Pearson: New Segmental Analysis

Pearson will announce its interim results for the six months ended 30 June 2014 on Friday 25 July 2014.

As we stated at our AGM (bit.ly/1qL33ej), Pearson’s profits are heavily weighted to the second half.  As expected, our first-half adjusted operating profit and adjusted earnings per share will be lower this year than in 2013, primarily reflecting the outlook given at our full-year results which included: the appreciation of sterling against the US dollar and key emerging market currencies; the phasing of Penguin Random House integration charges and the incremental H1 associate accounting impact of owning 47% of Penguin Random House compared to 100% of Penguin in H1 2013; the disposal of Mergermarket; the H1 phasing of reduced assessments in Texas and California; the later phasing of marking of UK exams and associated revenue recognition; and the phasing of restructuring charges, particularly in our North American Education division.

As previously announced, we will report the results using two new segmental analyses which reflect our new structure and operating model: Geographies (North America, Core and Growth) and Lines of Business (School, Higher Education and Professional).

We are today providing details of our 2013 financial results by the new Geographic segments analysis, which most closely match our previous reporting structure. On 25th July 2014, we will also provide revenues and operating income by Line of Business.

Our Geographic segments comprise our school, higher education and professional learning services, inside services and direct delivery in:

  • North America: the US and Canada;
  • Core: including the United Kingdom, Australia and Italy; and
  • Growth: including Brazil, China, India and South Africa.

Our 2013 results under this new segmental analysis were as follows:

£ millions Half year
2013
Full year
2013
Sales    
North America 1,243 3,080
Core 616 1,242
Growth 331 747
Continuing sales 2,190 5,069
Penguin 513 513
Mergermarket 53 108
Total Sales 2,756 5,690
Adjusted operating profit*    
North America 29 457
Core 55 119
Growth 12 56
Adjusted operating profit excluding Penguin/ Penguin Random House & Mergermarket 96 632
Penguin/ Penguin Random House 28 78
Mergermarket 13 26
Total adjusted operating profit 137 736

* Half year 2013 includes £29m net restructuring charges as follows: North America, £8m; Core, £16m; Growth, £5m. Full year 2013 includes £135m net restructuring charges as follows: North America, £53m; Core, £50m; and Growth, £32m.

These are preliminary estimates which are subject to audit which may result in adjustments.

Our Line of Business segments will be reported at our interim results on 25 July 2014 and will include:

  • School;
  • Higher Education; and
  • Professional (which includes Pearson VUE, the Financial Times and global English Language Learning).

ENDS

For more information

Simon Mays-Smith / Brendan O’Grady + 44 (0)20 7010 2310

Note to editors

Our 2013 results, as reported under the previous segmental analysis, were as follows:

£ millions Half year
2013
Full year
2013
Sales
North American Education 1,102 2,779
International Education 736 1,539
Professional 188 410
FT Group 217 449
Sales excluding Penguin/ Penguin Random House 2,243 5,177
Penguin 513 513
Total sales 2,756 5,690
Adjusted operating profit**
North American Education 13 406
International Education 50 140
Professional 20 57
FT Group 26 55
Total excluding Penguin/ Penguin Random House 109 658
Penguin/ Penguin Random House 28 78
Total adjusted operating profit 137 736

** Half year 2013 £29m net restructuring charges as follows: North American Education, £7m; International Education, £18m; FT Group, £4m. Full year 2013 includes £135m net restructuring charges as follows: North American Education, £49m; International Education, £69m; Professional Education, £6m, FT Group, £11m.