Pearson 2025 Full Year Results Friday 27th February 2026 1 Forward-looking statements Except for the historical information contained herein, the matters discussed in this presentation include forward-looking statements. In particular, all statements that express forecasts, expectations and projections with respect to future matters, including trends in results of operations, margins, growth rates, overall market trends, the impact of interest or exchange rates, the availability of financing, anticipated co ...

Financial Data and Key Metrics Changes - Sales increased by 2% on an underlying basis, in line with guidance set in February [31] - Adjusted operating profit also rose by 2% to £242 million, while adjusted earnings per share decreased to 24.5p due to FX headwinds [31] - Free cash flow improved significantly, up £129 million to £156 million, aided by good working capital management [37] - Net debt decreased by £200 million to £1 billion, driven by free cash flow [37] Business Line Data and Key Metrics Changes - Assessments and Qualifications sales grew by 2%, with strong growth in Clinical Assessments and UK International Qualifications, offset by declines in Pearson VUE and U.S. Student Assessment [32] - Virtual School sales declined by 1%, but enrollments increased by 5% in the spring semester [34] - Higher Education sales grew by 4%, with a notable 213% increase in digital subscriptions [34] - English Language Learning declined by 3%, while Pearson Test of English remained flat [35] - Enterprise Learning and Skills grew by 4%, supported by strong performance in Vocational Qualifications [35] Market Data and Key Metrics Changes - The medium-term outlook for PTE and ELL remains strong, supported by demographics and operational track record [10] - Federal funding accounts for a small proportion of total funding for K-12 and Higher Ed, with minimal impact from international mobility [9] Company Strategy and Development Direction - The company’s strategy remains unchanged, focusing on medium-term growth engines and innovation in products and services [6] - Emphasis on AI and skill development to address the evolving workforce demands [11] - The acquisition of eDynamic Learning is expected to enhance the company’s early career strategy and support medium-term guidance [42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company’s trajectory, citing strategic clarity and execution focus [44] - The company is well-positioned to take advantage of emerging opportunities despite market dynamics [7] - Management expects full-year financial performance to align with earlier expectations, with growth weighted towards the second half of the year [38] Other Important Information - The company is transforming revenue operations and modernizing marketing approaches to improve efficiency [19] - AI-driven simplification is progressing, with significant improvements in customer interactions and content development [20] Q&A Session Summary Question: Performance of new and renewed contracts - Management confirmed that contracts like ServiceNow and Salesforce are performing in line with expectations, with growth anticipated in 2026 [48][51] Question: Opportunities from Gen AI products - Management highlighted the potential of AI to enhance learning outcomes and drive cost efficiencies across various divisions [54][55] Question: Q3 and Q4 revenue growth expectations - Management provided insights on the expected growth drivers, including new contracts and enrollment increases in virtual schools [63][66] Question: Details on Pearson VUE contract pause - Management clarified that the pause was specific to an individual situation and not indicative of broader trends [76] Question: Expectations for English Language Learning growth - Management expressed confidence in institutional growth in the second half, particularly in Latin America [79] Question: Higher Education enrollment expectations - Management indicated that flattish enrollments are still the base case for planning, with growth expected from pricing and new product rollouts [84][88]