Pearson plc (PSO) Q4 2024 Earnings Call Transcript

2025-03-01 01:59:04 ET

Pearson plc (PSO)

Q4 2024 Earnings Conference Call

February 28, 2025 09:30 AM ET

Company Participants

Omar Abbosh - Chief Executive Officer

Sally Johnson - Chief Financial Officer

Art Valentine - President, Assessment & Qualifications

Tom ap Simon - President, Higher Education and Virtual Learning

Alex Shore - Investor Relations

Conference Call Participants

Adam Berlin - UBS

Nick Dempsey - Barclays

Steve Liechti - Deutsche Numis

James Tate - Goldman Sachs

Presentation

Operator

Good morning, everyone, and welcome to Pearson's 2024 Full-Year Results. Today, we will host a presentation followed by a Q&A session. There will be three ways to submit your questions. For those of you who have joined us in person and wish to ask a question, please raise your hand at the end of the presentation. For those of you who have joined us virtually and would like to ask your question personally, please use the numbers that are displayed on screen. These lines will open following the main presentation. Alternatively, please type your questions into the questions tab at the top right of the screen in the event platform and we will address them in turn at the end.

And with that, I'll hand over to Omar.

Omar Abbosh

Thank you, Alex. Good morning, and welcome to all of you. Thank you for joining us today. As well as hearing from Sally and me, we're also joined by our colleagues, Art, Tom, Vishaal, Tony and Sharon for Q&A. Many of you will recognize Sharon from the Assessments and Qualifications investor seminar that we held back in November 2023. But let me formally introduce it to all of you. Sharon has held many leadership roles over her successful Pearson career and is currently MD of our U.S. Student Assessments and UK and International Qualifications businesses. She has a track record of strong results delivery. I'm pleased to announce that Sharon will become our new President of English Language Learning effective next month.

This means that Gio Giovannelli has decided to leave Pearson. Gio has contributed so much to Pearson over the last 12 years. I'm glad to Gio, and he's been instrumental in driving the strong revenue and profit growth of our English Language Learning business. I'd like to thank him for his big contribution and wish him all the best for the next endeavor. He'll continue to be available to Sharon and the team over the coming period.

Now I'll kick off with an update on our strategic progress before handing over to Sally, who will run you through our financial results for 2024 and our expectations for 2025. You'll remember that we set out three priorities for 2024, and I'm pleased to say that we successfully delivered on all three. First, we delivered a financial performance in line with market expectations. We grew sales by 3% and profits by 10%. I'm particularly happy with the resulting EBIT margin of 16.9% and strong free cash flow generation.

Second, as further evidenced by today's announcement of our partnership with AWS, we're building real momentum in the enterprise business. And third, we are scaling the application of AI across a wide range of our products and services, and this is happening across the entire business, and we're starting to see commercial benefits flow through from these initiatives. We will share various examples during the presentation. And for those of you here in the room, we have lots of great demos for you outside that I would love for you to go and experience....

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