AcadeMedia AB (publ)

So good morning, everybody, and thank you very much for your time when we will present our quarter one interim report for 2024. And I will do this together with Petter Sylvan, that is the CFO, and I will give you a short update about the business development in the first quarter and also some comments on the quality development in the company. And the first quarter in Academiedia is a small quarter when it comes to the revenue and the profit, but it's an important quarter for Academiedia as a company. And we think that we have started this year very stable with a growth of 12% where 6% is organic and the international development is still strong in the company. And we are now reaching for 100 units in Germany. We are at 98 for the moment. And we see a strong development when it comes to our international business. And the government in Sweden, they really invest now in vocational training. I think it will be more than 100,000 students. The budget for this year is very important that to go ahead with the supply of skills. And Academedia, we are really the leading vocational trainer in Sweden. We are the leading actor when it comes to skill supply. And that's why we also see this very positive development when it comes to the adult education. We also have reported our 13th quality report. And we focus a lot on reading. And we see now a positive result. And we have seen this over many years. But this year is really, really positive. And the next step for us is my favorite subject. That is mathematics. That is really a challenge for the Nordic countries and also in Sweden. But we really focus on that for the moment. And I will just give you some short information from our quality report. And as I mentioned, this is the 13th year that we report. You can continue to the next page where we report the quality result. And our model that we call the academia quality model is really top of the line. It's a role model for a lot of other companies. And one very important subject in Sweden is that we should have the best conformity when we compare our grades with the natural average. And we are very proud to announce these numbers now that we are really a role model when it comes to grading both in compulsory schools and as this picture shows up in secondary schools. And if you go to the next page, same as the finance sector, we are really watched out when it comes to the school inspection. They do a lot of inspections. I would like to say that they do more inspection when it comes to the private schools than the public schools. And if you look at these numbers, we are also really outperforming the rest of the schools in Sweden. We have really good results. when it comes to leadership, when it comes to quality development and also the order in schools. So if you look at the most objective quality result, that is the school inspections result, we also perform very well. And then when it comes to the absolute number, I just put this slide, which shows the result in the compulsory schools. And we are very sorry to say that some of the schools in Sweden is now performing a little bit weaker, but the positive development when it comes to Academedia is still good. We have a higher result than the national average, and we are at a stable level. And you should keep in mind that this is also, if you look at the comparability with the national test. So the quality development in Academedia is strong and that is something that we continue to invest a lot in. And now I hand over to Petter that could comment on the financial results. Thank you, Marcus, and good morning, everyone.

I'm glad to have the ability to present the financial outcome that is great, while we at the same time have such quality improvement. So if we start at this page, as Marcus mentioned earlier, we see the good growth of 12% with contributions from the acquisitions of Tula in Finland and Windfort College in the Netherlands amounting to 7.1%. Our adjusted profit increased from 151 to 157 million in absolute terms. And as Marcus mentioned briefly, the first quarter is a seasonally small quarter as part of the business are closed. And this impacts the net sales profit and thereby margin development. Our newly finished preschool business that we acquired, Tula, follow this seasonal pattern. And in addition, last year's net sales and profitability was positively affected by energy grants of 15 million. So furthermore, the free cash flow development of minus 225 million was more negative than last year's 127. And this was because of unfavorable networking capital development. Now I'll turn to my page piece. Adjusted a bit increased in upper secondary school and adult education segment, whereas it decreased on preschool and international and compulsory school segment. The positive change is most notable in the adult education of class 20 million. And this is driven by increased demand in higher vocational education, which is countered by the 11 million negative effect in preschool and international business. And this is foremost driven of the seasonality effect of the acquired tool. As we mentioned in the previous quarters, the increase in group overhead cost is a natural outcome of our growth. And the increase in this quarter of one million was marginal. but more vacancies are to be filled in the coming quarters. So let's continue to a couple of pages, I think page 11. So if we look at the quarter's development within each segment, and then we start with the preschool and international segment. The number of children increased by an impressive 29.6%, with growth witnessed across all countries except Sweden. And there we had six units that were closed last year. Our growth was primarily driven by the acquisitions of Windford in the Netherlands and Thula in Finland, along with new preschool openings in Germany. This quarter, the total sales in the quarter of the group constituted 31% of international business. Net sales increased by 24.6% compared to last year with organic growth of 7.1%. Adjusted EBIT margin and EBIT decreased compared to the previous year. This year's margin was minus 0.8% down from last year's zero result and the operating profit was minus 11 million compared to last year's zero. And as mentioned, it was this acquisition of Tula that amplified the seasonal pattern of the first more quarter of the preschools are closed. Higher school vouchers in Germany compensated to a larger extent for the higher cost levels. Please move on to the next slide. At compulsory school, we note a 2.3% increase in student numbers. Net sales rose by 7.6%, driven by increased number of students and the positive impact of the annual school voucher revision. Adjusted EBIT and margin decreased compared to the previous year, and this year's margin reached 5.1% down from last year's 6.4%. And the operating profit was 44 million compared to last year's 51. The somewhat lower result was a consequence of higher personnel and maintenance costs. And part of that cost of high personnel was related to efforts in quality improvement. Last year, net sales and EBIT was positively affected by an energy grant by 5 million. Please move on to upper secondary school on the next page. And then we observe a 0.4% increase in student numbers. The sales growth of 3.4% was driven by more students, as well as the annual school voucher revision. Although it's worth noting that this revision hasn't been sufficient to offset inflation cost increases. Even so, the adjusted margin increased this year to 6.0% compared to last year's 5.7% due to higher capacity utilization and temporary lower costs. Move on to adult education. We see a 7.1% increase in sales driven by a higher number of students in higher vocational education. Adjusted EBIT increased to 67 million from previous year's With a margin of 17.1% compared to last year's 13.2%. The first quarter is last year a strong quarter affected by lower personnel costs due to vacations. Unemployment is forecasted to increase during 2024 before it decreases in 2025. And even though this quarter in Q1 used to be strong for the adult education margin-wise, it worked to notice that for the last 12 months, the profitability has been 10.4%. So overall time, a slightly lower margin. Let's continue to the next page, where I think it's page 16. We talk about the free cash flow in investments. Free cash flow for the last 12 months was 98 million, which was lower than last year, attributed to more unfavorable network and capital development. Maintaining capital as a percentage of the sales has slightly declined to 1.6%. and the significant increase in other expansion capex is associated with the acquisitions of Winford and Tula. Proceed to page 17, the financial position. Net debt, excluding IFRS 16, increased by 146 million compared to last year, with a leverage ratio including IFRS at 0.9%, well below the financial target of less than 3. including property related lease liabilities net debt was 1.5 billion higher due to growth the acquisitions of tula and indexation of rest so continue to finally page 18 and our financial performance against targets our organic growth including small bolton and acquisitions stands at 7.0 percent and this is exceeding our financial target of five to seven percent growth Our adjusted ebb and margin of 6.2% falls below the target range of 7 to 8%. And the leverage ratio of 0.9 remains comfortable below the required threshold of 3. And with these words, I end the presentation and we open up for questions.

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