Good morning, everyone, and welcome to Pearson's nine-month trading update. Today, there will be a brief overview from our CEO, Andy Bird, and our CFO, Sally Johnson. There will then be an opportunity for Q&A with two ways to submit your questions. If you'd like to ask your question personally, please use the number that are displayed on screen. These lines will be open following the main presentation. Alternatively, please type your questions into the question tab at the top right of the screen, and we will address them in turn at the end. With that, Andy, over to you.
Thanks a lot, Jo, and hi, and good morning, everyone. Thank you for taking the time to join us today. I'm keen to allow as much time as possible to answer your questions, so let me quickly run through the highlights of today's results before I hand over to Sally. First, the key takeaway is that our strategic and operational momentum has continued, resulting in group underlying sales growth of 7% in the nine months. We remain on track to deliver on sales and profit expectations for the full year. Second, and importantly, the whole of the company is now working together to form a stronger Pearson, which is demonstrated by our financial performance so far this year. Third, our strategic progress continues.
We're well advanced in reshaping our portfolio, increasing the interconnectivity between our divisions to unlock synergies, and building our digital learning ecosystem to serve many more people through their lifetimes. Let me give you just a couple of examples to illustrate the high levels of activity. In English Language Learning, we've integrated Mondly into Pearson Plus. This brings added value to Pearson Plus users and introduces them to the world of Mondly at just the click of a button. We've aligned Mondly also to our Global Scale of English, which sets us up to create personalized learning at scale. We're also trialing Mondly with several key institutional and corporate customers. In Workforce Skills, we have strong foundations in both the institutional and the enterprise markets. We're now operating the division in two zones, performance and transformation, which includes the recent acquisitions of Credly and Faethm.
In Workforce Skills, we have strong foundations in both the institutional and enterprise markets. Going forward, we'll refer to these as performance and transformation zones. It's worth remembering that enterprise already contributes about 20%. Leverage the technology of Faethm and Credly to meet the growing demand for skills certification. As we look over the next five years, the transformation zone will account for the majority of the division's growth and enable further growth and integration with enterprise services in other Pearson divisions. Finally, while we're mindful of the challenging macro environment, we're confident of being able to navigate these headwinds. In addition, we remain on track to deliver at least GBP 100 million in efficiencies in 2023, which will accelerate our margin ambitions from 2025 to next year. Very encouraging progress across the board.
We're delivering for learners while also creating value for shareholders and our wider stakeholders. With that, I'll hand over to Sally.
Thanks, Andy, and hi, everyone. We're pleased with our third quarter performance, which brings our revenue growth to 7% for the first nine months of the year. English Language Learning has been especially strong, and we've seen good growth in A&Q, Workforce, and Virtual Learning. Higher Ed declined, but revenue performance was in line with expectations. Running through each of the key elements by division. In Assessments and Qualifications, revenue grew 12%, driven by U.S. student assessments and U.K. and international qualifications as exam timetables returned to normal. Clinical performed well due to the ongoing focus on health and wellbeing. VUE revenue was down as expected, due to the headwind of the DVSA contract change. As a reminder, at the half year, we announced the decision to keep our Australian and Canadian courseware businesses, which were previously part of the strategic review.
They're now included within our A&Q division, albeit they're relatively small. In Virtual Learning, revenue increased 5%, with growth of 6% in virtual schools. As you know, H1 saw great retention rates for the 2021-2022 academic year. H2 reflects the 2022-2023 academic year, where we've seen a favorable revenue mix, partially offset by a small decline in enrollments as the COVID cohort fully unwinds. OPM revenue grew 3%, with growth in Australia and the U.K. Partially offset by declines in North America due to lower enrollments. Our higher education business continues to trade in line with expectations. Revenue declined 4%, with U.S. higher ed also down 4%.
Early market data for the back to school period shows enrollments to be down in line with our assumption at the beginning of the year. We also believe there may have been a loss of market monetization due to an increase in non-consumption. As previously highlighted, growth in Pearson Plus subscriptions means that there's also been a shift in revenue recognition from Q3 to Q4. These impacts have been partially offset by improved pricing. It's worth noting that these bridging elements mean that unit sales will have declined more than double of revenues. English Language Learning delivered an outstanding performance, with revenue growth of 28% due to continued strong growth in PTE as global mobility continued to improve and we strengthened our competitive position. In Workforce Skills, as Andy just mentioned, we're now reporting the business in two parts, performance and transformation zones.
Both zones grew strongly in the nine months. Turning to businesses under strategic review, we've now concluded the sales of our international courseware local publishing businesses in Europe, French-speaking Canada and Hong Kong. This means that these businesses, which were showing a decline at the half year, are no longer included in underlying sales growth. The revenue growth of 20% for the nine months now largely reflects a good performance and phasing in our South Africa business in the third quarter. The disposal of this business is expected to complete in Q4, meaning that at the full year, the underlying measure will only include those businesses being wound down rather than sold. This means that this division will show underlying decline at this point.
Impact of these disposals on our adjusted operating profit will be around GBP 15 million in 2022 and just under GBP 25 million for 2023. As a reminder, these businesses are second-half weighted, and there will therefore be an impact on 2022 cash conversion given the timing of the disposals. Turning to the outlook for the remainder of the year, we're on track to deliver on the expectations we set out at the beginning of the year, when consensus for adjusted operating profit was GBP 460 million at an FX rate of 1.37. Subsequently, of course, there's been a significant move in the US dollar rate, so I thought it'd be helpful to remind you that every GBP 0.01 movement in the U.S. dollar equates to approximately GBP 3 million of adjusted operating profit.
Now, I'm not going to try to forecast FX rates, but if we were to think of an average rate of 1.27 for the year, that would add some GBP 30 million to profit. You should also bear in mind the operating profit associated with the disposals of our businesses under strategic review, which I mentioned earlier. In terms of sales phasing, as I've said previously, Q4 is a tough comp, particularly for our assessments businesses in A&Q, Workforce and English, but we remain on track for a year of good growth. As usual, we'll provide guidance for 2023 at our full year results. The plans that we announced in August to realize at least GBP 100 million of efficiencies in 2023 are unchanged, progressing well, and will accelerate delivery of our mid-teens margins ambitions to 2023 from 2025.
Detailed planning is now complete and has confirmed efficiencies in product and content, support costs, technology and corporate property across all divisions but weighted to Higher Ed. We are now moving into the delivery phase, which is expected to be complete by the year-end. Finally, our GBP 350 million share buyback plan is progressing well, and our financial position remains strong with low net debt and strong liquidity. With that, I'll hand back to Andy.
Thanks a lot, Sally. As you've heard, we've delivered another successful quarter, and we're on track to achieve our expectations for the year. Building on the current base of over 140 million users of our products and services, we're making great strides in developing the Pearson Digital Learning Ecosystem. A very different Pearson continues to take shape, one that's poised to serve materially more people throughout their lifetime learning journeys. While we're mindful of the challenges of the external environment, we're confident in Pearson's prospects and in our ability to deliver better outcomes for the consumers while also creating value for shareholders and wider stakeholders. We look forward to sharing more about our plans, particularly for Workforce, together with our full year results. With that, Sally and I will be happy to take your questions. Over to you, Britt.
Thank you. If you would like to ask a question, please press star followed by one on your telephone keypads. If you change your mind at any time, please press star two. If you would like to ask a web question, please use the webcast questions box online. The first question comes from the line of Thomas Singlehurst of Citigroup. Your line is open, Tom.
Yes, thank you. Hopefully, you can hear me.
We can, Tom. Hi.
Tom here from Citi. Three, I suppose, quite distinct questions in terms of the divisions that they focus on. First, I'm afraid I'm gonna go with Higher Ed, but specifically the National Student Clearinghouse data on Thursday last week indicated community college was more robust than I think a lot of us were expecting, but specifically called out the phenomenon of dual-enrolled high school students, which is tracking up very strongly. Can you talk about that phenomenon and what it means for your business and whether that's a factor in the better 3Q performance? That was the first question. Second question was on English Language Learning, which actually accelerated in the third quarter and is running up 28% at the nine months versus full year guidance of mid-single digit.
I'm just wondering whether we're missing anything dramatic about the fourth quarter or whether we can just assume that guidance is too conservative. Then finally, on enterprise, L&D or workforce skills. Some other companies have talked about weakness in forward bookings or at least a lengthening out of the sales cycle. Are you seeing any signs of pressure on workforce skills? You know, does that impact the rate at which we should expect you to invest in bolt-ons and things like that? Thank you.
Thank you, Tom. Shall I start with the higher ed question?
You do one and three, and then I'll do two.
Yeah. Yes, the NSC data came out last week. As I'm sure you've all read, the headline number was a decline of just over 1%, which was in line with our expectations. I think it's encouraging for the sector. It shows that more students, as they come out of the pandemic, are going back on campus. As you pointed out, Tom, if you look a little deeper into the NSC report, you'll note that there is a phenomenon in the U.S. where high school students do what's called dual enrollment, and that's while they are still at high school, so we're talking 16- 18-year-olds, they take courses to get their high school credits and in some instances also take courses which will give them college credits.
They do that either at school or they do it at a community college. In many instances, if they get their courseware at the community college, the high school pays. It's a form of free to the student, free college courseware and gets them credits before they start their formal college career. That I think is a very interesting leading indicator. That number was up just shy of 12% year-over-year and represents about 750,000 high school students who are already choosing to take a college credit. Our research shows that those students who go on that path are, A, more likely to go on to full-time college, and they have a very high graduation rate. I.e., they go through all four years and graduate.
They show a really heavy degree of commitment. I think, as a sort of forward-looking indicator to potential strength in the enrollments going forward, that data point is also quite significant and encouraging.
English Language Learning. Three elements in Q3. Obviously, the impact of mobility across borders post COVID continues to be a factor. We also had the Australian study visa was extended, which caused a bit of a surge in Q3. Most importantly, our competitive position, particularly in India, has been really strong, which is really encouraging. While Q4 is a difficult comp because mobility of course opened up in Q4 last year, we're still set for a really strong performance in English Language Learning. I think it's probably fair to say it'll be better than mid-single digits. While that's on a relatively small number, I think that's a really encouraging sign for us as we look into the future where we see strong growth in PTE continuing.
Of course, we've got that Canadian opportunity. We'll have Mondly coming into our underlying comps from Q2 next year. Lots of reasons to be really confident with English Language Learning.
I can segue quite nicely from English language learning in India, where by the way, one of the reasons we've had such success is a fantastic localized marketing effort that's really making the PTE relevant to different parts of the country, different, as you know, many languages within the country. Really targeting very specific marketing messages has really paid off, and we've increased our market share there. The segue is, of course, many of those students who are taking the Pearson Test of English are doing so to go get a job, many in the areas of tech companies abroad.
That links into, you know, where the certification business that I referenced in, you know, largely led by Pearson VUE, where, remember, every 1.6 seconds, someone in the world is getting a certification from Pearson VUE. That certification tied with the Pearson Test of English is really leads us into your question around workforce skills. The emphasis here is on the skills piece. What we're focusing on, because we're seeing it and we've heard it loudly from. We have about 1,400 enterprise clients, and in the last 12 months alone, we've added another 450 enterprise clients into our Workforce Skills business. Credly is adding close to 80,000 certifications a week of new users registering on the Credly platform with their certifications.
This is the area of business, and as I said, we're going to dive deeply into this and the whole enterprise Workforce Skills part of our business. We're growing. When we do our full year results, probably in March, I would say. But we're very encouraged by that. What we're trying to do, as we've said all along, is we're creating something that is unique, something that only Pearson can do, and something that leverages all of the great businesses that we already have. I've given you some teasers of what you can expect as we go to market early next year. We're actually trialing a couple of products at the moment, really leveraging the Faethm and the Credly technology to create a new tech stack.
That's out in market and we're doing pre-sales at the moment, and will be launched early in 2023. More news to come on that.
That's great. Look forward to that. Thank you very much.
Operator, please next.
Thank you. We now have the next question from Nick Dempsey of Barclays. Your line is open, Nick.
Yeah, good morning, guys. I've got three questions, please. The first one, you refer to an increase in non-consumption in higher education. Is that literally more students just choosing not to access the textbook that's been mandated to them, or could it be more password sharing or other kinds of piracy? How, at this stage, do you really distinguish between non-consumption and students just choosing to opt for a print rental option? The second question, will you get any of the GBP 100 million or at least GBP 100 million of guided savings in 2022? If so, can you give us a ballpark figure of what you're baking in there? Third question, in virtual learning, you saw a small decline in enrollments. Is that the end of the COVID boost washing out?
Could we naturally expect an increase in enrollments in 2023 or still some of that higher cohort to wash through?
Okay. I'll take the first, and then you wanna do-
I'll do the other two, yep.
...the other two? So we're digging in deep into the non-consumption figures, Nick. As we get more data from NSC, we'll be able to draw a better picture. It's not one answer. It's a combination of a whole host of different factors, ranging from students being taught by the professor themselves, so they actually never have courseware. Their courseware is sort of built within their course. All the way through to sharing of PDFs, free material, sharing of textbooks is another thing, another part of this. But what the MPI data shows for ourselves and the sector is it's not related to market share loss.
We'll have a better idea, probably when we chat at full year, as to insights into some of the themes behind that non-consumption number. It's a combination of a whole host of little things.
I think just to emphasize, it's relatively small. We'll dig into the detail to get the learnings in terms of our future products. We've got two key product innovations. Of course, we've got the continuation of Pearson Plus, and I think that's something, particularly with the introduction of channels, that talks to that non-consumption piece, creating extra value for students. Also the things that we're bringing to market for our platform product next year in terms of there's about 100 or more titles which will be refreshed. Then three subjects we're bringing to our immersive experience within MyLab and Mastering, so in statistics, calculus, and algebra, I think. Those will be innovations that we bring that talk to that non-consumption piece, but something that we'll dig down on in Q4 as well.
You just reminded me. Pearson Plus. We just won a couple of contracts at Clemson University in physics in the last couple of weeks. The primary reason apart from the quality of the courseware was actually Pearson Plus. Both of the professors cited Pearson Plus and the channels within Pearson Plus as being something that they really had enjoyed. We're starting to see Pearson Plus help within the sales efforts of the team as we go into the spring selling season. It's another ancillary benefit of launching Pearson Plus, as well as giving students you know great tools for them to study. We're now seeing faculty recognize the benefits of Pearson Plus as well. Anyway, sorry.
Uh-
On to the GBP 100 million.
Onto the 100 million, which, as you know, we've confirmed at least GBP 100 million worth of efficiencies from next year. As I said, we're now entering into the delivery phase. We've had a really accelerated sort of planning phase. We've done that really quickly. We've confirmed where we're going to be getting those savings from. We're in delivery now, in October. You know, it's towards the end of the year. What that means is that we'll get those savings from the beginning of next year. My guidance does not include any savings. It's possible there'll be a small amount, but they'll be relatively immaterial. We can confirm that at the end of the year.
Virtual schools enrollments. We highlighted at the beginning of the year that the COVID cohort was likely to unwind a bit this year, so it's what we expected. Of course, that impacts across the 2022-2023 school year, so the second half of this year and the first half of next year. You know, I'll look to guidance on what we expect for the 2023-2024 school year, when we get to prelims.
Thank you very much, Nick. Operator, please, next question.
The next question comes from Matthew Walker of Credit Suisse.
Your line is open.
Hey, Matthew.
Thanks a lot. Hey, hey. Thanks a lot, and hope you can hear me.
Yeah.
Yeah, you've posted some really strong sales results today. I just had a few questions if that's all right. The first is you say you've added 450 over the last 12 months of clients in Workforce Skills. Your aim is to double revenues there. What's the kind of ARPU that you're getting from each customer on average? And when you go to market in early 2023 with the new offering, do you expect that size of customer to change? So maybe a bit of detail on what you're thinking, what your thinking is there?
On the Higher Ed, is the sort of share recapture story still alive, and with the better enrollment data, does that mean we could be seeing a sort of flat to up market for you guys for 2023? Finally, appreciate that you've talked about, you know, property and support and content, et cetera, for the GBP 100 million. I guess some feedback from investors seems to be that they would appreciate a bit more detail of where the savings are coming from by division? Any additional help you can give us on that would be appreciated.
Okay. I'll kick off, Matthew with the Workforce Skills question. In short, yes, you can expect ARPU to start increasing as we bring the new products and services to market starting at the beginning of the year. We have a roadmap of adding more services to that platform or it's actually a skills ecosystem as we develop. I don't wanna get too far ahead, primarily for commercial reasons, but we will be, as I said, diving deeper into that in March at the full year. Interestingly also, we're adopting a SaaS model. For the first time you're gonna see us enter into a SaaS model as we move from transactions to recurring revenues.
Very much think of ARPU in relation to a SaaS model as it relates to Workforce Skills. The only other thing I'd say is, you know, in total now it's about 1,400 clients, as I mentioned, ranging from some of the biggest companies in the world to a lot of traction, particularly in Europe, we're getting with SMEs. We think there's a big potential opportunity for us there. I feel extremely bullish. I had a demonstration of the product three weeks ago, and it's really good and really unique and really plays to our strengths. I'm looking forward to sharing it more broadly with you at the sort of the end of Q1 next year.
Do you wanna touch on the Higher Ed?
Share repurchase.
Share.
Absolutely. I think those investments that I talked about earlier will lead to market share recapture in time. Market share's flat this year. I think the things that we are doing will mean that we can recapture in time. As you know, it's a relatively slow process recapturing market share 'cause it's about professor adoptions and therefore, you know, you have to wait for the yearly cycle. Then in terms of better enrollments, I think as Andy said, when you double-click on the data this year, it looks quite hopeful, but let's do some more work on that before we then start bouncing ourselves into next year already.
In terms of the at least GBP 100 million worth of efficiencies, you know, as I've said, weighted to Higher Ed. To try and be even more helpful than that, I'd say about 50% of those savings are in Higher Ed, which, given that Higher Ed in current terms is about 15%-20% of the group's profit. Obviously, that is a weighting to Higher Ed within those savings.
Great. Thank you.
Okay.
Thank you.
Operator, please, next question.
We now have the next question from Lisa Yang of Goldman Sachs. Your line is open, Lisa.
Good morning. Thanks for taking my questions and congratulations on the results. First question on Higher Education, could you maybe give us or clarify what was the impact of the shift in revenue due to Pearson Plus from Q3 to Q4? I guess probably it's small, but any quantification would be great. Also you mentioned improved pricing in that segment. Could you also give a bit more color, like what percentage price you've been taking in Q3? Secondly is on the guidance for the full year. You're happy where consensus is just under GBP 437 million. Can I just clarify this now includes the disposal proceeds of the strategic review, basically includes the GBP 15 million in profit this year?
The underlying base improvement versus your guidance at H1 is effectively GBP 15 million. That's the second question. Thirdly, on OPM, just wondering if you can give us any update in terms of the level of interest you've seen for that business. I know you put it under a strategic review recently, but yeah, any approach, whether it's from a strategic or financial buyer. And if you could also, you know, clarify the favorable revenue mix in Q3, which obviously turned the segment back to growth? Just wondering whether, you know, what that was and whether we think that return to growth is also sustainable? Thank you.
My sums might be wrong. I make that five questions, Lisa. I think that's probably all from me. Each of the elements that I've outlined in terms of the bridging movements in Q3 be about a quarter, but I know that people like to focus on the quarter, which is why I've laid it out that way. The shift in revenue in Pearson parts from Q3 to Q4 is important for the Q3 and is important, I guess, for Q3 year to date, but it's, you know, it's a couple of percentage points. Pricing in Q3, again, a couple of percentage points, that's a favorable movement. Obviously offsets the enrollments piece and that shift from a phasing point of view.
Guidance for the full year, I think I've laid it out on that slide that I went through really carefully. 416 at 1.37 when we started the year. I'm not saying that the average rate for the year is going to be 1.27, but if it was, that would equate to about GBP 30 million worth of profit 'cause that's one cent times GBP 3 million, and then you take off from that the GBP 15 million gets you to an equivalent number in terms of guidance. I think consensus at the moment is about 425 at 1.27. You'd need to take out the GBP 15 million for strategic review. You know, I think there's a bit of a gap there at the moment.
That's for the market to take a look at 'cause I think I've laid out expectations super clearly. OPM, the strategic review, is continuing. When there's something to say more about that, we will let you know. Then the favorable revenue mix in Q3, I think you're probably referring to our Virtual Schools business. That is about which states we're getting the enrollments through in and we're getting it through in states where the average revenue that we get per student is favorable. That's what's happening in Virtual Schools. Brilliant. Thank you for your questions, Lisa.
Okay, operator. Next question, please.
Thank you. If you would like to ask any questions, please press star followed by one. We now have the next question from Adam Berlin of UBS. Your line is open, Adam.
Hi. Thanks. Good morning, everyone. Just three questions from me. First question on the guidance. It seems that a few of the businesses are doing much better at this point in the year than you may have thought when you gave the original guidance in March. I understand there's lots of movements around M&A and FX, but why haven't you upgraded the 416 underlying number given the strength you've seen in English, for example, at Virtual Schools and Clinical? Is that just being cautious into Q4 or are there sort of these lower margin businesses that don't really help the overall EBIT number for the full year? Second question on higher ed. I think you mentioned, Sally, that units have probably declined in absolute terms in this year, despite you know only moderate enrollment declines.
Can you just clarify, is that still being driven by a print decline in units and digital was still okay, or are we also seeing digital unit declines in the year so far? Hopefully you've got some of that data 'cause most of that's bought more directly. The third question on A&Q. Do you think in your kind of guidance by the end of this year for 2022, on an underlying basis, A&Q revenues are gonna be now above 2019 or kind of back to 2019 levels? Maybe you can give us some sense of where that is. Thanks very much.
Thank you.
In there for you.
I think they are for me. So one of the things that I've pointed to in terms of the guidance is that Q4 is a trickier comp. I think we're well set for good growth for the full year. At the beginning of the year, it was 3%-4%. It probably should round up to 4%. I'm not gonna use the word cautious, but I'm gonna say I'm confident about our profit number for the full year. In higher ed, we'll lay out all the unit stuff at the full year. I think the units piece is probably across the piece.
You know, you've got the enrollments impact and the monetization impact, which are then offset by the pricing piece, which is why you've got a different impact in terms of units than the dollar sales. A&Q for the VUE business and for the clinical business, last year, we'd already got back to post-2019. In this year, school assessments is back to, I'm gonna say, business as usual, but back to that level. Within the qualifications business, we had that school rebate that, given that people actually sat exams, has unwound this year as well. That's probably a really long-winded way of saying, yes, we're back to a kind of post-COVID number. As we look forward into the A&Q business, remember that for this year we've had that DVSA impact in VUE.
As we look forward to next year, that unwinds and we'll see VUE going back to growth. Great competitive position in that business. Lots of clients, diversified business, so lots of reasons to be really confident in the VUE business going forward within A&Q in particular.
Okay. Thanks very much, Adam. Operator, next question.
We'll take one from the floor. We've got Sami from Exane.
Hey, Sami.
Oh, Sami's on the floor.
It's okay. Can you please elaborate on the loss of market monetization due to non-consumption? What is driving that? How big an impact does it have? Is non-consumption driven by OER growth? The second question. Can you please elaborate on lower district partnership renewals in Virtual Schools? Which districts, and why did these renewals not occur?
I think that possibly that first question came in before we answered it. I can't remember who it was.
Maybe.
Is there anything you wanted to add to that?
No. I think I did my best to
Nick
To answer it when I mentioned to Nick. One point that maybe is also a little relevant to what Adam said and what I mentioned earlier. Because I'm kind of intrigued by the 12% growth in the high school students who are taking a college course. Of course, in terms of number of courses that they're taking. There's about 34% of the new enrollment cohort, and they're only gonna be taking one course for their credits. If you think about number of courses per enrolled student, they're gonna skew that number down. Again, over the next few weeks we'll be able to dig in a little more to that. I had nothing more to add on the non-consumption.
Sure.
What about the district partnerships?
Why don't I take that one? So we had a surge in district partnership revenues and relationships during COVID. I think it was quite natural that they were looking for a kind of hybrid way of teaching in those times. We've made some great relationships, and actually we've probably got a business there today that we wouldn't have done if COVID hadn't happened. I think what's really you know and it unwinding is not surprising. I think what is really important from a Virtual Schools business point of view, though, to recognize, is that we've got a curriculum and content and platform that can be then used in quite a few ways. That was a way of using it in COVID times. I think there are lots of other ways that we can use it going forward.
You know, in time it could be in Pearson Plus, using the content so that we've got a, you know, a K-12 element to that. We can use it internationally. At the moment, the U.S. is growing really nicely for us, so that would be a step in the future. One of the things we're starting to look at is vocational. As that world, which I think the high school students enrollment number also points out, as K-12 bleeds into higher ed, actually people are starting to think about vocational training within the K-12 space. We can use it for that as well. I think it's a really nice way of thinking about Virtual Schools in terms of the diversity of that business and where we can use one piece of content across the piece.
Yeah. It plays again to, you know, rethinking about who we are and what we do and how the different businesses kind of fit together. This notion, you know, I spent a fair amount of time talking with Tom ap Simon, who's just taken over the running of the Higher Education division, about how we redefine what is higher education. Because as you've just been hearing, you know, starting in some instances now at age 16 and is going through the formal college process and also into the enterprise space as well. We're very much looking at how we redefine higher ed ourselves and how we can reimagine a lot of the assets that we have within that space to fit both the enterprise needs as well as the institutional needs .
Thank you, Sami. Jo?
Next question comes from Omar from Morgan Stanley. Omar, I think we've probably done the cost-saving question, so I'll just go down to the two. First of all, does the National Student Clearinghouse data make you more optimistic about a return to growth in higher education, and should we think about 2023 as being an inflection year, or is it still further out? Second question, are you able to give more color on how Mondly, Credly, and Faethm are performing? How will they be integrated into your divisions, and where do you see synergies?
Uh, I can-
I don't know what the cost savings question was, but I'll take your word for it that we answered it.
Yes.
The NSC data and it being more optimistic for next year and getting on, let's talk about next year. But it's obviously good news for this year, and those pieces that Andy brought out in terms of the early years are certainly promising.
Yeah. I'd only add again, it demonstrates that students wanna go back on campus. I think that augurs well. It's certainly encouraging signs. The questions on Mondly, Credly, and Faethm, both of us have been out separately to Brașov, which is a beautiful place. I can thoroughly recommend a visit to meet the team who are doing phenomenal work. What's more pleasing, thanks to Gio's leadership and the rest of his team, is the way I gave one example of how we're integrating Mondly into Pearson Plus, but there's a lot of different work streams going on. Talking of work, actually, you know, integrating Mondly into Workforce Skills as well is another work stream that's going on.
You know, the English, there's 1.5 billion people in the world at any one time learning English. How you marry that, a desire to learn English, requirement to learn English with other parts of our business is something that we're very focused on. The team in Mondly and the team within the English Language Learning division deserve an enormous amount of credit for how they've really captured these opportunities. I know they have a lot of surprises up their sleeves for 2023 and beyond. I mentioned Faethm and Credly a little bit in my opening remarks.
What you will see when we do the presentations in March, Omar, is how we have created utilizing Faethm and Credly's technology and their data insights, their analytics, their AI. We've created a sort of new tech stack that allows us with lots of APIs that we can plug other bits of the company into. Which is very exciting in terms of how you think about the certification part of the business that is, you know, a sort of bedrock of VUE's business. You know, I think in the IT tech sector, we have approximately 90%+ market share in that certification business. I've mentioned how well Credly is doing and the massive demand for credentials and skills-based certification.
We're starting to put these elements together that work. Workforce Skills becomes sort of the conduit on behalf of a lot of other different elements of the company, and I think that's very, very exciting, and something that I can't wait to share with you in a few months' time.
From a synergies point of view, I think Andy's answered the question from the Credly and Faethm point of view, you know, the essence of the integrated product across Mondly, I think probably three, probably more pieces. What it can do in terms of our ecosystem going forward. You know, we've heard that we already linked it into Pearson Plus. There's what we can do with it in terms of a hybrid digital product within our institutional business. Real opportunity there over time. Then also opportunity with our Pearson Test of English business, where we're looking at a mid-stakes test that we're building out at the moment, and that interplay between Mondly providing the teaching and the Pearson Plus product, providing the testing will drive synergies, as well.
Very good. Are we going back to you, Jo, or to-
Next question comes from Sarah Simon from Berenberg. First question. Can you please remind us of the quantum of the DVSA contract change? Second question is, you talk about better pricing higher education, but might that not be partly why there's lower monetization, students trying to avoid paying for high-priced materials?
Do you wanna start?
Just two questions.
Yes.
Yeah.
DVSA contract change, I think I can't remember quite about the phasing, but I think it's about $20 million across the period. We can confirm the exact phasing for you, Sarah offline. It has meant that VUE this year has been flat to slightly down from a growth point of view. In Q4, that drops out, and therefore we'll see a return to growth for VUE in Q4, creating that momentum as we go into next year. Do you want to pick up the higher ed pricing point?
Yeah. It doesn't necessarily correlate, Sarah. I think we've done a lot and it's, you know, and I've seen a great reaction in terms of pricing as it relates to Pearson Plus and the opportunity to pay $9.99 a month for your textbook and get all the features and channels and everything like that, as well as opportunities to learn Mondly and other offers. That's been very well received. We will, by the way, at full year, be releasing those numbers that some of you are interested in. So that will also be coming then. I think, you know, our focus is, and the focus of the higher ed team, as Sally mentioned, is, you know, constantly introduce new product.
You're gonna see some exciting new product come to market in higher ed next year, that will be competitively priced. When you have compelling product, that creates demand. We're very much looking forward to introducing that to the market in 2023. Many of those coming within MyLab & Mastering, by the way.
Over to you, Andy, to wrap up.
Oh, okay. Anyone else on the call, Britt, before we go or no? That's it. Great. Okay. Well, thank you very, very much for taking time out of your day to join us. Sally and I look forward to, I think, hosting you in person for if you want to be hosted, at our full year. Thanks for your interest in the company. Thanks, as always for your questions. If you do have anything else, please reach out to Jo and her team, and they can give you more details. Look forward to catching up with many of you in the coming days, weeks, and months. Thanks a lot.
Thank you. Bye-bye.