Pearson plc (NYSE:PSO) Q3 2020 Earnings Conference Call - Final Transcript

Oct 14, 2020 • 03:30 am ET


Pearson plc (NYSE:PSO) Q3 2020 Earnings Conference Call - Final Transcript


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Hello and welcome to the Pearson Q3 Trading Update Analysts Call. All participants will be in listen-only mode and afterwards there'll be a question-and-answer session. Just to remind you, this is being recorded. So today, I'm pleased to present John Fallon, CEO; and Sally Johnson, CFO. Please begin.

John Fallon

Thank you. Good morning everybody. Welcome to today's Q3 trading update call. I hope you're all keeping safe and well. As you heard, it's John Fallon here and here at our office in Holborn. And I'm here -- with -- safe social distance, with Sally Johnson, our CFO and joining us remotely is our Chair, Sidney Taurel.

As you can see from this morning's update, trends have improved in Q3. We've laid them out by division and by quarter in the statement. As we and the world managed to learn how we manage our way through a global pandemic and we are trading broadly in line with expectations.

Before Sally takes you through the details, three quick headlines from me. First, in an extraordinary year, I'm impressed with just how well my 22,500 colleagues around the world are stepping up to help our customers, schools, and colleges, universities, employers, and our learners as they work through some very challenging times, whether they work in global online learning, up 32% in Q3, as the world embraces virtual schools and online universities, or whether it's colleagues working international, which is down 26% in Q3, as travel restrictions, reduced demand and make it more difficult for international students to take the Pearson Test of English as schools remain closed in some countries. And as we see the economic impact of COVID-19 affecting government and parental budgets in countries such as South Africa and Brazil, across those two extremes, our colleagues are giving it everything. We've not furloughed staff, we've not cut investment. We moved quickly to support blended and hybrid learning. We've been there from day one every day for our customers, our learners and our communities. They've noticed, they've appreciated it, and we're going to emerge stronger from the pandemic as a result.

Second, our competitive performance is strong. For example, major course adoptions regained in higher education courseware, a sustained winning streak of new contracts and school assessments, strong enrollment growth in virtual schools and online universities.

And third, we're starting to see the benefits of all the hard work we've done in recent years to lay the foundation and build the platform by which Pearson emerges as the winner in digital learning by focusing on the three things that really matter to learners, outcomes, affordability, and the experience.

I'll be back to say a little bit more about that in a moment, but first, let's hear from Sally.

Sally Johnson

Good morning. John's giving you the headlines. So I'll walk through revenue performance for each division. Global Online Learning revenue grew strongly at 14%. In Virtual Schools, we saw a 41% increase in enrollments for the 2021 academic year following the strong application growth we