Education Development International plc September 2008 Results and Trading Updates

1. Education Development International plc • September 2008 Results and Trading Updates • Nigel Snook, Chief Executive • Paul Bird, Finance Director

2. 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 Contents Looking Ahead • Business resilience • Development strategy • Drivers for growth • Shareholder profile

3. 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

4. Marketplace Illustrative course costs The players Exam Boards/Awarding Bodies Exams and Assessments. £50 (High margin) EDI, Edexcel, City and Guilds, OCR, AQA, professional bodies and 100’s of others Publishers Pearson, Nelson Thornes, Hodder and Stoughton and 1000’s of others Learning materials, books and online. £150 (Mid margin) Schools and Colleges Primary and secondary schools, FE colleges, private trainers – BPP, Melorio – and 10,000’s of others £800 (Low margin) Education and training programmes. £1000 In-house and/or outsourced Delivery and administration software. Logistics.

5. 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.

6. 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.

7. 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

8. Strong Team

9. Financial Trends

10. 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%. Highlights

11. 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.

12. Segmental Performance • UK 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.

13. Income and Margins

14. Impact of Tax * * Partially taxed – estimate after utilisation of tax losses.

15. Cashflow A £1m overdraft facility is in place.

16. Balance Sheet

17. 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

18. 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.

19. Development Strategy

20. 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.

21. Shareholder Profile • Total voting rights 57,585,304 at 27 April 2009. • Total number of shareholders 486 • Total share options under contract 4,632,855 (including SAYE options) with 85% EBT cover.