Cedergrenska AB (publ)

Skolkoncernen Cedegrenska har öppnat böckerna för det första kvartalet i det brutna räkenskapsåret 2025-2026. Med mig i studion har jag styrelseledamot Niklas Pålsson. Varmt välkommen Niklas. Tack så mycket. Ni verkar ha gjort er läxa och klarat provet. Omsättningen uppgick till 370 miljoner kronor i kvartalet mot 253 i jämförelsekvartalet. Motsvarande uppgång på drygt 46%. And a moving result is Bita at 31 million kronor versus last year's 12.6 million kronor. Can you explain what's behind the development?

Yes, thank you very much. Of course, we are very pleased with the first quarter, if you start with that one. The biggest explanation behind the growth is that we have two new businesses that are included that did not exist in the same quarter last year. Both Apprendere and Skolor AB. that came into the company in December last year. So that explains a lot of the growth, as well as the recently acquired Skärgårdsgymnasiet in Norrtälje. But with that said, the 8.4% EBITDA margin that we deliver in the quarter It is basically only possible to do if you have educational units that are attractive and to a large extent have full children and students. At the same time you have cost control and prove that we are able to integrate such a contract with Apprendere. Then you reach 8.4.

Thank you very much. However, the cash flow was clearly negative. Why then, when the overall results were so good?

The first quarter is always the weakest for us in terms of cash flow. And I think this trend has intensified recently. Both on what happens with the fact that state funds become a larger part of our revenues. State funds always come retroactively, so the revenues we know we will get for the first quarter, they come first in December. Then there are several other revenues, such as additional income from the municipalities to a number of our students, as well as the fact that we, to a greater extent, invoice certain municipalities for their students at our schools. This means that we get revenues here that, cash flow-wise, come first in the second quarter. And on the cost side, we also have this situation where we in the quarter take costs for computers, for learning materials, for things that will be used throughout the fiscal year, but cash flow-wise you get the full effect in the first quarter. So it is a weak quarter cash flow-wise, it has always been so historically. I think the trends we see strengthen the development, but we will of course see the opposite in the second quarter.

VD Lotta Smit writes in the VD-word that a stronger profitability, among other things, is due to the fact that you have initiated a number of quality-increasing initiatives, both at schools and within your support functions, and this is partly starting to give results. What kind of initiatives are these, Niklas?

Yes, I think we should share her comment in two different ways. One is that she really wanted to send the signal that the profitability we have today at 8.4% is not where we should be in the long term. We are very clear that our financial goals are between 6-8% EBITDA margin. When we run our businesses with optimal quality and a safe surplus, we are between 6-8%. So, what happens when the number of quarters we've had is higher than that, is that you have the luxury of being able to invest in quality-enhancing measures in a lot of different places in the business. And that's really the most important thing. I don't think there are many head of schools who can stand here and talk about a number of new jobs, both at Dekon Cernemensam and outside the schools. The initiatives that you mentioned, for the schools, there is not a single trend to point out, but it depends on what the school needs. But we are doing a very targeted initiative, which is probably worth a million at the cost of a small unit like the psychology gymnasium, just to increase the quality there, among other things. And of course, it is about strengthening the presence of talented teachers. But in the head office, a lot of new jobs are being done right now in several areas that will broaden our competences. It's in school quality, it's in properties, it's in HR, it's in business controlling. There are a lot of different places that we are now strengthening.

Yes, we have previously talked about your work to optimize the capital structure. Can you remind us why and what actions are you doing here?

Thank you for that question, because it has been a focus area for over a year now. We are a company with the ambition to grow, and a lot of that growth comes from the fact that educational services are gathered under the Sedrigenska paraply. That development is tied to moving capital, inevitably. The highest cost of moving capital comes from if you only make that growth with your own capital. We all know that the highest cost of capital is your own capital. If you're a company that has an uncertain business, maybe a new start, then it's often your own capital. You have to rely on it for your growth journey. But CDN should have, because we have proven ourselves for such a long time and have this security and cash flows and balance in our business, to be able to get the trust, in this case, Danske Bank. If you get the trust from such a large bank that wants to cooperate in our growth journey, then there is a good chance for us to combine bank loans with our own capital. And that's where you find the optimal balance. You don't have to have too much of a bank loan, because then it becomes too high risk. But we have landed in that If we are around a net debt of one times our annual EBITDA, or maybe just over that, then we have the perfect balance between, on the one hand, the cheaper borrowed capital for us, and the more expensive our own capital. That mix, I'm sure, in the long run will create the highest return for CDG and the best use of the resources for our shareholders.

Interesting. You don't seem to be in a vacuum. Can you tell us what's going on within the debate, politics and regulatory work?

Yes, absolutely. It's also a very motivated question, I think, where we are in school Sweden here and now. And it's a large number of investigations that have come with their conclusions during the last half year. Those conclusions are now in different degrees to be proposals for law changes. So now they are out on the ground and then we will see towards the spring what concrete proposals for law changes will be. But I want to repeat what I said earlier. We don't see anything in this development that makes it impossible for us to drive the company forward in a commercially valid way, where CDN will continue to be an actor in Swedish schools. And I would like to add that a lot of this is not just bad things, a lot of this is good things that will increase the quality and the view of professionalism and quality in school in Sweden. And it will be useful for all of us to finally get some peace and quiet when these proposals come through. But I also want to add that I think we are at an exciting point politically, because those actors who have so unilaterally focused on the fact that the key to saving Swedish schools is to abolish the tax companies, I start to feel that they are drawing a line. They miss the big question that everyone knows is the important one. What do we do for the whole Swedish school to rise? What measures and proposals do we have for the total Swedish school to rise to more levels? Which we all want. And to focus on the small percentage of companies that still exist, and to think that banning it, a percentage that in many ways makes it better in terms of quality, than the other 85% that are high in the municipal sector. To think that banning them is the solution for the whole of school Sweden to take new steps to become much better. I think people are seeing through that rhetoric quite sharply right now, and I think that It will benefit us who work on and instead show daily that, you know what, the stock companies do well from themselves. They contribute to Skolsverige and deliver quality-wise many times better than the municipal schools. Then you will come pretty short when you are stuck in your argumentation that a certain part of Skolsverige must be removed because it solves the whole of Skolsverige. It's going to be too bad.

Thanks for the point of view. I'm not going to go into the rest of the debate. Yes. No, but a lot is happening. Yes, a lot is happening. And in spring, there will be many team proposals, right? Yes, there will be. Lotta Smith writes further that the forecast remains for the fiscal year 2025-2026 with growth in revenue of at least 15%, an EBITDA margin of at least 6% and a goodwill-adjusted net profit of at least 67 million kronor. How confident are you that you are going to achieve these goals?

We are very confident that we are going to achieve these goals, and I think that the background to that is that we are here now at the end of the fall, at a point where the student changes that normally occur in an educational activity have happened in this situation. The number of students we have now tends to be quite stable for the rest of the school year. So we have a high level of security in terms of income. At the same time, we have received messages from most of the municipalities about school money revisions from and with January. So you have to be aware of that change parameter as well. And the cost base of all our units has also been set, and we have had a good overview of that. So it is based on these parameters that we repeat our prognosis and feel very safe with it. A prognosis that gives At least an EPS of 5.30 for this fiscal year.

In previous conversations we have talked about acquisitions and that you have had a pipeline with Prospect. How have these dialogues continued?

They have continued very positively. Back to your question about these regulatory changes. I think we are in a window where there are a number of smaller actors who feel that they need to look for a safer home for their business. In my experience, many of them are a first-hand choice when it comes to ensuring the continued development of your school. We continue to have very good dialogues with many interesting actors. We have to get back to the market when there is anything more concrete to say. But it feels just as positive as before, and we are happy about that.

Then that will be a positive point for this interview today. I would like to thank you for watching and being with us for about three months. And thank you very much, Niklas Pålsson, for your contribution.

Thank you very much.