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In 2012,
overall actually, the results were pretty good. We saw 5% CER growth
at sales, and excluding FTSE, which we sold later in 2011, we had 3% growth in profits.
If you don't exclude FTSE then you only get 1% growth in profits. But, even so, that was
a pretty good performance in the context of some very tough markets. In North America,
the market was down 10% for higher ed and school textbooks, and clearly that's a pretty
difficult backdrop. Now our North American business grew 2% CER, so that was a really
good competitive performance, even though 2% doesn't actually sound that great. But
competitively an immense performance. And their margin went up too, which is quite extraordinary.
So I think you'd look at that and say how did we achieve that? Well, strong growth at
eCollege again, strong growth in MyLabs, the digital programmes really working well, and
our services offerings into colleges working well as well. Our virtual schools working
extremely well too with Connections. So parts of the business were good in a very tough
market. In International we achieved 13% CER growth and, again, that's a pretty
startling performance. Really driving that, inevitably, was emerging markets and, you
know, they showed very strong double digit growth there. But the UK and the rest of the
world did well as well. Professional, clearly, was impacted by Pearson in Practice,
and Pearson in Practice's sales more than halved and that clearly was a problem for
us both at the sales and at the profit line. But behind that, Vue had a good year, so
it was good to see our high stakes testing business really performing extremely well
in Vue. The FT did well too, FT took some restructuring charges so the P&L, the
profit didn't quite come through because of the restructuring. We hope that'll benefit,
you know, next year, 2013. But the sales level we saw subscription growth again, inevitable
on-going contraction in physical copy, newspaper sales, and advertising tough, but maybe not
quite as tough as we thought it was going to be at the start of the year. And
Penguin, despite having a really tough first half, had a really strong second half and
a particularly good Quarter 4. We expect to see modest sales growth at CER in North
America next year. International will do a little bit better, I suspect, because the
emerging market growth will remain strong. The UK will have some pressures, because there's
examination reform in the UK, which means that our Edexcel business won't mark quite
as many tests. That's a transient thing, that will come back, but whilst in the midst of
reform often you see, you know, some perturbation and certainly the UK is not going to have
its strongest year, although I think we'll show a little bit of growth in the UK, and
the rest of the world developed markets will be pretty flat. So I think, overall,
International will show slightly faster growth than North America, and the FT, I think we'll
see the same sort of trends again, subscription growth, FT.com subscribers going up again,
but a further contraction in print copy sales. Advertising is really too difficult to predict,
it's just got so short term, it's really not easy to know where exactly that's going to
turn out. And I think Penguin will have a reasonable year. You know, a tough market.
I think they'll have a much better first half than they had last year, but it's not going
to grow at a rapid rate of knots, but they've got some good titles next year, so we're
feeling, yeah, pretty good about Penguin.