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Financial performance: Sales up 6% at CER in spite of tough trading conditions in many markets. Adjusted operating profit up 12% to £942m with growth in all businesses. Adjusted EPS up 12% to 86.5p (headline growth). Cash conversion remains strong at 104%; operating cash flow of £983m (£1,057m in 2010, which benefited from an unusually high working capital contribution). Return on invested capital of 9.1%, above Pearson’s cost of capital; ROIC lower than in 2010 largely due to significant acquisition spend and higher cash tax.
Growth markets: Digital revenues up 18% in headline terms to £2bn, now 33% of Pearson’s sales. Substantial digital growth in all parts of Pearson including: Students using our digital learning programmes up 23% to 43m. Penguin eBook revenues up 106%; now 12% of total Penguin revenues. FT digital subscriptions up 29% to 267,000; approximately 44% of total paid circulation. Developing markets revenues up 24% in headline terms to $1bn ($834m in 2010), now 11% of Pearson’s sales.
At Mobile World Congress, Adobe Systems Incorporated today announced that more than 16 million digital publications were powered by Adobe® Digital Publishing Suite across tablets over the last year. The company also released key insights about digital magazine and newspaper application usage, based on anonymous data aggregated from nearly 600 publishers worldwide who have created around 1,500 tablet publications using Adobe Digital Publishing Suite. In addition, Adobe announced new innovations that add more enterprise-class functionality and extensibility to the Digital Publishing Suite, helping organizations drive digital revenue and brand engagement through digital publications. Key enhancements include new in-app merchandising, provisioning of targeted content based on user role, and accelerated app creation.
The anonymous, aggregate data is derived from publications delivered using Adobe Digital Publishing Suite and shows shifts in reading patterns, willingness to pay for tablet applications, accelerated purchase funnel and advertising engagement. Tablets are driving new revenue for publishers as consumers pay for digital media content. Business publishers are also using tablet applications to drive awareness of their brands as well as the purchase of goods and services.