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Pearson at a glance

  
People in Education
27,000  
   
US 16,400
UK 3,000
RoW 7,600
People in Business information
4,800  
   
US 1,900
UK 2,000
RoW 900
People in Consumer publishing
4,200  
   
US 1,900
UK 800
RoW 1,500
Education - Proportion of Pearson revenue
67%  
  £m
North America 2,470
International 1,035
Professional 275
Business information - Proportion of Pearson revenue
15%  
  £m
FT Publishing 358
Interactive Data 484
Consumer publishing - Proportion of Pearson revenue
18%  
  £m
Penguin 1,002

Financial highlights
2009 Sales
£5.6bn +4%
2009 Sales by region
Region £m %
North America 3,663 65
Europe 1,222 22
Asia 519 9
RoW 220 4
2009 Sales by business
Business £m %
Education 3,780 67
FT Group 842 15
Penguin 1,002 18
2009 Adjusted operating profit
£858m +4%
2009 Adjusted operating profit by region
Region £m %
North America 637 74
Europe 118 14
Asia 58 7
RoW 45 5
2009 Adjusted operating profit by business
Business £m %
Education 587 68
FT Group 187 22
Penguin 84 10
Our record Average annual growth in headline terms 2004-2009
Sales +11%
Adjusted opertating profit +19%

Chairman's statement
Share price performance - 1 year % change (01.01.09 - 31.12.09)
Pearson 39.0%
FTSE 100 22.1%
FTSE All-Share Media 29.2%
DJ Stoxx 600 Media 19.8%

Source: Datastream
Share price performance - 3 years % change (01.01.07 - 31.12.09)
Pearson 15.5%
FTSE 100 -13.0%
FTSE All-Share Media -16.3%
DJ Stoxx 600 Media -29.7%

Source: Datastream
Total shareholder return - 1 year % change (01.01.09 - 31.12.09)
Pearson 46.0%
FTSE 100 27.3%
FTSE All-Share Media 34.1%
DJ Stoxx 600 Media 26.1%

Source: Datastream
Total shareholder return - 3 years % change (01.01.07 - 31.12.09)
Pearson 31.9%
FTSE 100 -2.0%
FTSE All-Share Media -7.5%
DJ Stoxx 600 Media -19.94%

Source: Datastream

Pearson's strategy
Adjusted earnings per share
+13%  
  pence
09 65.4p
08 57.7p
07 46.7p
06 43.1p
05 34.1p
Operating cash flow
+15%  
  £m
09 913
08 796
07 684
06 575
05 570
Adjusting operating profit
+4%  
  £m
09 858
08 762
07 619
06 552
05 470
Return on invested capital
-0.3%  
  %
09 8.9
08 9.2
07 8.9
06 8.1
05 7.3
Dividend per share paid in fiscal year
Year pence
96 16.1
97 17.4
98 18.8
99 20.1
00 21.4
01 22.3
02 23.4
03 24.2
04 25.4
05 27.0
06 29.3
07 31.6
08 33.8
09 35.5
The world's leading education companies - Education revenues
Company $bn
Pearson 5.8
Apollo Group 3.3
McGraw-Hill 2.6
Kaplan (Washington Post) 2.3
Education Media & Publishing 2.0
Career Education Corp 1.7
Cengage Learning 1.4
Corinthian Colleges 1.2
Lagardere Education 0.9
Santillana (Prisa) 0.9
ETS 0.9
Infinitas Learning 0.5
Scholastic 0.4
Samona Education 0.4
New Oriental 0.3

2008 data
Technology and services - FT Group revenue mix %
Year Print Digital
00 72% 28%
09 27% 73%

Year Content and Subscriptions Advertising
00 48% 52%
09 81% 19%
1. Long-term organic investment in content - Education and Penguin pre-publication expenditure and author's advances
  $m
09 794
08 775
07 741
06 657
05 642
2. Digital and services businesses - Pearson's digital revenues - % of sales
  %
09 31
08 29
07 27
06 24
05 21
3. International expansion - International revenues (outside USA and Canada)
  £bn
09 1.9
08 1.8
07 1.6
06 1.4
05 1.3
4. Efficiency - Pearson margins %
  %
09 15.3
08 15.8
07 14.9
06 13.8
05 12.8
Growth in services businesses - Pearson worldwide testing revenues
  $m
09 1,641
08 1,578
07 1,247
06 1,039
05 837
Rapid growth in emerging markets - Pearson revenues
$m
  09 08 07 06 05
In Total * 648 513 471 348 304
* Sum of Middle East, Central / Latin America, Africa, India,China / Hong Kong

Our performance: 2009 financial overview
Sales growth
+4%  
  £m
09 5,624
08 4,811
Profit growth
+4%  
  £m
09 858
08 762
Balance sheet strength Net debt was £368m lower at £1,092m (£1,460m in 2008). Since 2000, Pearson’s net debt/EBITDA ratio has fallen from 3.9x to 1.1x and our interest cover has increased from 3.1x to 8.8x.
Average working capital/sales %
  %
09 25.1
08 26.1
07 25.6
06 26.3
05 27.4

Our performance: North American Education
US combined school and college sales growth vs industry
%
  Pearson Industry
09 4.9 (0.2)
08 1.8 (0.2)
Pearson's total year-on-year sales growth in school and college products in the US versus the year on year sales growth of the total US industry.
Adoption cycle win rates
  Win rate %
09 37
08 31
Pearson's market share by value of new business in the US adoption states. Market share is quoted as a percentage of the total value of adoptions that we participated in.
State and national testing contract win rates
  Win rate %
09 60
08 47
The lifetime value of the US school testing contracts won by Pearson this year as a percentage of the total lifetime value of contracts bid for this year.
Online learning users
  Registrations no.
09 5,551,215
08 4,040,370
The number of registrations by students to access one of our US online learning programmes.

Our performance: International Education
Online learning users
  Registrations no.
09 474,068
08 301,931
The number of registrations by students and professors to access one of our International Education online learning programmes.
Online results logins
  Logins no.
09 79,751
08 55,224
Number of logins by users of the International Education's online results service.

Our performance: FT Group

FT circulation revenue growth
  Growth %
09 14
08 16
The FT Newspaper's year-on-year growth in circulation revenue.
The average monthly number of unique users of FT.com for the year
  No. millions
09 9.2
08 7.2
The average monthly number of unique users of the FT.com for the year.
Mergermarket renewal rates
  Mergermarket %
09 75.2
08 107.0
   
  Debtwire %
09 85.5
08 91.5
The current year value of sales to existing customers as a percentage of their spend in the previous year.
Interactive Data customer retention
  Retention %
09 93
08 95
The number of customers renewing contracts as a percentage of the total customer base.

Our performance: Penguin

US bestsellers
  Bestsellers no.
09 243
08 231
The number of Penguin books entering the Top Ten bestseller lists in the US (New York Times).
UK bestsellers
  Bestsellers no.
09 46
08 67
The number of Penguin books entering the Top Ten bestseller lists in the UK (Neilson BookScan Top Ten).
eBook sales
  Sales %
09 2.3
08 0.5
Penguin global eBook sales as a percentage of Penguin Group net sales.

Governance: Report on directors' renumeration

Proportion of total compensation
  Note 1 Note 2 Note 3
Marjorie Scardino 39.3% 32.7% 28.0%
Will Ethridge 43.4% 35.4% 21.2%
Robin Freestone 40.6% 33.8% 25.6%
Rona Fairhead 43.0% 34.1% 22.9%
John Makinson 49.5% 30.7% 19.8%

Note 1: Base salary and other fixed renumeration including retirement benefits

Note 2 Annual incentive and bonus share matching

Note3: Long-term incentives

 

UK bestsellers
  Bestsellers no.
09 46
08 67
The number of Penguin books entering the Top Ten bestseller lists in the UK (Neilson BookScan Top Ten).
eBook sales
  Sales %
09 2.3
08 0.5
Penguin global eBook sales as a percentage of Penguin Group net sales.