April 20091

Education Development International plcSeptember 2008 Results and Trading Updates

Nigel Snook, Chief ExecutivePaul Bird, Finance Director

April 20092

Contents

Background

• Introduction

• Marketplace

• What we do

• Business segments

• Revenue sources

• Strong team

• Financial trends

Results

• Highlights

• Acquisitions

• Segmental performance

• Income and margins

• Impact of tax

• Cashflow

• Balance sheet

• January and April trading updates

Looking Ahead

• Business resilience

• Development strategy

• Drivers for growth

• Shareholder profile

April 20093

Introduction

• A leading educational quality assurance company:

- Government approved and regulated

- UK and international reach

- Expertise in IT-based product delivery and administration

• AIM float April 2000 as GOAL plc:

- Merger with London Chamber of Commerce and Industry Examinations Board in December 2002 to form EDI

- Seven bolt-on company and product acquisitions, fully integrated

- Major investment in organisation, systems and products completed

April 20094

Marketplace

Illustrative course costs

£50 (High margin)

£150 (Mid margin)

£800 (Low margin)

£1000

Exam Boards/Awarding Bodies

EDI, Edexcel, City and Guilds, OCR, AQA,

professional bodies and 100’s of others

Exams and

Assessments.

Learning materials,books and online.

Education and training programmes.

Delivery and administration software. Logistics.

Publishers

Pearson, Nelson Thornes, Hodder and Stoughton and 1000’s of others

Schools and CollegesPrimary and secondary schools, FE colleges, private trainers – BPP, Melorio – and 10,000’s of others

In-house and/or outsourced

The players

April 20095

What We Do

• Design and implement assessment strategies – face-to-face and online – and provide certification for UK government approved vocational qualifications (Apprenticeships, NVQs, Diplomas).

• Endorse and certificate company training programmes (Sainsbury’s, Victoria and Albert Museum).

• Prepare syllabi and examination papers for international business qualifications and deliver secure examination sessions, marking and certification (LCCI branded).

• Design and deliver online key stage and related assessments for schools (GOAL).

• Design, build and operate online testing platforms (i-assess).

• Design, build and operate online qualifications administration systems (Campus).

• Provide customised administration, software and broadband services.

• Deliver industry leading customer service and support.

April 20096

Business Segments

UK Qualifications and Assessment Services

• 318 accredited vocational qualifications.• 279 specialist awards and approved programmes.• 1,873 registered centres (300 increase through ASET acquisition).• 200,000 candidate registrations a year.• 12% share of programme funded vocational qualifications in target sectors.• 652 school customers for online assessment services.

International Qualifications

• 65 business qualifications branded London Chamber of Commerce and Industry.• 4,530 registered centres across 103 countries.• 275,000 candidate registrations a year.

Support and Internet Services

• Eight contracts for specialist online testing platform services, (ACCA, CIMA, OCR).• Winding down administration and logistic contracts to focus on own customers.• 502 customers for commercial quality broadband services.

April 20097

Revenue Sources

• UK government funded programmes:- Centres’ annual registration fee : £500- Candidate registration and certification : £25 - £85- Candidate administration platform (eNVQ) : £25 - £50

• Company training programmes:- Initial audit and annual review fee : typically £5,000- Candidate certification : £5 - £15

• Schools’ assessment service:- Subject £299- Full range upto £5,000

• International business qualifications:- Candidate entry and certification : £25 - £85

• Software and Internet services:- Software licence fees up to £5,000 plus £2 - £8.50 per test- Broadband : £250 to £5,000 per month- Development work – one-off project fees

April 20098

Strong Team

Non-Executives Richard Price, Sir Bryan Nicholson, Barrie Clark

Executive Directors Nigel Snook, Jenifer Moody, Paul Bird

Senior Team Gareth Phillips, Stewart Jardine, Chris Daniel

Staff Coventry Head Office 117, sub-offices 18, home-based 21

Associates 234 part-time examiners and verifiers

Agents 15 overseas representative agreements (50 countries)

Centres 6,400+ schools, colleges, private trainers and corporates in the UK and worldwide registered to offer EDI qualifications

April 20099

Financial Trends

14,175

16,057

21,500

29,000

1,1642,158

3,339

7,0008,100

4,712

7,738

10,000

16,200

21,400

27,000

2005/06 2006/07 2007/08 2008/09 2009/10

Turnover

Adjusted Operating Profit

Net Assets

£000s - IFRS Basis

Analyst's Forecast24 April 2009

Analyst's Forecast24 April 2009

April 200910

Highlights

Financial Headlines

• Revenue up by 34% to £21.50m.

• Operating profit up by 35% to £2.70m.

• Adjusted operating profit* up by 58% to £3.34m.

• Basic earnings per share up by 36% to 6.0p.

• Adjusted earnings per share** up by 51% to 6.2p.

• Net cash generated from operations up by 137% to £4.46m.

• Net cash at year end £3.23m (2007: £3.05m).

*Operating profit adjusted for net finance income and amortisation charge on acquired intangible assets.

**Adjusted earnings per share is based on adjusted operating profit.

Highlights

• Acquisition of ASET Group Limited on 19 November 2007 and integration completed by 30 September 2008 with transfer of administrative functions to Head Office.

• Disposal of 50.4% shareholding in Singapore based Educational Resources Pte Limited on 4 January 2008 and introduction of new agency agreement for SE Asia.

• Full accreditation as a 14-19 Diploma awarding body.

• Long-term contracts agreed with ACCA, Protocol Skills and JHP Training.

• Business systems accredited under ISO 9001/2000.

• Final dividend of 0.3p per share recommended bringing the total dividend for the year to 0.42p, up 27%.

April 200911

Acquisition

ASET Group Limited : Acquisition 19 November 2007

• Accredited UK awarding body with revenues of £2.2m – sound strategic fit.

• Consideration – £2.7m on completion (£1.9m cash and £800k shares at 37.65p) - £590k net assets acquired.

• Deferred consideration of £200k paid in April 2008 after successful administration handover.

• Further payment of £200k not triggered as sales performance £120k short of £2.65m sales target.

• Re-organisation costs of £88k expensed.

• Net reduction in staff of 25 – 11 sales and development staff transferred to EDI.

• Full integration completed by 30 September 2008 – York and Macclesfield offices lease surrenders negotiated.

April 200912

Segmental PerformanceUK Qualifications and Assessment Services (55% of turnover)

• Sales up 53% to £11.88m:- ASET contributes £2.20m- Like-for-like sales growth 25%

• Extended products range, new customers, increasing average value per customer.• Long-term contracts agreed with two largest customers.• Positive response to schools’ service re-packaging and increased range.• £450k NVQ certification levy collected for QCA drops out next year, no bottom line impact.

International Qualifications (27% of turnover)

• Sales up 9% to £5.81m – after £69k adjustment for the disposal of ER.• Strong trading in South East Asia (revenue up 23%) and Germany (revenue up 21%).• Positive impact of strengthening Euro in second half, £250k.• Strengthened management capacity and focus on agent co-ordination.

Support and Internet Services (17% of turnover)

• Sales up 30% to £3.71m.• Like-for-like sales growth of 11%.• Fusion revenue £788k (like-for-like increase 83%).• Low margin administration services contract with annual revenue of £957k finished on 30

September:- In line with strategy to focus on EDI customers and high margin contracts

• Long-term contracts for software services agreed with ACCA, OCR, RHS and Newcastle University.

April 200913

Income and MarginsContinuing Operations (£000s)

UK International Support Other 2008 2007

Revenue 11,881 5,810 3,714 95 21,500 16,057

Cost of Sales (1,975) (3,009) (969) - (5,953) (4,606)

Gross profit 9,906 2,801 2,745 95 15,547 11,451

Gross margin % 83.4 48.2 73.9 100.0 72.3 71.3

Administration expenses: (excluding amortisation charge on acquired intangible assets)

Product developmentBusiness development and marketingOperations and IT developmentBusiness administrationProperty and facilitiesOther overheads

1,6822,4534,0622,1991,617

263

9811,8653,4801,4231,403

226Total (12,276) (9,378)

Net finance income 68 40

Adjusted operating profit 3,339 2,113

Adjusted operating margin %

Amortisation of intangible assets

Operating profit

15.5

(576)

2769

13.2

(78)

2035

April 200914

• Tax losses of £4.3m bought forward will be fully utilised during 2009.

2007 2008 2009 2010

Revenue 16,057 21,500 27,000 29,000

Adjusted operating profit 2,113 3,339 7,000 8,100

Adjusted fully diluted EPS:

- Fully taxed 3.0 4.4 8.7 10.1

- Actual/forecast 4.0 5.9 11.5 10.1

Impact of Tax

* Partially taxed – estimate after utilisation of tax losses.

*

April 200915

Cashflow

£000’s 2008 2007

Profit before tax 2,312 2,210

Depreciation and amortisation 967 411

Share options 76 21

Working capital movement 1,170 (644)

Interest and tax (66) (28)

Operating cash flow 4,459 1,880

Capital expenditure (198) (163)

Acquisitions and disposals (3,529) (729)

Purchase of own shares net of issues (355) (95)

Dividend paid (201) (160)

Net increase in cash 176 733

Opening cash 3,053 2,320Closing cash 3,229 3,053

A £1m overdraft facility is in place.

April 200916

Balance Sheet

£000’s 2008 2007

Goodwill 7,261 6,291

Other intangible assets and equipment 1,844 1,401

Investments – AEC holding 265 -

Deferred tax 1,238 556

10,608 8,248

Net current assets 773 702

Pension liabilities (564) (190)

Other non-current liabilities (524) (1,022)

Net assets 10,293 7,738

Dividend per share 0.42p 0.33p

April 200917

January and April Trading Updates

• Revenue and profits significantly exceed expectations.

• ‘One-offs’:- Exchange rate gains- Budget underspend (tight cost control)- Provisions releases- Short-term sales peak for taxi driver qualification

• Underlying Growth:- UK vocational qualifications ‘star performer’:

- Broad based demand - Major new customer - Government expenditure

- International business ‘sound’: - Exchange rate gains

- Support services ‘focussed’: - High value software contracts

April 200918

Business Resilience

• Visibility of revenue – annual education cycle and three year/open-ended contracts.

• Cash reserves and cash generative – self funded acquisition and investment programmes.

• Market share growth – plenty to go for.

• International spread – South East Asia a main market.

• Positive exposure to Sterling weakness.

• Significant and growing government funding for UK vocational education.

• Individual and company investment in skills development – especially in recession.

• Consolidating after acquisitions and major organisational changes – strong cost control.

• Current focus on organic growth with cautious approach to acquisition opportunities.

• Very experienced non-executive and executive management team.

April 200919

Development Strategy

UK Qualifications Size £750m+Grow 15-20% annually

• Become vocational qualifications number two after City & Guilds.• Package and grow range of services to schools.• Invest in product range, online delivery and customer service.

International QualificationsSize £1bn+Grow 8-10% annually

• Develop existing markets and exploit LCCI brand.• Professionalise and grow representatives network.• Invest in product presentation and support materials.

Support and Internet ServicesSize £500m+Grow 10-12% annually

• Focus on high value software contracts.• Withdraw from low value administration contracts.• Strengthen ISP business and cross-sell.

Organisation DevelopmentBecome a household name and exemplary employer

• Profile raising programme.• Invest in staff training and development.• Invest in systems development and quality audit.• Corporate responsibility projects.

April 200920

Drivers for Growth

• Growing global investment by governments, businesses, families and individuals in personal, vocational and English language skills development.

• Significant profile raising activity and momentum in business.

• Strength of underlying business, supported by positive investment strategy and acquisition programme.

• Accredited awarding body status, including for the new Diplomas.

• Winning market share with UK training providers and further education colleges.

• Partnerships to accredit employer training programmes.

• Increasing acceptance of screen based/online education services.

April 200921

Shareholder Profile• Total voting rights 57,585,304 at 27 April 2009.

• Total number of shareholders 486

Company directors and employees: - Employee Benefit Trust- Chief Executive- Non-executive directors- Employees

3,955,0003,109,2372,756,0001,094,098

6.9%5.4%4.8%1.9%

10,914,335 19.0%

Hargreave Hale Limited (Combination of funds & private clients) 5,794,450 10.1%

Wynford Dore (Founder) 5,000,300 8.7%

Octopus Investments 4,046,550 7.0%

Pershing Nominees (Williams de Broe) 3,231,650 5.6%

J D Slater and Family 2,985,000 5.2%

Blackrock UK 2,500,000 4.3%

Slater Investments 2,395,000 4.2%

Bank of New York Nominees 2,238,812 3.9%

Real Time Consultancy (Singapore) 1,650,000 2.9%

Gareth Newman (Founder) 1,405,000 2.4%

HSBC Global Nominee (UK) 1,300,000 2.3%

Simon Knott 1,200,000 2.1%

• Total share options under contract 4,632,855 (including SAYE options) with 85% EBT cover.