Pearson’s goal is to help people make progress in their lives through learning. We aim to be the world’s leading learning company, serving the citizens of a brain-based economy wherever and whenever they are learning. In financial terms, we measure our progress against three key measures: earnings, cash and return on invested capital.
Our strategy for achieving these goals has four major elements, which are common (though applied somewhat differently) to all our businesses:
- Long-term organic investment in content: Over the past five years, we have invested more than £4bn in our business: new education programmes; new and established authors for Penguin; the FT Group's journalism. We believe that this constant investment is critical to the quality and effectiveness of our products and that it has helped us gain share in many of our markets.
- Digital products and services businesses: Our strategy is to add services to our content, usually enabled by technology, to make the content more useful, more personal and more valuable. These digital products and services businesses give us access to new, bigger and faster-growing markets. In 2011, our digital revenues were £2bn or 33% of Pearson's total sales.
- International expansion: We are already present in more than 70 countries and we are investing to become a much larger global company, with particular emphasis on fast-growing markets in China, India, Africa and Latin America. In 2011, Pearson generated $1bn of revenue in developing markets for the first time. They now account for 11% of our total sales and 22% of our people.
- Efficiency: Our investments in content, services and new geographic markets are fuelled by steady efficiency gains. Since 2007, our operating profit margins have increased from 13.7% to 16.1% and our ratio of average working capital to sales has improved from 20.1% to 16.9%.
We believe this strategy can create a virtuous circle - efficiency, investment, market share gains and scale - which in turn can produce sustainable growth on our financial goals and the value of the company.