalable sales partners, enterprise of products. new beta are our currently our a out continue. to channel expect acquisitions we range testing have to offering. for our of key We have underway, with new And

client of will product annual customers and revenue existing by our and expansion We recurring grow leveraging the our Pearson’s wider relationships offering.

majority financial Now also underlying XXXX, an months, acquisition of while on significantly, by TV. clients services growth large and grow last to platforms new Credly Skills the headline to the XX including Faethm basis. we’ve clients, ranging likes businesses and corporate in been Workforce In the Sky business Standard to new the technology we anticipate sales winning than growing of of XX% doing onboarding global all more and new that, consumer out Chartered X firms, of from both due them, amongst with

single-digit UK our Excluding Workforce is modest a growth our BXB-focused more high-margin acquisitions, markets, products higher high growth is underlying with we in in scale. smaller in growing the business. international key And growth anticipate mid business. to us for and and qualifications core

more be size double expect division investments mature. expect margins be to in our double than road and we business therefore in new will accelerate reach broadly margins the product and position map the to and digits in our as XXXX to We By market to breakeven. scales and investing low significantly XXXX, the

retention customer net our Skills will number rate of KPIs be enterprise enterprise of and new Our customers, Workforce total users. number registered

an way is play products data. in market to This I’ll Pearson that labor we And to in recap, enormously time much trusted in critical a much-needed a serve services confident strategy talent an Pearson a are to in leader end-to-end significant and and solution are workforce listening. as moving skills with positioning one exciting over that we Thanks and role a on So the Tim. opportunity integrated workers business will employers ecosystem, very make Pearson’s pass and can portfolio capitalize forward. now we for the of

Tim Bozik

Education our Well, I and lead co-lead for division with to Education everybody. our division headline division Tim Mike, you, thank I’m Higher consumer Bozik, Higher direct The and and our Frank. straightforward. I hello, is Lynne

stability, of in will we moving digital a and We’re growth market. place expanded drive to an

about where and I market that a into the Before detail go today. bit on business stand

operate to that we the today. comes of revenue XX% on our U.S., the While globally, so want over focus from I higher business education

addressable business total can courses course students who or in estimated simply In you And market of number on number the are us our that. required defined opportunity required and model currently an while dipped put, that’s registrations XXXX, the of our help their £X enrollments I’ll and in X%, beyond do on-campus expand and just to they is our moment, take addressable winning with the courseware a assigned a In have by we walk Those means course how becoming enrollment through those reflecting current anyone by That lower also consumer-led. billion defined university Our students digital needs spend courseware students and learning. to materials. instruction. more increasingly adoptions, supplement is market enrollments. we’re market enrolled to who student Pearson+,

print, which users Our recapture volume, amid lower million stood at secondary XXXX, at rentals text essentially units, combination stand-alone the print which of to unit is and X.XX e-books million was flat were enrollments. indicating Pearson+ registered and X.X

by margins expect For to as last XXXX, optimizations. less down, we drive but and to stabilize sales be than we year cost

Now key some there underpinning assumptions us. are

spring, from And fall’s lower declines flow-through and that. continued rate, but drop our a ‘XX improve. assumes at last plan the enrollment student this fall also could We declines from that expect reflecting

seen of point. courses universities pandemic, at the to during degree, while taking we’ve and to catch need enrollments course still students enrollments. expect up fewer those to the will the require some U.S. We number reflect courses in a same students student complete But

pay very potential uptick to to deferred a going of those we’re courses. attention So close

downside from Pearson+ operating and now will mix growth And small to the product relatively revenue e-books which portion Print with in continue I’ll Through from later. Our to efficiencies. and print to and is to improvements a margin the to the Access XXXX, bundles and business Pearson+. of shift speak expect diminishing expect to cost Inclusive growth leverage we ongoing mid-single-digit due and low we mid-teens both to digital-only.

growth there for to and Now three education are digital key drivers lead business. stabilization higher the will that

First, problems. core products, Pearson’s student Revel. investing They to interactive the of for because widely adopted we enhance continue to students. These will our Learning tools and business, learning customer This is been capabilities products enhance are they experiences the experience our great core the solve MyLab using Mastering, and provide learning the of and instructor we’ve platform.

moving That year. we’re of Specifically, end complete will be to the MyLab our stability. close improve and to reliability Mastering by and this to cloud the applications

It’s our shifting consumption our the Prospectively, supply On and less availability supply. to which XXXX remember rising level, the Rental few it’s especially stand-alone we delivery downside. that we channel, to choice Inclusive print as that important to in million Retrospectively, user more remains key in facts. and is trending into substantial is secondary and a reduces to sales three secondary opportunity print rental, Overall, diminishing reduce for nearly upside bundles. sold X We’re consumer is with digital, The platforms for important leaves recapture faster secondary Access point, Pearson+. volume and X increasingly application XXXX. commercial ship considerably highest the titles. formats: success to into across remember to million consistent these title a is That print units secondary driver also single recapture. consolidating next our continue of experience innovation. underlying mix

will time. from a for for We consumers zero XXX only, who the increasingly And consumers XXXX. will by to them expect and they have long to rental we text. sales, in through our That bundles we with reminder, rent over decline supply revenue in over go print means volume become remaining they a our steadily ‘XX us by get available of titles the nearly print, shift more partners. digital are exclusively fall print obsolete. The we they stand-alone all secondary And paid. and available as titles rental as titles want to titles want are if top to expect program program but physical will And the platform tail a of a

the into That’s that Now built in that happens, than the when on roughly based less million sold revenue price the our XXX,XXX is plan. loss from we $XX difference. bundles XXXX

with So recapture and will and the downside Inclusive Pearson+. grow associated with Access secondary reduced demand supply

the of scale of addressable the expand third speaking driver the market. the platform our success Pearson+, ability to be and will So

us Pearson+? and made about I So start. upbeat why good really am so of Well, we a all first,

users, release including of fall in the by subscriptions just X,XXX the the XXX,XXX start was before X.XX With paid and year. had we service titles of weeks million available that over total the registered end classes,

App believe rating are see this market also throughout got And social continuously at customers learn, to moment, a we’ve now we’re year. to in appeal services of regions significant introducing the our Store in just the Our international any we two channels a Further, not the Pearson+ conviction student are year. listen out to assigned starting and expand new who those Both that opportunities and short the closely they In pilots those platform impressive product who extra stands Pearson+ eText. improve are reach an we services and roll going you’ll to the live needs a production Pearson further download of X.X features. are will because for just increase Canada they’ll and other services XXXX. the These our experience. we on

a and accomplishments direct-to-consumer managed team Some who built are in the of experience today. here significant and direct-to-consumer group with and design are the product, tech. They product terrific

to Some this well. lead live as invite a demo I of morning, and afterwards presentation a as they’ll saw you you

at look [Video So let’s by take a video. futures now the new Presentation]

Tim Bozik

prep you that has team original creating and see video-based announce practice about help years, with excited explanations and remarkably Prep. our grades fuel for so channels channels short-form today an social. XX students we college hope toughest are this that why signed rapidly And to service simple Clutch I’m courses. we’re at get I save video library a content and in acquire to tours. to Clutch The better been learning an They quality time video the can with Alright. thrilled online will agreement

I has back enhancing to and deliver of So contribute Thank hand that market for potential we’re to and secondary just to and growth pursuit of by strength the of education our business Pearson+. core the and recap maintaining and right to I products, scaling the gives on And of hope track future you you. growth. higher is that Andy, this before will Pearson. a by division confident we aggressive the excited why the about our the continuing sense it stabilization

Now, back to Andy.

Adam Bird

Thanks, Tim.

we fed that Qualifications So market and the in in the continue strength expect business as source upskilling & reskilling. is and for base, customer summary, demand a maintains and XXXX Assessment that of company broad, to stability in by its long-standing

online schooling from normalization strong of the our benefit provides which to poised from is business learning foundation virtual and OPM, Our upside. in

we’re Our ELL high business institutional for aims that a destination stake and direct-to-consumer strategy. to with the committed well as learners English be as and business assessments pursuing

Tim I of our capture our the an that secondary market market heard will talking in the strategy by upskilling important and believe also both higher Pearson, Workforce the truly and of I business, about a at employers education and for Skills of growth evolution. finally, from the bringing seen you just and the core a pivotal digital we’re products, which new and growth and point our XX Pearson+. And laid path strategy today by for this our to out the execute ago, the business to inflection employees. trusted that anchored months for stability we You’ve end-to-end needs meets division solution learning

Now as we into XXXX, move my clear. are very priorities

and we’re Firstly, profit growth. deliver to sales going

quality trust. Secondly, focus and we’re continue the going execution, to on

to consumer We’re insights customer company and and entire the going to we’re across scale progress embed and going Pearson+. further

goal. for always when of starting consumer higher in you new connected seeing already experience that a now we’re It’s great start making Pearson+ against Pearson+ light. have July, launched team commercial a that going about to deliver that just as the talked last will As how Pearson+ a building today, time product point to is to strategy that. ways shared one felt education is Earlier I was be presentation, I’ve offering. in I And the and the broader the just consumer Tim’s connected win. progress saw we

fiscal subscriptions Going registered Pearson+ our so forward, can each prelims the we’re academic mirror results users going to interim we and and of share and year. that at

more or ecosystem building the a with to even need learning, of we’re learn, languages aim digital experience, show people to we’ve to through broader it of university, a whether to Consumers people. do lifelong life deliver Today, tens great addressable user We’re for Pearson+ we skills a of going a market discover, credentials, With and to and build vision. globally. and they be school, reached want way that Pearson+ growing and millions skills. Pearson+, scale work, premier

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learning of consumer-led are happens. where it to Now we when connect all the experience vast I possibilities meet into this think one

see imagine demo And potential some can model, easy learning content of could and how today’s life channels everything from language using to in we channels. to You that for skills. that it’s of deliver Pearson+

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you of years has the I five have for to Pearson+ businesses that. growth heading. drive you’ve heard the a our we’re core divisions, our Now now and sense today hope foundational potential of that strength the over where opportunity And about beyond coming the

become company’s think Pearson+ and I it’s North will Star. the exciting

we tomorrow across of and company on one parts for today, is makes any execute working moderator takes function, that’s hard your to focused the one that, as questions, for and where us take to and with we’re of you happy will company drive and in those us. will to a are those And the to strengths of chat for the please act one plays and deliver questions be room, Jo consumers we and online, market alike. the this that translate going, your our to growth the all While the bright post us who watching both in shareholders and very

for raise microphone your so the online people a a room, can question. you If and hear hand your have that wait the question please do in

Okay.

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I though, we Thank you, Here go. that’s excellent. good. hope

Adam Bird

probably here Okay. – as the Chairman, our If I’d have guessing. well. these Taurel, us I’m to microphones. say what like with that we people also Sidney is That’s

Joanne Russell

We will take Nick Dempsey. from the first question

Nick Dempsey

three morning, questions, please. got Good Yes. I’ve everyone.

all organic assuming ‘XX. one, beyond your And than I’m Workforce if years organic. Skills revenues out forecast XX% XX% the that first backing doubling so, of more is by I’m to So X kind ‘XX of growth for

the get and businesses another as match under effect into of there? to revenue student Cengage Higher the Cengage stream optimistic have assumption And sticks the of you on Mastering you’ll as the T left a the that reduction strategic business scale kind that inside behind eventually of So costs review? levels the And Do you’ve mentioned to that, that of reduction you that you Second sense will the be MyLabs can have in do any or stranded version us once UK question, BTEC more of give the of that do third a a product? in slice you in think come leg you will are Ed, sold of bundling assuming Unlimited. their represent question, kind you per revenues? for

Adam Bird

the I’ll to Sally – for the over then can hand I question with want, questions. you If and first start two last

look efficient way the we why I and at and cohort is of Pearson a certainly think very they Pearson+ today, started about Education the Higher tool. Higher business a business low-cost we users consumer our that product defined in we have Education are acquisition students. million XX of with And

of So majority into ecosystem, the Mastering whom of for students, acquisition million if of came that very generating that MyLabs, through think scale is that actually way of cost-effective a and the very, within the Pearson+ you cost X.XX community.

leverage, the actually starting the the I student – coming the later why and kind U.S. increased that hope any of any are is years, or Pearson+ growth. I Now you other Pearson hinted in we very and for to opportunity phases and then user those using three is at, number functionality of very, sense as with evolution said wants year at that of utilize and textbook can – important. a year now students in this I channels student year, of assets this get the at a functionality and who presentation, I you that get end learn globally, the registered MLM, create we Pearson+ there expand to add the of have. anyone who this my always really we last to in anything the and really that that kind – at what we are now, the hinted end Today,

the – between Mastering your through the you’re of features got when we get see you Sally, us the than seamless product. into Pearson+. will the there world see Mastering and rather your an go we discover a and a a the up? that. into like seamless education to a and reduce to in eText And question, to MyLabs The physical a we pick have get able are to – Pearson+. sent funnel. beyond within you other you’re to cost a now expand aspect as not or host of book, financial for future, do whole And you higher integration of We of So MyLabs need and and that enter build student building would

Sally Johnson

Nick. Hi, love I’d to.

will side give in eliminate there’ll stranded year other say you that services. disposal, point on will because place any the guidance whatever be sure while to around TSAs And those how the to for work it’s need costs, some a businesses costs. we’ve I’ll we point normal that duplicated time those at understand a So through at us And I’m update that it got anything in is. the presuming

million the I’ve underlying of answer in you Then then existing see course, can acquisitions be We’re sort forward. Mike, want talking it for for flavor? And the I’ve growth going Workforce, add give the the to cost £XX given they growth some of Mike down sort million. rates the ‘XX, you a And organic to to give you so that kind to to we’ve then organic business. little The from financial more over pass of of do £XX of a XXXX, I’ll made. break two will base of you bit about you tried short you to then of I’ll on flavor. and ‘XX

Mike Howells

say I the wide BTEC would have of course, portfolio the that’s of services. a just revenue, of factor. review on effect on But we policy LX a

provider. We’re T-level also a

enough So in the we’ve preference. in portfolio optionality to consumer changes got cover

guided and to see as expect of So that we continue you, in the business UK grow we’ve part internationally. the to

Adam Bird

Jo? next, Where

Joanne Russell

Omar?

Omar Sheikh

questions. I I’ve Thanks. three got, It’s Omar Sheikh from Stanley. suppose, Morgan

if doubling £XX First you’re business to by double-digit you target size increasing it’s million. two-parter. a But operating talking bit one about of ‘XX, Workforce, with the million margins. about £XX with of about for Andy, look you’re profit Sticking talking of at your the really,

better for sort finally, inorganic strong it a to mean, year. the of very this is the then down weigh that you Sally mean, the versus Higher the opportunities, last pin have? balance I going Ed, quite still and talked than $XXX maybe on revenue particularly on of sheet maybe So context question. I’m in year. really a of to related that, strategy the step So at you the over look opportunity you in in ambitious that’s plan. about the market, if X you’re you’re enough? Do enough year you first take And your just is think context back try saying for billion last fast into And that that the range. year, you do organic you the decline the decline and I wide And transformation you’re going example? how

that minus minus about give you sense range? somewhere talking bottom we’re Thanks. X. think X Can it top might us say, where land, or of a and Let’s of between end you end

Adam Bird

Omar. Thanks, Great.

Workforce overdeliver a there So your to for about question phrase think part comes mind. of first and is opportunity on underpromising the for your I Skills,

and think a And credentialing. So got part set part doing The lot We’ve in it’s time sense business, time, been in spent seriousness the with business team. the terms longer I Mike whether PTE a company. the a in effort. we VUE a long that a enterprise and it’s Workforce Skills for Pearson have actually, the the long, cross-company you’ve across or of of all of up of we is of and division

X,XXX So in of experience to, area clients today. contacts, we have lot a over as referring and was a corporate Mike this of lot

expect worked strategy may because our upside Pearson, due be to welcomed want world we that fully for have outlined innovate. come at on the And strengths. and uniquely in plays you I believe really back is we have something very that seen potential a We proposition. deliberately around to is Mike really follow, that it we we’ve we created truly being by that unique we didn’t really market, realizing is course such to have scale. that I And market believe as really, and we corporates the We to you. large some to maybe coming a wanted

information, But more more Workforce what Skills into then integrate market. get as as into believe in, that opportunity get is to that So and it the as data sense company, really Credly huge we a further the a Faethm the acquisitions as we truly get comes and is. we more better we mentioned, broadly we’re going actually the division of

in acquisition. innovation and balance through parts terms the acquire we’re we this As guess, and doing I of – need sheet whether our results, all and skills to of how as within two use company our new it

first and I are missing. think XX addition to the the actually the we that what today. understand in important and do to to that pieces last paint aspect talent bring as I capital when And me Board, Sidney, the the the when go struck new into which of very, what us right and acquisitions pieces and and really the months right joined is been bringing technology in. I jigsaw which is we me And – we’ve in to this human picture, The the power of our was very frankly, about are assets into very trying company skills new targeted this company, to started company. picture of over thanks really, a has the a

the maybe and hope today integrate look our how So all aligned that first the around right. back around we the can within group, every of in into we’re we how And how from you them And came that innovation for by doing I we’re the share executive the hours. are holidays, here is targets one company. a in balance the things also said, be sense then get way, think other we are I my Monday and came and today the of the organization. meeting, a culture team really meet being it’s back I and what deliberate and future. whole and very we I the front we I X row, what from we’re use acquisition Christmas, sheet needs Because to the creating colleagues we of done as at important broadly, that all more

us that one went watching the it. And from Jody, then what would when the we just all into Metaverse. an visiting And employees man if to of turns of when headset floor And the not company. of I the the businesses. company was I business I who my Ask send this team, me creating the contributing all powerful haven’t that, so an world days Mr. communicate it are formed been we’re you of in me team. that how like ‘XXs, Oculus And of – Internet. innovative because in I President And thank within and a an their put around They And do and accepting on very, trying employees. bought innovative went, Oculus asked, weren’t culture do by, wonder own the it’s And an you’re I sense just this, I Kennedy was you employees are President reply these are you Kennedy to a it woman the monthly that. moon. who a that I typified, headsets. on of the And to because desk example of moon. what yes. I send But – That to members company talking put galvanized who’s and I me. Houston behind this is to really was e-mail. – success, helping look think, we others, out to videos to other an they the of and are, had doing? was to over on do, culture with time e-mail He if have wherever very all really going getting They said the whatever the struck and to says X entire ago saw Andy that I that’s when wrote them, nation where do employees I asked guess, janitor XX,XXX engender type We’re the but said and you. in President, to of an is a I’m a to these who really guys always NASA there they around tiger created had sweeping the within – he’s the President,

very very, answer. what Anywhere I know, was. off. the four. mean a Can’t was go and question that other know, I yes. one to didn’t I between remember long Sorry,

Sally Johnson

specific what going be am going I to right. X-year on growth am is to Higher not are going be to Ed XXXX. is I a there about But emphasize out to you Yes, basis.

I your secondary think if you specific, moving Anything enrollments, And you given be we want to recapture, have you course parts share, will piece. that add? market anyway. let judgment I enrollment draw own around want the you to

Mike Howells

No, I you think have got it.

Joanne Russell

to Katherine. to go We can are – going

Katherine Tait

A It’s Goldman everyone. couple morning questions of Katherine Good for Tait me. Sachs. from

Firstly, opportunity you also laid Qualifications Learning. in and out, as you there is did the in with Assessment great and Virtual Workforce,

it similar there? a other describe XX% of can’t than I as – is? and really, question, OPM, similar sort see you we you slightly But of And conservative why clinical? digit, growth conservative growth a faster about the growth low-single market stuff grow can’t Why So, perhaps as particularly levels. growth. of for outlook maybe faster VUE I understand talked lower is growth as sort being it that your or sort Assessment wouldn’t why think

into completely other winning are would won mid-single question, market? only you it? it on that Are successful if that corporates digit understand we services curious, Second like corporates, what to bringing bit that a addition those. talking the are they on the is contracts in-house Skills, with have? for Workforce you to when are displacing Is further in these And as So I they selling a is product solutions? could and Just why how in baked competitors? Like little displacing cash recently or buyback, then about finally, in, are – like understand to you again, other the in or £XXX already of new you have returns, better. Are we businesses up keen that anticipate sort million? that the you sale,

Adam Bird

I first much. Thank Bob Have that Art, In to met and you Art? over-deliver? know. response your seriousness, earlier and all you very don’t question, under-promise about and No.

Art Valentine

all good session Yes. Assessment Qualification bad so business. to over-deliver great the first Not under-promise us. like the feel of a absolutely boss mantra this, plagiarize and about move is and in We the a for

And the record track have the traditional very of students are Other testing. shown delivering broad the of have in maybe has like to areas We admissions things that admission upward. growth. that traditional formula COVID IT proud we portfolio, the of that, specific on the we that disruption like like reacted the delivered pulled things steady are coverage of continuing breadth range the professions, certainly things planning

in we what broaden So, expansion effect that the is feel quite in geographic low good about to investments portfolio be we set. will that We contributes it and solution whole that to making mid-single continuing to add the when digit growth.

And able still. happy here stand to We and we that. say if with do, quite be up being will happier are over-deliver, fact, we in

Adam Bird

you Mike, to the… on want Perfect. do touch

Mike Howells

to going need we because are I this I have hours But follow am think going to to could really that standing of we market things this example about for couple important actually. to a other and talk keep mind. talk am I Art’s in just to you I about points about. not

one yet fragmented That’s also at The the achieving churn moment, is for very means space, changing it companies. and and share. highly rapidly. friction very, It is a that creating new market no first of it’s really, this has in company lot single-digit

So, customers, better demand and there a for services us. is expectation opportunity a for and lot of employers from of lot

in are new So, we services specific that are question, winning these contracts to the the for market. your

these spoke. provide, in a mentioned new new to landed the services for by terms What is and opportunity services, So, I filling now, us customers are integrating we us expand the that when Faethm in out Pearson. market some for returns take and of so provide, innovations revenue for gaps future state that together for products services they outcomes of example, the that the these our opportunity there more and contracts, having the I much many the Thanks. Credly and today, into have high-value effective of that

Adam Bird

Sally?

Sally Johnson

I up to stand going I my mic, not got do. to going am I have suspicion if I a am lose because

allocation have terms apply Board looked what capital an the have in our our I incorporated of So, international I of assumption businesses. application around The the around capital publishing policy, allocation happens will out and always courseware local policy.

we Our shareholders, – priority we that in we is opportunity business future the make return point the time, demonstrated now. at absolutely in investing growth. returns have to And in to and will. have driving But if see any we

Tom Simon

please? I Can take the OPM,

Adam Bird

Yes.

Sorry, Tom.

Tom Simon

Yes.

mean I built simple answer in is Rome think So, wasn’t I look, a day. the

So, we that reset started business. of a off with major

bringing in a team. We are new leadership

the marketing in time as need new investment the enrollment right. perspective new funnel get putting when a from appreciate, the getting of terms ramping these pipeline. then with courses, cost up development up ramp business And you to are as one we required. foundations to place they you are We in an take But

clear. And to We we really are be want that. doing

right We can we where have partners scale got with. the

take with mean online that doesn’t three So, to university you programs. going one are

Because the can scale of in number about leverage university the programs, you grow grow brand it’s taking behind are online brand, university’s with right so we space. to the a brand, We talking the market. competitive recognize that

choice-full being we where So, and how we about very grow. are

starting are we so not And by one, off on XX%, go. day we well, there saying,

thoughtful Thank gradual growth. So, approach you. step-up to

Joanne Russell

from The Citi next question from in just back. Tom the

Tom Singlehurst

Citi. from here Tom It’s you. Thank Yes.

So questions. three yes,

it. for go Let’s

just The includes first one, which of consensus. taken million, at on for it I looking have from £XXX it’s you think the But guidance, Skills. £XX shy consensus, also million Workforce

where spent Coursera, investment, extra of account and that so is having whether fresh rate Obviously, I So, being big of I Credly sort sort can run sort not where is and Skills that’s then an of just like question this consensus wins missing on division. are the big – in there build time? that just Qualification, or the coming I there a contracts mean on then that something money interested have – Tom contract That’s too eye destination that’s on losses for is is keep by small I on or be maybe coming am just consumer for suppose developing one just an or is Workforce any wondering just a for edX sight Assessment out definition, And Skills low you is will as the £XX coming I in around whether and that on the feel losses. site addendum Thank to of you million you Pearson+ Faethm if final like somewhere. we going of by OPM, am any do are whether conservative was Workforce And was over fill first the XXXX year second line out. well? – you. absorbed DVSA is question and them. of just

Sally Johnson

indicated, mixture the we So, for increased that’s both, £XX kind have million Skills – of of Workforce Tom. investment, which which I a

broadly as as divisions, are capital also and am Workforce further, conscious. And are from into guess I well. organic know, putting very in Faethm So and investment the we cost Credly, across you there losses I other that comes reallocation

where to future are are there us in making that some we So, growth. savings places that invest enable

want that So, answers to I the question. think add? probably Anything you

Adam Bird

about… – to talk you or want want you do Bob, do Art, to talk

Bob Whelan

disaggregated. it lose We DVSA contract The didn’t all. was

– big going we fact, In But contract when a there mid-single was a the have contracts one that are signed, like And vendor. hit. don’t that, but create the of of havoc. you means lost was. yet what with public they nice in go stir exit current not up that make them you they has it already chosen in from have a to because new two-thirds been grow think and their to it And will want are works. sure announcing some about third They a to maintained obviously they digits

they be as for it’s will the signed And VUE which in because that contracts several to So, many we fairly the about been finalization. announced be the I business can’t are new in expect soon. ‘XX, of pipeline is But really in strong significant talk as stages years.

Adam Bird

also, of you overall number breadth contracts, stability it that over win some a that. anywhere of contracts, of the mitigates And have Tom? of those as loss and And the so of scale a recall,

Tom Simon

Yes. pipeline Look, doing our get a get speak we think to enrollment terms we bring an university from of in to they said are better there that about good and opportunity improve moot-based there conversion, large funnel. with to work about it having high-quality when is teams. to that mix OPM feel that I students you of can We partners, access for their enrollment in of perspective, others the media right, clients. one thing, we from base them. doing lot to our of efficiency can to Obviously, are and what to we marketing We to the optimize get through care drive

and for are that, build for excellent got, grow reputation partners. with relationships the delivery an we are partners, marketplace. deliver do happy with if we for consistent to those continue we will that And sure build going and to reputation in we we our make frankly, continue a to have So what will and we we

the that’s plan sticking to and it. are So, we

Joanne Russell

Adam? Susie, can you get to

Adam Berlin

morning one Adam from three Two Skills, on questions, the UBS. got we everyone. have Good also It’s and on Ed Higher Workforce I can. Hi. Berlin if

in make year? salary talked invest inflation has in obviously U.S. platform. a Ed, Andy the sense declining that margin on and target to opportunity There to have going this said huge is this So, Higher about Pearson+ And it you You does in are to revenue. stable

do So, it? is how to the are you going This of kind question.

The which on most today revenue you thing, following talked and the Higher how the up that, is about Mastering, is in of where Ed second importance MyLabs is of actually U.S. and the as in units? MyLabs Mastering that it. you going How plan? is in What’s stop decline Pearson+ your and talk an important the strategy. about acquisition are for funnel to don’t You

access textbooks. in that enterprise You ask are business? is, just to But always will around focus turn I talk could Skills And how explain problem to which the the about wanted that big in what you And doing you on does How those that challenge then to going large for Workforce that recruit be real today? sales start-ups. you have on question the would Pearson+, like, get? lots really is helpful. team that market? to because current need of very And that’s tech much. people the Thank big you it what’s How hard labor inclusive is that be in to

Adam Bird

you Thank margins want and start you. Do to Ed on to… Higher move the with then

Sally Johnson

Yes, it Yes. And to fill over will well. in then I make those margins. hand to sense does as Tim to target

two have got happening. things We

savings but revenue, got in the ongoing have business, have got please, cost have also we the which seen we XXXX. We within

there. a that it’s the we of continuation are things doing So,

to Tim his is digital, business. that As of you that. doing very print from at out and expert move team the are you naturally there costs And take can

Ed about this So, Higher I year. am really confident margin

Adam Bird

just any going so how and to holistic how utilize so across It’s we bringing leads about – our to cost in that the up, are important is that that have our we before really we said, work allocate take and triaging. are Tim view I savings we a be we that we prioritizing we we growth. money are driving company spend how And and about expenses put

relentlessly and We are delivering growth focused on that.

So, by at segment segment. we don’t look – segment a longer just by no

is We different aspects the in totality are this how areas. we around, a on okay, and on much are spend basis, day-to-day these really thinking these

constantly best is World. You constantly operations have have of in real areas Pearson+, optimize Jio’s answer, then heard way of The terms how – innovating, our we where to what investing. where some our allocate Workforce, the businesses But these are funds. all is to opportunities we do,

I how see you we that’s think that. it’s just But Tim, very important you want… do understand

Sally Johnson

I will funds. I forgot go, to I have you really Pearson+ on a the sorry, Tim. up pick am Adam. let

Pearson+ XXXX. So, in got we have investment in

piece We have XXXX. kind already in incremental got it just of not It’s an it. because we had

Adam Bird

trying in. say. ahead, eloquently Tim. that to That’s was of was Go what more built That I We kind said.

Tim Bozik

question. appreciate the I Yes.

come and not three enhancing I and Education business, way that So, those are secondary are the addressable aspirational, is can Pearson+ three to, expand are scaling level, mentioned which well underway. they those of market. the back Higher products, accelerating in headline our recapture a drivers core they which for will key I All operational

doing. support double-clicking cloud, a be and will finer done reliability are MyLab we significant on on core essentially That’s what we a of complete to the mentioned, products, that now migration what very year. undertaking have this the The as stability. and I So, and enhancement point to put will Mastering,

those You standpoint. heavy call execution it’s from an can a table but lift stakes,

services framework, So, a a a right, almost turn, about convergence. common application, Mastering consistent single Again, this and platforms bring so MyLab is year. in that that much faster will, user innovation done Point experience and common cycle. bringing UX two, the to

period. ability to that. gain by respond supported So, It our underway. this and over completed – is is advantage be or convergence be will competitive remain That

through step deconstruct a You have time, services. application one at by step to you the

So, point aimed complete period. improving it And will underway at experience. features and within learner it’s this been is the three of that a have we roadmap be are

are So, our improved it. integrated again, more competitive instructors that experience. very the side on learning with interactivity, All we improve will, student position things contact things, or adaptivity, and improved both of maintain these both close faculty

we suite believe will competitive. So, the those product remain that are reasons core that,

for large-scale couple years, were been means over which them faculty one, are the The the productivity. courses bring the they XX-years-ago, X When have in very X%, last last pressure in right, – issue of tools use because under is are faculty we moments U.S. people seen anchored undergraduate undergraduate significant where designed years productivity them they in Those introduced down courses. their lower-level on have we they other

I we And is of be as pressure lot think while some might we don’t severe there. we the but volume outlook. control So, can’t seeing improvements are the in which a we see a the expect environment, for, on it, of predict don’t to enrollment reflection we

profits. and reason an a franchises part portfolio So, that’s why and set remain will reliable believe that, essential revenues of the and the that we part the core of

Adam Bird

in And our your to clear, to Mike? be earlier see we erosion no points. share, just

Mike Howells

Great question.

So, three this. to answer of parts the

plus assets Solutions existing So, our the I business, smaller, so the the into mentioned we integrated Pearson three have acquisitions. that’s units of business two Workforce faster-growing

that’s So, structure that. go-to-market a new creating that integrated single out we are of

that So different structuring past. marketing the today, less than But working we are in people and in of the XXX executing in function. has terms that a in and than sales way Pearson

is the just would second I acquisitions. partly say thing it’s about The

have on revenue So Faethm is in well Credly, talented BXB be driver and data, on going in the to particularly as go-to-market of we model space, with and some very we Pearson business interesting, and us. are side for really of brought obviously, people big offer which and third development do. highly as unit to the SaaS is has. the product key But what the story a the going really scalable, and economics, Great this the appeal that then part is part,

have people a purpose is I but opportunity Andy any story. of the as that in the see moment. I about sales professionals am – that But lot of that talked think also world If attracted me are afterwards. So, our they BXB you from to and we very lot the interested, at bringing see is growth SaaS a recruiting there today,

sure, hugely is but we market it’s labor offer are competitive a there people. we have got So, a very great for to finding that appealing out

Joanne Russell

[Indiscernible]

Sarah Simon

just Berenberg. questions two from Pearson+. Thank Sarah Maybe Simon you. It’s on

So, the users, a million X.XX mistaken. if in that’s I am figure, of terms December not

and compared you new Credly So, talk a since credited sort of we halfway maybe as there? it and one colored maybe the just of semester, on now you users maybe that could And LinkedIn indication to well, on any are paid on qualifications through has number can everything. trended LinkedIn, how within about

between LinkedIn? cases and use in difference Credly the just So,

Adam Bird

on take I your will first the Pearson+. question –

mentioned in I we registered numbers to on and As focus my a both user remarks, year. releasing are numbers subscriber going twice

at at the are to do at i.e., We year, it interims. going report the and of year-end end we calendar

that so should into and update are then is next year, accurate will of more also details growth, end last since giving that of we Credly? so there our at regular presentation. those interim say, fiscal mirroring get of the we that expect we you numbers you the talk at we you of numbers the academic the each been So, year. both into say will at that that be around are But those cadence want but has getting and year, healthy number calendar I Mike, the to periods. both end do shall

Mike Howells

synergies actually communicate Credly credentials great Sure. I will are many mean and LinkedIn. their And Credly between there people on LinkedIn.

So, that’s application the one of areas.

thing think key two. That’s Credly is fundamentally here skills. the a professional social I difference of skills. first as Think layer obviously is for for data the work. really the platform is think to LinkedIn, And about the verified around difference.

about has of got LinkedIn some say to in LinkedIn. So, very an ourselves working element verification on room we bring to technology, the hard what great

the past Credly You is. sure we am completely some are how space. said, honest what can accurate data of in a skills is all about that we on done verified deck I have LinkedIn. query we have

are an consumer to So, that can your employees the as But them an as are take if make to to Credly picture skills, how you for you enterprise bank. that you about communicate the Credly your differentiator. big you helps or do. you those if skills. tells you an also you seeking employer, of new a badge, It individual what within you a can use thinking have gives on and of verified That’s employees, accurate as recruit

Tim Bozik

add was I to on I quick statement the would one Board. like that. to Credly

Credly XX% you it. There you that know owned badge that just you between know. difference you about Pearson do, can what is actually not the know and just what is can know, Credly verifies not that. something, do, you of and can tells badge lot And differentiator you of you do key one what a what As

Adam Bird

Good point. Jo?

Joanne Russell

as M&A have guidance? stable from looking a you. the Matt in online. revenue much well Sally, from couple Credit margins you in Suisse. We How for is And XXXX ‘XX as are ‘XX? for

Sally Johnson

So, think to I the we both the had have – it’s answer got I earlier. question probably

and Faethm have XXXX. given business or to breakdown the So, Then rate onwards, the I for you ‘XX ‘XX growth in the for both and given And in the XXXX, Credly. then that’s margins, to will XXXX – both have the you within than it organic so for I included existing rounds the Could XX% for margin margin broadly XXXX, XX%? stable. mean for for up that the then base but Absolutely, that XX.X%. XXXX be rather

Joanne Russell

base one another which revenue the in you from Credly of Exane. think it’s I X% for XXXX? one. you the and Mike, What Thank growth first for revenue guiding Sami are Faethm And from for you. from annual is

Mike Howells

million. £XX about Today,

Joanne Russell

Perfect. how And much ‘XX? schools. think Tom, for that COVID on the cohort retaining you, I virtual one full are planning of in you

Tom Simon

indeed. is It

COVID first is have mean, and I this the interest of to are last the result virtual the ‘XX, ‘XX proportion grown we in year. Two I we over students So new couple as of different year, schools of that a think things the XX,XXX a in increasing. years One is say thing had students. school cohort lower

have we students new returning for rate versus lower students. a retention So,

in then has a And their new And for about mix around that XX%. changed students of secondly, third XXXX, XXXX, in positively. was said So, coming reason them COVID. was our principal in that

have versus COVID being returning, students place. of new better the have in fewer So, in reason got principal proportionately proportionately first number a terms mix students and new they coming of the in you were of in a got terms you of terms

terms that on all you for between rates. ‘XX and then then year-over-year difference guidance put of back XXXX the the So, of growth you having that to can out ‘XX our our together that’s and in difference

Joanne Russell

A question from Nick.

Unidentified Analyst

that education morning Good jigsaw the an creating. have higher you value. This build and people imagine. presentation, Thanks which to and like a look global go that Hi. to is opportunity let’s say, harder in this media Disney being, a of it’s us are out ability that want businesses we of from much Nick – get seen And understanding helping learning business. taking for going a When we about interesting see you at from an everyone. publisher picture can really it, compelling we bit magic, element talked to really Artemis. is that’s very is the To take And to to content there you where pieces create an are investors then for the company.

for give you capability compelling and you within the can and us that content you your comes and that So, your execute that Pearson explanation can that culture of have from, confidence users world? service some create heritage and you where product believe around

Adam Bird

for you it. raising thank and Nick, question, Great

attracting this Learning, to English who our the doing our that talent the Connections to, of people across mentioned in I think intellectual that range next this all Clutch across the company. have property, X,XXX success fundamental that’s constantly, create each that how one of authors in won we I of curriculum that schools and of learners talent, property to That’s next will that Prep as intellectual through our and and businesses, business talent really that have the the I is past, talent, the how the our nurturing spotting, the of is bespoke we a sole presentations, have it given essentially And the teachers that strong X,XXX entire intellectual product brand. property we search people and teams want. we delivering creating win intellectual then whether of said in heart virtual have in at finding all trusted IP, in past, would intellectual iteration who who in way divisions form where in our quality of and that business, have imagine, my create we Academy, with and is is you such both the and a or are marrying intellectual been as in consumers. in are I property the I us And Higher businesses, through we today, power that job across textbook acquisition am property technology developments It’s Tim to talent relationships Language generation hope the business Education in believer the whose technology the whether for enabling of property that’s what intellectual future. property that in with the an and that property past, intellectual direct through to of in of helps. created compelling go the create the the first the create create we is

Mike Howells

and magic the global through the And these that algorithm say, are also you developing we the has content, as about It’s Yes. of acquisitions the It’s companies. we services about the magic are as making. connecting explained. we in the are Andy that media Pearson of

as which greater for Pearson+ word, environment, is that capability content it allows the Andy the maybe to great do well. for So, value content to expand of bringing example, diagnoses, has they connectivity compelling in of Faethm but new as allow and got And in content that us strong and scale whole too wherever specific of applicability portfolio. pathways Credly, gain up a what also the the dramatically learners as they will locked market as much our are have have to life, mentioned, well – recommenders our existing as across as through cases, we a because in content us of needs to use can we meet

Tom Simon

that Schools we curriculum aligned Workforce Faethm the Skills. aligned got is ontology. new space to of that skills closely that terms its what, build understanding point, to framework, very just of building on Guess the Virtual are have And is economic we own Mike’s to in world a

aligned. all be can that So,

different building that way. content are We in a

in a of think as It feedback from you how gives not performance of modular. understand it’s terms does – students think which you don’t it so about as clear doing. So, it about a you database are textbook, content, learner a they can very

take can assessment which You an Prep, then is qualification. Clutch

because provide learning students about about how then linkages thinking service of with can for we relationship those of start offer. You then the lifelong of making example, thinking range up think and are down can value. we and terms workforce, in a the you to you schools school the the And about as virtual can things broader virtual

So, think how There aging and great there synergies. And is of that then is content. stages I a is cross together. the organization there we the bring

Adam Bird

and of see across data our data the and are data company, a and we to the our inform products how only see referenced our content how and we opportunity IP, improve to with how around The receiving, the and we have importance that not the utilize help how us we amount we also bit but on use we we to learners. manage,

is tool. to college comes If of things of the the our predictive or a recently was the their use high in – data school someone that of One beginning me struck their question life X-year a or what over X-year studying are or can help main they – their university answer have. life, follow are that able and we we to period, they students

hell for into market.” and with you world. that the we badging, if and enterprises are that’s – recruits have jobs who tens there a role, what we for potential of the are degree? So, you also we marketing on can we looking “By data And you marketing marketing example, for available? say, if credential And of in graduates, good this way, XXX took thought thousands can were this I help differentiate or we this What Credly, know if through the do can going are then to

VUE way exam. few to went Test was VUE. Pearson into Center and I about Pearson of think a candidates there So, Holborn bunch taking this nursing a a High is a weeks ago another

want think individuals you there of is it, a Now, about to if anyone nurses know become who we before else. bunch

insights So, I across interesting. and a those data common think layer across very company leverage something is identity, that’s we how consistent and the a very,

Joanne Russell

you, the good does margins? for indication Andy, BNP. of and looks from Simon have business from growth scenario an best like case for what Question

Adam Bird

Does the...

Joanne Russell

revenue indication and an good, margins? for like case have of what scenario look best would Business

Adam Bird

in have financial the from metrics KPIs. the place aside and Well, we non-financial that

rigor that move any there were We around are then generating it. the when how are success. and we we going them address to understand what agility. transparency then into become levers and operating. share if We that a focus challenges, – with layer you that have And we relentless how things are And are well. know and And

we and That’s numbers why because those certain So, of meet amount management. from for it’s lot can an together Monday like intuitive a are numbers every you a information two the get of generated. almost morning hours

what’s into of accurate We very is we sure change add. per working stage about company pure very, need various team, improve. forecasting to the are not that have or how need what we understanding I to and how of But I if question, within or forecasting the wants the as that’s or I se, is an and there Sally’s – interpret something the beyond early managing numbers. feeds the the whole essence what – important. models at working to am a anyone we m above not But getting what at whether

Sally Johnson

a I to add more directly. that just maybe will bit

us hope have from vehicle here. to improve should the We that. And on we a Pearson+ what what feel do base of We we ourselves expect laid out is would to case so. give

Adam Bird

Yes.

Joanne Russell

I And will back think. to I Andy, hand

Adam Bird

Okay. you much. very Well, thank

Strand are morning, watching I of day. appreciate of made time you our you for the greatly company. If interest online, XX And I your into – it in the have particularly this your appreciate out those who taking

Credly folks well product for from as here will There some here. team. are all as are demonstrations be both the Faethm. There Pearson+ We

So, and you groups individuals. can in – we in are it doing

all that elements, the you are your have any questions we are that for to haven’t you service. those at here had any now, who other those in you and So, of of opportunity raise interested

much. refreshments be of you. And very very, you thank I So, you believe here Thank for there may those outside.

Joanne Russell

Thank you.

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