Pearson Plc · LSE:PSON
Pearson — Investor Presentation (October 2025)
47 slides from Pearson's investor presentation, October 2025
Slide 1: Introduction to Pearson
Introduction to Pearson October 2025
Slide 2: Forward-looking statements
Forward-looking statements Except for the historical information contained herein, the matters There are a number of factors which could cause actual results and discussed in this statement include forward-looking statements. developments to differ materially from those expressed or implied by these
Slide 3: Helping People Realise The Life They Imagine Through Learning
Helping People Realise The Life They Imagine Through Learning The World’s Lifelong Learning Company
Slide 4: Contents
Contents 05 Pearson Overview 13 Strategic Priorities 25 Financial Overview 35 Business Units
Slide 5: Pearson Overview
Pearson Overview 5
Slide 6: Pearson: A snapshot
Pearson: A snapshot Experienced Senior Team Strong Financials Company Overview Group Sales (£bn) Adjusted operating profit (£m) • The world’s lifelong learning company: services & Margin (%) (exc OPM & Strategic Review*) and software focused company, serving all ages Omid Kordestani 17% and stages o
Slide 7: Diversified, global and highly digital business
Diversified, global and highly digital business Pearson by business unit Pearson by digital % Pearson by region FY24 Sales FY24 Sales FY24 Sales 3% 3% 18% 2% 22% 9% 45% 14% 8% 12% 14% 82% 69% Assessment & Qualifications Virtual Learning Digital Non-digital US United Kingdom English Language Learning
Slide 8: Pearson Does Three Things
Pearson Does Three Things Create and Distribute Content Build and Curate Content Digitally and Physically Verify Skills Produce Assessments Deliver Assessments Score Assessments Learning Courseware Distribute Lessons Assess Gaps Design Courses Interactive Content Credential Skills Write Curriculum S
Slide 9: We have five business units
We have five business units Assessment and Virtual Higher English Language Enterprise Qualifications Learning Education Learning Learning & Skills Delivers the Delivers high Delivers digital, Helps people learn Helps employers assessments that quality, affordable, high quality and prove their future
Slide 10: Two Seismic Trends Changing Education and Work
Two Seismic Trends Changing Education and Work Demographic Shift AI, AI, AI 10% GenAI Of US jobs will be vacated by retiring Boomers (‘24-’30) The birth rate is below the replacement Multi-Modal Text Audio rate in many developed countries Models Images AI Video ~7% AI Models Moving to Risk to US GDP
Slide 11: Strategic framework underpinning medium-term outlook
Strategic framework unpinning medium-term outlook The World’s Lifelong Learning Company Why Helping people realise the life they imagine through learning Medium term guidance Driving Performance Execution in the Core Business Synergies Mid-single digit underlying sales CAGR What Average margin growt
Slide 12: Why invest in Pearson?
Why invest in Pearson? Unique breadth Access to a strong education market with a well-diversified business. Our offerings span all stages of learning and professional development. Established leaders in many of our segments Our products and services hold strong competitive positions in our chosen se
Slide 13: Strategic Priorities
Strategic Priorities 13
Slide 14: Our Strategic Priorities
Our Strategic Priorities We drive long-term shareholder growth through four strategic priorities: Driving performance Execution Targeted Medium Term in the Core Business Synergies Market Expansion Growth Vectors • We will continue to unlock • We will realise opportunities • Targeted expansion into •
Slide 15: Driving performance in the Core Business
Driving performance in the Core Business ASSESSMENT & QUALIFICATIONS HIGHER EDUCATION Execution Execution • Contract wins and 99% customer retention in VUE • Improved selling performance leading to adoption • VUE enterprise customer wins (ServiceNow & SalesForce) and enhanced customer share gain and
Slide 16: Driving performance in the Core Business
Driving performance in the Core Business VIRTUAL LEARNING ENTERPRISE LEARNING & SKILLS ENGLISH LANGUAGE LEARNING Execution Execution Execution • 3 new school openings • Landed strategic partnerships with • Strong sales performance in Institutional • Scaling career and college readiness enterprise cu
Slide 17: Driving performance in the Core Business
Driving performance in the Core Business Improvements in core operations benefitting Pearson as a whole AI content generation AI in customer services Driving a Performance culture Drive Operational Performance – Improved Customer Service – Enhanced Productivity 17
Slide 18: Driving performance in the Core Business
Driving performance in the Core Business Significantly expanded our AI powered products and services across the whole business A tablet on a table A tablet on a table Description automatically generated Description automatically generated Higher (See Video Education Here) – MLM Instructor AI Tools V
Slide 19: Execution Synergies
Execution Synergies We will realise opportunities for sales and margin synergies across the business from: Product and Service Bundling Product Management Strategic Partnerships Select examples: Pearson Product Group Consolidate down to a smaller implementing modern software number of strategic part
Slide 20: Targeted Market Expansion
Targeted Market Expansion School Higher Ed Enterprise ~$15B Delivery Simplified our Go-To- (2% CAGR) Market approach for Core Business Enterprise segment: • Large market ~$80B+ opportunity (5%+ CAGR) Core + Adjacent • Building dedicated Opportunities strategic account Tech & management Services • Pe
Slide 21: Targeted Market Expansion
Targeted Market Expansion Capital allocation targeting investment into faster growth segments Adjacent Market Opportunities Innovation to Support Future Growth ~$80B+ ~$15B (5%+ CAGR) (2% CAGR) Core + Adjacent Core Opportunities Partnership with McGraw Hill Formative Assessment College & Career Read
Slide 22: Medium Term Growth Vectors
Medium Term Growth Vectors We have identified two growth areas - early careers and enterprise skilling - in which we are well positioned to thrive given our strengths, IP and relationships. Early Careers Enterprise Skilling In Early Careers, we see a strong need for new approaches We continue to see
Slide 23: M&A Principles
M&A Principles Strategic Deals must be part of pre-agreed strategy, aligned Rationale with our corporate priorities. Deals need to demonstrate strong financial returns, Returns with confidence in value creation. Deals need to have very clear synergies with our core Synergies business. Strategic Focu
Slide 24: Pearson's Power Metrics
Pearson’s Power Metrics Introducing two power metrics to serve as leading indicators and help track progress against our strategic priorities. Given Assessments forms approximately two-thirds of our business and that we are very focused on driving growth in the Enterprise segment, the two power metr
Slide 25: Financial Overview
Financial Overview 25
Slide 26: 2024 Financial Highlights
2024 Financial Highlights • 10% increase in adjusted operating Sales £3,552m Adjusted operating profit £600m up 10% profit with margin expanding from up 3% underlying* underlying 15.6% to 16.9% (2023: £3,674m) (2023: £573m) • Adjusted EPS increased 7% to 62.1p • Cash performance was excellent with O
Slide 27: Financial progress provides foundation for ongoing confidence
Financial progress provides foundation for ongoing confidence Sales Adjusted operating Free cash flow profit and margin +5% CAGR* 17% 16% 12% 11% 3.6 3.6 9% 3.4 600 490 573 387 2.9 2.9 456 385 133 313 229 222 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 Group Sales excl
Slide 28: Segment Sales & Adjusted Operating Profit
Segment Sales & Adjusted Operating Profit Sales Adjusted Operating Profit Underlying 2024 2023 Underlying £m 2024 2023 2024 2023 growth* Margin Margin growth* Assessment & Qualifications 1,591 1,559 3% 368 350 23% 22% 7% Virtual Learning 489 616 (4%) 66 76 13% 12% (9%) Higher Education** 826 855 1%
Slide 29: H1 2025 Financial Highlights
H1 2025 Financial Highlights • H1 financial performance in line with our Sales £1,722m Adjusted operating profit expectations up 2% underlying £242m up 2% underlying (2024: £1,754m) (2024: £250m) • Full year outlook reaffirmed • Sales and adj. operating profit up 2% on an underlying basis Adjusted e
Slide 30: Driving long-term value through sustainable profitable growth
Driving long-term value through sustainable profitable growth Ample runway for margin improvement through our strong operating leverage on sales growth combined with being cost conscious and implementing technology-enabled cost efficiencies, partially offset by investments to drive growth. Adjusted
Slide 31: 2025 Outlook & Phasing
2025 Outlook & Phasing Full year H2 phasing considerations Group In line with market expectations* Stronger sales growth in H2, in particular in Q4 Assessment & Grow low to mid-single digit Growth will be H2 weighted, in particular to Q4, due to new and Qualifications renewed contracts Return to gro
Slide 32: Group Financial Expectations
Group Financial Expectations Adjusted Operating In line with market expectations* profit Interest c.£65m – cashflow strength offsetting acquisition funding 2025 Group expectations Tax 24 - 25% Free cash flow conversion** of 90-100% + £0.1bn State Aid repayment Cash flow received in Q1 2025 Every 1c
Slide 33: Focus on disciplined capital allocation
Focus on disciplined capital allocation 2020 2021 2022 2023 2024 Strong balance sheet | Net debt / EBITDA around 2x Capex + Product Development spend (£m) 518 493 553 468 454 Capex and product 1. Invest in the development for organic growth business to accelerate growth Acquisition consideration (£m
Slide 34: Strong financial position
Strong financial position Five years of positive cash flow characteristics, comfortable leverage and improved return on capital. Operating Net debt: Operating Free cash flow Net debt (£m) ROC cash flow Adj. EBITDA cash flow (£m) conversion (£m) 2024 853 1.1x 10.5% 662 110% 490 2023 744 1.0x 10.3% 58
Slide 35: Business Units
Business Units 35
Slide 36: Assessment & Qualifications (A&Q)
FY24 Sales Mix Assessment & Qualifications (A&Q) A&Q 45% Business Unit Overview Key Financials • Comprises of four sub-business units with significant scale and Sales (m) / Underlying Growth strong competitive positions, with over 90m interactions per year £1,600 +7% +3% +8% • A&Q offerings span all
Slide 37: Assessment & Qualifications (A&Q) (continued)
FY24 Sales Mix Assessment & Qualifications (A&Q) (continued) A&Q 45% Underlying Sub-Business Sales & Mix Sales 2025 Growth Core Purchase Decision Description Unit (2024) Growth Drivers Capability Maker (2024) Excels as a global leader in scaled testing services, New customer serving a range of indus
Slide 38: Virtual Learning (VL)
FY24 Sales Mix Virtual Learning (VL) VL 14% Business Unit Overview Key Financials • Provides high-quality, highly accountable online learning Sales (m) / Underlying Growth* solutions for K-12 students through two main offerings: Partner Schools and District Partnerships £600 +4% -2% -1% • Pearson op
Slide 39: Virtual Learning (VL) (continued)
FY24 Sales Mix Virtual Learning (VL) (continued) VL 14% Underlying Purchase Main Sales Mix Core Description Sales Growth 2025 Growth Drivers Decision Offerings (2024) Capability (2024) Maker Provides tailored virtual school solutions to public K-12 districts in the US, combining Partner Pearson’s co
Slide 40: Higher Education (HE)
FY24 Sales Mix Higher Education (HE) HE 22%* Business Unit Overview Key Financials *Restated to reflect the move of IT Pro between operating segments. • Market leader in providing world-class learning experiences in the post-secondary market with strength in both eText and courseware Sales (m) / Und
Slide 41: Higher Education (HE) (continued)
FY24 Sales Mix Higher Education (HE) (continued) HE 22%* *Restated to reflect the move of IT Pro between operating segments. Sales & Underlying Sub- Core Purchase Description Mix Sales Growth 2025 Growth Drivers Business Unit Capability Decision Maker (2024) (2024) Continuing to scale AI- enhanced o
Slide 42: English Language Learning (ELL)
FY24 Sales Mix English Language Learning (ELL) ELL 12% Business Unit Overview Key Financials • We offer comprehensive English learning and assessment Sales (m) / Underlying Growth solutions, including the Pearson Test of English (PTE) £500 • We aim to become the world’s leading destination for langu
Slide 43: English Language Learning (ELL) (continued)
FY24 Sales Mix English Language Learning (ELL) (continued) ELL 12% Sub-Business Core Purchase Decision Description 2025 Growth Drivers Unit capability Maker Expect PTE to decline due to a continuation of the challenging market Trusted brand providing secure, high-stakes English backdrop, including u
Slide 44: Enterprise Learning & Skills (EL&S)
FY24 Sales Mix Enterprise Learning & Skills (EL&S) EL&S 8%* Business Unit Overview Key Financials *Restated to reflect the move of IT Pro between operating segments. • Workforce Skills became Enterprise Learning & Skills in January 2025, Sales (m) / Underlying Growth +6% bringing together Pearson’s
Slide 45: Enterprise Learning & Skills (EL&S) (continued)
FY24 Sales Mix Enterprise Learning & Skills (EL&S) (continued) EL&S 8%* *Restated to reflect the move of IT Pro between operating segments. Underlying Sub-Business Sales Core Purchase Description 2025 Growth Drivers Unit Growth capability Decision Maker (2024) Enterprise Solutions addresses the evol
Slide 46: Investor Relations Contacts
Investor Relations Contacts Alex Steph Gemma Brennan Shore Crinnegan Terry Matthews SVP, Head Investor of Director, Investor Director, Investor VP, Investor Relations Relations Relations Relations alex.shore@pearson.com steph.crinnegan@pearson.com gemma.terry@pearson.com brennan.matthews@pearson.com
Slide 47: Thank you
Thank you Please visit here for further information on our targets and KPIs. pearson.com