Cedergrenska AB (publ)

Yes, welcome to this report commentary with the school corporation C.D. Gränska. I have with me the founder and board member Niklas Pålsson. Welcome. Thank you so much. Nice to have you here again. You have released a report this morning for the first quarter, July and even September, in the broken year of 2014-2025. I think we will start by looking at some figures. The revenue of the movement rose to 253 million kronor, an increase of 19.3%. EBITDA rose to SEK 12.6 million against SEK 4.7 last year. The EBITDA margin rose to 5.0% against SEK 2.2 last year. What are your spontaneous reactions when you see these figures?

First of all, we are very pleased with the quarter. This is exactly the type of start of the academic year we want to see in order to be able to reach the prognosis we have set for the whole year and to be able to feel that we are where we want to be in order to have this safe level of the sustainable economy in schools. It's completely according to our plan, I would say.

You mention in your speech that you regularly have higher costs during the first quarter. Could you exemplify that a little bit?

Yes, exactly. It is typically the case that in the school world, the first quarter is such a quarter that is burdened with a little extra costs. And it comes quite naturally that you have the school start. So what typically happens is that we go out with student computers, for example, to all or the majority of the students. And I think we mentioned in the report that this alone costs a little over SEK 6 million. Costs that are taken full out in this quarter. But of course, these are computers that have been used throughout the reading year and the cost does not come back later. And that's probably the biggest example of seasonal costs that come in the first quarter. But it doesn't stop there. of course, the learning materials that come into the school start that the students should use. We have a lot of activities with the students when they come to school and you start the schools. It can be trips and the like. So typically we have higher costs in this quarter. And just look at the last two years where we have, for example, put 2.2, respectively 3.6 percent of the EBITDA margin in the first quarter in the last two years. Now we are at 5. It is clear that it is It is a strong quarter for us, but still, you have to put it in context that it is the first quarter that is somewhat worse than the previous quarter.

And the growth is at a good pace, 19.3% compared to the same period last year. What is it that contributes to this growth?

I would say that around 4-5% is organic. The rest of the growth comes from the acquisitions that we have made in recent times. So you have Knivsta, the Margareta school, which we attended at the end of last academic year. A little over 200 students there. You have Nyköpings enskilda gymnasium and psychology gymnasium, which we attended on July 1st.

Right. Thank you. Could you tell us more about the effectiveness of the work?

Yes, exactly, thanks for bringing that up. It was an important part for everyone who has followed CDGenska. It was an important part that we could, we started last year as low as 2.2% and could still close the year with 6.2% EBITDA margin for the whole year. Then you have the seasonal effects, of course, but you also have the effect from our efficiency program. And it's so nice and safe to see that this effect is still there. It has permanentized and stuck in place in our company in a good way. So we should be proud of that. But there are still things to do. The old parts that are already there, it's a lot about services at the head office, the space at the head office, getting enough food for a number of units and getting started with that. But now comes phase two and three of the efficiency program, Partly to provide food for several of the units to achieve the effects of the guaranteed good quality and the better cost situation. But we have also come to a situation where we have come a long way in looking at a number of agreements and larger contracts that can be negotiated. Just to give one example of that, That's when you get to the point where you have a chance to change the reviews in connection with the company's reputation and in that way maintain quality but lower the cost by a number of hundreds of thousands. And it's similar to such negotiations that are still ongoing.

Another project that you describe, in addition to food, is local healthcare. What can you tell us about this initiative?

It is similar to the fact that we see a win-win here, to both improve the cost and at the same time get a profit for the quality of the schools. We have started a number of units with our own employed local caregivers. under their own management. It's incredibly positive to see that these people really feel like a part of the school in a completely different way than what we might experience when we buy this service externally. I think you gain a lot from their joy of work and the quality of their work. At the same time, we notice that in the same way that we see the Danish food, to create this unity for a principal, and for the staff. It's very meaningful. It builds a stronger unity in the school. So it's exciting to continue working with it.

It will be interesting to follow how it develops. When it comes to essential events after the release of the report, it was the offer to the shareholder of Apprendere Skolor, another listed school group. We had a separate broadcast about that, but for those who haven't seen it, could you give a brief overview of what this means?

Exactly, and it's good timing on that question, because the ambition is that later today, the prospect for the business will be released. Then you have a couple of weeks to accept this offer, which is an exchange of five Apprendera shares against two CDG shares, plus a cash investment of 50 euros per Apprendera share. So far, we have received a very positive response. You can see the opportunities with the larger corporations. But I also notice that a lot of questions have emerged that are up to us to answer and return to in the next quarter. Because where the company Apprendere, which is a fine school business, they have on a reported basis had quite low recognition, you have to be honest. We see that there is a completely different type of actual income, and I think that when I was here and we had the interview together about the business, I signalled that we reasonably should see around 20 million EBITDA from this business, and it is those questions that we need to answer now. We need to use the quarter to come back with more details and more substance behind how this is going to go, because I think that is something that will strengthen the trust for

How confident are you that you will achieve the desired results with the business?

We need to get over 90% acceptance to carry out the business and we have an acceptance of 82% from now on. So we're not in the 90s, and it's always hard to know, but it feels very safe. The logic is so strong, and I think I said it last time when we saw it. The logic is so strong that it just feels like with all rationality this should be manageable.

Niklas Bålsson, CD Granska, thank you for answering my questions. Thank you very much.