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New strategic focus for Pearson
25.02.13 | Benedicte Page
Pearson has announced a new strategic framework for the company, while revealing it will spend £150m in restructuring costs this year.
The publisher, which announced its 2012 results this morning (25th February), will be "significantly accelerating" the shift of its education businesses towards fast-growing economies in the developing world, and towards digital and services businesses.
Digital and service businesses contributed 50% of its sales in 2012, while emerging economies now make up 16% of the company's sales on a continuing basis, Pearson said. Meanwhile there has been "pressure" on the book business in the developed world due to structural trends, it added.
For the future, Pearson is developing a new strategic framework which will see it prioritise certain geographic markets identified as offering bigger growth opportunities while reduce local infrastructure and investment in a "long tail" of smaller markets. The company will be concentrating on four global businesses: schools, higher education, English and business, plus four business models: direct to consumer, "Pearson Inside" which caters for institutions, assessment and certification, and learning services.
The £150m restructuring costs also cover the spend on separating Penguin from Pearson in preparation for the merger with Random House.
Pearson said the restructuring is expected to generate annual cost savings of approximately £100m in 2014. Those savings will be reinvested in development in education markets, plus further restructuring with the integration of Penguin Random House.
Sales in 2012 were up 5% at £6.1bn, Pearson announced earlier today. Adjusted operating profit was up 1% on 2011 at £936m.
The publisher said it expected 2013 to remain "challenging" for the developed world and publishing businesses due to pressures on education budgets, retail consolidation, the shift to digital, changing consumer behaviour and strong competition. Market conditions in developing economies and education software and services will remain "favourable", Pearson predicted.