Pearson in Asia30 March 2006

Pearson in Asia (2005)

Sales

RoW

Adjusted operating profit

Europe

Asia Pacific 7%

North

America

Asia Pacific 7%

Europe

RoW

North

America

Group: $7,045 Asia: $516 million

Group: $875mAsia: $64 million

Pearson Education International

By region

ContinentalEurope

By product

SchoolPublishing

UK

Canada

Asia

LatinAmerica

SchoolTesting

ELT

Higher Education

Professional

2005 sales: $1.4 billion

Economic and demographic landscapeMix of developed and developing economies

0 1,000 2,000 3,000 4,000 5,000

Pakistan

New Zealand

Malaysia

Thailand

Indonesia

Australia

India

China

Japan

Source: UNESCO

0 10,000 20,000 30,000 40,000

India

Philippines

Indonesia

China

Thailand

Malaysia

New Zealand

Australia

Japan

Source: UNESCO

GDP GDP per capita$bn, 2004A $, 2004A

School age populationVast addressable market, shifting demographics

0 50 100 150

New Zealand

Australia

Malaysia

UK

Thailand

Japan

Philippines

Pakistan

United States

Indonesia

China

India

2015E

2005E

0 50 100 150 200

New Zealand

Australia

Malaysia

UK

Thailand

Japan

Philippines

Indonesia

United States

Pakistan

China

India

2015E

2005E

Source: World Bank Source: World Bank

Number of children of primary age Number of children of secondary agemillion million

Participation ratesHigh in primary, growth to come in secondary

n/a

n/a

0 20 40 60 80 100

China

Pakistan

Thailand

India

United States

Indonesia

Malaysia

Philippines

Australia

New Zealand

Japan

UK

n/a

n/a

n/a

n/a

0 50 100

Thailand

India

China

Pakistan

Indonesia

Philippines

Malaysia

Australia

United States

New Zealand

UK

Japan

Source: UNESCO Source: UNESCO

Primary participation rates, 2002 Secondary participation rates, 2002% of primary pop. in primary school % of secondary pop. in secondary school

Government expenditure on educationGrowth in absolute spend and secondary participation key

0 10 20 30

India

Indonesia

UK

Hong Kong

China

Australia

Malaysia

Thailand

Pakistan

Japan

United States

Philippines

Source: UNESCO

n/a

n/a

0 20 40 60 80 100

New Zealand

India

Indonesia

UK

Hong Kong

China

Australia

Malaysia

Thailand

Pakistan

Japan

USA

Philippines

Source: UNESCO

Education exp. as % of govt. exp.% of most recent data % of education expenditure

Primary vs Secondary exp.

Educational attainmentEducation levels are rising

0 10 20 30 40 50 60 70 80 90 100

Australia

India

Japan

Malaysia

Thailand

UK

None Primary

Secondary Post-Secondary

0 10 20 30 40 50 60 70 80 90 100

Australia

India

Japan

Malaysia

Thailand

UK

None Primary

Secondary Post-Secondary

Highest level of education achievedProportion of adults aged 15+ (1980)

Highest level of education achieved Proportion of adults aged 15+ (2000)

Source: World Bank Source: World Bank

Schooling and literacyTime spent in school and literacy rising

0

1

2

3

4

5

6

7

8

9

10

1960 1965 1970 1975 1980 1985 1990 1995 2000

Japan India China

0 20 40 60 80 100

China

India

Indonesia

Philippines

Malaysia

Pakistan

Thailand

Adults 15+ 15-24

Source: World Bank

Average number of years in school Adult literacy

Source: World Bank

Kirihara Shoten (Japan)

WFOE (Shanghai)

Co-publishing MOE

Pearson VUE

Edexcel

Hong Kong Asia hub

13 regional bureaux

5 regional print sites

Beijing rep office

Beijing rep office

India: English language and new regional publishing

DK: 80—100 title pa

Partnerships

World-wide rights for China (eg. Wolf Totem)

One Pearson

Financial training

Government relations

Shared services

Group out-sourcing

Pearson in Asia

Joint publishing

Content exchange

Infrastructure-distribution

Production and services initiatives in Asia

School, Higher Education and DK pre-press operations

Pearson Education and DK printing

School technology product development

Back office, transaction and IT Services

$100m+ of production, printing and services sourced in Asia

FT Asia

0

10,000

20,000

30,000

40,000

50,000

2003 2004 2005 2006

Average copies Online subscribers

FT Asia print and online subs Year end subscribers

0 50,000 100,000 150,000

Financial Times

Asian WallStreet Journal

InternationalHerald Tribune

Winning readership Average issue readership

Source: Pearson Source: Pearson

Gaining share in print and online

Republishing – Revenues, take 2

FT China

FT ChinaBreaching the Great Wall

0 20 40 60 80 100

hqcj.com

stock.163.com

forbeschina.com

hexun.com

eobserver.com.cn

business.sohu.com

fortunechina.com

chinese.wsj.com

finance.sina.com.cn

businessweekchina.com

ftchinese.com

Most valuable Valuable Surfing

Source: Pearson

FT China users and page views Most valuable business sites

Source: Pearson

New site live

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Jan-

05Fe

b-05

Mar

-05

Apr-0

5M

ay-

Jun-

05Ju

l-05

Aug

-05

Sep

-05

Oct

-05

Nov

-05

Dec

-05

Jan-

06Fe

b-06

Uni

que

user

s pe

r wee

k

0100,000200,000300,000400,000500,000600,000700,000800,000

Pag

evie

ws

per w

eekUnique users per week

Pageviews per week

Old site Hard Relaunch

Major holidays in China