Cedergrenska AB (publ)

Välkomna. Utbildningskoncernen C.D. Grenska, som bedriver utbildning för barn och elever från förskoleålder till eftergymnasiala utbildningar, har publicerat kvartalsrapport för det andra kvartalet 2025-2026, i det brutna räkenskapsåret. Det avser perioden oktober till och med december. As usual, I have the founder and board member Niklas Poulsson in the studio. Welcome. Thank you, it's great to be here. Just because it's about education, it's hard for me to speak at all. A few weeks ago, you published a reverse profit warning with preliminary figures for the quarter. But before we go over them, how would you describe the quarter in general?

It's a very, very eventful quarter where the company has really delivered in many different ways. If we think, for example, of what we have promised in order to change our entire balance sheet towards a more optimal capital structure. This was the quarter when we were able to fully implement our resale program, 50 million. For the first time, we were able to implement the high-ordinary divisions. 1,90 per share went out to the division in December. We were able to continue to show, through our acquisition strategy, that we could to add to the group another nice business in the form of Kristina's schools in Lidingö. And then we ended up at about 0.6 in net debt, still a bit from the around 1.0 that we have said is optimal for us to rely on. So that shows everyone that we are on the way to 312, a lot happened in the quarter, but there is still a journey to be done with regard to an optimal capital structure. So, a lot of focus on that, a lot of focus on investments. There have been a lot of new jobs in the quarter, and that partly explains why the margin is lower in the second quarter than it was in the first. But these are really nice new jobs that will benefit the entire company for our continued journey forward. And I think everyone also sees that even with those done, it is a very nice, stable, underlying profitability. And of course, a quarter marked by a lot of new information about the regulatory changes that will come this summer and after the election.

Yes, you're starting to become a big employer. There are about 1,700 employees in this team.

Yes, we also passed 10,000 children and students in the last acquisition. A milestone in itself. A milestone in itself.

But if we look at the numbers, the revenues increase by about 55% compared to the quarter and hit almost 400 million.

Comments? Yes, of course it has a lot to do with the fact that the large number of apprenticeships were done at the change of the year last year. So that has the full effect of the fact that there was no more comparison period last year. And also a small amount of contributions from both the Kristina schools and the previous collaboration with the archipelago high school in Norrtälje that took place in the summer.

But the cash flow is also getting a big boost. From 24.7 to 73.1 million. What are the driving forces here?

I think we talked about this after the first quarter report that the cash flow was a bit weak from the current business. But then I indicated that it will be reversed in the second quarter and it's still nice to see. Very nice to see that it goes as planned here, that we instead get a very strong second quarter in terms of cash flow. If you now follow our net profit, adjusted for goodwill and writing, and our cash flow, then they both have to get at about a level that is double the level compared to last year's same period. And it shows that even if it turns between quarters, so yes, our income is higher and our cash flow is growing in the same degree. So it's a good sign, I would say. Yes, good.

And some events in the quarter. We have already touched on Kristina's schools at two occasions, so maybe we can skip over that. The other thing you mentioned was the political or regulatory, what sets your conditions. There will actually be proposals for rule changes that will soon be on the table so that you know what you can relate to. How will you adapt to this and how active are you to influence the situation?

We are very involved. As you said, we have become a big player in education in Sweden. We are very involved in various forums to debate this and be part of remit instances. We are not far from now, sometime in the middle or end of March, you can expect to see the final law proposals for changes for our industry, which will be voted through in the right way before the election and introduced in the coming years. These are comprehensive changes. I think that everything is in line with what we were able to foresee when we discussed this during the whole autumn, because that was a recurring discussion we had. And it's nothing to underestimate that it will lead to further investments that we have to make. You asked how we act when we see this happening. It is of course responsible to make sure that the company has a really good profitability, a really good budget for what to come. And I think we can show in the last quarter and also the whole year that we are in control. We are very, very well prepared. And the end product of all these changes, I also think the end goal remains. These are good changes that will lead to, if they are only implemented now, they will show the whole world, the society, that it is a powerful move to increase quality and demand at free schools. And with all reason, it should lead to a return of confidence for the industry. We welcome this, but of course it also contributes a lot. We need to be alert, we need to prepare for it, and we do that fully. But I will also say as a closing remark that there is nothing, but we also summarize the proposals that you will see coming on the table here now during the spring, so it is in all ways, in a united, consistent, healthy, healthy business in free school in Sweden. So what I'm trying to do is to drive a healthy business that is based on good quality for children and students. That connection and that platform is still there. but in an even more sophisticated and improved form. We don't want this to be implemented, and we don't want society to be able to see what it really gives for school Sweden. Because we have something good there, which we are convinced of.

Super interesting, and it's an incredibly important debate. In principle, everyone is engaged in this issue in one way or another. But that's the first part. Then we have the next concern around the corner, if you can put it that way, and that's the election. Because it has already started to come into play, and a bit like you and I discussed before, it's one thing what you fundamentally stand for, but it's another thing what you then want to do in reality. Can you describe a little bit what the landscape looks like here in the future?

Exactly, and if we start with what has actually been said recently, we have an opposition in the country that leads in opinion polls and is very offensive in how they express themselves around our industry and what they want to do if they win the election. And it's very destructive. It's something that only damages the whole game plan and the security and long-term safety. It's nothing our industry needs. I think that roughly speaking, oppositionen underskattar det stora arbetet som myndigheter har framför sig att implementera de lagar som ska komma här från hösten och framåt. Det är ett stort antal nya lagar som ska styra vår bransch. There are a lot of resources in force to implement this, and everyone who follows Skolsverige knows that the authorities have had challenges to get a number of earlier changes in the law, for example around digital and art-general proof. When you see what forces are needed to change Skolsverige, then you really feel that you have to have patience, have humility, because it will be filled up. to introduce these smart new laws that are coming now. To believe that you can move around in that pot with something dramatically new. No, it feels both stupid for children and students and stupid for the long-term and purely illogical to do.

We are often too diverse in other contexts. As long as businesses work well and the results are good for children and young people, it's hard to see the problem.

Jo, men jag vill skriva under på det. Jag är part i målet förstås. Jag kan ändå säga, och det tror jag alla behöver ta till sig, att när de senaste studierna görs här nu för att försöka mäta den här kvaliteten, hur mycket lär sig barnen, hur nöjd är vårdnadshavarna, i vilken grad tycker medarbetarna på skolorna att deras arbetsgivare lives up to the goals that a school should have, in every such study, the private schools do better than the municipal schools. So that, plus my knowledge that it is cheaper to run a private school than a municipal school, it makes the real political reality, when we stand there after the election, even if it were to be a change of in government meetings, then the upside of tearing this up from many different perspectives, it just feels difficult to see that someone in practice is going to see a big win in this. So it's my absolute hope and belief that the resources we take, we will first let them deliver and then we will see to what extent all of us citizens think that the school has improved and regain our trust in the Swedish school.

Somewhere it is what you as a citizen care about, that the children get a very good education at a reasonable cost. And if then a municipality does it effectively or a company does it and thereby can generate some profit, does it matter if it is the same money?

I don't think so, but we'll see.

Yes, we may be capitalists here at the table. Okay, but let's look a little back then. What are you most pleased with that you have managed to achieve here in Q2?

I think that it is, first of all, for our business idea where we want to bring in new, nice businesses to our collaboration within CD Granska, it is very important to see that both the introduction of Skärgårdsgymnasiet in Norrtälje and the Kristina School recently, that it is going well. And good in our world means that The teachers believe that they should be part of Cedrienska. They choose to stay. The principals stay. The caretakers are calm. That there are no major changes. Rather, with curiosity, they see that this can give something new and good, to be part of Cedrienska. And that is really the case with both of the last two So that, plus the very nice and nice new jobs that we have been able to do in the group to strengthen for the future, so that there are strong improvements and further lift in our ability to work with quality projects out at the schools, to follow them up. and get the best order and order in all administration and all functions. It really makes a big difference for us. Give us a few quarters, then you will see that it further raises the quality of the entire company. So I would say that the new positions, the investments we make, plus the latest integrations, it feels very important internally in the company.

I'm also a little curious about a little update on cities and food. Yes, it's on.

It's fun that you ask about it, because I forgot to talk about it. Cities, if we start there, they almost double their responsibility this coming quarter compared to earlier. So a number of other schools... Now they're starting to cover maybe a quarter of the entire CD-border. And all the feedback we get... It differs a bit from... It's important to point out that all the feedback we get here is that we think the quality of the internal product is sharper than what we've had before. So it's just a thumbs up for that group. Then, economically, it doesn't have such a big impact, but above all, maybe the profit has been increased quality. The food is growing, we are up to 75% of our students who get Swedish food. The food without half-fabricate is so good for the students. And then we get a very nice addition that otherwise would have run out from the concert with an external actor. But it's starting to get big now. It's an essential part of our total movement that comes from us taking care of all our children and students with an internal food solution.

If you take this in a few years, will you start to offer these services to other schools abroad and eventually close them down?

We get a lot of inquiries about CED food for external schools as well. But we don't have the capacity today. The kitchens we have are too full just to deliver CED food to our own children and students. But of course, if you look at it, this is a concept that is quite unique for Skolsverige in terms of quality and the health aspect of it, which of course all children from preschool to high school, if you get that instead of much of the external food that the alternative is, it will be better for children and students. And yes, it's a bit more expensive for our external schools to look at it. But we think it's worth it, and we think they will also think it's worth it. But we can't go there unless we have that extra capacity, and it's not here and now. But you have to dream and think.

We'll see where we end up in a while. Absolutely. Okay, and with that we'll stop for today. Thank you so much for being with us today and answering questions. Yes, of course. It's fun to be here.