AcadeMedia’s interim report, July 2023 – September 2023

First quarter (July – September 2023)

• Net sales increased by 10.5 percent and amounted to SEK 3,430 million (3,104). Organic growth, including bolt-on acquisitions, was 6.5 percent.
• Operating profit (EBIT) amounted to SEK 232 million (239).
• Adjusted operating profit, adjusted for items affecting comparability and effects of IFRS 16, amounted to SEK 151 million (151). Items affecting comparability amounted to SEK -6 million (6).
• Net profit for the period amounted to SEK 62 million (94).
• Earnings per share was SEK 0.59 (0.73) after dilution. Adjusted for IFRS 16, earnings per share was SEK 0.87 (0.93) after dilution.
• The average number of children and students in preschool, compulsory school, and upper secondary school during the first quarter was 100,752 (95,834), representing an increase of 5.1 percent.
• The Preschool Segment has changed name to “Preschool and International Segment”. 

The complete report will be made available at

https://academedia.se/en/investors/reports-and-presentations/

Comments from CEO Marcus Strömberg

The number of children and students increased by 5.1 percent in the first quarter to 100,752, contributing to the strong revenue increase of 10.5 percent. In the Adult Education segment, our higher vocational education business made a strong start with higher numbers of participants than before and our restructuring measures during the spring have had a positive impact. In our school operations, the first quarter is a lesser one, which is why index-adjusted rental costs for 2023 and salary reviews have had a greater impact. The effect is greater in the Upper Secondary School Segment since the 2023 school voucher increase in the Greater Stockholm area, about 30 percent of the segment, only increased 1.8 percent. All in all, adjusted EBIT was in line with last year SEK 151 million (151). 

Autumn and the start of the school year is an exciting time for us, as we welcome all children and students to a new class or school after the summer. This year was a particular highlight, as we passed the 100,000 children and students mark. The positive development was partly due to the opening of our two campuses in Stockholm last year, which accommodates around 4,000 students. Both campuses have been very successful, and at the start of autumn 2023 there was a great deal of interest in the schools. Based on this experience, we plan to build more campuses, both in Stockholm and in other major cities.

Strong start for higher vocational education business

In adult education, our higher vocational education business got off to a strong start. We now have more courses and more applicants than before, and the business now accounts for nearly half of total sales for the segment. With more than 12,000 students, we are the leading education provider in the sector. This educational format is highly popular both among participants and in the labour market, which is why the Government's investment in an additional 3,000 places in higher vocational education in the autumn budget for 2024 is absolutely right.

The labour market situation remained stable in the quarter, but the number of redundancies announced has increased and unemployment is expected to rise going forward. During the spring, we realigned our offering in municipal adult education and labour market services to reflect the lower demand. These operations account for about 40 percent and less than 10 percent of sales, respectively. Should the need arise, we are of course ready to scale up again.

Campaign to encourage more people to take up vocational teaching

To succeed in our mission, our sector needs to attract the right skills. As Sweden's largest - and leading - provider of vocational education and training (vocational education and training includes programmes, for example aimed at nurses, plumbers, childcare workers, and construction workers), we know how important these professions are. We are also aware of the scale of the shortage of teachers who can train our future nurses and plumbers. Against that background, this autumn we have launched a national campaign to encourage more professionals to retrain as vocational teachers. The response has been overwhelming, and our hope is that this initiative will help to persuade more people to choose to become teachers and will enable more students to train as the next generation of nurses, electricians, and vehicle mechanics.

Acquired and organic growth with a focus on international expansion

Ever since AcadeMedia was established, the company has pursued a clear growth strategy. During the first quarter of the financial year, we made three acquisitions. In Sweden, we acquired Centrina grundskolor and in Germany AcadeMedia completed the acquisition of the adult education MediaDesign Academy. In the Netherlands, we took a strategically important step with the acquisition of Winford College adding 10 compulsory and upper secondary schools to the existing 10 preschools. After the end of the reporting period, we also acquired Berghs School of Communication, one of the world's leading schools in the field of communication. Berghs will be incorporated into our Adult Education segment and will strengthen our offering in the privately funded market.

Organic international growth continues according to plan and in Germany six preschools opened in the quarter where we now operate 88 preschools. A new development this year is that we grow organically through our game development programmes for adults. Futuregames runs programmes in Poland and The Game Assembly operates in the UK. These businesses are still small but represent milestones in the implementation of our international growth strategy. Overall, operations outside Sweden account for just over 25 percent of AcadeMedia's sales.

New political conditions in Norway

Norway held municipal and regional elections in September, and the Conservative Party became the largest political party in Norway for the first time in almost 100 years, overtaking Norway’s Labour Party. When the new municipal governments are in place, a large majority of Espira's 9,336 preschool children will attend preschools in municipalities with right-wing administrations; before the election, 20 percent of the children did so.

Preliminary indications for 2024 school voucher funding

A number of municipalities in Sweden have announced their proposals for school voucher increases from 1January 2024. It is too early to say what the overall picture for each of AcadeMedia's operations is expected to be, but the Greater Stockholm and the City of Stockholm municipalities, which affect many of our students, indicate an increase of around 5 percent for compulsory schools and 3.4 percent for upper secondary schools.

In October, the Swedish Association of Independent Schools published a report reviewing school voucher funding decisions in 32 municipalities. The report showed that, contrary to popular belief, independent schools are undercompensated. This is partly because the municipalities exclude costs for premises and central administration before calculating school voucher funding. The report also highlighted that municipalities already receive higher compensation for their broader responsibilities than independent schools.

Quality report 2022/23

On 23 October 2023, AcadeMedia published its quality report. The theme of this year's report was "Equal assessment and grading”, and the report contains several articles on the subject. For example, the report describes the Group's efforts to increase the correlation between results in the national tests and the grades awarded, external reviews of grading in compulsory and upper secondary schools, and also provides examples of how schools have taken on the extensive package of measures launched during the past school year. We can see that the correlation between the national tests and the grades awarded has increased significantly, so our work has produced results.

This is the eleventh year in a row that we publish our quality report. It is an important tool in our systematic quality work and our endeavour to always be a little better at what we do.

Marcus Strömberg
President and CEO 
AcadeMedia AB (publ) 

Presentation of the report

A web-cast telephone conference will be held at 09:30 CEST today, where CEO Marcus Strömberg and COO Katarina Wilson will present the report.

To participate in the conference call please register via this link:

https://conference.financialhearings.com/teleconference/?id=5001422

After registration, you will be provided with telephone numbers and a conference ID to access the conference. You can ask questions verbally via the telephone conference.

To follow the presentation webcast on the following page: https://ir.financialhearings.com/academedia-q1-report-2023

The presentation material will be available before the conference begins on AcadeMedia web via:
https://academedia.se/en/investors/reports-and-presentations/

It will also be possible to access the recorded version of the webcast after it is finished on this page.

For more information, please contact:

Marcus Strömberg, CEO
Telephone: +46 8 794 4200
E-mail: marcus.stromberg@academedia.se

Katarina Wilson, COO and deputy CEO
Telephone: +46 8 794 42 91
E-mail: Katarina.Wilson@academedia.se

About AcadeMedia

AcadeMedia creates opportunities for people to develop. The 19,400 employees at our 730 preschools, compulsory schools, upper secondary schools and adult education centres share a common focus on quality and development. Our 198,000 children and students are provided with a high quality education, giving them the best conditions to attain both learning objectives and their full potential as individuals. AcadeMedia is Northern Europe ́s largest education company, with locations/facilities/presence in Sweden, Norway, Germany, and Netherlands. Our size gives us the capacity to be a robust, long term partner to the communities we serve. More information about AcadeMedia is available on www.academedia.se.

This information is information that AcadeMedia AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 08:00 CEST October 25, 2023.