eEducation Albert AB (publ)

Good morning and welcome to today's presentation where we have Albert Group presenting the year-end report for 2024. With us presenting we have the CEO Jonas Mortensen and CFO Katarina Strival. If you have any questions please use the form to the right and we'll take that up during the Q&A and with that said please go ahead with your presentation.

Thank you Martin for that introduction and a warm welcome everyone to this morning's call and we're going to talk about the 2024 and Q4 for the Albert Group. What we will talk about today is first start with a quick summary then go through some general things about Albert Group and then we talk about the full year 2024 and the Q4 results both some operational key points and the financial key points. Then we will elaborate a little bit on what does things look like going forward before we look forward to a Q&A session so as Martin said please ask any questions you have in the form. But before getting started just a refresher and summary of who we are and the quarter in general. So the Albert Group we are a leading Nordic EdTech group with focus on the Nordics, UK and US. We develop market and sell different type of learning tools for schools and private persons. These products they are curriculum based and especially focused on the core subjects of mathematics literacy and science and there are many products out there but our USP is really engagement which I will come back to later. Financially we are on a journey to profitability where we have set the financial target to reach a positive EBTA this year in 2025 and a positive cash flow in 2026 and that's something we should be able to manage with cash we have today so we are well funded. Looking at the full year 2024 and Q4 in short, 2024 was very much for us a year with focus on profitability and we've taken many actions to set us up for achieving this in 2025. I think the biggest thing is probably the big restructuring we're doing in the first quarter and then continued in the fall where we reduced the staff cost something that we now start to see the effects of and that we will bring with us into 2025. We've also spent a lot of focus in commercial readiness in terms of marketing and the people to really drive sales growth in 2025 so we enter now 2025 with good preparedness and a strong business plan for achieving our goals. Looking at 2024, oh sorry at the fourth quarter in particular we have continued to see a good momentum in invoice sales which is up 15 percent compared to the fourth quarter last year and some of it also started to materialize in the recognized revenue so it's also up. We have continued to see good momentum in customer acquisitions we have spent more money on marketing to build a pipeline which has been our biggest change in cost and therefore also resulted in a dip in profitability in the fourth quarter being minus eight million. But now we'll go forward and talk much more about these things. But let's start with a recap of Albert for those of you who are new to us. I mean we are here because formal education in the world has a problem. There are many children out there who are struggling with school especially mathematics. Some of the reasons for that is that the recent lack of equal access to qualified teachers. Typically if you grew up in socioeconomic strong areas there's a good access to good teachers or if you're in a poorer area it might be worse access to good teachers. And depending on the support you can get from school the support you can get from home is much more important. But not all the kids can get the support they need from school or from home either because their parents may not have the competence they don't have the time or the money to support. So therefore school results are in general declining and the socioeconomic inequalities are increasing. And this is not something we like. So I mean as both parents and entrepreneurs we want to go to work every day with a mission to really help every child reach their full potential through engaging and personalized learning. And what do we then really mean by this? And we think especially the word engaging is so important because for many kids out there in schools I mean they do have a negative attitude to school either because they might be struggling or there's a group pressure that school might be boring or nerdy and so on. And that's something we want to turn around. But then you also have the talented students which might be ahead of the rest of the class and they maybe not get challenged enough by school. And then not forget as well there is a lot of kids out there who have special needs it can be due to ADHD, autism or other learning disabilities and for them traditional teaching can be difficult. But having an engaging learning tools really can sort of get all these groups of kids interested in learning so they actually get into it. So what we really focus on is to create take the position of being having engaging learning tools which are strong educationally and really based on the curriculums. And that's something we think is very important because looking at traditional textbooks and other teaching methods they're typically very high educational value but perceived as quite dry and not so engaging. And then there are a number of different entry companies out there who try to provide different solutions and either they are typically in the lower right corner where they have just digitalized textbooks or they're more in the upper left corner where it's more games which are educational. But we see that the very important spot to be in is in the upper right corner where we combine education and engagement. And to do that some of our I mean lead words are strong pedagogy as the foundation to ensure they are educational but then add gamification and creativity and storytelling and other things to really make it engaging learning tools. And when working with learning obviously we really believe in placing the learner in the center and both work with the learner in school together with the teacher and at home together with the parents or guardians because children typically learn in everyday life so we need to work with them in both places. And to do that I mean we are and have been during the last couple years built a portfolio of different learning tools because we really believe in blended learning which is using books, using apps, using construction kits, films and different type of learning methods. So although I mean our definite core is digital learning apps we also have construction kits and educational films really cater to different interest and learning styles for the kids. And these different learning tools we sell under eight different brands Samlox, Robis, HolyOwl, Albert Junior and Teen, Swedish Film, Filmen Skola and Joramba. And each brand has their unique identity and positioning for the different tools but they're all collected under the Albert Group name which stands for Trust and Quality and High Educational Standards. We are mainly focused in the Nordics, the UK and the US and we have headquarters in Gothenburg, Sweden with another office in the UK. But then we're also present in a number of markets especially across Europe and a new market on the map here today is Tjeckia that we just launched a couple of weeks ago. I will come back more to that later. But that's it about sort of the Albert who we are and now we want to go more into depth and talk about 2024 and Q4. And I'll start with some operational key points before handing over to Katarina to take us through the financials. But trying to sum up 2024 in general obviously a lot of things have happened so but I think it can be grouped in four different areas like we have spent a lot of time in restructuring the organization. We have refocused the company on really our high performing areas. We have started to grow sales again and improve user engagement. But to go a bit more in depth and starting with end restructuring the organization after a couple of years now with rapid growth both organically and have acquired a number of different companies we were in a state where we were a group of different companies who were quite operating quite independently without many synergies. So during the year now we focused a lot on getting this group together into a united organization but also making that organization more functional. So we have like a head of b2b sales selling all products or a product development organization working with all different products and that has made it much easier both to sort of identify and extract synergies and also reallocate resources much more quicker. But this organization is also flatter and required less people to work efficiently so that made it possible for us to lower staff cost and reduce the size. And we have also right-sized the b2c organization. It was designed initially for very rapid growth but as we switched your profitability we also redesigned the b2c organization to match with the ambitions and revenues that we had. Then we spent a lot of time on focus on high performers. We quite early in the year set up the motto of we want to identify the high performers and double down on them and reallocate resources there. So we have conducted a number of strategic reviews and so on and really set now focus on Albert jr, Strobez, Sundog and Swedish Film and also decided to really focus on Nordics, UK and the US and then reallocate resources there. And by doing this we get more resources in the areas where we have a good return on those resource investments but it also give them a better conditions to really succeed with those brands. And also for those brands there is a very clear road to profitability. So now we have laser focus on achieving those ones. Moving on to growth and growth sales which during 2023 and 2024 hasn't really been our focus since we're mainly focused on the cost side but as we're preparing for 2025 and 26 it was about getting growth again. And back in last summer we started to see a nice friendship especially on the b2c side where it became much cheaper to acquire customers again and the acquisition volumes that we got were back to sort of pre-recession levels. So we decided to increase more marketing during the fall especially in b2c but also in b2b to really build the pipeline. But we've also grown the revops or commercial organizations so we have more people who can work with marketing, with sales and customer success to really convert those leads to sales and then ensure they stay and they see the full value of the product. This has resulted in increased marketing costs during the second half year and increased staff cost but that's just a little fraction in compared to the savings we had on the big restructurings. But we have of course which is the end goal increased the number of leads in voice sales and ARR which was really what we look for. But then once the customers are there it's really about keeping those customers and engaging them in the products so they stay as paying subscribers for as long as possible. And this we've addressed by both restructuring our customer success team so we can provide better customer service and really focus on the customers that matter. But we've also worked a lot in the interface between the user experience, the product and the communication. So ensure that all new customers together much better onboarding and we can help them in building a habit of using the products in their everyday life in schools or at home. And this has resulted in better product usage and lower churn. And these things that we did now historically obviously remain important going forward as well. So that summarizes 2024 as a whole. Zooming in now on the fourth quarter it has been a lot about sort of pegging up for more sales in 2025 but we have actually seen I would say surprisingly good sales in the fourth quarter as well because normally this is quite a slow quarter for us where parents are getting ready for Christmas and schools are also getting ready for the Christmas break. But this year it has been it. So we had 14% more invoice sales than in the fourth quarter the year before. So the strong momentum in B2C continued from the summer. The quarter four campaign that we were running during October, November and December also continued to perform very strong with high volumes, good cac and initial low churn. Now we've just monitored those customers for two months after year end but it looks promising so far. As a result of the good momentum we continued to increase marketing which added cost during the fourth quarter but will pay also during 2025 as we ended the year with more paying subscribers than we had real planned for initially. On the B2B side as I said before it's typically a slow quarter but this year we had surprisingly good work in especially Sweden in selling educational films on a title by title basis. But it was also a very good quarter because that was the quarter where both Strawby's and the Swedish film brands they hit their all-time high sales on an annual level. So it felt like we really ended the year in a strong momentum. On the product development side we had also really spent a lot of time in focusing on what are the key areas to develop the products in to really drive business in the future. We haven't made any big launches in quarter four but we were in the final stages of finalizing product development that is or has already been launched now in the first quarter or will be launched. So for instance for Albert Junior it was another localization to a new market the Czech Republic which was launched a few weeks ago. It's Albertine for children between in the middle stage and higher stages in Sweden to really turn it into the national exam preparation tool. In Swedish film we have invested a lot of work in developing a new streaming site which makes it possible to sell films on a title by title basis. We have released the first beta version of that already to existing customers and we release it to the wall customers here during the spring. In Strawby's where we especially focus on the US and we have had a laser focus on Texas we decided to do a tight curriculum alignment to the new curriculum teaks in Texas which was also launched a few weeks ago in connection to a trade show in Texas and showed that it really helped in selling it into the Texas customers. Sumdog is our fluency math practice tool and to really like emphasize and strengthen this position we have now worked for a long time in developing something we call the fluency booster which is a feature to really in an adaptive way make fluency practicing both fun and engaging. And that was something we have also launched here this quarter. So that was it on the operational side where a lot of exciting things have happened and Katarina please take us through the numbers.

Thank you Jonas. During the year we have focused on setting the stage for enabling future profitability and as a part of this work we have reviewed our cost structure to ensure that we have the right cost base to drive profitability. This has involved restructuring in Q1 affecting personal costs followed by an additional restructuring in the autumn which was communicated in October and concerned our French subsidiary Kids MBA. Also this affected personal costs as well as revenue and as a result we have significantly reduced our personal costs as Jonas mentioned and the restructuring of the French subsidiary also expects to contribute with a positive impact on EBITDA with approximately 8 million SEC and personal costs are now about 1 million SEC lower month year on year as we enter 2025. In parallel we have significantly increased our focus on sales and sales processes as we mentioned and as well as refining and developing our customer success strategy and work and this has already yielded results during second half of 2024 with increased invoice sales which have exceeded last year's figures for the same period as mentioned. And marketing costs have increased due to the strategic efforts that we have made capitalizing on strong market momentum and these efforts have delivered strong revenue in B2C and are expected to continue having a positive impact as we move forward. And if we look at the graph to the right last year's adjusted result excluding one of effects was minus 16.1 million SEC and this is compared to minus 30 million SEC this year and this development is primarily driven by our increased marketing efforts as we have mentioned and as well as a lower proportion of capitalized cost this year. And net revenue has improved by 2 percent quarter over quarter and this is in line with our plan to maintain stable revenue levels in line with the previous year. And as we mentioned there is a strong focus on sale and sales process to increase revenue and sales and we have increased invoice sales by 13 percent as Jonas mentioned compared to the previous years and this will have a positive impact on the future net revenue since a significant portion of our invoice sales is recognized over time and this is due to our subscription based business model. And we did have a strong Q4 with B2B sales reaching an all-time high for the quarter and B2B also had a strong quarter towards the end of the year as school sales resulted in full year all-time high revenue for the Swedish film. Looking at the composition of our revenue we see a continued increase focus on B2B with a larger volume compared to B2C. This aligns with our strategic plan and as mentioned B2B sales through Swedish film were particularly strong in Q4 driven by the digital non-subscription sales where Swedish schools purchased educational films on a title by title basis. And we can also conclude that we continue to follow our expected seasonal patterns. And EBDA for the quarter was minus 8 million SEK which is 2 million SEK lower compared to last year's adjusted EBDA. Last year's adjusted EBDA is due to adjustments connected to the earn-out reversal from acquisition that was not materialized. The change is driven by slightly higher net revenue, increased marketing costs due to our B2C efforts and lower personal costs following the restructurings. However we also had a lower proportion of capitalized costs. And the effects of our cost reduction initiatives have started to materialize in the second half of 2024 and are expected to contribute to probability as we end 2025. And then cash flow for the quarter was minus 15 million SEK and this is primarily due to the lower result. And at the year end our cash balance stood at 44 million SEK and this is as a proportion of the year's sales will be paid in the coming period. And our plan remains to become cash flow positive in 2026 with cash at hand. And then Jim Nats will

go on. Not the future, yes. Thank you Katarina. So looking at the future I just first wanted to start by zooming out and talking about our four-step plan which I mentioned before. You know that back up until 2022 Albert Grubbs strategy was all about taking and building a strong market positioning by organic investments but also buying new companies. In 2023 we sort of started to stop for a bit and lay a solid foundation sort of restructuring, restructuring everything that we have done so we can then do what where we are right now which is about reaching profitability before returning to growth in the future. But we'll now zoom in on the yellow stage here reaching profitability. And these things they match very well with the financial objectives we have set. The two first ones are related to this yellow stage of first achieving positive EBITDA in 2025 to really prove that the business model is profitable and scalable. And then in 2026 reach positive cash flow to really show that we are self-funded with the business model we have. And with that in place we can go profitable growth and strive for that double digit profitable growth to really drive long-term value in the company. And then talking and zooming in a little bit more on this and how we're going to approach it. And obviously the equation is simple profitability is a combination of increasing revenues and reducing costs. And on the revenue side I mean for the future now our mission is to continue to grow sales and recognize revenue from 2024 to 2025. We started to see that good growth momentum during the second half of 2024 with the invoice sales being 11% up in the third quarter and 14% up in the fourth quarter. And now going into 2025 we're going to continue to focus on sales. So main sales will be the primary focus instead of just cost reductions. And also to drive new sales but some of the invoice sales which which Katarina mentioned before it will also financially be recognized during the year. We do believe that I mean the normal seasonality will apply in 2025 again which typically means that the start of the year in Q1 is about marketing and building pipeline for the more important sales periods in the second and third quarter where the actual sales will come. Moving away to direct cost and gross margin that was something we had a lot of focus on during last year and we managed to keep the gross margins on stable levels around 77%. I think it's just gone up and down like one percentage unit. So the way it started to grow invoice sales and the gross margin levels have remained intact which is a good sign if we continue to grow going forward as well that we can keep it stable. Marketing it's an area where we really need to keep laser focus on to ensure we have profit or return on investment on every seq dollar a pound or euro we spend on marketing. Marketing is super important to drive sales especially in B2C but also in B2B to be honest although it's a little bit more sales incentive there. Marketing costs are paid up front in order to drive their customers and then we sort of we get revenues over time as the customers remain a subscriber which means that the cost will come first and then we will get revenues over time. So therefore in order to really ensure over time that we get profitable we are looking into every campaign and sort of look at how much do we invest in it to spend on it and how much money do we make from it and show that we get positive return on it and that focus and principles will continue into 2025 as well. And then fixed running cost which was really in the spotlight during 2024 will continue to be an area where we need to have strong focus in 2025 to ensure we keep control of that because we did a lot of improvements thanks to the profitability program now we want to ensure that we can preserve those improvements and as Katarina mentioned before the running cost especially in terms of staff is now a bit more than a million lower per month and those are areas where we continue to focus on to keep that. So in combination now we hope that the I mean improved revenues in combination with the focus on cost will take us to profitability. And some actions for really achieving this are summarized like this on the B2B side to grow that business it's about really doubling down on some of the areas. We have a super strong position in Scotland so there it's about reducing churn by improving product and customer success. We're for instance centralizing many of the contracts on a local authority level which is proven very very effective in reducing churn. We're also growing down in England and here we're going to try to win new business which we have started to take market share already this year I think I mentioned it when I wrote the report that we thought early on that I mean the partnership with YPO would be a very important driver of this in combination with the direct sales efforts we're doing with marketing and sales. It has been slower than expected to drive growth through YPO so we are really working on that and we're also working on the marketing efforts. We have seen during 2024 that US is going very well especially in the sales model we have for selling the Strobeis product we have doubled down on that area in terms of increases resources on it both the people working with it but also the money spent on marketing and going to events so really doing more what has worked well. In Sweden we are focusing on growing and taking market share in the film market today I sent customers to other streaming sites but now we have with the new streaming site that we talked about before we can offer this ourselves we should be able to take more market share and really to make this happen we are now seeing how we can improve the Swedish B2B revops of commercial function to work more efficiently effectively by learning best practices from other parts of the group. On the consumer business consumer side it's really about doubling down on the customer acquisition cost. We have a good position in many in many markets already so there we're going to focus on really capturing the full potential which typically is about ensuring your customers get into the product they get engaged to this day and pay over a long time but also scaling to new markets because that is a good opportunity for us to add more customers while keeping the customer acquisition cost low. Looking internally on operations last year was very much about restructurings cost savings and so on this year is going to be more about working in a more efficient and effective way so for instance automation of a lot of internal processes seeking cost synergies and between different brands with the people we have we can get more output from that. So it feels like we have a strong plan for 2025 to achieve our goal. So go in for landing and try to summarize the entire presentation now I mean we in we now stand strong for turning to profitability in 2025. We spent a lot of time in 25 on the 24 on the profitability program it has now been executed so now have focused on the high performing areas we have restructured the organizations we have now lower running running costs and the strengths than commercial organization. We have a lot of strategic product launches in the pipeline some have already been launched now in early in Q1 some will come during the spring year and we have seen and hope for a continue good momentum in sales. So with that let's get back to you Martin and hear if we've got any questions to talk more about.

Thank you very much Jonas and Katarina for the presentation and yes we got plenty of questions that we got from the audience here. We'll start with the first one you've mentioned positive sales momentum in this report and in the Q3 what do you exactly mean by that?

Good question as I think we can probably break it down into two parts I mean for a subscription business sales and growth is very much about both customer acquisition and keeping them for a long time. And we then mean positive sales momentum it's partly about I mean acquiring customers at scale while keeping the cost of customer acquisition cost at the good level so we get the desired LTV to CAC ratio that we want and secondly it's about keeping the churn low so customers stay and generate value and that's the sort of definition wise and why we think we have good momentum now is that for instance in B2C I think we have since June last summer seen that we've been able to attract higher volumes and at the desired CAC level that we have been able to do during the actually since the economic downturn started a few years ago. Another example is on the B2B side we've been able to have good retention with the customers so they choose to stay in their subscriptions and pay but also in terms of the repurchases in both like strawbees and what Katarina mentioned before the title by title purchase of educational films that even though it's not a subscription the loyalty is super high with those customers and tend to come back more and more so the combination of those is what I mean with positive sales momentum.

Thank you Jonas for clarifying that and are you done now with all the restructurings now or do you expect more to come?

The big things that we had had identified as part of the profitability program when we entered 2024 we are done with them so I mean the big changes to the organization is done and we have identified the strongest performing areas like the four main brands and the three key regions where we're selling so I mean we have put focus on them we have reallocated resources there and we have downsized in other areas so those things are done. Having that said though I mean I think the benefit of being in like a portfolio business which we are with multiple brands and multiple markets in two business models B2B and B2C is that we can like continuously optimize the business and double down on the areas that are performing well in terms of the brands the products or the markets. I mean just one good example I think is if we go back a few years we had absolute focus on B2C we got headwind as the economy turned down a few years ago and then we started shifted focus to B2B which was the right decision back then but now since last summer when the wind turned to tailwind for B2C we could very quickly shift back some resources to B2C and utilize that positive momentum and conditions so with that I mean we're never satisfied we continue to optimize the business every time but all the major restrictions should be done.

Thank you let's move on to the next question here you said that the focus in 2024 was on profitability but your EBITDA in 2024 is actually worse than in 2023 can you explain why and also your plan for reaching your 2025 goal of positive EBITDA? Thank you

for the question I understand that you need to really understand the numbers to to see the logic if I start with explaining the between 2023 and 2024 the reported EBITDA in 2023 was minus six million SEK but that in that one of a number of one effects were included and we had a positive effect from a reversal of a provision from an earn out related to the acquisition of some dog that didn't materialize and 2023's EBITDA was also affected negatively by three million SEC in transaction costs related to the acquisitions of Strabi's Swedish Film and Holy Owly in the beginning of last year so adjusted for those things the EBITDA was minus 16 million SEC and in 2024 the EBITDA was minus 31 which is 13 million SEC lower than that and those 30 million SEC are mainly explained by three things first two things we have made the short term EBITDA worse and as Jonas mentioned before the customer acquisitions momentum has been good so we decided to increase marketing spend to ride this momentum and build a bigger portfolio of subscribers but those marketing costs hit the result now whereas the subscriptions revenues will come later and secondly we have capitalized less R&D in 2024 our products have become more mature and we therefore allocated more resources to selling and maintaining them and as a result the proportion of R&D that we capitalize has decreased and we still carry out a lot of new product development though and we have also seen positive effects we have managed to lower our personal costs and the financial effects of this with restructuring in Q1 started to show up in the numbers in the second half of the year and during the autumn we also did the restructuring in France but don't yet see the result of that so if we compare the running rate for the personal before and after these restructuring it's more than one million SEC lower per month and although these effects together make EBITDA worse this year we think they are all signs of a more long-term and healthy business and that brings me to the second part of the question and what's the plan for raising profitability in 2025 and in short that's about leveraging what I just talked about the increased focus on marketing and sales combined with the more favorable market conditions should have a positive effect on the revenues and the restructuring that we have done make the fixed running costs lower and combined the revenues will be higher than the cost and we will get profitable however as it both takes time to see the restructuring cost and the cost savings and the new sales at subscriptions revenue this will be a gradual shift during the year yeah

thank you Katarina for clarifying that answer and we'll move on to the next question here can you describe the decision to enter the Czech Republic and Romania and how has the product been by the market?

Thanks for that question and just to clarify for all of you I mean we entered both Czech Republic and Romania with the Albert Junior product and really there are two reasons for it I mean one is obviously to grow Albert Junior here in the sort of short to mid term but second it's also a bigger purpose of let's call it being a scout for testing new markets for the group in general because although we have focused on the three main regions right now I mean we over time will enter new markets and then it's good to sort of test them out with a product which is easy to do it and Albert Junior is one of those which is quite cheap and easy to localize the new market but focusing on sort of growing Albert Junior I mean in essence we can either grow Albert Junior by acquiring more customers at the lower cost as I mentioned before or increase the lifetime value and expansion is about increasing volumes while keeping the CAC low and why then Romania and Czech Republic in particular I think the answer goes the same for both of them actually I mean we started out doing market research about a year ago looking at which should be the next market to enter and on like a paper and based on desktop research and so on and both of those ones looked very promising so we then different experiments on those markets in terms of testing marketing and interest for these type of products and so on and both those markets came out as high scorers in that test thirdly I think we can mention that I mean we're sort of interested in believing Eastern Europe because looking at Eastern Europe in general it's attractive it's not as crowded at web as in Europe or the US but the interest in education is high often you have to take a lot more responsibility for education at home if you want to be successful and also the purchasing power in those countries are increasing and we've also seen and learned from others that's what there are a lot of similarities in interest in Eastern Europe so if you sort of manage to crack how to sell into them in terms of product and marketing and things and so on it's a good opportunity for growing across the different Eastern European countries in general and then another thing which I think has been very useful for us when we did the first international expansions was that we had people on the team who came from those countries and by coming from such a country I mean you understand how people there work you know families and friends and the school system you can see what they're interested in ways of marketing local competition you understand the language and many of those things and that proved very important for us in the early launches and now when we have also chosen the later launches if two markets have been equally promising we have chosen to go with the one where we have people on the team who come from those countries and can really help out with all those local understandings and then if I recall correctly I think you also asked how the product have been received so far and when we had our last poll here I think I talked a bit about Romania then we were very early on there and now we're similarly early with Czechia I think in general you can say it's gone as expected I mean we are definitely strongest in the Nordics Sweden followed by Norway and Denmark wherever I've been present for some 10 years spent a lot of money on marketing and so on but then both those new markets Romania and Czechia has sort of come in in our second or third tier like on the levels with Poland and the UK where we've been selling Albert Jr for a few years now we show that I mean initial interest seems to be good in terms of volumes then for these markets at least for now I mean we have positioned us as a little bit of a lower price point so the LTV is a little bit lower than the other markets that also means that the customer acquisition cost needs to be lower to get the positive LTV or a desirable LTV-CAC ratio and that we managed to achieve as well which is good so I mean they are really nice additions to the B2C business however right now they it's the bread and butter comes from the Nordics but as we get stronger and stronger in these new markets they can definitely contribute in the future I would love to update you all when we know more now we've just been live for a few weeks in these markets right Martin thank

you Jonas for that answer yes and how was the return on marketing been in the quarter and how is the spend on marketing compared to Q4 last year?

Yes of course I can probably separate this question in B2C and B2B in B2C we see the effects much quicker than we see in B2B without I mean saying any specific numbers I mean the return has been good in marketing we were running out the Q4 campaign which ended on the in the end of December so we have just seen the results so the churn behavior for those customers now for the last one and a half almost two months but the the volumes were good and the customer acquisition cost was attractive now the initial churn behavior and the output we get from those customers give us all of in our simulation models that we can simulate the lifetime value of them and by combining them it really looks like the return on investment will be attractive with a lot of the results. And then I think you asked spend versus last year in Q4 and yes as we mentioned throughout this presentation we have increased spend a lot during 2023 I mean we reduced marketing spend a lot because the conditions in B2C was not favorable and we didn't see it as a good business decisions to spend more but as it has been more favorable now we have increased marketing I mean quite a lot actually and then talking quickly about B2B I mean marketing there in terms of it's more I mean we use more channels in B2B marketing both like the digital channels but also physical channels and trade shows and so on and where we have spent money there as well it has shown we have got a good number of leads and so on then it typically takes longer time to cost for attracting leads and so on it's been good in B2B as well. I think that's my answer on that one Martin.

Yes thank you and yeah adding on that how has the feedback on the campaigns been during Q1?

Yeah so I mean we launched the Q1 campaign in the mid-January approximately so now just been live for some five six weeks I could say that I mean it started well now it's a little bit too early to say because it will keep on until Easter so that's when we really will see how many of the free trial customers that convert to paying and how does that influence the paying subscriber portfolio in the end but early on in terms of free trial and customer acquisition cost it has continued to be to look promising so we hope that will continue.

And can you please discuss the YPO partnership and what are the main reasons for it underperforming?

Yes so to provide some context YPO we talked about it during the autumn it's a big distributor to schools in the UK and they're pretty much selling to all schools and they have been selling computers, papers and pencils and all those stuff for decades and then they decided now as they had an anniversary the launch sort of get into Edtech as well and launch something they call the learning box which is a combination of different Edtech tools where they sort of they have scanned the market and to make it easier for customers they bundle it in the learning box to sell and our Sunlog product was chosen as one of the core products in there. So that was the quick background and why I think it has underperformed. I guess I mean in our early discussions with them it was very very promising you know of course we were a little bit not skeptical but we didn't manage to fully believe in that we'd be able to achieve that but now since the launch was delayed actually a couple of months which was a little bit first initial disappointment but then also after the launch a lot of like let's call it startup mistakes have been made because it's run a little bit like an internal startup it takes a bit of time to learn how to sell Edtech products in general and they have now tried a few different setups for making that work. There was now lately done a little bit of reboot got new people on board change approaches and so on so now we are much more positive towards YPO and then we were maybe some weeks or months ago when it were a bit disappointing. However we also realized that it's a little bit risky to just sit and rely on a reseller to drive the growth there so before we sort of we said we have the direct sales and YPO is the combination of it to drive sales now we're shifting more of the resources to direct marketing and direct sales and rather see YPO as a nice icing on the cake or bonus. Thank you.

Yes and do you expect a continuous strong performance from Strawbees in the US?

I guess short answer is yes. I mean we have in Strawbees had a very good growth history during the last years where it's been many years where we just with existing team have been able to grow quite a lot and that was the same from 2023 to 2024 where we hit all-time high in 2024 again I think it was already back in September sometime where we beat 2023 and I mean we hope that that will continue in the upcoming year as well but we don't just hope as well I mean we are increasing more resources to it we have grown the teams we have hired people in marketing and in sales but we have also for the first time ever introduced the customer success team in in Strawbees learning a lot from how successful that has been in some dog to really ensure once we have sold the product to really work with the teachers to get it used and especially in Strawbees citizens a lot of the sales people they are focused on selling on a like decision making level on the districts or school leadership we now also really need to work with the teachers and I mean on top of that we've also added more money to marketing so the combination of more people and more money on marketing and as an example we're going to go to the double amount of trade shows this year than we did last year we really hope that this will be able to to pay off in more leads and sales throughout the year and as I mentioned before in the call as well I mean we for instance have realized the importance of really focusing on some of the states in the US like a state like Texas is almost like a country of its own and adapting the product to there and aligning it to their specific curriculum like texas in Texas also makes it more attractive for them to buy it so that's my hazard

yes thank you and we'll take one final question here before we wrap up the Q&A section is it correct that you have a forecast for positive cash flow in 2026 yes

that's

correct okay thank you for that quick and good answer thank you very much Jonas and Katarina for presenting today and thank you everyone who followed this presentation with albert group and I wish you a great rest of the day thank you

thank you