#1P Pearson Introduction to Pearson May 2023 1#2Forward-looking statements Except for the historical information contained herein, the matters discussed in this statement include forward- looking statements. In particular, all statements that express forecasts, expectations and projections with respect to future matters, including trends in results of operations, margins, growth rates, overall market trends, the impact of interest or exchange rates, the availability of financing, anticipated costs savings and synergies and the execution of Pearson's strategy, are forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will occur in future. They are based on numerous assumptions regarding Pearson's present and future business strategies and the environment in which it will operate in the future. There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including a number of factors outside Pearson's control. These include international, national and local conditions, as well as competition. They also include other risks detailed from time to time in Pearson's publicly-filed documents and you are advised to read, in particular, the risk factors set out in Pearson's latest annual report and accounts, which can be found on its website (pearsonplc.com). Any forward-looking statements speak only as of the date they are made, and Pearson gives no undertaking to update forward-looking statements to reflect any changes. in its expectations with regard thereto or any changes to events, conditions or circumstances on which any such statement is based. Readers are cautioned not to place undue reliance on such forward-looking statements. 2#3Our Purpose Add life to a lifetime of learning Our Vision Everyone can realise the life they imagine through learning Our Mission Create vibrant and enriching learning experiences designed for real-life impact m#4Pearson: A snapshot Experienced senior team Omid Kordestani Chair Andy Bird Chief Executive Officer Sally Johnson Chief Financial Officer Strong financials Underlying revenue* £3,428m 2021 34.9p +5% 2021 £3,841m Adjusted earnings per share 2022 +48% 51.8p 2022 Adjusted operating profit £385m 2021 20.5p +11% 2021 £456m Dividend per share 2022 +5% 21.5p 2022 2022 Revenue 23% 5% 8% 4% 21% I Assessment & Qualifications Virtual Learning** English Language Learning Workforce Higher Ed Strategic Review 38% *Underlying growth rates exclude currency movements, and portfolio changes **As of March 21, 2023, Pearson agreed to sell its OPM business, which represented £301m of revenue in 2022 4#5Why invest in Pearson 1 Market opportunity 2 Competitive advantage WHAT MAKES YOU STAND OUT? 3 Growth strategy 40.75) 15.01 12.02 of 14.01 11.02 2 ģ Strong financials 17.01 14.02 2 M 20.01 (201 2 S 4 22.01 22.01 16.02 18.02 2 2 2 2 monetary dynamics 23.25 2 Building on our legacy to create a different kind of learning company, delivering innovative digital tools directly to consumers worldwide 5 Purpose driven 5#6Market Opportunity Pearson is ideally placed to serve and benefit from three big global demand drivers 1 The rise in online and digital tools for schools and education 2 The workforce skills gap OOOO OOOO OOOO 000 3 The growing need for accreditation and certification Estimated c.£6 trillion market today, growing to c.£8 trillion by 2030 BO#7Pearson's competitive strengths: Scale and trusted consumer relationships. Pearson's unique strengths ● Unmatched scope and scale: 160 million global users (direct and monetised relationships with 15 million) Trusted brand and high quality, which inspire customer loyalty and generate strong cash flow Multiple areas of expertise supporting innovative direct to consumer learning solutions, including Mondly, Credly and Pearson+ Market tailwinds across two key dimensions ● ● More learners progressing through formal education Rising demand for lifelong and informal learning, particularly for reskilling and upskilling 7#8Our integrated business, supporting learners throughout their learning journey Assessment & Qualifications (see more on page 11) ● Certifications to prove achievements as workers upskill and reskill Largest division by revenue and consumer reach, as all activities across our five divisions can lead to some form of assessment or qualification Virtual Learning* (see more on page 12) ● Highly effective online learning for every age and stage Learning where, when and how a student learns best, with a truly personalized experience *As of March 21, 2023, Pearson agreed to sell its OPM business ● English Language Learning (see more on page 13) Digital and blended English solutions for educational institutions and the flagship Pearson Test of English, in over 150 countries. Pearson Test of English is a trusted brand for entry into higher education and a path to immigration recognised by regulators Mondly acquisition provides access to high- growth online DTC language learning market The Foundation: Pearson+ Workforce Skills (see more on page 14) ● ● Helping workers gain skills to boost employability and access new job and career prospects Helping employers understand, maintain and enhance their most important asset - their people Faethm and Credly acquisitions boost our capabilities in this dynamic, high-growth space Higher Education (see more on page 15) ● Market leader in Higher Education content High-quality digital content that provides enriching experiences for 18 million students annually Pearson+ provides foundation for premier digital learning ecosystem 8#9Pearson+ is the foundation of our digital learning ecosystem ? Р Pearson+ ● What is Pearson+? ● Monthly pay as you go subscription offering affordable, flexible, convenient access to quality e- books and learning tools ● • $9.99/mo for single text or $14.99/mo for access to 1,800+ titles; no long-term commitment Resets the economics of our US Higher Education Courseware business Pearson+ Impact Accelerates the recapture of the secondary market Helps us to build direct relationships with students Drives digital growth Longer term - international expansion and consumer acquisition tool for English and Workforce Skills laying foundations for digital learning ecosystem *Registered users and paid subscriptions represent July 16 to Dec 31 Strong growth since 2021 launch Paid Subscriptions* 133K +3x 406K Fall 2021 Fall 2022 Video & Practice Content 40k+ Registered Users* 2.75m +80K Expanding Pearson+ Channels 2.83m Fall 2021 Fall 2022 Video Minutes Played c.2m Practice Engagements 1m 9#10Talent investment platform in focus Product functionality today and future developments Key Future development FÆTHM by Pearson P Pearson Psychometric TalentLens assessments Credly Inferred skills based on roles yer prop Earned skills from credentials Consumer prop 8 Profile Q Career paths and recommendation engine Visibility of real-time workforce skills Understand workforce impact of tech and economic scenarios Improve strategic workforce planning decisions (redundancy, redeployment & retraining) Marketplace for credentialed learning 10#11Assessment & Qualifications Growth drivers Long- term contracts with high renewal rates Key financial metrics* Revenue £1,238m 2021 +8% £1,444m Large scope and scale of business 2022 Adjusted operating profit £219m 2021 *Underlying growth rates **VUE test volumes include GED tests. +6% £258m Moving up the Pearson Vue value chain by offering more support to learners 2022 Strong market position 2025 Targets Low to mid-single digit Underlying revenue 3- year CAGR 2022-2025 Increase Margin 2025 Clinical Assessment . . Producing scientifically backed products to help experts understand how people learn US Student Assessment 25% Helping K-12 students to advance at appropriate pace in their schooling VUE test volumes 18% 19.4m** +16% vs 2021 2022 Revenue Mix 17% VUE partner retention 99.9% 2021: 99% 40% Non-financial key performance indicators UK & International Qualifications Developing highly sought after academic and vocational qualifications Pearson VUE Delivering tests to over 19m learners** each year; Nearly 20K test centers serving 550 credentialing organizations OnVUE test volumes 3m Flat vs 2021 11#12Virtual Learning Growth drivers Secular growth trends towards virtual learning Key financial metrics* Revenue £713m 2021 +4% £820m Strong market position, 1 of 2 national players in the U.S. Adjusted operating profit £32m +88% £70m n 2022 Synergies from rising demand for upskilling & reskilling Virtual Schools 2025 Targets Low-single digit Increase Underlying revenue 3- Margin 2025 year CAGR 2022-2025 2022 2021 *Underlying growth rates As of March 21, 2023, Pearson agreed to sell its OPM business, which is reported in Virtual Learning and represented £301m of revenue in 2022 Virtual Schools Providing high quality alternatives to the traditional classroom for over 20 years US K-12 students can enroll in full-time online school programs offered by Pearson Virtual Schools 106k 2021: 111k ● Partnered with over 300 districts and serving more than 100,000 full-time students annually in Connections Academy Non-financial key performance indicators Virtual Schools US enrolments NPS: Connections Academy +67 2021: +62 12#13English Language Learning Growth drivers Accelerating development of digital-first, flexible products that will deliver personalized pathways for learners Key financial metrics* Revenue £238m 2021 +24% £321m 2022 Adjusted operating profit £15m Continue to win approval of high stakes assessments as well as expand addressable market outside of traditional high stakes assessments 2021 *Underlying growth rates +33% £25m 2022 Mondly enhancing value proposition and converting indirect relationships to direct ones 2025 Targets High-single digit Underlying revenue 3- year CAGR 2022-2025 Increase Margin 2025 PTE Score Return 57% 2022 Revenue 1.3 days 2021: 1.2 days 43% 2022 revenue ONLINE COURSES Institutional** Digital and blended English solutions for educational institutions and the flagship Pearson Test of English, in over 150 countries. Non-financial key performance indicators **Revenue figures exclude online DTC High Stakes Assessments** Pearson Test of English is a trusted brand for access to higher education and immigration Online Direct-to-Consumer Acquisition of Mondly in 2022 provides entry into high-growth online language learning market and synergies across Pearson PTE volume 827k +90% vs 2021 NPS: PTE +52 2021: +56 13#14Workforce Skills Growth drivers Talent investment platform that helps enterprises solve their workforce challenges Key financial metrics* Revenue £172m 2021 +7% £204m 2022 Adjusted operating profit £27m Expand customer reach as well as increase the value we bring to current clients 2021 *Underlying growth rates -67% £(3)m 2022 Opportunity to lead in labour & talent data market 2025 Targets Greater than 20% Underlying revenue 3- year CAGR 2022-2025 Improve MMM Margin 2025 ||||| BOL 8888 70% of employers believe college graduates lack core skills Workforce Skills number of enterprise customers 1,503 2021: 645 PROR Diagnose future skills training needs Helping employers understand how to futureproof their workforces at scale in a changing global economy Skills-based learning and assessment Helping workers gain skills to boost ployability and access new job and career prospects Verify individuals' skills Using verified skills credentials to close skills gaps, realise untapped potential and mobilise talent Non-financial key performance indicators 30% of jobs at risk of automation by 2030 Number of Workforce Skills registered users 4.7m 2021: N/A Enterprise customer net retention rate 74% 2021: n/a 14#15Higher Education Growth drivers Implementing product-led operating model, and leveraging positive momentum for Pearson+ Key financial performance* Revenue £849m 2021 -4% £898m Reorganised and increased sales team to enhance go to market strategy Adjusted operating profit £73m +12% £91m 2022 Secondary market recapture 2025 Targets Low to mid-single digit Underlying revenue 3- year CAGR 2022-2025 Increase Margin 2025 2022 2021 *Underlying growth rates **2021 US Higher Education digital registrations restated from 11.4m to 11.1m due to recategorizing ***Pearson+ registered users represents the number of unique user accounts added over an academic year. M P Pearson + P Pearson MyLab & Mastering Non-financial US Higher Education digital registrations 9.9m 2021: 11.1m** ● We create personalized, digital learning experiences for higher education and college students We partner with thousands of expert authors to create content across many academic disciplines We are leaders in science, technology, engineering and math (STEM) Over 600K paid subscriptions 4.8M registered users accessed from over 170 countries 30 subjects mostly in Math and Business Mastering: Over 2 million registered users at more than 3,700 universities 16 subjects featuring real-time student performance data for instructors Pearson+ registered users*** 2.83m 2021: 2.75m US Higher Education product usage - text units 4.8m 2021: 5.4m 15#16Financial expectations Group Revenue Margins** Capex & product development Cash conversion Return on capital 2022 *Excluding OPM and strategic review **Adjusted operating margins £3,841m 12% £196m £357m 88% 8.7% 2023 Low-to mid-single digit growth* Mid-teens Capex reduces, reinvested into product development > 90% Improvement 2025 Mid-single digit (3-year CAGR 2022-25) Upper end of mid-teens Capex reduces, investment mix shifting towards product development > 90% Double digit £120M of cost efficiencies identified supporting margin expansion in 2023 16#17Focus on disciplined capital allocation Robust, efficient balance sheet Operating cash flow £388m 2021 +£13m £401m 2022 Cash conversion Liquidity 88% 2021: 101% How we deploy capital 2020 £1.4bn 2021: £1.6bn 2021 Organic investment Inorganic investment Dividends 2022 Net debt £557m 2021: £350m 3 year average Share repurchases Capital allocation decision factors Maintain a solid investment grade rating Invest in the business to drive growth Meet appropriate hurdle rates for investment opportunities Maintain progressive and sustainable dividend policy Apply above framework to all organic and inorganic investment decisions 17#18Our ESG framework Our sustainable business pillars Products Driving learning for everyone with our products Achieved through: ● ● ● ● Consumer engagement Product effectiveness Digital growth Responsible & sustainable content Affordability & Access People Empowering our people to make a difference Achieved through: . ● ● Investing in talent Inclusion & diversity Employee engagement • Local community engagement Planet Leading responsibly for a better planet Achieved through: Reducing our environmental impact ● ● ● Investing with purpose Cyber security & data management Reducing our carbon footprint Our aspiration By 2030, reduce scope 1, 2 & 3 emissions by 50% against 2018 baseline as approved by the Science- Based Targets initiative ● Become net zero across scope 1, 2 & 3 by 2030 Progress to date ● tCO₂ are down 33% vs. 2018 base Next steps to achieving aspiration Further digitisation and re-organisation of our print supply chain (e.g. print on demand) Engaging our wider supply chain to deliver their own GHG reductions Adopting flexible working polices that reduce emissions from business travel, commuting and offices 18#19Financial calendar and Investor Relations contacts Investor Relations contacts Joanne Russell SVP, Head of Investor Relations [email protected] James Caddy Director [email protected] Gemma Terry Director [email protected] Brennan Matthews Vice President [email protected] 19#20P Pearson Please visit here for further information on our targets and KPIs. 20