PENGUIN GROUP REPORTS RECORD SALES AND OPERATING PROFTIS IN 2000 FOR SECOND CONSECUTIVE YEAR

Profits Up 22 Percent; Revenue Up 34 Percent

London -- March 5, 2001 -- The Penguin Group today reported a significant increase in operating profits and sales in 2000 versus a year ago, achieving record results in both categories for the second consecutive year.

Total operating profits in 2000 (excluding one-time integration costs) were £79 million, compared to £65 million in 1999 - an increase of 22 percent compared to 1999. The record operating results in 2000 reflect the company's strong front and backlist performance worldwide, further cost savings resulting from the completion of the integration of Penguin Putnam's warehouse operations, supply chain efficiencies at Penguin UK and overall reductions in overhead expenses.

Total net sales in 2000 were £755 million, compared to £565 million in 1999 - an increase of 34 percent versus a year ago. For the eight-month period (May through December), DK achieved break even, before integration, on net sales of £125 million. Excluding DK, Penguin Group sales grew by 12 percent.

2000 was another strong year for Penguin in the UK with 39 titles in the Booktrack top 15 during 2000, including 10 titles that spent more than 10 weeks on this list. Jamie Oliver's The Return of the Naked Chef was on the list for 33 weeks, 16 at number 1. Penguin UK won more awards than ever in 2000. Matthew Kneale's English Passengers was shortlisted for the Booker Prize and won the Whitbread Prize, and Zadie Smith's White Teeth received many shortlistings and won the Whitbread best first novel award and the Guardian Prize. Penguin also published non-fiction of great distinction including Ian Kershaw's highly acclaimed second volume of his biography of Hitler and Frank Kermode's Shakespeare's Language. On the children's side both Puffin and Ladybird notched up high sales for its programme of Digimon titles, and Spot celebrated his 20th anniversary and saw a significant increase in sales around the world.

Penguin continued to invest in its brand with a new phase of award-winning generic advertising in a prominent outdoor campaign during the summer. The relaunch of the Penguin.co.uk website reinvigorated Penguin's industry-leading online presence.

At DK, the creative team, under founder Publisher Christopher Davis, is developing a strong new title programme for 2002 and beyond and the integration of the company into Penguin has gone well. DK's sales, marketing and distribution are being strengthened around the world. Both DK and Penguin move into shared offices in June.

Anthony Forbes Watson, Chief Executive of the Penguin Group in the UK commented:

"For the Penguin Group in the UK 2000 was a transformational year. Not only did Penguin continue to grow but we also welcomed DK into the group where it is now performing well. Looking ahead, we are very excited about 2001. We've enjoyed an excellent start to the year and have a very strong publishing programme across the group, with new fiction from Nick Hornby, Pat Barker and Jane Green and non-fiction from Jamie Oliver, Niall Ferguson and Paul Davies, to name but a few. Puffin is looking forward to an exciting year, celebrating its 60th Anniversary with publication of the eagerly anticipated Artemis Fowl and a new novel by Brian Jacques."

David Wan, President of the Penguin Group, stated: "It is a tremendous accomplishment for any publisher to achieve a record performance, let alone have back-to-back record years. We have done just that. As in 1999, the record operating performance achieved was particularly impressive in that we benefited from the strong performance of our core operating companies worldwide. We saw the results of our strengthened publishing program in the US and UK in 2000, made strong progress in integrating DK into the Penguin Group - quickly bringing it to break even - and positioned ourselves for continued sales and profit growth in 2001 and beyond. We are very pleased with the results."

There were many highlights across the Penguin Group in 2000

• 2000 was another record year for Penguin Putnam. It had a record 42 adult hardcover and 54 adult paperback titles on The New York Times bestseller lists. Penguin Putnam's hardcover titles spent a record 333 weeks on The New York Times list, an increase of 27 percent over last year's record total of 262 weeks. Penguin Putnam's adult paperback titles spent a total of 267 weeks on The New York Times bestseller list, an increase of 50 percent over last year's total of 178 weeks.
  
• The Penguin Putnam Books for Young Readers division swept the major children's awards, winning the Caldecott and Newbery Awards amongst others. The children's division also had 10 titles appear on The New York Times list in 2000, including titles by Jan Brett, Eric Carle and Brian Jacques.
  
• Penguin Australia/New Zealand, Penguin India, Penguin Canada, and Penguin South Africa all had improved operating performance in 2000.

Other Penguin UK successes in 2000 included:

• Further prizes: Brian Cathcart's The Case of Stephen Lawrence won the Orwell Prize, Lindsay Bareham's Big Red Book of Tomatoes won the Glenfiddich best food book, Berlioz: Servitude and Greatness by David Cairns won the Samuel Johnson Prize, The Past in Hiding by Mark Roseman won the Fraenkel History Prize and Garrick by Ian McIntyre won the Theatre Book Prize. Beverley Naidoo's novel The Other Side of Truth won a silver medal in the Smarties Book Awards.
  
• There have been many online initiatives during 2000 including the launch of www.funwithspot.com, which now receives one million hits a month; the award-winning www.peterrabbit.com website was launched in three new foreign languages. In addition www.ladybird.co.uk was launched in the autumn which is aimed at under sevens and their parents.

The Penguin Group is owned by Pearson plc, the international media group.

For the full Pearson Earnings Release please go to www.pearson.com

For further information please contact:
Joanna Prior
Publicity Director
Penguin and DK
Tel: 020 7416 3250 mobile: 0370 380 557
Joanna.prior@penguin.co.uk

www.penguin.co.uk/pressoffice

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