Pearson would like to teach the world a thing or two. The company, which previously owned British newspaper The Financial Times before selling it off to Nikkei in late 2015, has rebranded and refocused entirely on education. Education has long been the company's largest segment: Pearson is the world's top educational publisher of textbooks and related material. The company provides education materials for schools, higher education and professionals, as well as internationally recognized qualifications. Beyond educations, Pearson retains a 47% stake in one of the most famous brands in book publishing, Penguin Random House, which accounts for about 15% of the company's revenues.
Pearson divides its operations into three segments: North America, the largest at some two-thirds of revenue and which covers School, Higher Education (HE) and Professional businesses in US and Canada; Core School, which covers School, HE and Professional in mature markets including the UK, Australia and Italy; and Growth School, which focuses on high-growth countries like China, Brazil, India and South Africa.
The company provides textbooks through brands including BTEC, Bug Club, Fronter, GradPoint, Schoolnet, and SuccessNet. In the UK it operates exam board Edexcel, which is the UK's only privately owned exam board; qualifications from Edexcel, which include GCSEs and A-Levels, are internationally recognized.
Its Professional services is broken into Pearson English and Pearson VUE. The former includes English language textbooks and learning, e-learning for large corporations, and English language schools for business professionals. Pearson VUE provides electronic testing for regulatory and certification boards in over 150 countries.
Schools-related activities are Pearson's most significant activity by sales, bringing in over 40% per year; Higher Education and Professional bring in some 39% and 19% each.
Though it operates in more than 80 countries around the world, Pearson's largest markets are North America (66% of sales) and the UK (around 10% of sales). The Asia-Pacific region accounts for around 15%.
Sales and Marketing
In 2015 the company worked with brand design agency Together Design to refocus the Pearson brand around the idea of curiosity and the excitement that comes with learning. The company's new logo combines an exclamation mark and question mark (the "interrobang") to form the letter ‘P’.
Pearson provides services to institutions, governments and individuals, mostly through textbooks and online.
Note: Growth rates may differ after conversion to US Dollars.
In 2015, revenue fell 2% on prior year to £4.5 billion, due to weakness in Schools revenue. The segment was hurt by declining revenue from UK qualifications as the end of a period of policy change approaches (Pearson stands to benefit from changes in education policy as textbooks need refreshing). The Growth segment failed to live up to its name as sales in Brazil were negatively affected by disposals, and in South Africa sales fell due to a smaller textbook adoption cycle and the negative impact of fewer qualified high school graduates and tightening consumer credit on re-enrolment rates. In the Middle East, the business was impacted by Pearson's withdrawal from the Saudi Arabian Colleges of Excellence.
However, the weakness in Schools was counterbalanced to an extent by the Higher Education and Professional segments, which both recorded positive growth figures (of 2% and 4%).
Net income increased 75% to £823 million due to proceeds from disposals. Cash flow from operating activities fell £244 million due to changes in tax paid and trade and other liabilities.
Pearson is shedding its non-education activities. In late 2015, it sold of The Financial Times, one of the UK's most reputable newspapers, for around $1.3 billion to Nikkei, and before that Pearson sold its half of FTSE to the London Stock Exchange for £450 million in cash in 2011.
In terms of product delivery, Pearson is reducing its exposure to large, direct delivery operations to focus on online, virtual, and blended services, in order to focus on fewer but larger commercial opportunities.