AcadeMedia AB (publ)

So good morning everybody and I will start Marcus Strömbere CEO here and I just must say that Stockholm today has fantastic weather and Academedia has started the new school year in a really good way. We increased the number of children with 8% and that is a result of the efforts and investments that we have done both international and also in the Swedish education parts. So we think that we sum up a very good year and a good quarter with strong demand. We have increased the number of school places but we have also increased the capacity utilization. The net sales grow with more than 15% of which around half was organic and the profitability also increased a lot and the result of the international development that really has increased the profitability. We have now 50% growth international and we also see that 40% of Academedia is adult education and international education and our target that is 50% so we are on the good road to reach the target and get a good balance between Swedish education and international education. We have had a lot of efforts on reading skills, vocabulary, early age programs and that has also given us very good quality results this year. We have worked a lot with the grades and equivalents between the national tests and the grades and I would like to say that Academedia is really the leader in the way that we work with our quality development. The board has decided to continue to keep the dividend at the same level as last year and they will also propose a program of share redemption to the annual meeting in November. So with that short introduction I will hand over to Petter and he will go you bring you through the numbers and I will gladly answer questions after that.

Thank you Marcus and good morning everyone. So to start with as Marcus said we end this year with a very strong quarter. I'm very glad to be part of that in my second quarter's presentation in this company. As Marcus outlined earlier we achieved a good growth of .6% and that was with contributions from the acquisitions of Tula in Finland and Winford College in the Netherlands and they amounted to 8.7%. Additionally our adjusted profit margin increased to .5% compared to last year's .9% which means that we were reaching 415 million in absolute terms up from 333 million. And we have for long had a stable and profitable Swedish operation and I'm glad to say that now we managed also to increase the profitability in the national operation mainly an effect of that Germany and Norway are better compensations for inflational costs. And finally this increased profit has translated into correspondingly higher free cash flow. Now turn to page four please. The improved adjusted EBITS are evident across all segments apart from the better compensation through annual increases in school vouchers which now adequately account for inflation. The positive change is most notable in the preschool and international segment where in addition to better school voucher compensation the acquisitions also has contributed an additional 30 million. As we mentioned in previous quarters the increase in group overhead costs is a natural outcome of our growth. Some of our staff functions are adding extra resources to accodimate our expanding operations. Let's look at the quarters development within each segment and we start with the preschool segment at page seven. The number of children increased by an impressive 33% with growth witnessed across all countries except Sweden. And in Sweden we had five or sorry six preschools that were closed in the past 12 months which are affecting the year over the year numbers. Our growth was primarily driven by the acquisitions of Winport in the national

segment and

Tula in Finland along with new preschool openings in Germany. As Marcus mentioned the international operations now account for a little bit more than 30% of the growth total sales this quarter. Net sales increased by 35% compared to last quarter with organic growth at 8.3%. Adjusted EBIT margin and margin improved compared to the previous year's quarter. This quarter margin reached 8% up from last year's .8% and the operating profit was 151 million compared to last year's 95. These improvements are attributed to better compensation for inflational costs through annual school voucher increases in Germany and Norway and the contributions from acquisitions. Moving on to compulsory school on page

eight

we note a .6% increase in the student numbers. Net sales rose by 6% driven by increased number of students and the positive impact of the annual school voucher revision in January of 5.5%. Adjusted EBIT and margin improved compared to the previous period. This quarter's margin reached .1% up from last year's .6% and the operating profit was 99 million compared to last year's 88. These improvements are attributed to better compensation through the school voucher revision now better compensating for inflation costs. Now turn to upper secondary school on next page. We observe a .9% increase in student numbers. The sales growth of .9% were driven by more students as well as the annual school voucher revision of 3.8%. Although it's worth noting that this revision hasn't been sufficient to offset inflation costs increases. Even so the adjusted margin increased this quarter .2% compared to last year's period of 11.6 due to higher capacity utilization and lower energy costs. Moving to adult education. We see a .5% increase in sales driven by a higher number of students in higher vocational education and the acquisition of works. In the municipality business our implemented capacity adjustments and cost-cutting measures from last year's continued to yield positive effects. Adjusted EBIT increased to 23 million from previous quarter's 20 with a margin of .4% compared to 5.0 last year. For the fiscal year the profitability was .4% compared to last year's 7.7%. Continue to next page. Free cash flow and investments. Free cash flow for the year was 332 million higher than last year attributed to higher profit and a more favorable network and capital development. Maintainance capex as a percentage of sale has slightly declined to 1.6%. The significant increase in other expansion capex is associated with the acquisitions of Winford and Tula. Proceeding to page 13, the financial position. Net debt excluding IFRS 16 increased by 1 billion compared to last year with a leverage ratio excluding IFRS 16 at 0.6 which is well below the financial target of less than 3. Including property related lease liabilities net debt was higher due to growth, the acquisitions of Tula and the share redemption program. And let's continue to next page 14. I will now summarize the financial year in total. Number of students grow .2% mainly through the 30 newly established preschools in Germany and the acquisitions of Winford in Netherlands and Tula in Finland. In other words this was an effect of the planned international expansion according to our strategy. Net sales increased by .5% compared to last year with organic growth at 7.3%. Adjusted debit and margin improved compared to the previous year. This year's margin reached .3% which is up from last year's .2% and the operating profit was 1 billion 97 million compared to last year's 964 million. And these improvements are attributed as reflected in the quarter to better compensation for Germany and Norway and contributions from acquisitions but reduced by the lower compensation in upper secondary schools that not fully compensate for inflation costs. If we move on to slide 15. And looking at the increase of EBIT over the years we see that it's obvious that preschool and international justice in the quarter isolated contributed most to this year's profit increase.

Let's move on to the financial target

and financial performance. Our organic growth including small bolt on acquisitions stands at .3% exceeding our financial target of 5 to 7% growth. Our adjusted EBIT margin of .3% falls below the target range of .8% but in the quarter we reached 8%. The leverage ratio of .6% remains comfortably below the required threshold of

3.

If we continue to next page. So as we have described the board intends to propose a voluntary share redemption program and to further emphasize what has been agreed to be intended to propose at this time is the mechanism for the share redemption program. The fact of how it will intended to be proceed the timing of the program in the Q3 of 2025 but was not has been decided to be recommended is the amount, the specific amount. And that is to later intended to later be proposed during the autumn. And with these words I end the

presentation and we open up for questions.

The next question comes from

Johan Lanslis Sunden from Carnegie. Please go ahead.

Good morning. Thank you for taking my question. I have one first on the preschool business where you show quite impressive margins. And I was curious to get some comments on how much of this that should be extrapolated going into next year. You made first one quite big acquisition during the spring which should be margin dilutive for the segment. Should there be enough with the kind of better compensation for the inflationary environment to hold up margin or how should you think about margins in preschools for next year?

We believe that overall the margins we represent now is translated to next year. And I mean you have to look at the whole year to represent the margin development as you know with different bit between the different quarters. And I think that Q1 is significantly different in terms of margins than the other quarters. But generally speaking I think what we see in Q4 and what we have seen Q3 combined for the preschool segment is a fairly good representation of what the level we expect going forward. Now we are not only better compensated in the quarters, international segments, but we also see that better compensation better represents our expectations of the

compensation level going forward. Okay, so at least the

4.8 report this year should be achieved next year despite dilutive earnings.

Yeah, if everything else is equal, if nothing else is changed in the compensation level or compensation framework from what we know right now, that should be

relevant expectations. Excellent, that was the first one. I'll get back in line and see if there's more questions on the call.

The next question comes from Carl Johan Bonnevier from DNB Markets. Please go ahead.

Yes, good morning Markus and Petter. Good development no doubt in the fiscal year. And looking at the student cross numbers you alluded to Markus, the 109,000, could you give us some idea about how it looks across the segments at this stage?

No, you know we are really early on that. So we are quite, we're taking it as a total. So but we will be coming up with that in next quarter report.

But I guess if you look at the particularly the upper secondary school segments, do you still see growth in year one students year on year? I guess that's the most important kind of indication.

What I mentioned is that we will comment on that. I understand the question of course, and we have focus on that all the time. But we will comment on that after quarter one here. When we see the numbers, it's very early. Excellent. It has been more movement. You know over a year we see that the number one students move a lot between different schools. So we would like to wait a few more weeks before we say how things are developing.

That's fine. That's fine. Looking at the growth case for you in preschool Germany, what kind of ambitions do you have for this year of new openings? And what is the extended pipeline for new openings in Germany?

So our intention is to open another 10 more schools this year. And that is to compare to I think the 13 we opened this year. So as you can recognize, there is intended a little bit lower pace of growth in the new establishment. But that's also both a consequence of that we're focusing on increasing the capital utilizations of the schools that we have established. And also focus on profitability. And as you have seen, that's an important part of the results in Q4. But we see further room for further improvement.

And we have just worked with organic growth in Germany. And maybe we will have some opportunities now to also make acquisition in the preschool segment in Germany. So because you know how it works when you make acquisition, you get full capacity schools at one up and running. So we will continue to grow organically. The need for new school places are really high. But I think that we will also see some opportunities now to make acquisitions.

Excellent. And when you look at the acquisition pipeline, is there any new areas you would suggest or is it digging deeper where you are?

I think we still try to dig deeper in Germany. We see potential when it comes to schools in Germany. We think that they have the group that we hired have developed quite well. And if we grow with schools in Germany, it will be through acquisitions. And we see when we come to Netherlands, the preschool market in Netherlands is quite big. And we have a small group and it's quite immature so far. So we see also opportunities to grow in the Netherlands. And then hopefully we also could look into Poland. You know, we run a dedication in Warsaw with our IT programs and gaming programs. And it's growing. It's more business, but it's growing. So that is a country that we want to know more about.

Excellent. And when Tula has now been part of your operation for a period, I guess the management team there is driving more of a profit margin expansion recovery case for it. Do you feel better confidence in that case now when you have been owner of it for a while? Or how do you see that case developing?

We must say that they are coming. We have looked at this company for many, many years and we see improvement when it comes to financial results. And we think it's really professional management. They have focused on really creating margin, quality and try to make a big and strong group. Hopefully we will see some opportunities also in the future to make acquisition because the sector is growing and a lot of the municipalities need more places in municipalities that is growing. And there are also movements from taking care of your children at home to go to professional operators. So it's an underlying movement towards ordinary preschool. And we would like to be a part of that development. But the focus now is to keep up the improvement of the profitability in the business.

Excellent. And one final for me. Looking at adult education, good move in the continued underlying margin recovery. If you look at the backlog and the tender kind of situation that you are now exposed to in this fiscal year, do you see still an opportunity for a margin expansion? Or should we expect it to be more stable at the current level?

We would like to keep it in the target range that we have. But what is very positive when it comes to the adult education is that we are not so depending on the tenders anymore because we have this higher vocational training that is very, very good. We have a good market share and we are very professional. And here it's more like a school voucher system. So it's up to the students to show our schools. And we are very hopeful on that coming here too, because when we see that the unemployment increase, we see that more students and people go to the adult education. So we have less big contracts and more focus on the school voucher part of the adult education. But maybe one thing we could comment on, and that is the online training that the adult education has. We really have focus to develop our own platform. It's called Omniway. It has its own website. So we have developed a platform that we are working with in the total municipality training programs, the online training and also the higher vocational training. So we have an effective machine when it comes to adult education.

Excellent. And Gaston, on that, with the voucher part of that business increasing, so to say, I guess that should fit your business model even better to some extent.

Yes, that is the short answer.

Excellent. Thank you very much. I'll go back.

The next question comes from Beltran Palazuelo from DLTV. Please go ahead.

Good morning, Marcus Peter. Congratulations on the strong results.

I have a couple of questions, if I may. Maybe if you can comment on, first of all, on the cost for next fiscal year, let's say salaries and rents, maybe you could give us a light on that. Then the second question I have is regarding acquisitions. I know you just commented in the previous question, but maybe let's say apart from the things you mentioned, let's say the amount that you're willing to spend, how aggressively, let's say, if the opportunities arise there. And then without, of course, we don't know, let's say, what would the vouchers be, but how do margins look for next fiscal year? You think that, let's say, with higher organizations, we can, let's say, keep on going to the target margins. And my last question is regarding the redemption program. I know it's not decided exactly the amount, but what type of amount you think that the balance sheet can have. And then the last question about the redemption, why redemption? It's quite weird that you do the redemption. Why not a normal buyback? Because the redemption creates a lot of, let's say, admin work. So maybe why not a buyback?

Perfect. We tried to remember the question. Thank you very much, Beltran, for the question. The first is on the salary and the rental increase. And we have seen quite high salary increase two years back and also the rental because it reflects the inflation. If we look at the coming year, it will be much lower, you know, because the inflation affects the rental costs. And it's the inflation in October that is the increase of the rental cost first of January. So if you look at the forecast, it's difficult to say, but my guess is between two and three percent, maybe even less. But who knows? It's better to make your own forecast. If we look at the salaries, I think we will see quite low salary increase also the coming year because we have had quite high salaries. And that is also a result of the inflation. But we will see. And when it comes to the school voucher, that will also be reflected by the inflation. We saw two years back that we had a higher school voucher, and that is because of that we had high inflation. Now we will have lower inflation and then the school voucher also will will be lower. And we are we are following this very closely. We ask the municipality what they think about the coming year. We try to plan in the best way and we always plan for the worst and work for the best. That is our strategy when it comes to school vouchers. And when if you look at the possibility to make acquisitions, we will, I think, make a lot of acquisitions in Sweden. And in the coming coming time, we have a have a good pipeline on that. But that is not our main focus. So I would like to say that I mentioned before our focus when it comes to acquisition now that is schools in in Germany. It is preschools in in the Netherlands and maybe also preschools in Germany. But that depends on on the prices. We have seen really high valuation when it comes to schools in in Europe. And we don't want to pay too much. That is the strategy for the moment. And if you take the last question on the redemption program, it's up to the board. And, you know, we had this discussion also last year. And the board really want to have this voluntary program that it's up to each shareholder to decide what they want to do. And so they want to continue with that program. And we think that it worked out quite well last year. And now we think that people understand how it works. And it's it's good to continue with the same model. And when it comes to the amount, as Pesce mentioned, the board has not decided the amount. But they will where they will tell that in good time before the annual meeting. But if we look at the financial situation in the company, it's stronger than last year at the same time.

Understood. So maybe the redemption last year was

266 million. And the net results have gone up, let's say, nine point three percent. It is likely that it's higher. It can be a good estimate.

I'm very sorry to say, but I can't estimate that. But I tried to be as clear as I could on that point. But we will know that in a few months, I think.

OK, thank you very much. I know the support from our side. And thank you

for your hard work.

Thank

you

very much. Thank you very much for your interest. And we wish you all a good day. Thank you very much. Thank you. Thank you

very much.