Pearson 2021 Q1 Trading Update

Pearson 2021 Q1 Trading Update (Unaudited)

We show below our performance in the quarter under the new divisional structure announced on 8 March, which we will implement in the second half of the year. As previously announced we expect to publish proforma actual and comparative financial information on this basis together with our interim results.

·      Higher Education was flat, reflecting the same performance as for North American Courseware, excluding growth in Canada school courseware which is under strategic review.

·      English Language Learning down 4%, due to the continuing COVID-19 impact on English as noted under International above.

·      Workforce Skills down 8%, due to the effect of college closures and exam cancellations on BTEC revenue as noted under International above.

·      Assessments & Qualifications was flat, with improvement over Global Assessment due to the inclusion of international clinical assessment and UK schools revenue, which were up slightly.

*Subject to change as review concludes

Strong balance sheet

We maintained a strong balance sheet and significant financial headroom.

As noted in our 2020 Annual Report, in February 2021, we received Charging Notices in relation to the European Commission 2019 ruling on alleged State Aid and £100m was subsequently paid in March. We expect to recover the funds in due course.

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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 Pearson'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.