AcadeMedia’s interim report July – December 2021

Second quarter (October – December 2021)

• Net sales increased by 9.8 percent and amounted to SEK 3,774 million (3,436). Organic growth, including bolt-on acquisitions, was 6.0 percent.
• Operating profit (EBIT) amounted to SEK 342 million (273).
• Adjusted operating profit, adjusted for items affecting comparability and effects of IFRS 16, amounted to SEK 263 million (224). Items affecting comparability amounted to SEK 7 million (-9) and include insurance compensation received in relating to a fire in a compulsory school in the first quarter and VAT-expenses relating to the Adult Education Segment.
• Net profit for the period amounted to SEK 186 million (133).
• Diluted earnings per share was SEK 1.76 (1.26). Adjusted for IFRS 16, diluted earnings per share was SEK 1.96 (1.49).
• The average number of children and students in preschool, compulsory school, and upper secondary school during the second quarter was 92,363 (85,927), representing an increase of 7.5 percent.
• High spread of infection in the quarter resulted in lower personnel costs, net SEK 10 million, and lower costs due to cancelled activities, SEK 5 million, compared to last year.

First six months (July – December 2021)

• Net sales increased by 10.0 percent to SEK 6,685 million (6,077). Organic growth, including bolt-on acquisitions, was 6.3 percent.
• Operating profit (EBIT) amounted to SEK 575 million (495).
• Operating profit, adjusted for items affecting comparability and effects of IFRS 16, amounted to SEK 457 million (375). Items affecting comparability amounted to SEK -23 million (1) and include costs and insurance compensation received in relation to a fire in a compulsory school and VAT-expenses relating to the Adult Education Segment.
• Net profit for the period amounted to SEK 285 million (224).
• Diluted earnings per share was SEK 2.70 (2.12). Adjusted for IFRS 16, diluted earnings per share was SEK 3.11 (2.61).
• The average number of children and students in preschool, compulsory school, and upper secondary school during the first six months was 91,897 (85,785), representing an increase of 7.1 percent..

The complete report will be made available at

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

Comments from CEO Marcus Strömberg

The second quarter of the financial year shows continued strong demand for our education programmes. The number of children and students increased by 7.5 percent and the organic growth was 6.0 percent. Growth is strongest in the Upper Secondary School Segment in Sweden and in our Germany preschools, where three new units have opened in the period. In total, seven new preschools were established. The Adult Education Segment’s higher vocational business has also continued to perform well.

Once again, the pandemic is affecting operations

During the autumn, most teaching took place in the classroom, but absence among staff and students remained at high levels. Staff absence linked to the caring of own sick child increased significantly. We have had to postpone activities, but our digital transformation continued, an area where AcadeMedia has a strong position. Altogether, costs were lower-than-normal in the period due to high absence, and cancelled activities.

2022 has also begun with high infection rates and increased absence. We foresee that this situation will continue as long as infection levels in our communities remain high.

Our employees are working under severe pressure due to the pandemic. Over nearly two years of extraordinary circumstances our people have been doing a fantastic job keeping operations running.

AcadeMedia trusted to continue providing higher vocational education

AcadeMedia has a clear strategy to be the leading vocational education provider and the Adult Education Segment has for some time had a strong focus to increase the share of vocational education. Higher vocational education constituted 33 percent (26) of the segment’s total net sales in the quarter

In January, the Swedish Agency for Higher Vocational Education’s announced their allocation decision. AcadeMedia was awarded 5,430 educational places, with the first starting autumn 2022. The award means that current volumes are maintained

Although the pandemic still continues, the labour market has returned to normal.

Unemployment is back to pre-pandemic levels, generating normalised volumes in the municipal adult education and in the higher vocational education. However, unemployment remains high in Sweden and skills shortages are still elevated in many sectors continuing to drive adult education.

School voucher funding 2022

A large portion of the decisions determining school funding for 2022 have now been received. Based on around 85 percent of decisions, we are seeing an average increase of 2.6 percent (1.7) in our Swedish preschool and school operations. This year's school funding adjustment is higher than last years.

In Norway, school voucher funding is expected to rise by about 2.8 percent (4.4). Last year’s increase reflected the earlier implemented staff density norm. At the same time the pension supplement, which is another part of the renumeration model, will decrease. We estimate that the revised pension supplement will impact revenue by SEK 35 million annually.

Strong position ahead of autumn 2022

During the spring, children and students make their school choices for the autumn start. This is an important time for us. The demographic trend is in our favour, especially in the Upper Secondary School Segment. Intensive preparations are under way within our units for the school choices that will be made. So far, activities taking place both on site and digitally indicate a high level of interest, which is encouraging and bodes well for the future.

Many new units are planned for autumn 2022. In Sweden, plans include one preschool, one compulsory school, and three new upper secondary schools. At the same time, completion of our two new campuses in Stockholm is underway. Eight of our existing schools will relocate to the campuses and have the opportunity to continue to expand. Altogether, we will create approximately 2,500 new upper secondary school places to be filled in the coming years.

In Germany, expansion continues, and in the coming year 15 new preschools are expected to open.

AcadeMedia continues to grow in EdTech

In January, AcadeMedia increased its ownership stake in Hypocampus, to 36 percent. Hypocampus is an EdTech company that develops AI-based learning tools targeting medical students. With the injection of additional capital, expansion into further countries can continue after successful growth in France during the autumn. We view this as an exciting and value-generating activity.

AcadeMedia acquires Sandviks AS and will form a new business area

After the end of this reporting period, AcadeMedia acquired the Norwegian company Sandviks AS. Sandviks has, since 1965, created physical and digital products and services that inspire children to read. Sandviks’ most well-known brand is Goboken, a book club for children with 40,000 members in Norway and Sweden.

With AcadeMedia’s experience in the education sector and Sandviks’ established position among parents of young children, we will have the opportunity to target both our existing and new markets. We look forward to the joint development of educational products and services that further strengthen children’s learning.

Marcus Strömberg
President and CEO 
AcadeMedia AB (publ) 

Presentation of the report

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

To participate in the conference call, and thereby be able to ask questions, call one of the following numbers ten minutes before the start of the call:

SE: +46 8 505 583 74
UK: +44 33 3300 9273
US: +1 646 7224 904

You can follow the presentation and the conference on the following page: https://tv.streamfabriken.com/academedia-q2-2021-2022

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, CFO
Telephone: +46-8 794 42 91
E-mail: katarina.wilson@academedia.se

About AcadeMedia
AcadeMedia creates opportunities for people to develop. The 18,100 employees at our 680 preschools, compulsory schools, upper secondary schools and adult education centres share a common focus on quality and development. Our 188,000 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 and Germany. 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 CET 1 February 2022.