AcadeMedia AB (publ)

So good morning everybody and welcome to this call that we will present our interim report of the third quarter and we are in the middle of the preparation the last time of the school year so it's really a fantastic time for us and we also now deliver a strong report with a stable development focus on the future that we could do with Academedia. And I will take a few starting notes and then I will hand over to Petter to present the financial result. And if we try to sum up the third quarter, as I mentioned, it's a strong and stable quarter. We have followed our strategic focus and we have delivered a lot of acquisitions. We have this target where we should be 50% out of the Swedish schools and we have really worked with this during this quarter, just during the quarter and also after the quarter. We have announced five different acquisitions in the international strategy and one in Sweden. And if you look at the number, we continue to grow in a good way. And also the financial stability has also performed in a good way. And we see good, positive performance from the international operation, from the adult and from primary schools. We could continue. And of course, one key for us is the quality in the business. And one way to look at this is to look at the Swedish school inspectors quality reviews. And I must say that Academedia performs very well if we compare with the total sector. We see strong activities from the Swedish school inspection, and we think that that is very positive for the schools in Sweden. But as you see from this slide, we perform in a very good way. And if we continue then and look at what have Academedia done in the history, so this is not really what I talk a lot about, you know, I've been working with the company for 20 years, but we have been, as you all know, very good to develop brand, to create organic growth, to give trust to the parents and the children, but we are also a very good company to make acquisitions. And if we look back around 15 years, we have made 75 acquisitions, a lot of them in Sweden, but also a lot of acquisitions international. And I must say that I don't want to be humble, that's a part of my person, but I must say that we are maybe the best to acquire education companies in Europe. And if you look at all of these companies that we have acquired, we also have the performance to develop the quality, the growth in the different brands. So Academedia is a strong company when it comes to acquisitions. And then we also have expanded in different countries. So it's not so easy as to start a business in other countries. We see a lot of Swedish and other companies try to build up markets in other countries. And we build our ability to start with strong relations. If we look at the management team that we have in Germany and the Netherlands, we have known them for many, many years. And then we start with this platform acquisitions. And over the year, we have developed a very strong business now in four different countries. And we also have focus both in Poland and in the Netherlands. And what we think is the right thing to do now when we have built up this strong management teams, then it's time to grow, then it's time to make more acquisition. And that is what you see now in Germany, in the Netherlands, because we have a strong presence, we have a strong platform to continue to grow from. And then, of course, we have focus on the international. That is our roadmap. But we have also made one acquisition in Sweden. This is a company that I personally know for 20 years. It has been some illness among the owners and they wanted to find a new owner. And we are very happy that Academedia is the new owner of Produmpia. Very well performing schools. They have 10 schools, more than 4,000 students, a long queue in all of their schools. So they are really good schools, but they also have this profile that is missing at Academedia when it comes to sports and health. And we think that that is the right focus to build a group of schools with this platform. And we hope that this could be the base of this. We want to maybe change some of our schools in this profile. And we think that this will create also attractiveness. We see that it will be more challenging when it comes to demographic development in some of the cities in Sweden. And we think that these schools, they really have the right position. And if you look at the long-term development when it comes to Academedia, we are so proud to see that we have stable financial performance, we continue to grow, we continue to follow our strategy when it comes to the international development, and all of our segments now have a very strong position. And you can see on the next slide, you can see the performance when it comes to the number of the percentage of the companies that is outside Swedish schools. And we have also strong pipeline when it comes to make acquisitions. And our focus here now is to enter Poland, UK, and also to continue to grow in the existing markets. So thank you very much and I will hand over to our political expert now Petter.

Thank you Marcus and good morning everyone. Yes so let's start to talk a bit about the political situations and investigations as we have at hand right now. As we mentioned in the last turning call, the Swedish government presented a legislative proposal to extend the principle of publicity to include all independent educational providers in January. And the legislation is now expected to be adopted in January 2027, beginning of next year. Under this proposal, the public will have the right to request access to documents from our operations on essentially the same basis as for public authorities. All requested documents will be subject to confidentiality assessment and formal decisions will be required in cases where information is not disclosed. So we are closely monitoring the legislative process and we are preparing for implementation to meet the requirements in January 2027. And at this stage, we estimate that the implementation will result in a runoff cost of approximately 25 million Swedish krona. The ongoing implications, however, are assessed to be manageable within existing financial frameworks and it's not expected to have any material impact on the operating margins. And then there is some update regarding the profit inquiry. There has been recent negotiations expect the legislative proposal in June followed by parliamentary vote before the election with the new rules expected to enter into force in 2028. So that's the update about the investigation and we can continue to next page 10. And then I once again would like to highlight our investor podcast, which is available wherever you get your podcast. And for instance, in the latest episode, we look further into our international business together with Christopher Hammer, who is Director of International Operations. And in the podcast, he developed his thoughts on our international M&A. just 10 to 15 minutes and this far we have released about or eight episodes so please continue let's talk about the financials now as Marcus outlined earlier we achieve a solid growth of 6.6% year-on-year preschool and international segment together with primary schools and adult education contributed to the positive development. And upper secondary had a softer performance where extended library staff following new legislation had a negative impact on the result. Additionally, our adjusted EBITDA margin increased to 8.2% compared to last year's 7.7%. And this means that we were reaching 438 million in absolute terms, up from 386 million. The increase in profit has translated into higher free cash flow. Now, turn to page 12. In the preschool and international segment, the increase of 44 million was positively impacted by increased volumes and revenue in Germany and temporary lower cost in Norwegian operations. Compulsory school segment is up 10 million year-over-year. The upper secondary school segment saw a decrease in earnings of 12 million. This was primarily attributable to increased personal cost due to expanded library staff. Following this new legislation, lower rental cost and improved capacity utilization had, on the other hand, a positive effect. Adult education continues to report strong results driven by increased volumes in higher vocational education and labor market services. And group costs increased compared to the same period last year. Non-recurring items affecting comparability amounted to 3 million krona. And there was acquisitions and integration costs of 30 million krona. And there was a reversal of provision for contingent consideration amounted to 27 million krona plus. So please continue. The 12-month rolling net sales continued to grow and amounted to 19.8 billion. The rolling 12-month adjusted EBITDA amounted to 1.440 million and corresponding to a margin of 7.3% within our profitability target of 7 to 8%. And we continue to have a solid free cash flow. Slide 14, please. And let's look at the quarter's development within each segment. So let's go to the preschool first and international on page 16. So the number of children increased by 11.3%, and our growth was primarily driven by international expansion. The international operations account for more than 30% of the group's total sales. The net sales increased by 11.3% year over year, positively affected by acquisitions. Currency changes had a negative impact, 3.5%, and the organic growth was 10.4%. adjusted every day was 169 Swedish krona compared to 125 last year and this improvement was largely driven by increased volumes in higher school voucher funding funding in the German operation as well as temporarily lower cost levels in the Norwegian operations if we now move on to compulsory schools on next page we know that minus decrease in student numbers and adjusted for units that are to be closed the number of students decreased by 0.7% and corresponding figure for the country as a whole is 1.0%. Net sales rose by 3.4% primarily explained by the annual school voucher edition and adjusted a bit Please move on to page 18 and for upper secondary school segment. The number of students grow here by 0.5%. We saw stable growth in sales while profitability was somewhat softer year over year with an adjusted EBITDA of 127 million compared with last year's 139 million. Adjusted EBITDA margin was 8.1%. The decrease is primarily attributable to higher costs related to the purchase of literature and the expansion of library staff, partly offset by lower rental costs and improved capacity utilization, which then had a positive effect. And then we continue to the adult education segment where we continue to see strong performance. with profitability now improving for the 11th consecutive quarter. Sales increased by 6.7% to 495 million, up from 465, mainly attributable to higher volumes in higher vocational education and labor market services. Adjusted every day came in at 67 million, up 19.6% year-over-year, Just to remind, the second half year includes more courses that are completed resulting in a lower capacity utilization. This mainly affects the fourth quarter to come. Please continue to the next page, financial position, and we look at the free cash flow and investments on page 21. The free cash flow for the last 12 months amounts to 1.444 million. The free cash flow as a percentage of EBITDA is 74%. Maintainance capex as a percentage of sales continue to decline. This is a consequence of fewer new openings and expansion units. We continue to the next page, 22, the financial position. A net debt excluding IFRS 16 increased by 508 million compared to last year, with a leverage ratio excluding IFRS 16 at 0.9, still well below the financial target of less than 3. Increase in net debt to EBITDA is mainly explained by the acquisitions made during the quarter. And finally, on page 23, our financial performance against the target. Our last 12 months organic growth, including small bulk on acquisitions, stands at 5.6%, within our financial target of 5-7% growth. Our adjusted EBITDA margin amounts to 7.3%, within our target range of 7-8%. And under our former profitability target of adjusted EBIT, which is typically 20 basis percent lower than adjusted EBIT A, this would also have been within the target range. The leverage rate of 0.9 remains well below the required threshold of 3, leaving further room for acquisitions when opportunities occur. And with these words, we end the presentation and we open up for questions.

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