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Fourth quarter (April-June)

  • Operating income increased by 23.7% to MSEK 756.5 (611.4), of which organic growth amounted to 14.3%
  • The number of students in the Swedish operation at the end of the quarter was 25,536 (23,927)
  • The number of registrations in the queue in Sweden at the end of the quarter was about 191,700 (190,000)
  • Operating profit (EBIT) rose 155.4% to MSEK 71.0 (27.8)
  • The operating margin was 9.4% (4.5)
  • Profit for the quarter totalled MSEK 54.3 (19.5)
  • Earnings per share were SEK 1.35 (0.49)
  • Cash flow for the quarter was MSEK 68.3 (-123.3)
  • Anna Sörelius Nordenborg was appointed CEO in June and will assume her position on 25 November 2019. Cecilia Marlow will continue to serve as Interim CEO until then

Full-year (July-June)

  • Operating income increased by 18.4% to MSEK 2,781.1 (2,347.9), of which organic growth amounted to 11.1%
  • Operating profit (EBIT) rose 36.9% to MSEK 208.6 (152.4)
  • The operating margin (EBIT) was 7.5% (6.5)
  • Adjusted for items affecting comparability of MSEK 6.4 (2.7), the operating margin was 7.7% (6.6%)
  • Profit for the year totalled MSEK 154.6 (116.5) and earnings per share were SEK 3.85 (2.91)
  • Cash flow for the year was MSEK 122.8 (-76.5)
  • The board of directors proposes a dividend of SEK 1.16 per share (0)

After the end of the year

  • On 5 July 2019, IES sold its 50% shareholding in Colegio IALE to the coowner, the Monzonis family, for MEUR 3.9, generating a capital gain of approximately MSEK 25 for IES

CEO’s comment

Strong fourth quarter

In the fourth quarter, we continued to show strong growth in both Sweden and Spain, and welcomed more students and acquired more schools. Operating income increased by 23.7% year-on-year, while operating profit rose 155%. The favourable results are due to a better balance between the respective increases in school voucher funding and teacher salaries, solid cost control and a positive trend for the acquired Spanish schools.

Five new schools in Sweden and one in Spain
We are continuing to grow rapidly in both Sweden and Spain and in the fourth quarter, announced no fewer than five new schools in Sweden and two in Spain. We are also continuing to simplify our ownership structure in Spain and after the end of the period, we sold all of our shares in the joint-venture owned Spanish school Colegio IALE in Valencia to the coowner, the Monzonis family. We now own five schools in Spain, of which all are subsidiaries of IES with an approximate total of 2,500 students, and are regularly evaluating new schools. More schools are also under evaluation in Sweden, and the Swedish Schools Inspectorate has approved all new applications submitted by IES in early 2019.

Conditions have steadily improved during the year, with a resulting gradual strengthening of profitability. Operating income for the full-year increased by 18.4% to MSEK 2,781.1, of which organic growth amounted to 11.1%. The operating margin (EBIT) was 7.5% (6.5).

In Sweden, revenues per student rose 4.0% during the year, and personnel costs per student rose 3.9%.

Due to the positive earnings trend for the year, the board of directors proposes a dividend of SEK 1.16 per share, corresponding to 30% of profit for the year in line with the dividend policy. That corresponds to a dividend yield of approximately 2% to shareholders, based on the share price at 30 June 2019.

Annual quality surveys
Since 1993, IES has been running all of its schools according to the same three principles: a safe and orderly environment for students and employees, high academic expectations and that students learn to command the English language. Every year in May, we conduct surveys among all students, parents and employees to determine how well our schools are living up to our objectives. In addition to our surveys, the Swedish Schools Inspectorate also conducts surveys and reviews the results of several national tests.

Maintaining the highest quality in all of the promises we have made is crucial to our future. It is gratifying, therefore, that we once again received positive reviews from our students, parents and employees this year. Nine of ten parents would recommend their IES school, nine of ten employees would recommend IES as a good place to work and nine of ten students feel secure in their school. At the same time, 97% of the students who left our schools in June were eligible for upper secondary school.

Year after year, our students also achieve better results in the national tests than the national average. In 2019, for example, 70% of IES’s students achieved grades of A-C in national tests in Swedish. The Swedish National Agency for Education has not yet released the national average for 2019, but in 2016 (the most recent year for which reliable comparable data is available), 72% of our students achieved grades of A-C in Swedish, compared with the national average of 51% for municipal schools.

January Agreement on schools is also needed locally
In January, five political parties reached a 73-point agreement on the Swedish Government’s policies until the next election. Many of these points concerned schools and affect all students and all of those involved in education. They are points that must be honoured if all parties are to focus on the real core issue for Swedish schools – how we can improve quality for all schoolchildren. However, school issues are largely determined locally, where there is not usually any equivalent to the January Agreement. We have been building very solid partnerships with a large number of municipalities over a long period of time, but unfortunately, we are sometimes seeing local behaviour at municipal level that is not in line with the principles of the Agreement. One example is whether all operators are able to compete on equal terms. This also applies to transparency in school voucher decisions and in the building permit process. It sometimes means that the uncertainty is simply too great, making such an establishment impossible with the heavy investment and long-term commitment required to open and run a school. As an example, some municipalities have not raised their school voucher funding for many years, or have even reduced it, despite the significant increase in teacher salaries.

About 1,000 new schools will be needed in Sweden in the coming years. We firmly believe that the state, municipalities and free school organisations need to work together to solve the challenges facing Swedish schools and to improve the quality of all schools, for all children. With our mixed group of students, of whom 38% have a foreign background, we know that the critical factors for improving results are: to have strong leadership that motivates and develops dedicated teachers, to ensure a safe and secure environment and to impose the same high demands on all students regardless of background. Unfortunately, the phenomenon of having lower expectations for students with weaker socio-economic backgrounds is widespread in Sweden. I listened to the former principal of Sjumilaskolan in Biskopsgården, Hamid Zafar, on the radio programme “Summer on P1” who called this phenomenon “the racism of low expectations.” Eliminating low expectations in Swedish schools would be a major step towards ensuring that children leave school with a high level of knowledge and well-equipped for the next phase of their life. Here at IES, we know that it works. We have been working according to the same philosophy for more than 25 years.

Being able to choose a school without having to pay a fee is a fantastic right that parents in Sweden can enjoy. The focus of politicians and school experts must quickly be shifted to improving the quality of those schools with shortcomings. An obvious starting point would be to have the same high expectations for all children, regardless of background, instead of seeking fault with those schools that have succeeded.

Cecilia Marlow
Interim CEO

Emma Rheborg, Head of Communications, tel. +46 (0)768-511 540
Cecilia Marlow, Interim CEO, tel. +46 (0)73-414 61 28
Fredrik Åkerman, CFO, tel. +46 (0)70-415 23 65

Interim CEO Cecilia Marlow and CFO Fredrik Åkerman will be holding a teleconference today, Friday 30 August, at 10:00 a.m. in connection with publication of the quarterly report. The teleconference will be held in English. To participate in the teleconference, call the following number: +46 (0)8-566 426 51 and then press 62242392#. The presentation material is available on IES’s website:

Annual Report         28 October-3 November
2018/2019 Annual General Meeting 21 November 2019
Q1 interim report 2019/20 21 November 2019
Q2 interim report 2019/20 20 February 2020

This is a translation of the Swedish original. In case of any inconsistency between the Swedish and the English version, the Swedish version shall prevail.

This information is such information that Internationella Engelska Skolan i Sverige Holdings II AB (publ) is obligated to publish in accordance with the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact people set out above, on 30 August 2019 at 8:00 a.m. CEST.