Pearson January Trading Update (Unaudited)

Key highlights for the 12 months:
*Group sales declined by 10% and we expect to report adjusted operating profit in the range of £310m-£315m at an average USD:GBP exchange rate of 1.28; with portfolio changes, inflation and the trading impact of COVID-19 partially offset by restructuring savings.
*The challenging impact of COVID-19 has been felt most acutely across International and Global Assessment due to test centre and school closures, exam cancellations, reduced global mobility and international economic pressure on spending. It has accelerated demand for digital learning and performance in Global Online Learning has been strong. US Higher Education Courseware has performed in line with expectations, despite COVID-19.
*Global Online Learning sales grew 18% due to strong enrolments in new and existing schools in Virtual Schools and good sales growth in Online Program Management (OPM), with growth in continuing programs partially offset by discontinued programs.
*Global Assessment sales declined 14%, reflecting the impact of test centre closures during the lockdowns in H1 in Professional Certification, with pent up demand in the second half partly moderated by Q4 lockdowns. Cancellation of Spring testing impacted US Student Assessment and school closures impacted US Clinical Assessment.
*North American Courseware declined 13% with US Higher Education Courseware revenue down 12%, with good growth in digital registrations and eBooks and a further decline of higher priced package and print sales. At the end of 2020, over 70% of US Higher Education Courseware revenue was digital.
*International declined 19% due to school and test centre closures and the continuing impact of COVID-19 on public and private spending on courseware and assessments.

Cost management
Pearson achieved incremental in year benefits of £60m associated with the 2017-2019 restructuring plan, and we remain on track to create the further £50m of cost efficiencies for full year 2021.

Strong balance sheet: Pearson retains significant financial headroom with net debt of c.£0.5bn and immediately available liquidity of c.£1.9bn through committed facilities and cash balances.

Andy Bird, Chief Executive said: “I am very proud of the way that our employees across the world have come together – in an incredibly challenging year – to support one another, our customers and the broader communities in which we operate. My priority remains keeping our employees and customers safe as global lockdowns and tighter restrictions persist.

“Despite facing significant uncertainty, our teams have been laser-focused on closing out 2020, enabling us to report sales and profit for 2020 in line with expectations. Uncertainty remains in the near term as a result of the ongoing pandemic, with further lockdowns, exam cancellations and reduced global mobility. However, I am excited about our future given the shift to online learning and the huge opportunity to help more people develop the skills they need.

“At the end of 2020, we made several key hires to accelerate our digital growth and, looking ahead, we start the year with momentum, pace and confidence. Our broader goal is to become a more consumer-focused company, targeting the incredible opportunity that exists to have a direct relationship with millions of lifelong learners. We look forward to sharing more details at our Preliminary Results in March.”
more detail at: https://www.pearson.com/news-and-research/announcements/2021/01/pearson-january-trading-update–unaudited-.html

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