eEducation Albert AB (publ)

Hello and welcome to today's webcast with Albert Group, where CFO Fredrik Bengtsson and CFO Katarina Strival will present a report for the first quarter of 2025. After the presentation, there will be a Q&A, so if you're calling in and have a question, you can submit them in the form to the right. And with that said, I hand over the word to you guys.

Thank you. Thank you. And welcome to Albert Group's interim report for the first quarter of 2025. I am Fredrik Bengtsson, and I'm joined today with our CFO, Katarina Strival. I joined the group on April 22nd, so I've been here just a little over three weeks. Even though I'm new at the helm of Albert, I'm not new to this industry. Previously, I was the CEO of Enne and also a board member at Swedish EdTech Industry. I'm very happy to be here. Albert is a company with a meaningful mission, a strong consumer attraction, and talented people. What we do here matters. Our mission matters. I will... start off today by briefly presenting the Albert Group and our why. Then we'll continue with the Q1 report results for 2025, a brief look forward, and then the Q&A. Schools today face significant challenges. Shortage of teachers, growing demand and shrinking resources is a hard equation to solve. The teachers face diverse learning needs in their classroom. The demand for individualized instruction is growing. Traditional methods like group instruction alone are no longer enough. The one size fits all approach simply does not work for every student. Classrooms are overcrowded, material is outdated, recruiting and retaining qualified teachers, especially in STEM subjects, is a growing challenge. Today in Sweden, three out of 10 primary school teachers lack the formal qualification required to teach. Education is a key foundation for both individual growth and a thriving society. Still, millions of people lack basic skills and many never realize their full potential. Learners struggle with lack of motivation and engagement. Standardized learning does not reach all the learners at their individual level and need. Many learners fall behind in core subjects, in specific mathematics and literacy is an area of concern. In Sweden, one in every five students finishes ninth grade without passing grades, leading to a higher risk of unemployment and exclusion. Many parents struggle to help with the homework due to unfamiliar curricula or to language difficulties. Parents often lack a clear insight into the child's academic levels, progress or performance. Time and social demographic factors vary widely, and parental support is not always an option. When education fails, it's not about lower grades. It's about missed opportunities and a growing social gap. The need is real, and here Albert Group has an important role to play. At Albert, we make learning more engaging, more personalized, and more accessible, both inside and outside the classroom. We equip the teachers with powerful digital tools. We support parents on their children's learning journey. Simply put, we make learning something that every child wants to do. We have a portfolio of brands in learning. Albert Junior is a business to consumer training app that's a leader in the Nordics. and has just entered the Romanian and Czech markets. Sumdog is a fluency practice in mathematics for schools across the UK. Here we have a market leader in Scotland that has now also launched a localized version in Wales. Strawbees is a combination of creative online and hands-on learning of STEM subjects, primarily focused at the American market. We know that what we do works. It improves learning outcomes. It brings a positive change. Results like these inspire us to continue improving our services, to help new generations of learner and to shape a better future. Now over to Katarina who will take us through the Q1 numbers.

The first quarter has been characterized by both ups and downs. The uncertainty that has persisted throughout this quarter due to the US market and macroeconomic condition has impacted sales in some areas. Sales are lower compared to last year and amounted to 42 million SEK, while this year sales stands at 39 million SEK. EBITDA is minus seven and shows an improvement compared to last year's EBITDA. This is mainly due to lower costs linked to sales and lower personal costs resulting from the restructuring program that was carried out in Q1 last year. Activation of proprietary products and assets has increased slightly compared to last year, which has a positive impact on the earnings. Invoice sales have decreased by 4% in the first quarter, and net sales have decreased by 7%. Sales in B2C are in line with last year's sales, while B2B has not met the target during the quarter, mainly due to this uncertainty in the US market. This situation has caused customers' purchasing decisions to be delayed, leading them to be increasingly cautious during this quarter. When we look at the distribution of various target groups and segments, we find that the mix remains consistent. We have a slightly larger share of the B2B business compared to B2C, and we continue to see that the distribution follows seasonal patterns. The Swedish markets have had a strong quarter. EBITDA is 6 million SEK better than last year's reported result and 3 million better than the adjusted last year's results, which included 2.8 million in restructuring cost. EBITDA is also positively impacted then by the lower sales cost and the lower personal cost. And in the graph here, you can see last year's adjusted result. Cash flow is positive in Q1, amounting to 11 million SEK. This is an improvement compared to last year, primarily driven by the better operational result this quarter. Cash flow is 4 million SEK better compared to the same quarter last year, and the plan remains to reach positive cash flow in 2026. And now over to Fredrik.

Thank you, Katarina. To summarize this report, Q1 was a mixed quarter for Albert. Revenue performance, particularly in B2B, was below our expectations. The challenges we faced are real and ongoing, and we are responding accordingly with a sharper commercial focus and a stronger portfolio prioritization. We saw improvements in some key metrics, such as lower costs and improved EBITDA, but we are not yet where we need to be. We have a skilled and dedicated employee team in the group and together we are now further simplifying operations and focusing only on initiatives that support profitability. We are now reviewing everything and nothing that supports profitability and cashflow is off the table. With that, I want to be clear, despite the challenging start of this year, our targets remain Positive EBITDA in 2025 and a positive cash flow in 2026. Thank you. That was the last slide. And now, if you have any questions, we'll move on to the Q&A.

Thank you so much for the presentation here. And as you mentioned, we will now carry on with the Q&A here. You mentioned simplifying operations and reviewing your product portfolio. Can you elaborate on what type of products or markets might be prioritized or excited to improve profitability?

Well, we're reviewing everything. I've been here for three weeks. So this is happening right now, actually. We are going to focus on everything that has a potential to add to the group. And if it does not in a short or medium term, then it's not in our focus and we will not invest good money into it. So that's basically the overall goal of what we're doing. We are simplifying the business. Elbit is not a big group, so we must be lean and a fast moving company. And that includes a sharper focus on what drives profitability, also improved cost control and more accountability in commercial execution. Thank you.

On what levels were marketing investments and how are you planning to invest ahead?

We are looking at the CAC level, the customer acquisition costs with regards to our lifetime value in regards to revenues. And we will invest as long as we see a positive outcome in that. At the moment, we are, well, we're looking at the different markets because they have different characteristics. Our goal is to be profitable in the core markets, of course. Looking at the Czech Republic and Romania, we are not profitable as those are investment markets for Albert Junior, for instance. So we have a different set of metrics for different maturity in markets. But we invest as much as we feel that we can get a profit back from. So that is the focus.

Thank you. Given the cash burn and the lower cash position compared to previous year, do you foresee a need for additional financing to receive a positive cash flow in 2026 or is the current cash balance deficient under your updated cost structure?

With 55 million SEC in cash and a positive operating cash flow in Q1, we are in a stable position. However, we're not passive. Every investment and every cost line is under review to preserve liquidity and support our 2025 and 2026 goals. So, do we foresee a need of raising capital? No, not at this stage. Our current plan is to reach positive cash flow in 2026 using our existing resources.

Thank you. How do you plan to mitigate the impact of US import tariffs on strawberries? And are you considering any strategic adjustments to your supply chain or pricing models to protect your margins?

That is a good question because looking at what happened in the US this year, it caught us a little by surprise. Or at least that's my impression. The changes in leadership in the American administration and the policy changes have had an impact and still has an impact on our operations. So we're currently reviewing our business to business product portfolio and the commercial approach. We're adjusting to the impact of tariffs and shifting our sales focus. It's early and the environment remains challenging, but we're actively working to reverse the trend through more hands-on commercial execution, strategic focus on core offerings, finding alternative different distribution channels. So, well, we're working on everything that we can change from our side. And given that, that the tariffs shift from week to week. I would say that at the moment it's looking brighter, but in 90 days, we'll have to reevaluate what we do again. So this is an ongoing work, but we are very near what's happening and making changes as we go along.

Thank you. With B2C showing stable subscriber growth and successful campaigns, are there plans to allocate more resources to the consumer-facing channels as a way to offset B2B volatility?

We are doing that and we have done that during Q1 as well when we saw that we had a shift in the market. So we monitor and see what the outcome is on a day-to-day basis. But looking at B2C, we had a solid campaign performance and we have a loyal customer base. We have a strong product to market fit. And the brand equity in Albuquerque continues to grow, especially in the Nordics. So that remains a pillar in our growth strategy. But again, things can change. And if the customer acquisition costs or lifetime value changes, then we must be fast and alter our priorities. So we are, well, trying to accelerate the revenues and decelerate the costs at the same time. So it's break and pedal to the metal balance from day to day here.

Thank you. Moving on to the last question here. With your leadership transition now complete, what strategic shifts or cultural changes do you aim to implement in the short term to accelerate performance improvements across the group?

Yeah, well, as I said, we're simplifying the business. I come from a perspective where it's, well, to simplify as much as possible and to focus as much as possible on the commercial aspect of our operations. So looking at what I bring to the table, it's I hope a clear leadership, a focus on commercial perspectives, removing as many hurdles and everyday struggles as possible to be able to focus on what actually drives the business and to get as many hands on deck as possible for that. I lead through transparency and performance and we're not going to complicate things. We're clear on our priorities and we will shift focus to swift execution. That is the focus we have now.

Thank you so much. And thank you so much for the presentation here today and answering all the questions. And I wish you all a good day.