Pearson(PSO)2025-03-14 10:06Financial Performance - Total sales for 2024 were £3,552 million, representing a headline decrease of 3% compared to £3,674 million in 2023[15]. - Adjusted operating profit was £600 million, reflecting a year-on-year increase of 10% on an underlying basis[15]. - Free cash flow reached £490 million, with a free cash flow conversion rate of 117%[15]. - Underlying sales growth increased by 3% year-on-year, taking into account portfolio adjustments and foreign exchange[15]. - In 2024, Pearson generated a total shareholder return of 36% and distributed £474 million through dividends and share buyback programs[68]. - The Board recommended a 6% increase in the final dividend, resulting in a full-year dividend of 24.0p per share[69]. - Pearson's return on capital in 2024 was 10.5%[66]. - Adjusted operating profit for 2024 is projected at £600 million, reflecting a year-on-year increase of 10% on an underlying basis[80]. - Underlying sales growth for the year was 3%, excluding OPM and Strategic Review businesses, with operating cash conversion at 110% and free cash flow conversion at 117%[81]. - The company expects underlying sales growth and adjusted operating profit to align with current market expectations for 2025[182]. - In 2025, the company anticipates free cash flow conversion of 90-100% and a £0.1bn State Aid repayment[182]. - The effective tax rate on adjusted profit before tax is projected to be between 24% and 25%[182]. - Intangible amortisation charges in 2024 were £41m, down from £48m in 2023, due to decreased amortisation from disposals and increased from acquisitions[187]. Business Growth and Strategy - The company scaled AI across its products and services, enhancing generative AI tools in Higher Education courseware and developing new AI tools in English Language Learning and Virtual Learning[15]. - In 2024, Higher Education returned to growth, driven by the expansion of AI study tools products in the US[31]. - The Assessment & Qualifications business demonstrated strong financial performance and customer retention, with plans for geographic expansion and new contract wins in 2025[23]. - The company signed deals with ServiceNow, Degreed, Microsoft, and AWS to prepare employees and organizations for the future of work[15]. - The Workforce Skills unit will evolve into Enterprise Learning and Skills, focusing on talent planning and development solutions[40]. - Pearson expanded its AI-powered study tools across various platforms, including Pearson+ eTextbooks and MyLab, enhancing educational support for students and teachers[44]. - The partnership with Microsoft aims to equip the workforce for the AI-driven economy, focusing on personalized learning and new AI credentials[61]. - Pearson's collaboration with AWS will accelerate the delivery of AI-powered learning solutions globally[64]. - The company plans to expand market presence by enhancing formative assessment capabilities and broadening the enterprise customer base[100]. - The company is focusing on building its capabilities in data analytics to identify skill gaps and provide solutions to workforce challenges[103]. - Investment priorities are aligned with growth opportunities, particularly in Assessments & Verification, Enterprise Skills, and Early Careers[103]. - The company plans to launch a new brand in 2025, aiming to strengthen its position as a leader in lifelong learning[105]. - The brand strategy focuses on reframing the perception of learning, emphasizing its importance alongside sleep, nutrition, and exercise[105]. - The company will implement the brand transformation in phases, starting with critical growth areas such as Enterprise Skilling and Early Careers[108]. - The company aims to refine its offerings based on ongoing consultations with employers, identifying Enterprise as a medium-term growth vector[120]. Customer Engagement and Community Impact - Engagement with over 9,000 educators and 2,000 students in the UK through the Pearson School Report provides insights into the educational landscape[116]. - In 2024, employees volunteered over 33,000 hours in support of 360 causes, with participation in Learning for Impact activities increasing to 11%[148]. - The company donated $90,360 in humanitarian aid to the American Red Cross for hurricane relief in 2024[148]. - The company conducted research on the impact of English skills on job satisfaction, with 85% of respondents indicating English is important for their work life[133]. - The company is committed to creating exceptional employee experiences, recognizing that managers account for up to 70% of employee engagement variance[152]. - In 2024, 88% of employees participated in the engagement survey, with a Grand Mean score of 4.16 on a 5-point Likert scale, up from 82% and 4.09 in 2023[154]. Digital and Product Development - Digital sales growth was reported at +3% in 2024, with underlying growth in group digital and digital-enabled sales also at +3%[169]. - The number of Pearson+ registered users reached 10.1 million in 2024, an increase from 9.8 million in 2023[169]. - The net retention rate for Credly enterprise customers was reported at 91% in 2024, compared to 88% in 2023[169]. - VUE test volumes reached 2.3 million in 2024, down from 2.7 million in 2023[169]. - The average time for PTE speed of score return improved to 1.3 days in 2024, up from 1.0 days in 2023[169]. - The number of Mondly paid subscriptions increased to 495,000 in 2024, compared to 432,000 in 2023[169]. - The company reported a Grand Mean score of 4.24 on a 5-point Likert scale for employee engagement, up from 4.21 in 2023[169]. Sales Performance by Segment - Sales decreased by £122m or 3% from £3,674m in 2023 to £3,552m in 2024[178]. - Adjusted operating profit increased by £27m or 5% from £573m in 2023 to £600m in 2024[178]. - Operating cash flow was £662m in 2024, up from £587m in 2023[175]. - Free cash flow increased to £490m in 2024 from £387m in 2023[175]. - Adjusted earnings per share rose to 62.1p in 2024 from 58.2p in 2023[175]. - In Assessment & Qualifications, sales increased by 2% on a headline basis and 3% on an underlying basis, with adjusted operating profit up 7% in underlying terms[191]. - Virtual Learning sales decreased by 21% on a headline basis and 4% on an underlying basis, with adjusted operating profit down 13% in headline terms[195]. - Higher Education sales decreased by 3% on a headline basis but grew by 1% on an underlying basis, with adjusted operating profit increasing by 12% in underlying terms[197]. - English Language Learning sales increased by 1% on a headline basis and 8% on an underlying basis, with adjusted operating profit up 30% in underlying terms[199]. - Pearson VUE sales were up 3% in underlying terms, with a contract renewal rate of 99% for 2024[192]. - In Clinical Assessment, sales increased by 4% in underlying terms due to pricing and digital product growth[194]. - US digital subscriptions grew by 3%, with Inclusive Access up 24%[198].