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| ===Demand for educational services is growing in emerging markets=== | ===Demand for educational services is growing in emerging markets=== | ||
| - | As a board we debated | ||
| - | and approved Pearson’s largest disposal ever: the | ||
| - | $2.0bn sale of our stake in Interactive Data to Silver | ||
| - | Lake and Warburg Pincus. We looked at all the | ||
| - | acquisitions that the company made during the year | ||
| - | – including significant investments to expand our | ||
| - | position in fast-growing developing markets such as | ||
| - | Brazil, India and Africa. And we also, as a matter of | ||
| - | routine, revisited acquisitions made in prior years to | ||
| - | assess their performance against the plans originally | ||
| - | laid out for them. In 2010, in addition to reviewing | ||
| - | returns and lessons learned from capital allocation | ||
| - | decisions over the past seven or so years, | ||
| - | we conducted detailed post-acquisition reviews | ||
| - | of acquisitions completed during 2008. | ||
| + | Pearson has a growing presence in the world's fast-growing markets: language schools in China, Sistemas and Penguins in Brazil; universities in South Africa, and online tutoring in India.<ref name=annual/> | ||
| + | Pearson PLC is looking to use its recently enlarged education operations in Brazil and China as a template for expansion elsewhere in the world. Pearson plans to add 50 new English-language centers in China over the next few years to the 66 centers and schools already operating under the Wall Street English and Longman English brands.<ref name=wsj>[http://online.wsj.com/article/SB10001424052702303745304576362933781939742.html Wall Street Journal: "Pearson to Use Brazil as Education Template" June 3, 2011]</ref> | ||
| - | + | Brazil has a population of around 203 million, making it the world's fifth most populous country after China, India, the U.S. and Indonesia.<ref name=wsj/> Pearson doubled its footprint in the country last year in July with the £326 million ($533.6 million) acquisition of Sistema Educacional Brasileiro's learnings systems business.<ref name=wsj/> Under the Sistema deal, Pearson acquired 1,000 private-school customers and 1,000 public-school customers in Brazil, and 100 municipalities.<ref name=wsj/> And the potential for securing new customers is massive, said Juan Romero, president and CEO of Pearson's Latin American business, noting there are 35,000 private schools and 6,000 municipalities in the country.<ref name=wsj/> | |
| - | Pearson today has an important presence in many of | + | |
| - | these fast-growing markets: language schools in China; | + | |
| - | Sistemas and Penguins in Brazil; universities in South | + | |
| - | Africa; online tutoring in India, to name just four | + | |
| - | examples. We won’t slight our strong developed world | + | |
| - | businesses, but you can expect to see us investing and | + | |
| - | picking up speed in these newer places. And you can | + | |
| - | figure out that to do that we’ll need to get better | + | |
| - | and faster at moving our intellectual talent all around | + | |
| - | the world, not just from West to East, and North | + | |
| - | to South, not just to the next step on the ladder, | + | |
| - | but to build a new ladder entirely. | + | |
| ===The rise of e-readers has created new sales channels=== | ===The rise of e-readers has created new sales channels=== | ||
| - | Though ebooks have been around for more than two | ||
| - | decades, I suspect publishers of all kinds will look back | ||
| - | on 2010 as the ‘lift-off’ for digital reading. Apple with | ||
| - | its iPad sparked a lot of the buzz. But the real | ||
| - | phenomenon was the quick emergence of a symbiotic | ||
| - | community of multi-purpose devices, ebook formats | ||
| - | and sales channels. There’s now genuine consumer | ||
| - | demand for high-quality digital reading (and learning) | ||
| - | experiences, and we’re beginning to deliver them | ||
| - | in earnest. | ||
| - | At Penguin, for example, ebook sales almost trebled | ||
| - | over the course of 2010 (having increased four-fold in | ||
| - | 2009) and now represent more than $1 in every $20 of | ||
| - | Penguin’s total global sales (and much more in the US). | ||
| - | At the FT, another example, digital subscribers topped | ||
| - | 200,000 as the year ended, and also brought in more | ||
| - | print subscribers. And in our education companies, | ||
| - | demand for our combination of ebooks and our digital | ||
| - | learning platforms – eCollege, MyLabs, to name only | ||
| - | two – has been growing fast, but this past year that | ||
| - | pace exploded. | ||
| - | In fact across Pearson, just as we see developing | ||
| - | economies growing several times faster than those | ||
| - | in the developed world, so we see a similar contrast | ||
| - | between our digital services and our more traditional, | ||
| - | print-only products. | ||
| + | Over the last year, a plethora of multi-purpose devices, tablets, and e-readers have come to market. There is now a real consumer demand for high-quality digital reader and learning devices, and Pearson has been highly involved in this digital content revolution. | ||
| + | |||
| + | At Penguin, for example, ebook sales tripled in 2010 (having increased four-fold in | ||
| + | 2009) and now represent more than $1 in every $20 of Penguin’s total global sales.<ref name=annual/> | ||
| + | |||
| + | At the Financial Times, digital subscribers reached 200,000 at the end of 2010, and also brought in more print subscribers.<ref name=annual/> The demand for Pearson's combination of ebooks and digital learning platforms – eCollege and MyLabs – has been growing fast, but this past year that pace exploded.<ref name=annual/> | ||
| ==Competition== | ==Competition== | ||
| + | Pearson is the largest education company in the world by revenue, with annual sales of $5.935 billion. Pearson's largest competitors in education are Apollo Group ($4.468bn in revenue), Benesse Education ($3.338bn in revenue), Kaplan Washington Post ($2,637bn in revenue), and McGraw-Hill ($2.388bn in revenue).<ref name=annual/> Despite the dominance of a few companies in the education space, Pearson competes with many smaller education and information companies, including [[Blackboard (BBBB)]] and [[Scholastic (SCHL)]]. Pearson's top publicly traded competitors include: | ||
| + | |||
| + | *[[Apollo Group (APOL)]] | ||
| + | *[[Benesse (FRA:BE8)]] | ||
| + | *[[Washington Post Company (WPO)]] | ||
| *[[News Corporation (NWS)]] | *[[News Corporation (NWS)]] | ||
| *[[Reed Elsevier (RUK)]] | *[[Reed Elsevier (RUK)]] | ||
| Line 87: | Line 47: | ||
| *[[Lee Enterprises (LEE)]] | *[[Lee Enterprises (LEE)]] | ||
| *[[John Wiley & Sons CL A (JWA)]] | *[[John Wiley & Sons CL A (JWA)]] | ||
| + | *[[Blackboard (BBBB)]] | ||
| ==References== | ==References== | ||
Revision as of 14:37, July 17, 2011
Pearson PLC (NYSE: PSO) is a media and education company. The company delivers content in a range of formats and channels, including books, newspapers and online services. Pearson offers services and content, including test creation, administration and processing, and teacher development and school software.
Pearson's major markets are the United States (59% of sales) and Europe (21% of sales).[1] Pearson consists of three worldwide businesses: Pearson Education, The FT Group and The Penguin Group.[1]
Contents |
Business Growth
In 2010, Pearson's profit rose 21 percent as the company benefited from investments in emerging markets and digital operations.[2] Sales in 2010 rose 10 percent to 5.66 billion pounds.[2]
Pearson posted double-digit profit growth in all businesses in 2010, led by a 54% increase at the FT Group, which publishes the Financial Times.[2] Digital revenue accounts for 29% of the company’s sales, and emerging markets makes up 10%.[2]
Pearson's strong earnings reflect the growing demand for educational services from emerging economies and in digital formats.
In 2010 sold its 61% stake in Interactive Data for $3.4 billion and has since used some of the proceeds to expand through acquisitions, focusing on technology and education.[1] In April 2011, the Company acquired Schoolnet. During 2010, Pearson acquired Melorio plc and Sistema Educacional Brasileiro.[1]
Trends and Forces
Demand for educational services is growing in emerging markets
Pearson has a growing presence in the world's fast-growing markets: language schools in China, Sistemas and Penguins in Brazil; universities in South Africa, and online tutoring in India.[3]
Pearson PLC is looking to use its recently enlarged education operations in Brazil and China as a template for expansion elsewhere in the world. Pearson plans to add 50 new English-language centers in China over the next few years to the 66 centers and schools already operating under the Wall Street English and Longman English brands.[4]
Brazil has a population of around 203 million, making it the world's fifth most populous country after China, India, the U.S. and Indonesia.[4] Pearson doubled its footprint in the country last year in July with the £326 million ($533.6 million) acquisition of Sistema Educacional Brasileiro's learnings systems business.[4] Under the Sistema deal, Pearson acquired 1,000 private-school customers and 1,000 public-school customers in Brazil, and 100 municipalities.[4] And the potential for securing new customers is massive, said Juan Romero, president and CEO of Pearson's Latin American business, noting there are 35,000 private schools and 6,000 municipalities in the country.[4]
The rise of e-readers has created new sales channels
Over the last year, a plethora of multi-purpose devices, tablets, and e-readers have come to market. There is now a real consumer demand for high-quality digital reader and learning devices, and Pearson has been highly involved in this digital content revolution.
At Penguin, for example, ebook sales tripled in 2010 (having increased four-fold in 2009) and now represent more than $1 in every $20 of Penguin’s total global sales.[3]
At the Financial Times, digital subscribers reached 200,000 at the end of 2010, and also brought in more print subscribers.[3] The demand for Pearson's combination of ebooks and digital learning platforms – eCollege and MyLabs – has been growing fast, but this past year that pace exploded.[3]
Competition
Pearson is the largest education company in the world by revenue, with annual sales of $5.935 billion. Pearson's largest competitors in education are Apollo Group ($4.468bn in revenue), Benesse Education ($3.338bn in revenue), Kaplan Washington Post ($2,637bn in revenue), and McGraw-Hill ($2.388bn in revenue).[3] Despite the dominance of a few companies in the education space, Pearson competes with many smaller education and information companies, including Blackboard (BBBB) and Scholastic (SCHL). Pearson's top publicly traded competitors include:
- Apollo Group (APOL)
- Benesse (FRA:BE8)
- Washington Post Company (WPO)
- News Corporation (NWS)
- Reed Elsevier (RUK)
- New York Times Company (NYT)
- McGraw-Hill Companies (MHP)
- Gannett (GCI)
- Reed Elsevier NV (ENL)
- Scholastic (SCHL)
- Lee Enterprises (LEE)
- John Wiley & Sons CL A (JWA)
- Blackboard (BBBB)
References
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