Pearson : 2023 Full Year Results Press Release

Registered address: Pearson Plc, 80 Strand, London WC2R ORL Registered in England 53723

Pearson 2023 Preliminary Results (Unaudited)

1st March 2024	Another year of financial outperformance. Positive outlook with a stable
	platform for continued growth
Financial Highlights
£m	2023 2022 £m	2023 2022
Business performance			Statutory results

Sales

Adjusted operating profit Operating cash flow Free cash flow

Adjusted earnings per share

3,674	3,841	Sales	3,674	3,841
573	456	Operating profit	498	271
587	401	Profit for the year	380	244
387	222	Net cash generated from operations	682	527
58.2p	51.8p	Basic earnings per share	53.1p	32.8p

Highlights

• Underlying Group sales growth1 of 5%, excluding OPM2 and the Strategic Review3 businesses.
• Group adjusted operating profit of £573m, up 31% on an underlying basis compared to 2022 with significant expansion in adjusted operating profit margin from 11.9% to 15.6%, underpinned by sales growth and execution of £120m cost efficiency programme.
• Operating cash conversion of 102% driving 74% headline increase in free cash flow.
• Proposed final dividend of 15.7p, resulting in full year dividend up 6% to 22.7p.
• Clear capital allocation priorities underpinning £300m share buyback launched last September and today announcing intention to extend share buyback programme by £200m.
• Positive outlook for 2024 and 2025 in line with expectations and Group guidance unchanged. Free cash flow expected to further improve next year due to lower restructuring cash costs.

Omar Abbosh, Pearson's Chief Executive, said:

"2023 was another year of strong operational and financial performance, with results surpassing initial expectations once again, driven by our Assessment & Qualifications and English Language Learning businesses. Our consistently strong cash generation has sustained investment to support our future growth and deliver ongoing value for shareholders.

"Pearson is a strong company with excellent market potential, people committed to our mission, and a purpose that genuinely helps communities. My conversations with our customers, our people and our investors have confirmed that and more. Pearson is well positioned today, providing a stable platform for continued growth that can benefit from the inflection point we see with the development of AI. I am optimistic about the opportunities this advancement in technology brings, underpinned by our trusted brand, large high quality data sets and strong capabilities in assessment, content and services. We have an exciting future ahead of us."

2024 priorities

• We will deliver on current 2024 market expectations4 for Group underlying sales growth and adjusted operating profit given the strength of our core businesses, alongside a disciplined focus on organic growth, customer expectations and execution.
• The range and quality of products across our business supplying the vast Enterprise market presents a large and still forming opportunity, which we plan to maximise.
• We will continue to infuse our products and services with a wide range of AI solutions and capabilities to ensure we lead on innovation for our end consumers.
• We will provide a business and strategic update at our interim results in July.

1

Underlying sales growth1 of 5%, excluding OPM2 and Strategic Review3 businesses; 1% in aggregate

• Assessment & Qualifications sales were up 7% largely driven by a strong performance in Pearson VUE with good progress in IT and healthcare alongside the commencement of new contracts. There was also good growth across US Student Assessments, Clinical and UK & International Qualifications, due to new contract wins, good government funding and price increases.
• Virtual Learning sales decreased 20%, primarily due to an expected 87% decrease in the Online Program Management (OPM) business resulting from the previously announced ASU contract loss. Virtual Schools sales declined 2%, with enrolments for the 2023/24 academic year lower due to the previously announced loss of a larger partner school.
• Higher Education sales were down 3%, in line with expectations, driven by loss of adoptions to non- mainstream publishers in the first half of the year, as well as pricing mix. Pearson+ continued to perform well, passing the milestone of 1 million cumulative paid subscriptions for the calendar year.
• English Language Learning sales increased 30% with all three segments contributing to this growth. Pearson Test of English (PTE) was the outstanding contributor, delivering volume growth of 49% against a backdrop of favourable migration policy in Australia and market share gains in India.
• Workforce Skills sales grew 11% for the full year, with a solid performance in both Vocational Qualifications and Workforce Solutions.

Adjusted operating profit1 up 31% on an underlying basis to £573m

• Performance driven by sales growth and execution of the £120m cost efficiency programme, partially offset by investment and inflation. Adjusted operating profit margin rose to 15.6% (2022: 11.9%).
• Headline growth was 26% reflecting business performance along with portfolio changes and currency movements.
• Adjusted earnings per share grew to 58.2p (2022: 51.8p) reflecting adjusted operating profit growth, normalisation of tax and interest charges and the reduction in issued shares as a result of share buybacks.

Cash performance

• Operating cash1 inflow increased on a headline basis from £401m in 2022 to £587m in 2023, representing excellent cash conversion of 102%. This increase is reflective of the trading performance of the business, good cash collections and reduced product development in Higher Education connected to the cost efficiency programme.
• Our excellent cash conversion drove an increase in free cash flow from £222m in 2022 to £387m in 2023, a free cash flow conversion of 93%5. 2023 included £63m of cash restructuring costs in relation to the cost efficiency programme.

Strong balance sheet supports continued organic and inorganic investment alongside increased shareholder returns

• We completed the acquisition of PDRI, significantly expanding Pearson's services to the US federal government as well as growing our presence with large employers.
• Year-endnet debt of £0.7bn (2022: £0.6bn) with net debt / adjusted EBITDA ratio at 1.0x (2022: 0.8x).
• Return on capital was 10.3% (2022: 8.7%).
• Proposed final dividend of 15.7p (2022: 14.9p) which equates to a full year dividend of 22.7p (2022: 21.5p).
• The previously announced buyback to repurchase £300m of shares continued. As at 28th February 2024 £288m of shares had been repurchased at an average price of 928p per share, representing 96% of the total programme.
• Given the strength of our free cash flow in 2023 we intend to extend our share buyback programme by £200m.

Statutory results

• Sales decreased 4% to £3,674m (2022: £3,841m) reflecting business performance, portfolio changes and currency movements.
• Statutory operating profit was £498m (2022: £271m). The increase in 2023 was driven by increased trading profits and a reduction in the costs of major restructuring, partially offset by a net loss related to acquisitions and disposals compared to a net gain in 2022.
• Net cash generated from operations of £682m (2022: £527m).
• Statutory earnings per share of 53.1p (2022: 32.8p).

2

Continued strategic and operational progress across the business

Advancing future growth drivers and building strong digital offerings

• In Assessment & Qualifications we won a number of VUE contracts that commenced in 2023 and maintained our high customer renewal rates. Within our UK & International Qualifications business we leveraged our technology capabilities to extend our onscreen exams offering with the roll out of GCSE Computer Science and International GCSEs in English Language and Literature. Within Clinical Assessment our high quality, trusted portfolio of intellectual property continued to be a source of competitive advantage, helping to drive growth in our Digital Assessment Library for Schools (DALS) product. We won subscription contracts with Chicago Public Schools and Miami Dade County School District.
• In Virtual Schools we launched a new Connections Academy Career Pathways programme in five schools for middle and high school students, where we are offering a tri-credit approach to career-readiness courses in partnership with Coursera and Acadeum, amongst others. We saw encouraging enrolment trends in these schools and are planning to roll the initiative out to an additional 15 schools in 2024 to drive future growth. We are pleased to have secured two new schools in the States impacting the 2023/24 and 2024/25 academic years.
• In Higher Education we made significant strides in converging our platforms to enhance stability and deliver upgraded, best-in-class features to improve our customer experience. Stability was much improved in the Fall semester with up time improving to 99.8% for our platform products. We also improved our technology support, leading to improved NPS scores amongst faculty during the peak Fall season. Within our product suite we introduced 6 new iLabs to take our total to 21. Generative AI study tools designed to help students better learn and understand challenging subjects were launched in beta within select titles for Pearson+ and Mastering for Fall back-to-school. We're encouraged by how students are engaging with these tools, with over 60,000 AI conversations taking place in Pearson's Tro Chemistry Mastering eText alone and 75% of users saying the tools were 'helpful' or 'very helpful'. We have already expanded the beta to 12 additional MyLab and Mastering titles with at least 40 math, science, business and nursing titles to follow by Fall semester 2024. We delivered 2% growth in platform units in 2023. Pearson+ continued to grow, passing the milestone of 1 million cumulative paid subscriptions to reach 1,048k for the calendar year and we continued to build out our supplementary learning Channels offering, with 19 study channels now live. The changes we have made to our sales team and go to market strategy are delivering early signs of success including a number of takeaway adoptions in the Fall back to school selling period. We believe these changes set us up well for continued progress in 2024.
• In English Language Learning, we have seen a strong increase in the number of users on our digital platforms. Coupled with investment in new digital content, including video and audio, and the strength of the Global Scale of English, we are confident that we are delivering engaging learning experiences while enabling teachers to better understand and meet the needs of their learners. In our Mondly enterprise focused business, we are launching Mondly by Pearson Workplace English, which benefits from workplace- specific content, leveraging our institutional courseware portfolio, and enhanced features. Coupled with investment in our Versant suite of tests, this strengthens our offering in the Corporate language learning space.
• Within our Workforce Solutions business we evolved our offering from a unified product approach, building a powerful technology stack that has enabled us to break down core Faethm capabilities into modular application programming interfaces. We are seeing contract wins across digital credentialing and strategic workforce planning solutions with the likes of Cleveland Clinic and ServiceNow.

Expanding our reach in new and adjacent markets

• In Assessment & Qualifications we acquired PDRI, a trusted provider of workforce assessment services. PDRI launched a full suite of hiring assessment programmes for the Transportation Security Administration and also won multi-year contracts with a number of other US federal agencies, including the US Air Force, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, and Department of Homeland Security. Within VUE we expect to derive future growth from moving further up the technology certification value chain and we saw encouraging signs in this market in 2023. Within Clinical Assessment we made further progress in pursuing our strategy to partner with clinical pharmaceutical companies, winning a contract to deliver assessments to aid determining the effectiveness of a drug used in the treatment of Alzheimer's disease. Our UK & International Qualifications business delivered good international growth in 2023. We see further opportunity for growth internationally across our Assessment & Qualifications businesses into 2024 and beyond.

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• In English Language Learning we won recognition for the Pearson Test of English for Canadian Student Direct Stream and economic immigration visa applications. This grants access to the full potential of the Canadian market, which is the largest of the three key markets which Pearson now has recognition to operate in. We launched PTE for Canadian Student Direct Stream visa applications in the second half of 2023 and opened bookings for PTE for Canadian economic immigration visa applications in February 2024. We continue to invest in building our brand awareness and testing capacity in the PTE market. We opened one of our largest company-owned Pearson VUE testing centres in Chandigarh, India. With the ability to deliver more than 14,000 tests per month, including PTE, this marks another step forward in the important Indian market, where based on the estimated market size we have seen market share gains throughout 2023.
• In our Vocational Qualifications business we signed a contract with the Jordanian Ministry of Education to partner on the reform of Jordan's technical and vocational education and training provision in schools with over 50,000 learners expected to take these courses over the next three years. International expansion will be an important growth driver for our Vocational Qualifications business going forwards.

Delivering efficiencies and reshaping the portfolio

• We delivered £120m of cost efficiencies in 2023 across product and content support costs, technology and corporate property.
• Cost efficiencies supported adjusted operating profit margin improvement from 11.9% in 2022 to 15.6% in 2023.
• We disposed of our Pearson Online Learning Services (POLS) business, further focusing Pearson's portfolio towards future growth opportunities.

Outlook

2024 outlook

• We expect Group underlying sales growth, adjusted operating profit and tax will be in line with current market expectations4. Our interest charge will be c.£45m given our ongoing £300m share buyback and intended extension by a further £200m.
• Every 1c movement in £:$ rate will equate to approximately £5m adjusted operating profit impact.
• In Assessment & Qualifications we expect sales growth of low to mid-single digit.
• In Virtual Schools we expect sales to decline at a similar rate to 2023, given the previously cited loss of a larger partner school for the 2024/25 academic year. We are pleased to have secured two new schools in the States impacting the 2023/24 and 2024/25 academic years and therefore expect the division to return to growth beyond 2024.
• In Higher Education we expect to return to sales growth.
• In English Language Learning we continue to expect high single digit sales growth.
• In Workforce Skills we expect to achieve high single digit sales growth.
• We expect a free cash flow conversion of 95-100%.

2025 ambition

• We continue to expect the Group to achieve mid-single digit underlying sales 3-year CAGR from 2022 to 2025, excluding OPM and Strategic Review businesses, and remain on track to achieve our 16-17% adjusted operating profit margin guidance.

4

Executive changes

We are excited about the growth opportunity across the enterprise learning market and working with organisations to address the challenges of building an adaptable workforce that is augmented by AI. Reflecting on our partnerships and capabilities, we are confident we can build on our existing products and services in the enterprise market to drive higher growth longer term.

Pearson announces the appointment of Vishaal Gupta as the new President of Workforce Skills. Vishaal currently serves as a Senior Managing Director with Accenture. Vishaal is an enterprise sales leader who leads a team that originates and closes large and complex deals, particularly in the areas of Technology Transformation and Strategic Managed Services. Vishaal has over 29 years' experience working in technology driven companies.

Mike Howells, President of Workforce Skills, will be leaving Pearson in March. Mike has led the evolution of our Workforce Skills division for the last three years, overseeing the development of our enterprise solutions business and further extending the international presence of our Vocational Qualifications business. We thank him for his contribution.

Contacts

Investor Relations	Jo Russell
	James Caddy
	Gemma Terry
	Brennan Matthews
Media
Teneo	Charles Armitstead
Pearson	Laura Ewart
Results event	Pearson's prelim results presentation today at
	08:30 (GMT). Register to receive log in details:
	https://pearson.connectid.cloud/register

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About Pearson

At Pearson, our purpose is simple: to add life to a lifetime of learning. We believe that every learning opportunity is a chance for a personal breakthrough. That's why our Pearson employees are committed to creating vibrant and enriching learning experiences designed for real-life impact. We are the world's leading learning company, serving customers with digital content, assessments, qualifications, and data. For us, learning isn't just what we do. It's who we are. Visit us at pearsonplc.com

Notes

Forward looking statements: Except for the historical information contained herein, the matters discussed in this statement 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 cost savings and synergies and the execution of Pearso n's strategy, are forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will occur in future. They are based on numerous assumptions regarding Pearson's present and future business strategies and the environment in which it will operate in the future. There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including a number of factors outside Pearson's control. These include international, national and local conditions, as well as competition. They also include other risks detailed from time to time in Pearson's publicly-filed documents and you are advised to read, in particular, the risk factors set out in Pearson's latest annual report and accounts, which can be found on its website (www.pearsonplc.com). Any forward-looking statements speak only as of the date they are made, and Pearson gives no undertaking to update forward-looking statements to reflect any changes in its expectations with regard thereto or any changes to events, conditions or circumstances on which any such statement is based. Readers are cautioned not to place undue reliance on such forward-looking statements.

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Operational review

					Headline	CER	Underlying
£m	2023	2022	growth	Growth1	growth1
	Sales
Assessment & Qualifications		1,559	1,444	8%	9%	7%
Virtual Learning		616	820	(25)%	(24)%	(20)%
Higher Education		855	898	(5)%	(4)%	(3)%
English Language Learning		415	321	29%	32%	30%
Workforce Skills		220	204	8%	8%	11%
Strategic Review		9	154	(94)%	(94)%	(74)%
Total		3,674	3,841	(4)%	(3)%	1%
Total, excluding OPM2 and						5%
Strategic Review3
	Adjusted operating
	profit/loss
Assessment & Qualifications		350	258	36%	36%	33%
Virtual Learning		76	70	9%	9%	(17)%
Higher Education		110	91	21%	22%	20%
English Language Learning		47	25	88%	116%	112%
Workforce Skills		(8)	(3)	(167)%	(167)%	(400)%
Strategic Review		(2)	15	(113)%	(107)%	94%
Total		573	456	26%	28%	31%

1Throughout this announcement: a) Growth rates are stated on an underlying basis unless otherwise stated. Underlying growth rates exclude currency movements, and portfolio changes. b) The 'business performance' measures are non-GAAP measures and reconciliations to the equivalent statutory heading under IFRS are included in notes to the attached condensed consolidated financial statements 2, 3, 4, 6, and 13. c) Constant exchange rates are calculated by assuming the average FX in the prior year prevailed through the current year.

2We have completed the sale of the POLS business and as such have removed from underlying measures throughout. Within this specific measure we exclude our entire OPM business (POLS and ASU) to aid comparison to guidance.

3Strategic Review is sales in international courseware local publishing businesses being wound down. There will be no sales or profits reported in this division going forwards.

42024 consensus on the Pearson website; underlying sales growth 3.7%, adjusted operating profit of £621m at £:$ 1.22, tax rate 24%.

5Free cash flow conversion calculated as free cash flow divided by adjusted earnings.

6VUE test volumes include PTE and GED tests but sales for each of these tests are reflected in the English Language Learning and Workforce Skills divisions respectively. PDRI test volumes are not currently included in this metric.

Assessment & Qualifications

In Assessment & Qualifications, sales increased 7% on an underlying basis and 8% on a headline basis. Adjusted operating profit increased 33% in underlying terms due to operating leverage on sales growth and margin and opex cost efficiencies, partially offset by inflation and 36% in headline terms due to this, portfolio changes and currency movements.

Pearson VUE sales were up 10% in underlying terms with particularly strong growth in the IT and healthcare segments, alongside the commencement of new contracts. VUE test volumes6 grew 6% to 20.7m. We maintained our high contract renewal track record, reporting a rate of 93.6% across the business for 2023.

In US Student Assessment, sales increased 4% in underlying terms driven by the commencement of new contracts following new business wins.

In Clinical Assessment, sales increased 5% in underlying terms supported by pricing, good government funding and continued focus on health and wellbeing.

In UK and International Qualifications, sales increased 6% in underlying terms driven by price increases and good international growth.

6

We are pleased with the continued momentum that Assessment & Qualifications showed in 2023. We're poised to deliver low to mid-single digit sales growth and continued strong margins in 2024, with an excellent outlook beyond, with growth initiatives that will help us to expand the scope of offering and reach.

Virtual Learning

In Virtual Learning, sales decreased 20% on an underlying basis and 25% on a headline basis, primarily due to the expected decrease in our OPM business. Adjusted operating profit decreased 17% in underlying terms due to trading performance partially offset by cost efficiencies and increased 9% in headline terms due to this and portfolio changes.

Sales in our OPM business were down 87% on an underlying basis, as expected, following the wind down of the ASU contract. Pearson Online Learning Services sales are no longer included in underlying measures following the completion of the disposal in the first half of the year.

Virtual Schools sales were down 2%, driven by lower enrolments and lower district partnership renewals, partially offset by good retention rates, improvements in funding and growth associated with the launch of our Connections Academy Career Pathways. Enrolments for the 2023/24 academic year were down 5% due to the previously cited loss of a larger partner school. Excluding the impact of this school, enrolments were up 1%.

We are pleased to have secured two new schools in the States impacting the 2023/24 and 2024/25 academic years. We expect enrolments to be lower for the 2024/25 academic year, due to the loss of a major school in that period and for annual sales to decline at a similar level to 2023. We remain confident in the long-term growth of the business as we roll out additional Career Academies aimed at supporting teenagers who wish to gain career and technical education and experience.

Higher Education

In Higher Education, sales declined 3% for the full year on an underlying basis, in line with expectations, and decreased 5% on a headline basis due to currency movements and portfolio changes. Adjusted operating profit increased 20% in underlying terms driven primarily by cost efficiencies, partially offset by trading performance and inflation, and increased 21% in headline terms due to this, currency movements and portfolio changes.

In the US, sales declines were driven by the loss of adoptions to non-mainstream publishers in the first half of the year, as well as pricing mix. There was strong growth in Inclusive Access with 22% sales growth to not-for-profit institutions and the total number of institutions increasing to c.1,250. We delivered 2% growth in platform units in 2023 enabled by changes we have made to our sales team and go to market strategy with the support of increasing platform stability. Pearson+ performed well in the Fall semester with 3.03m registered users and 516k paid subscriptions, representing 27% growth compared to the prior year Fall semester. Pearson+ passed the milestone of 1 million cumulative paid subscriptions for the calendar year.

We expect a return to sales growth in 2024, with increased margins as the organisational changes and focused investments we have made to strengthen our competitive position begin to bear fruit. Further cost savings will be partially offset in 2024 by above the line restructuring charges.

English Language Learning

In English Language Learning, sales were up 30% on an underlying basis and 29% on a headline basis. Adjusted operating profit increased by 112% in underlying terms due to sales growth partially offset by increased investment in brand awareness and testing capacity and inflation, and was up 88% in headline terms due to this and currency movements.

PTE volumes were up 49% supported by favourable migration policy in Australia as well as market share gain in India. Our Institutional business performed well, with strong performance across Latin America and Middle East markets. Our Mondly business also contributed to growth with an increase in consumer billings.

English Language Learning continues to deliver strong growth and strategic progress for Pearson. We expect this division to deliver more normalised high-single digit sales growth in 2024.

7

Workforce Skills

In Workforce Skills, sales were up 11% on an underlying basis and 8% on a headline basis. Adjusted operating profit declined by £8m in underlying terms due to investment in the business across our Workforce Solutions product suite partially offset by trading and decreased £5m in headline terms due to this and portfolio changes.

Sales growth was driven by solid performances in both the Vocational Qualifications and Workforce Solutions businesses. The Vocational Qualifications business grew by 10% in underlying terms. The Workforce Solutions business grew by 13% in underlying terms. Pearson has 1,547 enterprise clients in its Workforce Skills portfolio, up 3% on last year.

We focused our efforts on pivoting towards delivering more modular, personalised offerings to our clients in 2023, leveraging our powerful technology stack. In 2024, we intend to capitalise on the positive signs we are seeing in our customer pipeline and will be targeting high single digit sales growth.

Strategic Review

Sales in our international courseware local publishing businesses under strategic review declined 74% on an underlying basis and were down 94% on a headline basis for the full year. Operations in these businesses have now been wound down in line with our previous communications. There will be no sales or profits reported in this division going forwards.

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KPIs

	KPI	Objective	KPI Measure	2023 Actual	2022 Actual
	Digital	Drive digital	Underlying growth in Group	8%*	9%
	Growth	sales growth	digital and digital-enabled
			sales
			Virtual Schools US	100k	105k
			enrolments**
			OnVUE volumes	2.7m	3.0m
			Higher Education US digital	9.8m	9.9m
			registrations
			PTE volume	1,231k	827k
	Consumer	Create	NPS for Connections	+67	+67
	Engagement	engaging	Academy
		and	NPS for PTE	+55	+52
		personalised
		Pearson+ registered users	3.03m	2.83m
		consumer
		experiences
		Mondly paid subscriptions	432k	446k
			Workforce Skills new	5.3m	4.7m
			registered users
	Product	Improve the	PTE speed of score return	1.0 days	1.3 days
	Effectiveness	effectiveness
	VUE test volumes	20.7m	19.4m
		of our
		products to	VUE Partner retention	93.6%	99.9%
		deliver better
		Workforce Skills number of	1,547	1,503
		outcomes
		enterprise customers
			Workforce Skills enterprise	66%	74%
			customer net retention rate
			Higher Education product	4.5m	4.8m
			usage - text units
	Culture of	Build a	Employee engagement	4.09	3.96
	Engagement	culture of		GrandMean on a 5	GrandMean on a 5
	& Inclusion	engagement	Pearson uses the	point Likert scale	point Likert scale
		and inclusion	GallupQ12 survey to
		where	measure engagement,
		diverse talent	annually
		is heard,	Investing in diverse talent	In the last six	In the last six
		invested in		months, someone	months, someone
		and valued	The % of responses who	at work has talked	at work has talked
		for their	agree or strongly agree to	to me about my	to me about my
		strengths	Gallup Q12 survey	progress = 73%	progress = 67%
		and skills	questions.	This last year, I	This last year, I
				have had	have had
				opportunities at	opportunities at
				work to learn and	work to learn and
				grow = 76%	grow = 72%
			Culture of Inclusion Index	4.21 GrandMean	4.12 GrandMean
				on a 5 point Likert	on a 5 point Likert
			The GrandMean of 3	scale	scale
			Gallup Q12 survey
			questions:
			- At work, I am treated with
			respect
			- My company is committed
			to building the strengths of
			each employee
			- If I raised a concern about
			ethics and integrity, I am
			confident my employer
			would do what is right
			Increasing diverse talent***	Representation of	Representation of
				BIPOC/BAME	BIPOC/BAME
			Objective: Increase BIPOC	employees at	employees at
			/ BAME representation at	Manager level and	Manager level and
			all manager levels and	above = 22.0%	above = 20.7%
			maintain overall gender	Global % of female	Global % of female
			parity	employees = 59.1%	employees =
					59.0%
			9

Sustainability	Achieve net	Progress against achieving	16% reduction vs	3% reduction vs
Strategy	zero carbon	net zero carbon by 2030,	2022	2021
	by 2030	as measured through
		percentage carbon
		reduction****

• Excluding OPM and Strategic Review businesses.
• Measure definition has changed to number of government-funded student enrolments at partner schools within the US as of 30 September. Excludes private-pay students at Pearson Online Academy and district partnerships. This is more closely aligned to business processes.
• Previously reported 'Increasing diverse talent' metrics retired and new strategic remuneration measures incorporated.
• The net emissions reduction figures have been assured by an independent third-party, SLR Consulting Ltd. Corporate Citizenship % reduction in total tCO2e above is calculated using a location-based methodology. Within the 2023 number, 4% is due to portfolio changes. These will be removed following the normal rebasing exercise in 2024.
  For a full list of KPI measure definitions, please refer to: https://plc.pearson.com/en-GB/company/our-targets-kpis

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