AcadeMedia AB (publ)

So thank you very much and good morning to this report of Academedia first quarter. And the first quarter, it is a small quarter, but it is an important quarter in Academedia. And we are very pleased with the results of the first quarter when we look at our numbers. A lot of students have attended our different schools. And I will just start to make some updates and then I will hand over to Petrus Jolvan and he will continue to go through the numbers. And if you first look at the net sales, it's around 7% up and most of it, it's organic. And what we look a lot of is the number of students. And last year it was 7% up and we continue with a good growth of 3.5%. And most of all, we are very pleased with the development when it comes to upper secondary where we have a record result when it comes to number of students. And we also have this focus on quality and to act early. So the focus on the reading, the focus on quality has also resulted in these good numbers. And we also have a proposal to the General Assembly of the Annual General Meeting from the Board of Directors to make this continue with this voluntary share redemption programs of totally maximum 400 million Swedish crowns. We have also revised our financial targets. It's very small changes, but I will update you on that in a few slides. So please continue. And this is something that we are really, really satisfied to talk more about. And it's our focus on reading. And we have always had a lot of focus on this, but we have really increased our efforts. We have trained teachers, we have a lot of collaboration with different parts to improve the reading in early ages. And if we look at this number, this is a way to look how many of our students in year one is available to read according to the school authorities standards. systems. And we are now at the level of 90%. And that is very pleased to see this, we of course want to achieve 100%. But this is a very good step at the right direction. And then if we continue to look at the next slide, please. So and this is when we talk about the revised and financial targets. And this is something that we have done to clarify the development of Academedia. And if we look at the sales growth, we keep the target with five to seven percent and we are now at that range when it comes to profitability we want to make a clarification that we will talk about ebit a instead of ebit and that's why we are really a company that is growing through acquisitions and if we look at the companies that is working a lot with acquisitions they have this target ebit ea And the difference between the EBITDA and EBIT in Academedia is very small. And we don't want to see this that we are decreasing our target. We are increasing target and we have a very strong pipeline when it comes to profitability. And when it comes to the capital structure, we keep the target. And maybe Petty could also comment on that a little bit more. And on this slide, you see the different changes in the profitability. And we look at the first quarter. And if you look at the first quarter, you can see that we have improved the profitability compared with last year. And you can also see the differences in these two measures. And as I comment on, they are very, very small. And we will keep the target to be in the range of 7% to 8%. And then if we continue to look at our historical development, we really like to look at this picture because it shows that we have continued to grow our EBIT year by year in a very good way. And if you see this development, we want to keep it up through acquisitions and through improvement also in our mature market. So we have a long-term record of improving the profitability and the EBIT in the company. And one of our most important targets now is to continue the international development. And during this quarter, we opened 500 new places in Germany. And what is fantastic with these places is that they are almost full at once. So the capacity utilization is 100%, almost less in less than one year. And if we look at what we did just before the summer, we continued with acquisitions both in Netherlands and in Germany. And for the moment, we have a quite strong pipeline where we want to continue with these international acquisitions. And we also have power to do these acquisitions because we have a low debt. It's around 0.6, 0.7 of EBITDA. And Petter will comment on that in the coming slides. And of course in Sweden we have this regulatory environment and we are also moving into the election period in Sweden where you get a lot of different proposals from different parties. But we just want to comment on the three important acquisitions, three important proposals that are in Sweden for the moment. It is the profit inquiry, the school voucher inquiry and also the principle of the public. So it's about looking into the company in different ways. And we think that there will be proposal during the spring in 2026. And they have these steps that we show in these pictures. And if you want to have any more explanation around this, you can ask us questions when we have this session with questions.

Thank you, Markus. And good morning, everyone. Before I specifically inform about the Q1's financials, I would like to inform about that we, a couple of days ago, launched our new podcast, which has the purpose to engage Swedish investors and other stakeholders through short, focused episodes delivering insights in just 10-15 minutes. So it's Academedia's InvestorPod. The podcast host is Charlotte Stjerngren, who is former editor-in-chief at IFN and analyst at DMD Carnegie in the past. This far, we released two episodes, which first is the initiation of Academedia with me as a podcast guest. And the second is the Behind the Political Statements with Henrik von Sydow, which is external affairs strategist at DMD Carnegie and former member of the Swedish parliament. The purpose of the podcast is to offer transparent and accessible insight into academia and helping investors to understand what are the opportunities and challenges for academia going forward. So let's continue to the next slide. As Marcus outlined earlier, we achieved a good growth of 6.7% this quarter. And it's important to emphasize that this first quarter is a seasonally low quarter for Academedia. And this is because part of the business are closed during the summer, which has an impact of net sales and profit. All segments except the upper secondary school segment contributed to the positive development. Additionally, our adjusted EBITDA margin increased to 4.4% compared to last year's 4.3%, reaching 182 million in absolute terms, up from 166 million. And the increase in profit has translated into higher free cash flows. Now, turn to page 10. The improved adjusted EBITDA are evident across all segments, except the upper secondary school segment, as I mentioned. And in the preschool and international segment, the increase of 7 million is driven by positive contribution from the acquisition of YES in Netherlands. In the compulsory school segment, it's up 5 million year over year and it's stable. The upper secondary school segment, we saw a lower earning of minus 5 million due to higher costs following new reforms for the gymnasium, including increased costs for libraries. And some of these costs are expected to persist throughout the financial year. Adult education continues to report strong results driven by high unemployment and in particular increased volumes in higher vocational educations. Let's move on to the next slide and the 12 months rolling result. The net sales continue to grow and amount to 19.3 billion. The rolling 12 months adjusted EBITDA amounted to 1.3 billion SEK, corresponding to a margin of 6.9%, just below our profitability target of 7-8%. We continue to have a solid free cash flow. Next slide. And we can continue to the segments that a couple of slides had. That's the first, yeah. And let's first look at the preschool and international segment. The number of children increased by 8%, and our growth was primarily driven by new preschool openings, as well as more school students in Germany, and the acquisitions of YES in the Netherlands. The international operations account for more than 30% of the growth, total sales. The net sales increased by 9% year-over-year, and currency changes had a negative impact, minus 2%, and the organic growth was 7.5%. Adjusted EBITDA was zero, and the results reflect the segment's seasonal low. The positive effect came from the contribution from the acquisition of Yes. On the 25th of September, we announced the decision to establish over 500 new preschool places in Germany across seven new units. We now have a pipeline of 2,000-2,500 new preschool places over the coming three years. Okay, let's move on to compulsory school. And we note a 2.5% increase in student numbers. Net sales rose by 5.1%, driven by increased number of students and the positive impact of the annual school voucher provision. Adjusted EBITDA grew by 11.4% year-over-year, reaching 49 million SEK. Corinne Spaldington adjusted EBITDA margin of 5.4%. We move on to the next page, an upper secondary school segment, and the number of students grow by 0.8%. We saw a stable growth in sales, while profitability was somewhat lower over the years, with an adjusted EBITDA of 65 million compared with 70 million in the same period last year. The adjusted EBITDA margin was 5.4%. And as I mentioned earlier, the earnings were negatively affected by initially higher costs for teaching materials, due to new reforms, the so-called GIY25, and libraries, and some of these are expected to persist throughout the financial year. Okay, we continue to the next slide and we there see a continuously strong performance from the adult education segment with profitability now improving for the ninth consecutive quarter. Sales increased by 7.7% to 421 million and this was mainly attributed to higher volumes in higher vocational education and also from revenue perspective labor market services. Adjusted EBITDA came in at 79 million, up 12.9% year over year, and this resulting in a record high margin of 18.8%. And during the quarter, the Swedish economy showed early signs of stabilization, although the recession persists and unemployment remains elevated. Okay, continue to the next page. One more page. We are at the free cash flow and investments. Free cash flow for the last 12 months amounts to 1.222 billion SEK. The free cash flow as percentage of EBITDA was 67%. Maintainings cap as a percentage of sales continues to decline. This is a consequence of fewer new openings and expansion units. Next, the financial position. Net debt excluding IFRS 16 decreased by 222 million compared to last year, with the leverage rate excluding IFRS 16 at 0.7, well below the financial target of less than 3. Even including property-related lease liabilities, the net debt is lower than last year. This is due to low indexation, low number of new entry contracts in the quarter and FX effects. You can continue to the next. Finally, on page 21, our financial performance against targets. We are, for the last 12 months, organic growth, including small bottom acquisitions, standing at 5.8% growth. And this is within the financial targets that we have, 5 to 7%. Our adjusted EBITDA margin of 6.9%, just short of our target range of 7 to 8%. But we are slowly getting closer. The leverage ratio of 0.7 remains, which is well below the required threshold of three. And as Marcus mentioned, leaving further rooms for acquisitions when opportunities occur. And with these words, I end the presentation and we open up for questions.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Philip Eckengren from ABGSC. Please go ahead.

Good morning, guys. Thanks for taking my question. So perhaps just start with a short elaboration on the rationale for the new target. and perhaps also a clarification on what you call the new dividend policy. To me, it doesn't really sound like a change, but could you just clarify that slightly? Thank you.

Yeah, we have done what we call small revisions, basically to either clarify what we find most important every day, the fact that we are an acquisition-driven company, or with the dividend policy, reflecting what we are doing and what we continue to aim to do. And if I explain that further for EBIT-A, as Marcus described, the difference between EBIT and EBIT-A is EBIT-A is very little to academia, 0.1 to 0.2%, depending on what time of measure. uh and uh it's basically only that we find a bit a the absolute most used metrics for a company that is acquisition driven at the media and therefore long term we find that more relevant to follow and i think that would it have been a greater difference in the change then we also would have changed the target of 78 percent now the differences are small so it doesn't make and it doesn't make it relevant to change it to 7.1 to 8.1% of those kinds of minor adjustments. So that's the reason behind that. For the dividend policy, we can conclude that we have basically only strike over a few sentences in the current policy. We have had the policy that we make dividends of 30% and that distribution could also be done using share redemption or buybacks. And as part of fulfilling this 30%. But in reality, for a number of years, we have always, or for a number of years now, done the dividends at 30% or something around that profit. And in addition to that, we have done the share redemptions for a couple of years. and the total distribution we have done isn't reflecting what we say in the targets so by changing this we change to language that we believe is common for most companies that do share buybacks or redemption programs that you have a dividend expressing uh the financial distribution we aim to do with dividends i.e the 30 of the profits and then uh Of course, the dividends is only made after we have secured the quality and after we have secured that we are having our maximum growth agenda fulfilled and financed. But then we continue as the same we have done now, that we make the distribution of the dividend. And if there's still after that is excess capital available, then we will continue to do share redemptions or buyback programs. So it's basically just reflecting what we have done the last year. We aim to continue to do the years ahead.

Thank you, Petter. Sounds more than reasonable. And then just to kind of touch on politics here for a bit. I think we all appreciate your kind of timeline of the proposals that are kind of set right now. But could you comment on what you're seeing in the sort of the start of the election year? We've seen the Liberals being out stating that they want to ban profits in schools. Could you just comment slightly on that, please? Thank you.

If we start with the Liberal Party, of course, we are a little bit surprised of that, because the Liberal Party has done very good things for the school system in Sweden. If we look at Björklund, who was a very good education minister, made a lot of good things, and now they have one new proposal every day, so we are a little bit surprised of that. That is maybe part of the election year. But we look at reality and reality is what we believe that the TD parties will make some sort of agreement that will come with proposal next year. And we think that it will be some tough regulations. It will be when it comes to this, what we call profit regulation. It is something that we are quite used to working with in Norway and Germany. But we think it's possible to handle from our side and we are well prepared to handle it. But we think that the TIDI government, they will give some proposals the spring 2026, according to the slide that we showed you.

Sounds good. And then finally, maybe coming back a bit to the operational side of things. So in upper secondary school, I understood it as the costs are up due to more supplies. And if I got you correctly, that is set to continue throughout the year. Could you specify that a bit and perhaps give some guidance on how much it will impact the remaining of the year?

We don't make specific forecasts, but what we want to clarify is that the reforms that are in place pretty much start to have the effect from the start of the school year, meaning now this quarter. And these are costs, for instance, for fulfilling the requirements on libraries, which means that you need to You need to further develop libraries and hire personnel and similar. And then there are reforms for for GI25, that is the program for how you set the grades. And all of this will require resources that will persist during the year. I mean, it will not have a dramatic cost effect overall, but it will mean that we don't, even if we would increase the efficiency in the upper secondary school, we don't think that will translate into further higher profitability during the year. We will be happy if we can try to defend or have similar margin as last year.

Just a few words about upper secondary because we had a fantastic year last year. As Petter mentioned, we may make some investments. Some of them are one-off. You could say the investment in in the new course system is a sort of one-off but what you have to keep in mind when you look at upper secondary is that we have fantastic student numbers this this august and we are in fact at the all-time high level so so even if we invest a little bit more we also have a lot of students and i think our strategy when it comes to secondary are different brands they are performing performing very well and we also see an increase in number of students going to vocational programs and that is that that is also very positive so it's it's a lot sort of more investments but we also see results of what we have done perfect thank you very much guys that was all for me i'll get back into the queue the next question comes from johan lonquist sundian from dnb carnegie please go ahead

Hi Marcus and Petter, thank you for taking my questions. First one from my side, it's a little bit of talking into Phil's question earlier on the kind of new targets. And yes, curious to hear, given your kind of new, your new margin definition, the margin target definition, should we anticipate that PPA amortization should increase significantly ahead i.e. that you will ramp up your M&E activity quite significantly compared to what we've seen over the last few years.

You can say if we go back in history, we've made a lot of acquisitions. But the reason is we have done acquisition, of course, but we have also had a lot of focus on organic growth when it comes to Germany and when it comes to Sweden, investing in campus. and so on so but what we see now is that we have a low real debt we have a lot of firepower we have a good pipeline of acquisitions so of course we would like to increase the acquisition place And that is also a signal that we want to send. So that's why we changed this from EBIT to EBITDA. And it's not about the numbers because the difference is very small. It's more about the signal that we want to increase the pace when it comes to acquisition.

When you look at the pipeline, give some color on kind of split between smaller Bolton acquisitions versus bigger platforms, potential geographies? What do you want to do? What could be expected for us to see in the coming six months?

What we would like to see is that we continue the growth in Germany when it comes to acquiring schools, because we think that is the right thing to do in Germany. We will continue to open up new schools, but that is not the question you ask. So more schools in Germany. And we also see very interesting development now in the Netherlands with a lot of different proposals that is coming to us. And we also look, I think we mentioned that before, that we look into Poland and we look into UK. But the main focus that is Germany and in the Netherlands. And of course, we also look in the countries that we have spoken about. And we have also spent some time together with the bigger operators in Europe, and Petter and I also spent a few days in the US meeting some of the big operators over there. So what we have learned is that Academia, in fact, has a very interesting position at the international education market with the low debt. So the problem for a lot of our competitors is that they have high debt. So we think that the opportunities that will open up now

is really something for academia we will be in key positions so that's why we do these changes okay it sounds promising um and you know not have any specific kind of target do you want to deploy x amount of your cash flow this year to acquisitions no or something like that okay cool um Then if we go to a few nitty-gritty questions maybe better for Petter to answer. Q1 tend to be impacted about kind of calendar effects and vacation outtake. It's possible to give some kind of comment on how that impacted Q1 and if that was a bigger headwind than normal in this year and how to kind of think about that as a kind of

reversal thing for the rest of the year uh no we we uh we didn't have any unusual uh distribution of occasion effects uh this quarter compared to last year so and that's the reason why we haven't either talked about it in the report okay um

And looking at the adult education business, now you're starting the year in a quite good way. You have earlier said that you should take on a little bit more cost in the adult education business during this year, which should give some headwind on the margin. What should be achievable this year, margin-wise? Maybe you were a little bit above trend in last year, but if you continue to have a high number of short courses, the margin should be high, right?

we would expect something lower than last year's margin. I mean, volume hopefully will increase in line with our growth target. And if we can have, and if we add some costs for quality work, the margin will be somewhat lower. But surely it could be a scenario where if it continues as it has opened up now in the first quarter, it could be a scenario where the margin is slightly above the long-term margin we have between 9% to 11%. So I can't be more specific than that right now, but it's kind of range indication of expectation. And then also, I mean, the little note we make that there are small positive signs, and you can read about them yourself, a more positive development of unemployment rates the last week in Sweden. A few positive signs for quite a long time. I mean, that might be a start of a change of the unemployment rate. And I wouldn't think if it looks as it looks like now, I wouldn't think it has that much effect here and now this year. But within a year or so, this can, of course, have a major impact for the health education.

Makes sense. And then on preschools, where we have an uptick now in a quite small quarter, but you have this kind of improvement program in the Finnish platform acquisition and the vouchers has been lagging for some time in both Germany and Norway. Where do you expect your margin to end up during this year? how much of an improvement could be kind of taken out?

We aren't specific about that but I hope that we can reach our margin target for 78% this year that's a hope at least and I think that the major positive contribution, if that will happen, then will come from the preschool and international. And that will probably be a summary effect from several countries, including Germany, Norway, Finland, for various reasons, as you mentioned.

Excellent. I think I covered my main topics here. I get back in line. Thank you. Thank you.

As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

Thank you very much for your questions and we wish you all a good day. Thank you very much.