AcadeMedia’s subsidiary Hermods has reached a settlement with the City of Malmö regarding the SFI-contract

On March 19, AcadeMedia announced that Hermods had identified a deficiency in their reporting of teacher qualifications to the City of Malmö. Following a dialogue with the City of Malmö a joint agreement has now been reached.

On March 19 and 21st  2018 AcadeMedia informed that an internal review had found that the reported information to the City of Malmö on the teacher certification levels was faulty and that this could have a financial effect for Hermods. AcadeMedia immediately informed the City of Malmö about the situation and has since then undertaken several measures to investigate what has happened and to address the deficiencies.

The managers within Hermods who were identified as responsible in the internal investigation were removed from their positions and their employments have now been terminated. Hermods has also mandated an external party, PwC, to urgently undertake an independant review of the situation. Based on PwC’s report that was made public on April 27, Hermods has undertaken several measures to improve internal processes and controls in order to mitigate similar events in the future.

Following a discussion with the City of Malmö a settlement agreement has been reached with the following key content:

• Hermods shall pay a compensation amounting to SEK 14 million to the City of Malmö for the previous and current deficiencies in relation to the SFI-contract and for the whole matter. This is the full compensation that the City of Malmö will receive from Hermods for the whole contract duration up until the July 31st, 2018.
• The City of Malmö will not pre-maturely terminate the contract with Hermods, which will run until the end of the contract period which is the 31stof July 2018.

In addition to the settlement agreement, Hermods and the City of Malmö have agreed that the City of Malmö shall take over Hermods’ staff that are working with the SFI-education in Malmö relating to this contract.

In addition to the compensation to the City of Malmö following the settlement agreement, Hermods has had expenses for legal advisors, PwC’s investigation, termination of managers, and redundant premises. These additional expenses are currently estimated to SEK 12 million which together with the compensation amount brings the total effect on earnings to about SEK 26 million. The majority of the earnings effects are expected to impact the fourth quarter 2017/18.

For more information, please contact: 

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

Eola Änggård Runsten, CFO
Telephone: +46 8 794 4240
E-mail: eola.runsten@academedia.se 

About AcadeMedia
AcadeMedia creates opportunities for people to develop. The 15,800 employees at our 650 preschools, compulsory schools, upper secondary schools and adult education centres share a common focus on quality and development. Our 176,000 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 11:20 CET June 1, 2018