24
Lehman Brothers Lehman Brothers June 15, 2005 June 15, 2005

Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

  • Upload
    others

  • View
    11

  • Download
    2

Embed Size (px)

Citation preview

Page 1: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

Lehman BrothersLehman Brothers

June 15, 2005June 15, 2005

Page 2: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

Lehman BrothersLehman Brothers

Will EthridgeWill EthridgePresident and CEOPresident and CEO

Higher Education, International Higher Education, International and Professional Group and Professional Group

June 15, 2005June 15, 2005

Page 3: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

Agenda

Overview of our Higher Education business

Opportunities in Workforce Education

Our plan

Page 4: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

Our Higher Education business

USUSUSUSUSUSUSUS79%79%79%79%79%79%79%79%

Int’l Int’l Int’l Int’l 21%21%21%21%

2004 revenues : $1,360.2m

#1 in the U.S. and around the world

Outperformed the industry for 6 consecutive years

Six year revenue CAGR of 7%

Page 5: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

Pearson is the market leader

Source: Monument Information Resources (MIR)US College Bookstore Sales. Excludes Trade and Reference Books

Others9%McGraw-Hill (#3)

19%

Thomson (#2)25%

Houghton Mifflin (#4) 7%

Wiley (#5) 5%

(#1)Pearson Education35%

Page 6: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

Pearson’s competitive advantage

Leading brands:

Custom leader

Multi-channel sales and marketing reach

Leader in innovative products and services;

Page 7: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

Growing demand for Higher Education

Growth in College Enrollment: 1967-2012

Source: NCES

Projected

Strong demographics

Rising participation rates

Postsecondary graduates earn almost twice as much as High School graduates

Rising cost of Higher Education

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

1967

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

200

0

200

3

200

6E

200

9E

2012

E

Page 8: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

Technology and accountability

Course management infrastructure in place

Students are digital natives

College readiness

Retraining and life-long learning

Page 9: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

What is Workforce Education?

Pearson’s market position

Growth drivers

What our customers need

Our plan

Page 10: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

This is Workforce Education

Page 11: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

Pearson portfolio view (2000-2005)

Taking share in a down market

#1TechnicalComputer ScienceEngineering

Strong market; increased investment

#2Workforce Education

Steady market growth; Outstanding market performance

#1TraditionalArts & SciencesBusiness

GrowthOur PositionHigher Ed Markets

Page 12: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

Why is it growing?Job growth fuels enrollment (through 2010)

66%

15%

36%

10%

30%

0% 10% 20% 30% 40% 50% 60% 70%

Teacher Education

Hospitality

Criminal Justice/Homeland Security

Construction and Trades

Allied Health

*

*Due to attrition and retirement

Source: Bureau of Labor Statistics; Eduventures

Page 13: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

Workforce Education market dynamics

For-profit chains

• 1,400 companies run 2,500 schools

• 1.6M students

Strong growth at Community Colleges

Page 14: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

For-profit college growth continues to climb

Combined Revenues of Leading For-profit Colleges

2000 2001 2002 2003 2004 2005e 2006e

Cal

enda

rized

reve

nue,

$m

Apollo Group, Corinthian, Strayer.

CAGR: 20%

Source: Multex

$1,000

$5,000

Page 15: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

For-profit chains

Page 16: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

Traditional Higher Education vs. Workforce Education

Degree and/or certification; job placement 75-100%

College DegreeBenefit to Student

All ages, generally older; minimum on-campus time

All ages, about 18-22; mainly on campus

Student Demographics

600-1,000 hours4+ yearsLength of Degree Program

Frequent starts; often every 6 weeks

Semester/trimester/quarterFrequency of Course

Shorter courses (6, 8, 12 weeks)

Semester/trimester/quarter Course Length

Workforce EducationTraditional College

Page 17: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

What our customers need

Quality materials for students and faculty• Academic credibility• Accreditation issues

Customized content• Career-specific programs• Competitive differentiation

Print and digital• Enrollment in online courses growing at 44%

Highly responsive services and support

Page 18: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

The customer

PEARSONPEARSONPEARSONPEARSONLEARNINGLEARNINGLEARNINGLEARNING

SOLUTIONSSOLUTIONSSOLUTIONSSOLUTIONS

Wealth of Content

Pearson Partners• Audible• Safari• NY Times• Blackboard

Technology & Assessment Capabilities

Technical,Business &

TradeCareers

GeneralEd

PearsonCustom

PHHealth

TeacherEd

Services• Tutoring• Teacher Prof.

Development

Page 19: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

The Pearson Teach & Learn Cycle™

Page 20: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

Where it works

William F. WeldChief Executive Officer

Decker College[Former Governor of Massachusetts, 1991-1997]

A unique distance education program customized by Pearson Prentice Hall

Based on the National Center for Construction Education and Research certification and accountability standards

Page 21: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

Where it works

Patrick MayersVice President of Academic Affairs

DeVry University

Customized MyMathLab online courses aligned with DeVry's mastery learning strategy

Page 22: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

Where it works

Mary Barry Executive Vice President, Academic Affairs and Compliance

Jack AbbottVice President, Curriculum and Instruction

Corinthian Colleges, Inc.

A customized student and instructor program perfectly aligned with Corinthian’s Medical Assisting curriculum

Page 23: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group

Summary

Growing Workforce Education market

Pearson market share opportunity

Pearson Advantage: Integrated, customized Learning Solutions

Page 24: Lehman Brothers Pearson Education presentation · Lehman Brothers June 15, 2005. Lehman Brothers Will Ethridge President and CEO Higher Education, International and Professional Group