Pearson plc (PSON) Earnings Call Transcript & Summary

All right. Good morning, everyone. On behalf of the Pearson Board, I would like to welcome all those online and in the room to our Annual General Meeting. There's a quorum present, and we can start the meeting. I'm Omid Kordestani, the Chair of Pearson. I'm pleased to have opened the meeting with a video telling the powerful story of Savannah. She is the embodiment of millions of learners who rely on Pearson to help them adapt and thrive. Savannah was a Connections Academy student challenged by the loss of a parent and by bullying in her brick-and-mortar school. Her experience at Connections Academy propelled her to NYU. Her story also captures something more profound about the world of learning today. There is no longer a single path. People are thriving in virtual classrooms, earning micro credentials and retraining mid-career, all to keep pace with the world being reshaped by AI. We have anticipated that shift and have positioned ourselves at the center of this transformation. You'll hear more about that today. I would like to welcome those who are attending in person to our London offices at 80 Strand. For those of you in the room, please place your phones on silent mode. Shareholders joining us virtually through the Computershare platform will be able to participate in the meeting by watching us live on the webcast. They will also be able to vote on the resolutions and ask their questions. When we get to the formal part of the meeting, there will be an opportunity for all shareholders present in the room and online to ask questions. Shareholders on the Computershare platform can submit questions at any point using the message platform on the left-hand side of the screen. We will endeavor to address any unanswered questions on your website as soon as possible after the AGM. I'm joined today by Omar Abbosh, our Chief Executive; Sally Johnson, Chief Financial Officer; Graeme Pitkethly, our Deputy Chair and Senior Independent Director and Chair of our Audit Committee; Sherry Coutu, Chair of our Remuneration Committee; Annette Thomas, Chair of our Reputation and Responsibility Committee, along with our other Non-executive Directors, Alex Hardiman, Alison Dolan, Arden Hoffman and Costis Maglaras. Welcome. Esther Lee is not able to join us today. Also with us in the front row is our incoming Chief Financial Officer, Simon Robson. At last year's AGM, we welcomed Arden, and she joined the Board in June. Arden is the Chief People Officer at General Motors and brings strong expertise in the area of workforce and talent development in the era of AI. Costis joined the Pearson Board last November and is here for his first AGM. Costis is Dean of Columbia University Business School and brings with him significant expertise in academia, AI and tech-driven enterprises. He also has extensive experience in finance, having worked with financial institutions, including Goldman Sachs, Bank of America and Mismi. In February, we announced that Simon Robson will succeed Sally Johnson as Chief Financial Officer and joined the Board as an Executive Director on 8th of May. Simon brings extensive financial leadership experience from Sky. We're thrilled to welcome them to the Board. Along with welcoming them, we're also saying farewell to our CFO, Sally Johnson, who is with us for her last AGM. In her 26 years at Pearson, she played a central role in strengthening our financial performance and advancing our business and financial transformation. Sally has been a valued member of our Board and a close friend and colleague to many of us. She's leaving to take the role of CFO at a privately held company, and I, along with the Board, wish her all the best in her next chapter. Thank you, Sally. I'm delighted to join you again and host our Annual General Meeting. It's been another successful and transformational year for Pearson. As AI and demographic change reshapes learning and work, Pearson's purpose to help people realize the life they imagine through learning has never been more relevant. We're evolving to better support learners, institutions and employers as workforce needs shift. Thanks to Omar's clear strategic leadership, the company's disciplined financial management and the focus of our people, Pearson executed against its strategy in 2025 to deliver growth and sustainable returns. Our commitment to innovation and impact is reflected in the continued application of new technologies across our products and services. Our investments in AI are translating into differentiated offerings, improved customer service, faster routes to market and improved data capabilities. Pearson's focus on moving faster and more effectively is also reflected in the 9 multiyear enterprise partnerships we have signed with leading players such as Microsoft, AWS and Google Cloud. These partnerships will strengthen Pearson's position in bridging skills gaps and helping learners and enterprises adapt in an AI-enabled world. As AI innovation continues to accelerate, the demand for learning and the validation of skills is increasing. Pearson's deeply embedded position within the global learning ecosystems, strong and trusted relationships and operational scale position us well to navigate the evolving landscape. Leaders are under greater pressure than ever to adopt AI while demonstrating return on investment and engaging employees. The biggest obstacle is a lack of human skills to work effectively alongside these new technologies. Learning and upskilling will augment workers while driving productivity. In fact, research we published earlier this year showed that if we can augment jobs with AI, we could add up to $6.6 trillion to the U.S. economy alone by 2034. Sitting at the intersection of education, skills and workforce development, Pearson is uniquely placed to help address the needs of an evolving job landscape. Pearson also recognizes the need to encourage upskilling among our own people. Last year, we expanded our learning opportunities for our people, set up professional communities and launched our Pearson lab here at 80 Strand. This will help us encourage a culture of curiosity and collaboration to support faster innovation and execution. We remain uniquely positioned to meet the demands of a changing world. And while there is still much to be done to meet the needs of learners, we see clear momentum as we drive further growth for you, our shareholders. Our significant strategic progress is evident in our 2025 financial performance, which I will turn to now. Pearson delivered another year of good financial performance. We achieved underlying sales growth of 4% and adjusted operating profit grew 6% on an underlying basis to GBP 614 million. Cash performance continues to be strong with free cash flow conversion of 125%. 2025 also saw margin expansion from 16.9% in 2024 to 17.2%. As a result of our performance in 2025 and strong cash position, combined with our balance sheet strength, the Board recommends a 5% increase in the full year dividend to 25.2p. Today, we released our Q1 trading update. We have made an encouraging start to 2026 with underlying sales growth of 4%. It demonstrates the continued momentum of the business and the strong execution of our teams in delivering against our strategic priorities. I'll now turn it over to Omar to tell you more about what we achieved in 2025 and talk to our 2026 priorities. Thank you, Omar.

Thank you, Omid, and good morning to everyone here in person and online. It's great to be with you today. I'd like to start by expressing my gratitude to Omid and our whole Board for their incredible support of our strategy and our management team over the past year. I also want to thank our Pearson people for their hard work and valued contributions to another year of good financial and strategic progress. You'll remember, we set out 3 priorities for 2025, and I'm pleased to say that we successfully delivered on all 3. First, we again delivered a financial performance in line with expectations. Second, we continue to embed AI-based innovation across our products and services, allowing us to deliver more engaging and personalized learning experiences. And third, we're making great progress on our enterprise relationships with the enterprise business now on a journey towards delivering meaningful shareholder value. We continue to be very excited about the future of Pearson, thanks to the megatrends driving strong demand for what Pearson offers and because of the unique characteristics and enduring competitive strengths of our business. In Assessments and Qualifications, we delivered a solid performance with all sub-business units contributing to growth. Pearson Professional Assessments secured several new contracts, while U.S. Student Assessments announced a partnership with McGraw-Hill. Clinical Assessment grew through strong demand for our digital products together with an expanding customer base. We also launched Revibe, an AI-enabled wearable designed to support focus and self-regulation. In U.K. and international qualifications, we introduced the GCSE exam Practice Assistant, an AI-powered tool for personalized revision. Virtual learning delivered a strong performance, particularly in the second half of the year with underlying sales up 18%. We opened 2 new schools, bringing our total to 41 schools across 31 states and embedded our career program across the whole network. We're also already seeing that our AI tools are contributing to improved student outcomes with higher grades and pass rates. The Higher Education business improved as expected versus 2024, driven by a solid performance in our core U.S. courseware business. Our performance has been supported by the expansion of AI features in our offering. And as our AI tools scale and become more embedded in the student learning process, we're seeing learners deepening their cognitive ability and engagement. We'll now show you a short video, which captures the breadth of our AI offering in higher education and how we're improving student outcomes. [Presentation]

In English Language Learning, we executed strongly with continued growth in the institutional business and customer wins in key markets such as Latin America. Pearson Test of English performed well despite a tough market backdrop, demonstrating its resilience. We advanced our offering with the launch of PTE Express test and the launch of our AI product communication coach developed in collaboration with Microsoft and our ELS business to improve workplace communication skills of both native and non-native speakers within the flow of work. Let's introduce you the communication coach. Please roll the video. [Presentation]

In Enterprise Learning and Skills, we established our global enterprise sales team and signed multiyear long-term strategic partnerships with a range of key hyperscalers and leading professional services firms. Communication Coach, which you've just heard about, is one of the first examples of many joint go-to-market products that we'll be collaborating on with our new partners. Our achievements in 2025, driven by the agility, ambition and strong execution focus of our teams across Pearson position us well in 2026 and for the future. Before I talk more about those unique strengths, I want to acknowledge the broader AI-related market uncertainty that we've seen. This uncertainty has affected many companies across media, software and technology. Pearson has felt that, too, but we don't fit neatly into any of those sectoral buckets. We are truly diversified, and we're uniquely positioned. A core part of Pearson is built around trusted human-led services, which I'll describe in more detail. Additionally, the accelerating demand for reskilling and skills validation plays directly to our strengths. In an AI-driven world, this combination positions Pearson well for the long run. So let's take a step back and remind ourselves of what Pearson does and why we're such a resilient business. Over 80% of Pearson's profit comes from assessments and virtual schools. These businesses are driven by human-led services where complex physical and digital workflows enable large-scale delivery in highly regulated markets. Our services must meet a very high bar for accreditation, authorities and regulators, meaning that strength and operational delivery really matters. Together, our services act as verification infrastructure for companies, industry associations, states and government agencies. Even in today's AI world, some countries or customers are not ready for digital at any scale, so there will continue to be a need for print-based products for the foreseeable future. That means that about 90% of Pearson's profit stream is coming from operationally complex, interconnected hybrid physical and digital services alongside print. The remaining about 10% of our profits comes from primarily digital courseware, for example, in our Higher Ed business. Here, once again, we have deep relationships built on a foundation of quality and trust. Our digital products are not just content, they're designed to manage a course end-to-end and are tightly aligned with educator and student needs as well as course curriculum and assessments. Our unique, deeply embedded position in the learning ecosystem gives us petabytes of proprietary data, and we hold leading positions across almost all of our businesses. We have a breadth of offerings that are unmatched globally, and this diversity makes our business model really robust. Trust underpins the strength and breadth of our offerings. And this has been gained through a long track record of operational excellence high-quality IP and our expertise in how people learn with evidence of how we can drive better learning outcomes. This kind of trust and verified skills is even more important in the era of AI. As the world's lifelong learning company, we're perfectly positioned to benefit from the demand for skilling and the validation of skills. Our unique characteristics of trust, infrastructure level quality, operational strength and breadth of services enable us to deliver strong, durable cash flows and profitability and our deep and enduring competitive advantages provide a unique platform for future growth. I've just talked to the unique strengths and positioning of our business and the progress we're making against our strategy and the opportunities that lie ahead. For 2026, our strategic priorities are simply an evolution of those that we had in 2025, and they're serving the business very well. First, once again, we will deliver our financial targets. Second, we will continue to lead in the application of innovative technologies, including AI across all our products and services. And third, we will deliver against our core business and enterprise power metrics. Everything that you've heard today highlights how we continue to be very excited about the future of Pearson. And with that, I'll hand it back to Omid for Q&A.

Many thanks, Omar. Before I ask you to vote on the resolutions, we will be pleased to answer your questions on the business or any of the resolutions. We have encouraged participants to pre-submit questions, and these have been prioritized in terms of responses and will be answered in order of submission. We'll start with these. But as a reminder, you can also ask questions in the room at any time, and you can submit questions at any point using the online messaging function. Any person wishing to ask a question should raise their hand and one of our stewards will make a microphone available to you. For those attending the meeting via the Computershare meeting platform, please submit your questions via the Computershare meeting platform. You can do so by clicking the Q&A icon on top of your screen, type your question into the box and click the send button. We have no pre-submitted questions, so we will take questions from shareholders in the room.

Nick Steiner private shareholder I have 2 questions. The first one, I've been trying to work out how to actually ask it to do with the English language learning. And that obviously has great scope. I don't say which countries you're in, India and China would obviously be that. The second part, as you teach the language, you're also getting expertise in the language of the mother tongue of the learner. So it seems that this is something you could do a reciprocal learning for, say, an English speaker to learn minority language, and it hasn't really been mentioned. You talk about the AI use, and that obviously makes much sense. Omid sort of mentioned human skills and that sort of thing. And you talk about a Communication Coach. Is that a human or an AI? Or should tutors be involved in this learning? And if that's the case, that would suggest that there's an increasing demand for tutors who can actually sort of speak the necessary languages. I probably better stop there on that. Do you want the second question now?

Let's answer your first one, but thanks for your creativity. I'll have maybe Omar address this.

Pleasure. Thank you so much for being here and for being a shareholder and for your questions. I mean so on English language learning, there are about 1.5 billion people every year learning English. It's by far the biggest language that people are trying to learn around the world. And there's a ton of evidence that when people learn English, it helps them with their careers and with the money that they can earn in their jobs. And so there's a big demand for it. Our English language learning business serves that need, and it's focused essentially on 2 areas. You have folks who live in a particular market like in Australia, who want to improve their English to improve the jobs that they have access to, and we serve that need. And then you have folks who may live in a country like India who may want to migrate, but need to meet certain visa requirements for language, and we support those learners as well. And so the markets that we're primarily serving that you'll hear us talk about are U.K., Australia, Canada for migration purposes and then in some of those core countries like India and China, the way you mentioned. And so that's our big focus. Some of the properties inside Pearson have focused on language to language learning. And so you may have heard us a few years ago talk about a product called Mondly. That is in that zone. But for now, I really want the team to focus on the biggest market by far, which is English. The next biggest would be Spanish. And indeed, we've got capabilities and can help in that space. But I quite like focus because it helps us perform better, and that's where we're at. With how Communication Coach works, I mean, Communication Coach is indeed an AI engine running in the background that interprets your speech, for example, in a team's call. What we found with when you use AI in private with a person, people really like it because they can ask dumb questions. And we also have a ton of evidence that shows when people are effective communicators at work, they have a much better career. Sometimes you can have genius people at work who are poor at communicating and they're genuinely impeded because they can't get their thoughts across. And so Comms Coach is a private tutor using AI that reasons over your speech and then it gives you direct feedback just to yourself in terms of how to improve your communication skills. And we originally built it for non-native speakers to help people with grammar and pronunciation. And we were very surprised to find it was extremely effective with native English speakers and helping them get their point across better. And it generally helps slightly more introverted people, shy people, et cetera. And it just helps them enunciate what they're trying to say more clearly, and that just helps works at work. And that one, as you know, is in partnership with Microsoft. And so for all the companies in the world that have Microsoft products on their desktop like Copilot or Teams, Comms Coach is a plug-in that appears there and can help people.

Your second question...

The second question really picks up on your strategic partnerships, which seems a sensible way to go. Are we a junior partner in these partnerships? Or do we have a say in it? Or are we sort of much bigger or a senior partner? What are the -- how strong are these partnerships? Are they just for the next year, next 10 years? Or how are they evolving?

I can address at a high level and then Omar can add. But basically, they are very much reliant on strong relationship with these customers and partners, highly negotiated. They're typically multiyear agreements, lots of financial commitments on both sides, lots of product road map work that's committed to. So it's not just an agreement and a relationship. It's also a very tight relationship that builds as we deliver on our commitments and as the partner delivers on theirs to us. So we look forward to delivering these wonderful services from Pearson to them, integrating with their products and services and then ultimately, hopefully delight the ultimate customers of those products and continue to expand these relationships and renew them. That's our goal.

Thank you, Omid. I mean just adding a couple of little points. I mean, so as you know, in any relationship, if you are invested in one another's success, you have -- you're more likely to have good outcomes. I mean, so just to pick on a subset. So we mentioned the professional services firm. So we signed 5 big deals with big professional services companies. Pearson had more than 60 arrangements with professional services companies. But those are all not partnerships. They were simply master vendor type contracts where you're buying time. We wanted to focus on a strategic much smaller number, 5 of partnerships and go deep with one another. And exactly as Omid said, those are multiyear contracts where we are bringing their expertise to help us with things we need help on and our expertise to help them. A partnership only works if you each bring something. They don't -- they're not trying to be the world's leading learning company. That's where we bring skills. But they may have invested heavily in cloud or frontier models or have a giant distribution workforce in enterprise around the world. And so each of us brings things that we're good at, and you put that together so that 1 plus 1 can be 3 in service of the end customer.

Mic is coming right behind you.

Phil Clarke, a very long-term shareholder. I've actually got 4 questions. So -- but some are easier than others. So can I just give you the first two to start with. First of all, on Page 27 of the accounts in the reconciliation between operating profit and adjusted operating profit, there's a write-off for GBP 87 million for product development impairment. Can you tell us a bit more about that, please?

We're very lucky today, we have two CFOs in the room.

You going to ask the second one?

Let me give you the second one as well. Note 30, Page 221, the acquisition of eDynamic Holdings, we paid GBP 168 million for that, but their turnover is only GBP 18 million, and they're kind of a breakeven sort of business. how will we ever get the money back for our GBP 160 million?

Good question. Thank you.

I think those are both for me. I've forgotten the first one -- it was the write-off. So we made a write-off last year of some of our platform systems within our higher education business. The reason for that is because we are undergoing a project at the moment to converge 3 platforms into 1. That's going to benefit our customers because it's going to make those platforms easier to deal with as a customer. It's also going to reduce costs because then the support cost for those platforms is going to be less. So that's going to be good for us on a go-forward basis, but it does mean that the platforms that we've got at the moment aren't needed, and therefore, we've taken a write-off. And then on EDL, there's actually an accounting thing. I don't get asked about accounting very often. There's actually an accounting thing that goes on when you buy a company. And effectively, what you have to do is the revenues that you've deferred within that company, you actually have to write down to 0 in terms of the acquisition accounting. And therefore, you don't have that deferred revenue to recognize for about the first 18 months of that acquisition. So that means that the revenues and profits for EDL look much smaller than they actually would if we were recognizing that deferred revenue. Actually, what we've shared is the multiple that we paid on that acquisition was about 13, 14x. And therefore, you'll be able to see that actually once that accounting has worked through, it's a really nicely profitable company with great margins, great growth, and it also releases a lot of cash as well. So you'll see the returns on that in about 18 months when that accounting unwinds. Thanks for your question. 3 and 4...

I misspoke. We actually have 3 great CFOs. We also have my colleague on the Board. I'm so sorry. Sorry. So my jet lag coming from California. So we're well covered.

This is for the collection of CFOs as well, I think. On the consolidated statements of comprehensive income, we took a whopping write-off due to exchange differences of GBP 193 million. which kind of wiped out the profit for the year pretty much, the net profit. And obviously, that -- I'm guessing, but I suspect that's down to the exchange differences because of the weakening of the U.S. dollar, which raised...

We've got 5 CFOs in the room. You've answered your own question.

All right. Maybe this one is more for Simon for you. But 2/3 of our sales are in the U.S.A., 2/3 of our noncurrent assets are in the U.S.A. Surely, this is a U.S. dollar-denominated business, and we should prepare accounts in dollars, and that would avoid these bonkers write-offs through the comprehensive statement. And a second point, I guess part A of the question is, can we convert to dollar accounting. The second part would be our debt is denominated in sterling and euros. Why on earth isn't denominated in dollars to match the income. So I think we've got a currency problem, and it's not quite right. So that's question 3.

So I'll answer that because I forgot the other question before, and then you can ask question 4 afterwards. Great question. And actually something that we've been thinking about in terms of the dollar reporting question. And we've got a project underway at the moment to look at whether it's the right thing to do or not. Obviously, these things aren't simple and you can just switch flip a switch and you can report in dollars, but it's a point well made. And then in terms of our sterling debt, we do actually use derivatives to swap that debt into dollar debt. So the debt matches our revenue profile. The reason that we issue in pounds is because we have great liquidity for debt in the U.K. market. In fact, we issued a bond very recently, and we were 6x oversubscribed. If you want to issue debt in the U.S. market, you tend to have to do it in bigger chunks. And so it's better for us to issue in pounds and then use derivatives to swap it into dollars.

That's very good. And the last question, I think, is more philosophical then because although you've made good steady progress in the results and you -- quite clearly, you're working very hard to drive the business forward. The market didn't love you last year, and it marked you down, but it also marked down heroes such as RELX because of the skepticism about whether or not AI is a good thing or a bad thing and whether you'll be winners or losers. So I don't know if there's anything you'd like to say. I'm sure there's a ton you'd like to say, but it'd be good to have your take on whether you're going to be winners from AI or as the market suspect losers.

Great questions.

I'm happy to talk to that one. We're absolutely going to be winners from AI because AI will force a reconfiguration of occupations across every industry where -- which means that every workflow, every process in every company will evolve. which means that people are going to have to learn new skills of how to work with AI agents in their refined roles, their evolved roles. And we're already seeing that demand most heavily in the tech sector who are already deepest with applying AI. So I'm absolutely certain about that. Now obviously, I'm not going to speak to the financial markets at large, but as you know very well, it was the whole media sector tanked, the whole advertising sector tanked. Software-as-a-Service sector tanked, information services tanked. At some point, it was wealth managers and freight and logistics truckers as people were running around saying, Anthropic have released a new plug-in and what's that going to cause a drama. So you know markets better than me, they swing, et cetera. But I think in the medium term, markets look at, as Mr. Buffett said, like it's -- in the medium term, they're a weighing machine. So we're going to keep focusing on executing our business. We'll keep driving revenue growth. We'll keep driving cash flows. We'll keep driving profitability. And at some point in the future, people will look at how our EPS has improved over time, and we know that, that will play out because on average, the market is sensible over the medium term, and that's how it will be.

A shareholder and former Pearson employee. Also on AI, I wanted to ask whether you have made arrangements with any AI companies to license content for LLM training. And if so, whether you've consulted your authors to get agreement to those arrangements?

The short answer is no. I don't -- I mean, when I joined the company, people were already making offers to buy Pearson's historic content for sums of money. And my view and obviously, in discussion with the leadership team is that, that is not a strategy. That is like a short-term blip that doesn't particularly help. We're still being barraged by the AI companies who want to use our things. In reality, they have used pirated versions of Pearson copyrighted material. That, as you probably know, is subject to a whole range of lawsuits in the U.S. Anthropic are busy settling one right now. And Pearson Authors will be a beneficiary of that. So in general, I'm not a fan of licensing content as a strategy. I am a fan of allowing third-party organizations to use Pearson learning experiences that may leverage content, but in which case, of course, they would need to be a proper commercial construct underpinning that.

[indiscernible] private shareholder. Pearson is doing very well in advancing its AI capabilities. But unfortunately, this will lead to job losses in Pearsons. What sort of scale of job losses are you anticipating in the next couple of years amongst Pearson staff, please?

So the focus that we have on applying AI is on making our products better for learners. And I mean, as I said earlier, I do think that AI will cause a reconfiguration of roles and jobs across all industries. I don't think Pearson will be immune from that. But our focus is not on using AI to drive job or headcount reductions. That is not the focus. We have said that we think as we adopt modern technologies like AI, we will find tens of millions of pounds of cost savings in our cost base over time. And that's just the normal evolution of business as we go. But we're not looking for anything drastic on this front. We will, of course, act in shareholders' interest over the medium term. So for example, let's say that it took 3 years in the past to create a piece of content with all the different stages and steps of that. What you find when you go and look at that process is that QAing the content is a core part of the thing, and it takes a long time. You can use AI to accelerate that. Translation, you can use AI to accelerate that. Copy editing, you can use AI to accelerate that. So of course, we will apply the techniques to improve the efficacy and the productivity in the business. But my ambition, and I think what we really want to do is turn this towards growth because actually Pearson can produce much more material and more learning and assessment experiences to address more markets and more quickly with AI than we could without it. And that should be a growth driver, and that's the main focus.

Okay. As there are no more questions in the room, I'll now hand over to Laura Gamble, Executive Partner, Corporate. Is that the actual title?

Yes.

Sorry in our Corporate Communications department, who will help with the virtual Q&A. Thank you, Laura.

Thank you. So we do have three questions, and they come from Sheryl Cuisia. Sheryl is a private investor, and she's a representative of the Engagement Appeal. Sheryl's first question is, what more can Pearson do to harness a more diverse customer shareholder-centric base? And she'd also like to know when can we expect a collab between Mr. Abbosh and Will.i.am.

So yes, I mean, so Will is a wonderful chap, as you know. And I think we last saw him -- Danny and I met with him at ASU+GSV, which is a big education conference in San Diego just how long ago, 2 weeks ago, 2, 3 weeks ago. Will actually is talking about investing in skills. I mean he's incredibly focused on STEM and helping people in local communities in the U.S., particularly disadvantaged communities. And so who knows? Perhaps there'll be room for another collaboration with him. For those of you wondering what this question is all about is Will and I did a couple of series of podcasts together on essentially applying technology to the world in a good way, and he's just a great guy to work with. And then the first part of the question was about our shareholder register being more diverse.

More diverse, customer-centric and more shareholder-centric, so mostly in regard to younger shareholders.

I mean -- so Pearson, obviously, completely following all the normal corporate governance codes and things that we need to pursue. We have a very high institutional shareholder base. I'd love to see a bigger retail shareholder base in the company. And perhaps our friend who just asked the question can spread the word amongst her colleagues to say that this is a company going places, and it's a great valuable opportunity to buy into.

Okay. Sheryl's second question. She says, I'd note that you've consulted extensively with shareholders on your remuneration policy and report. Please could the Chair of the Remuneration Committee run us through the steps that Pearson is undertaking to ensure that its remuneration practices align with those required of a socially responsible employer.

Yes. Thank you, Sheryl. So we've got our strategic -- the strategic priorities. We've got the earnings and the others, which are in the LTIP and the bonus. Those are important. And on the strategic side, we are oriented towards making sure that we get more customers and that we retain those customers. We monitor throughout the company a number of social and sustainability things, and those take place in other -- in some of the other committees. And in fact, I might not trying to bounce the question over to colleagues, but I might tee you up for adding on to some of the things that we do at Pearson around those really important issues. The targets and the incentives are really focused on driving the growth of the company so that we can achieve our objectives for our learners, and we do that in a responsible way. And you can see that on our -- throughout the company, we're well diversified in a number of different ways on pay and both ethnicity and gender. And that's important. And these individuals produce the learning materials, which we want to get into billions of more people's hands. But on some of those other things, there's some people doing some extraordinary work, not just on the Remuneration Committee that we work with, and you're also on the Remuneration Committee.

We have a very well-developed sustainability program focused on 3 pillars: people, product and planet. product, as Omar has talked about extensively, is really focused on demonstrating how what Pearson does has impact on people's lives and increasingly linking those learning outcomes to that impact. In terms of planet, we have a very well-developed sustainability strategy focused primarily on reducing our greenhouse gas emissions. We are well ahead of our target for doing that both in terms of our target for 2030 and also 2050. So people, product and planet. And then with regards to people, Sherry spoke a bit about our approach overall. And it really is at its core is ensuring that there's opportunities for all of our people to grow and develop within their careers in Pearson using our own approaches in Pearson that we also share with other companies, but also promoting activities outside of Pearson for example, spending time volunteering for causes, which our employees hold dear.

And Sheryl's final question is, as the war in Iran continues, does the Board foresee any impact this may have on performance? And if some, how can this be managed effectively?

So let me comment on that one briefly. So obviously, the first and foremost thing that we're focused on is the safety of our people. And I think we took some actions to get some folks out of there in the heat of the situation early on in the crisis. Since then, what we've seen is that some of the countries that are closest to Iran, so UAE, Qatar, Bahrain, have shut schools. And so the protocols that we've had to put into place are the ones like the ones that we learned during the COVID era. So how do you manage remote learning? How do you help kids get exam results if they don't want to defer when they haven't actually set the final exam. So you're using all their class work and their mocks results to put that together. And so our teams are doing that. We feel good about where we're at so far from the year, and we don't see a material impact on our financial performance. Just to put it in context, those countries plus some of the nearer ones like Pakistan and Turkey, add up to about 2% of Pearson's revenues between A&Q and ELL. And so for now, we feel good about it. But obviously, we're watching how that goes. And from a humanitarian point of view, we hope it is over quickly.

We have no further online questions. So back over to you, Omid.

As there are no further questions, I'll now hand over to our Company Secretary, Graeme Baldwin, to oversee the formal part of the meeting.

Good morning, everyone. Thank you. The Notice of Meeting was published on the 26th of March, and copies are also available here today. Unless anyone objects, the Notice of Meeting will be taken as read. For the voting procedure today, the Chair is calling for a poll on the resolutions as this meeting is being held partly by means of electronic facility. On a poll, every member, whether an individual or a corporation, present in person by means of electronic facility or by proxy is entitled to one vote for every ordinary share of which they are a holder. If you would like to vote for or against the resolutions or would like to withhold your vote, you must either fill in the poll card, which you will have been given when you registered in person or click on the voting icon on the online meeting platform and follow the instructions on the screen. I'll ask you to complete that in a moment. If you submitted your vote before the meeting, you do not need to complete a poll card or vote online now unless you wish to change your vote or if you did not originally appoint the Chair as proxy and the person you appointed as your proxy is not present in person or online. If you are attending as a proxy, you should vote now. If you are entitled to vote as a shareholder, proxy or corporate representative, but do not have a poll card, please raise your hand and one of our stewards will provide you with a card. A separate poll card should be used for each separate holding. So if you are representing more than one holding, please ask for additional cards as necessary. It is now formally proposed that each of the resolutions as set out in the Notice of Meeting is put to the meeting. There are 23 resolutions to be voted on, of which 1 to 19 are ordinary resolutions and 20 to 23 are special resolutions. With your permission, each resolution will be taken as read. Over the next few minutes, you will be able to see the results of all the proxy votes that were received ahead of the meeting. These will be displayed on our presentation slides. Please would you now complete your poll card or vote online via the Computershare meeting platform. In order to complete your poll card, please enter your full name in block capitals. You should cast your votes on each separate resolution by putting a cross in one of the boxes marked for, against or vote withheld. If you're not voting your total holding in Pearson shares, please also write down the number of shares you wish to vote. Please then sign your poll card and hand it to a member of the registrars as you leave the room. To vote online via the Computershare meeting platform, please follow the instructions on the screen. You will be able to vote while the poll remains open. The poll will close in 10 minutes. The final results of the voting will be announced to the markets and posted on the Pearson website as soon as possible following the conclusion of this meeting. Now back to you, Omid.

Thank you, Graeme. That concludes the business of the Annual General Meeting. Thank you very much for attending today. I declare the meeting closed. For those attending in person, my colleagues and I will be pleased to meet you outside. Thank you very much.