Pearson Plc (PSON:LN)

Home , Bloomsbury Publishing, Pearson PLC

Consumer Discretionary/Publishing Price: 710.00 GBX Report Date: September 28, 2021 Business Description and Key Statistics

Pearson is a holding company. Through its subsidiaries, Co. is a Current YTY % Chg provider of educational courseware, assessment and digital services. Co.'s primary segments for management and reporting Revenue LFY (M) 3,397 -12.2 are geographical as follows: North America, comprising the EPS Diluted LFY 0.41 20.6 courseware, assessment and services businesses in the United States and Canada; Core, comprising the courseware, assessment Market Value (M) 5,342 and services businesses in more mature markets outside North America, including the UK, Australia and Italy; and Growth, Shares Outstanding LFY (000) 752,355 comprising the courseware, assessment and services businesses Book Value Per Share 5.48 in emerging markets, including Brazil, China, India and South Africa. EBITDA Margin % 21.30 Net Margin % 9.3 Website: www.pearson.com Long-Term Debt / Capital % 16.0 ICB Industry: Consumer Discretionary Dividends and Yield TTM 0.20 - 2.75% ICB Subsector: Publishing Payout Ratio TTM % 47.6 Address: 80 Strand London 60-Day Average Volume (000) 1,569 GBR 52-Week High & Low 869.40 - 499.60 Employees: 21,335 Price / 52-Week High & Low 0.82 - 1.42

Price, Moving Averages & Volume

887.9 887.9 Pearson Plc is currently trading at 710.00 which is 8.4% below its 50 day moving 837.0 837.0 average price of 775.23 and 9.1% below its 200 day 786.2 786.2 moving average price of 781.06.

735.3 735.3 PSON:LN is currently 18.3% below its 52-week high price of 869.40 and is 42.1% above its 684.5 684.5 52-week low price of 499.60. Over the past 52-weeks, 633.7 633.7 PSON:LN is up 27.4% while on a calendar year-to-date basis it is up 4.4%. 582.8 582.8 The Relative Strength Index (RSI) indicator for PSON:LN is 532.0 532.0 currently 31.6. An RSI value of 70 and above is considered 481.1 481.1 overbought and 30 and below 10/20 11/20 12/20 1/21 2/21 3/21 4/21 5/21 6/21 7/21 8/21 9/21 oversold. Volume (000) 16,888 16,888

12,666 12,666

8,444 8,444

4,222 4,222 Mean (2172.71)

0 0 10/20 11/20 12/20 1/21 2/21 3/21 4/21 5/21 6/21 7/21 8/21 9/21

Price Price (50-Day Simple Moving Average) Price (200-Day Simple Moving Average)

Consumer Discretionary/Publishing Price: 710.00 GBX Report Date: September 28, 2021 Price Performance, Technical Indicators & Risk Metrics

Difference Price Performance % Change vs FTSE 350 Technical Indicators 1-Day % 1.25 2.03 50-Day Average Price 775.23 1-Week % 0.00 -1.25 Price / 50-Day Average 0.92 4-Week % -7.50 -5.42 200-Day Average Price 781.06 52-Week % 27.38 6.34 Price / 200-Day Average 0.91 RSI - Relative Strength Index 31.60 Quarter-to-Date % -14.46 -14.94

Year-to-Date % 4.35 -5.16 Risk Metrics Last Month % -11.71 -13.63 Price Volatility 24.21 Last Quarter % 7.57 2.90 Sharpe Ratio 0.02 Last Calendar Year % 6.81 19.80 Sortino Ratio 0.03

5-Year Price Performance vs. FTSE 350

Pearson Plc Current: 0.94 CAGR: -1.2% Over the past five years, FTSE 350 Index Current: 1.18 CAGR: 3.3% Pearson Plc's stock price is down 5.7% which is 23.4% 1.4 1.4 below the FTSE 350 Index performance of 17.6% over the same period. Pearson Plc's 1.3 1.3 cumulative annualized growth rate (CAGR) over the five year 1.3 1.3 period has been -1.2% while that of the FTSE 350 Index has been 3.3%. 1.2 ^NMX:LN 1.2 Over the past year, Pearson Plc's stock price performance 1.1 1.1 of 27.4% has outperformed that of the FTSE 350 Index by 1.0 1.0 6.3%. On a year-to-date basis, Pearson Plc's stock price performance of 4.4% has 1.0 1.0 PSON:LN outperformed the FTSE 350 Index by 5.2%. 0.9 0.9 Over the past week, Pearson Plc's stock price performance 0.8 0.8 of 0.0% has underperformed that of the FTSE 350 Index by 1.3%. 0.7 0.7

0.7 0.7

0.6 0.6

0.5 0.5 2017 2018 2019 2020 2021 2022

Consumer Discretionary/Publishing Price: 710.00 GBX Report Date: September 28, 2021 Growth and Profitability Metrics

5-Year 10-Year Historical Growth 3-Year 5-Year 10-Year Profitability Current Average Average Revenues % -9.0 -5.3 -5.0 Gross Margin % 48.0 52.6 53.9 Revenues Per Share % -7.4 -4.4 -4.6 EBITDA Margin % 21.3 15.4 15.7 EBITDA % 1.8 -0.6 -2.7 Pre-Tax Margin % 10.3 -4.1 -0.3 EPS Diluted % -6.3 -16.5 -12.8 Net Margin % 9.3 -1.0 4.7 Free Cash Flow % 18.0 23.1 -9.3 Return on Equity % 7.4 0.2 4.8 Cash from Operations % 9.3 13.0 -9.1 Return on Capital % 5.6 0.6 3.8 Book Value % 3.1 -7.0 -2.3 Return on Assets % 4.2 0.2 2.5

Revenue (M) Pearson Plc's cumulative annualized revenue growth Current: 3397.00 Median: 4129.00 High: 4552.00 Low: 3397.00 CAGR: -7.1% rate over the charted period is 4,783.0 4,783.0 4,552.0 4,513.0 -7.1%. This compares to cumulatative annualized 4,301.8 4,129.0 4,301.8 growth of -9.0% over the past 3,869.0 3 years. 3,820.5 3,820.5 3,397.0 3,339.3 3,339.3 2017 2018 2019 2020 2021 Pearson Plc's cumulative EPS Diluted annualized EPS growth rate Current: 0.41 Median: 0.41 High: 0.76 Low: -3.23 CAGR: 0.1% over the charted period is 1.56 1.56 0.1%. This compares to 0.76 0.50 0.34 0.41 cumulatative annualized -0.11 -0.11 growth of -6.3% over the past 3 years. -1.77 -1.77 -2.87 -3.43 -3.43 2016 2017 2018 2019 2020 2021

Net Profit Margin % Pearson Plc's net profit margin of 9.3% is 10.3% above the Current: 9.32 Median: 8.73 High: 14.71 Low: -51.27 CAGR: 2.1% period's mean net margin of 18.0 18.0 -1.0%. During the charted Mean (-0.96) period, the observed net profit -6.2 -6.2 margin high and low were 14.7% and -51.3% respectively. -30.4 -30.4

-54.6 -54.6 2016 2017 2018 2019 2020 2021 Pearson Plc's return on equity Return on Equity % of 7.4% is 7.2% above the Current: 7.40 Median: 7.25 High: 14.50 Low: -39.60 CAGR: 1.7% period's mean return on equity 17.2 17.2 of 0.2%. During the charted period, the observed ROE Mean (0.18) -2.6 -2.6 high and low were 14.5% and -39.6% respectively. -22.5 -22.5

-42.3 -42.3 2016 2017 2018 2019 2020 2021

Consumer Discretionary/Publishing Price: 710.00 GBX Report Date: September 28, 2021 Valuation Metrics

5-Year 10-Year 5-Year 10-Year Current Median Median Current Median Median

Price / EPS TTM 17.3 16.0 17.3 Earnings Yield % 5.01 6.38 5.96

Price / Sales 1.6 1.4 1.7 Free Cash Flow Yield % 6.13 5.40 5.09

Price / Operating Cash Flow 8.7 8.3 8.7 Dividend Yield % 2.75 3.30 3.67

Price / Book Value 1.3 1.3 1.5 Enterprise Value / EBITDA 7.3 9.4 11.2

Price / EPS TTM Pearson Plc is trading at 17.32 times its EPS generated Current: 17.32 Median: 16.01 High: 99.90 Low: 10.83 CAGR: -29.6% during the latest fiscal year. 104.4 104.4 This multiple is above the historically observed median 71.7 71.7 of 16.01, while high and low observations have been 99.90 and 10.83. 39.0 39.0

Median (16.01) 6.4 6.4 2016 2017 2018 2019 2020 2021 Price / Sales Pearson Plc is trading at a Price to Sales ratio of 1.61 Current: 1.61 Median: 1.41 High: 2.00 Low: 0.88 CAGR: 3.4% based on sales generated 2.06 2.06 during the latest fiscal year. This ratio is above the 1.65 1.65 historically observed median Median (1.41) ratio of 1.41, while high and low observations have been 1.23 1.23 2.00 and 0.88.

0.82 0.82 2016 2017 2018 2019 2020 2021 Pearson Plc is trading at a Price / Book Value Price to Book ratio of 1.29 Current: 1.29 Median: 1.34 High: 1.93 Low: 0.77 CAGR: 6.1% based on book value at the 2.0 2.0 latest fiscal year end. This ratio is below the historically observed median of 1.34, 1.6 1.6 while high and low Median (1.34) observations have been 1.93 1.1 1.1 and 0.77.

0.7 0.7 2016 2017 2018 2019 2020 2021 Pearson Plc has a Free Cash Free Cash Flow Yield % Flow Yield of 6.13% based on Current: 6.13 Median: 5.40 High: 9.66 Low: 3.42 CAGR: 10.9% free cash flow generated 10.0 10.0 during the latest fiscal year. This value is above the historically observed median 7.7 7.7 yield of 5.40%, while high and low observations have been 5.4 Median (5.40) 5.4 9.66 and 3.42.

3.1 3.1 2016 2017 2018 2019 2020 2021

Consumer Discretionary/Publishing Price: 710.00 GBX Report Date: September 28, 2021 Dividends Data

Dividends Per Share TTM 0.20 Payout Ratio TTM % 47.56% Dividend Yield TTM % 2.75%

Rate Ex Date Record Date Payment Date Currency Note 0.135 25-03-2021 26-03-2021 07-05-2021 GBP FINAL GROSS 0.060 13-08-2020 14-08-2020 21-09-2020 GBP INTERIM GROSS 0.135 26-03-2020 27-03-2020 07-05-2020 GBP FINAL GROSS 0.060 15-08-2019 16-08-2019 13-09-2019 GBP INTERIM GROSS 0.130 04-04-2019 05-04-2019 10-05-2019 GBP FINAL GROSS 0.055 16-08-2018 17-08-2018 14-09-2018 GBP INTERIM GROSS 0.120 05-04-2018 06-04-2018 11-05-2018 GBP FINAL GROSS 0.050 17-08-2017 18-08-2017 15-09-2017 GBP INTERIM GROSS 0.340 06-04-2017 07-04-2017 12-05-2017 GBP FINAL GROSS 0.180 18-08-2016 19-08-2016 16-09-2016 GBP INTERIM GROSS 0.340 07-04-2016 08-04-2016 06-05-2016 GBP FINAL GROSS

Dividend Growth and Yield

Dividends Per Share TTM Pearson Plc's trailing 12- month dividend per share is Current: 0.20 Median: 0.20 High: 0.52 Low: 0.17 CAGR: -18.2% 0.20 and its dividend has 0.54 0.54 grown at a cumulative annualized rate of -18.2% over 0.47 0.47 the charted period. This compares to dividend growth 0.41 0.41 of 0.00% over the past year and cumulative annualized growth of 4.70% over the past 0.35 0.35 3 years.

0.28 0.28

0.22 0.22

0.15 0.15 2016 2017 2018 2019 2020 2021

Dividend Yield TTM % Pearson Plc's current dividend yield is 2.75% based on Current: 2.75 Median: 3.30 High: 9.15 Low: 1.70 CAGR: -16.8% trailing 12 month dividends. 9.52 9.52 The current yield is below the historically observed median 8.16 8.16 of 3.30% and, over the charted time period, the observed high 6.79 6.79 yield has been 9.15% and the observed low yield has been 1.70%. 5.43 5.43

4.06 4.06

2.69 2.69

1.33 1.33 2016 2017 2018 2019 2020 2021

Consumer Discretionary/Publishing Price: 710.00 GBX Report Date: September 28, 2021 ICB Subsector Peer Comparisons

Price Change Year to Date % Price Change Last Calendar Year % 0.0 37.9 75.7 113.6 151.4 -83.1 -59.5 -36.0 -12.5 11.1

Reach PLC 144.4 Pearson Plc 6.8

Time Out Group PLC 62.0 GlobalData PLC 5.8

Daily Mail & General Trust PLC 43.4 Reach PLC 5.3

Peer Group Average 41.9 Bloomsbury Publishing Plc 1.4

Wilmington Group Plc 36.7 RELX PLC -5.9

RELX PLC 18.6 Daily Mail & General Trust PLC -10.1

Bloomsbury Publishing Plc 17.7 Peer Group Average -12.9

GlobalData PLC 8.1 Wilmington Group Plc -35.7

Pearson Plc 4.4 Time Out Group PLC -71.0

0.0 37.9 75.7 113.6 151.4 -83.1 -59.5 -36.0 -12.5 11.1

Price / EPS TTM Price / Book Value 0.0 26.1 52.2 78.3 104.4 0.0 5.1 10.2 15.3 20.4

Merit Group plc 99.9 RELX PLC 19.5 Time Out Group PLC 99.9 GlobalData PLC 12.7 Reach PLC 99.9 Merit Group plc 8.9 Il Sole 24 Ore SpA 99.9 Peer Group Average 5.2 GlobalData PLC 81.5 Wilmington Group Plc 4.4 Peer Group Average 56.2 Rizzoli Corriere della Sera MediaGroup… 2.3 Wilmington Group Plc 41.4 Daily Mail & General Trust PLC 2.1 RELX PLC 33.6 Reach PLC 2.0 Bloomsbury Publishing Plc 20.7 Bloomsbury Publishing Plc 1.7 Pearson Plc 17.3 Pearson Plc 1.3 Daily Mail & General Trust PLC 13.2 Il Sole 24 Ore SpA 1.0 Rizzoli Corriere della Sera MediaGroup… 10.5 Time Out Group PLC 1.0 0.0 26.1 52.2 78.3 104.4 0.0 5.1 10.2 15.3 20.4

EPS 5-Year Growth Rate % Revenue 5-Year Growth Rate % -270.5 62.2 395.0 727.7 1,060.4 -13.2 -3.4 6.4 16.2 26.0

GlobalData PLC 999.9 GlobalData PLC 24.2

Rizzoli Corriere della Sera MediaGroup… 999.9 Merit Group plc 8.7 Peer Group Average 218.7 Bloomsbury Publishing Plc 8.4 Merit Group plc 70.5 Wilmington Group Plc 3.5 RELX PLC 12.3 Peer Group Average 3.2 Daily Mail & General Trust PLC 6.6 Reach PLC 0.3 Bloomsbury Publishing Plc 5.3 Pearson Plc -5.3 Wilmington Group Plc -9.8

Pearson Plc -16.5 Rizzoli Corriere della Sera MediaGroup… -6.3

Reach PLC -100.0 Daily Mail & General Trust PLC -8.2

-270.5 62.2 395.0 727.7 1,060.4 -13.2 -3.4 6.4 16.2 26.0

Consumer Discretionary/Publishing Price: 710.00 GBX Report Date: September 28, 2021 Abbreviations: CAGR - Cumulative annual growth rate. EBIT - Earnings before interest and taxes. EBITDA - Earnings before interest, taxes, depreciation & amortization. LFY - Last fiscal year M - Million LON - London Stock Exchange

Definitions: Market Value - Weekly Price times latest Shares Outstanding times any applicable ADR factor. Revenue - Sum of the last four quarters of Revenues. Revenue Per Share - Sum of the last four quarters of Total Revenue divided by Weighted Average Shares Outstanding. Operating EPS LFY - EPS excluding non-recurring, non-operating items, fiscal year aligned TTM value. 60-Day Average Volume (000) - The average of the last 60 daily volume values in thousands of shares. Price 52-Week High - The high closing price from the last 52 weeks of daily closing prices. Price 52-Week Low - The low closing price from the last 52 weeks of daily closing prices. Price / 52-Week High - Latest price divided by the high price from the past 52 weeks of daily closing prices. Price / 52-Week Low - Latest price divided by the low price from the past 52 weeks of daily closing prices. 50-Day Average Price - Mean of last 50 daily closing prices. 200-Day Average Price - Mean of last 200 daily closing prices. Price / 50-Day Average Price - Latest closing price divided by mean of last 50 daily closing prices, as a percentage. Price / 200-Day Average Price - Latest closing price divided by mean of last 200 daily closing prices, as a percentage. Relative Strength Index - Relative Strength Index or RSI measures the magnitude of gains over a given time period against the magnitude of losses over that period. The equation is RSI = 100 - 100 / (1 + RS) where RS = (total gains / n) / (total losses / n) and n = number of RSI periods. In this item, 14 days is used and one year of daily prices are considered. A value of 30 or below may imply oversold and 70 or above may imply overbought. Price Volatility - The standard deviation of the last 20 days of daily closing prices. Sharpe Ratio - The 5 year average of the excess monthly return over the risk - free rate(1 - month T - bill) over the 5 year standard deviation of the same series. Sortino Ratio - The same calculation as the Sharpe Ratio but with positive excess returns set to zero for the standard deviation denominator, so only negative volatility weighs in. Dividends Per Share TTM - Sum of the last four quarters of Dividends Per Share. Payout Ratio - Dividends Per Share TTM divided by Operating EPS TTM. Dividend Yield TTM % - Sum of the last four quarter of Dividends Per Share divided by Weekly Price. EBITDA - Sum of the last four quarters of EBITDA (Operating Income + Depreciation & Amortization). Free Cash Flow - Sum of the last four quarters Net Cash from Operations minus Capital Expenditures (Purchase of Property, Plant & Equipment), from the Cash Flow Statement. Book Value Per Share - Total Common Equity last quarter divided by Shares Outstanding last quarter. Gross Margin % - Sum of the last four quarters Gross Profit divided by the sum of the last four quarters Revenues. EBITDA Margin % - Sum of the last four quarters EBITDA divided by the sum of the last four quarters Revenues. Pre-Tax Margin % - Sum of the last four quarters of Earnings Before Taxes divided by sum of the last four quarters Revenues. Net Profit Margin % - Sum of the last four quarters of Operating EPS divided by sum of the last four quarters Revenues Per Share. Return on Equity % - Sum of the last four quarters of Operating EPS divided by the average of the last four quarters Book Value. Return on Capital % - Sum of the last four quarters of Operating EPS divided by the average of the last four quarters Total Capital Per Share. Return on Assets % - Sum of the last four quarters of Operating EPS divided by the average of the last four quarters Total Assets Per Share. Price / EPS TTM - Weekly Price divided by the sum of the last four quarters of Operating EPS (capped at 99.9). Price / Sales - Weekly Price divided by Revenues Per Share TTM. Price / Book Value - Weekly Price divided by Book Value Per Share last quarter. Book Value Per Share is Total Common Equity last quarter divided by Shares Outstanding last quarter (capped at 49.9). Free Cash Flow Yield % - Free Cash Flow Per Share TTM divided by Weekly Price. Enterprise Value - Market Value plus Total Debt last year plus Preferred Equity last year minus Cash & Cash Equivalents last year. Enterprise Value / Sales - Enterprise Value divided by the sum of the last four quarters of Revenue. Enterprise Value / EBITDA - Enterprise Value divided by EBITDA TTM. Enterprise Value / EBIT - Enterprise Value divided by trailing four quarters of Operating Income. Enterprise Value / Free Cash Flow- Enterprise Value divided by the sum of the last four quarters of Free Cash Flow. Russell 1000 Index - The largest 1,000 stocks by market cap, the index comprehensively covers the US large cap universe. EPS 5-Year Growth Rate % is capped at 999.9%. Revenue 5-Year Growth Rate % is capped at 999.9%.

Consumer Discretionary/Publishing Price: 710.00 GBX Report Date: September 28, 2021

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