Update on COVID-19 and impact on Spanish operations

Internationella Engelska Skolan (IES) owns seven bilingual private schools in Spain, which have been closed since mid-March following a decision by the Spanish authorities when they declared a state of emergency and lockdown. The timetable relating to the school closures has been deferred several times and the expectation now is that schools will remain closed for the remainder of the term.

The students are being entirely taught through distance learning, which is working well. IES has, in line with the recommendations of the sector organisation, continued to charge student fees for teaching, while no fees have been charged for food, transport or other related activities. As of May, IES will also apply a discount to student fees for the remainder of the academic year for those grades for which IES does not consider it possible to fully provide digital education. This mainly applies to the youngest students (1-5 years old).

In total, this entails lower full-year revenues of approximately MSEK 65 (approx. MEUR 6) for the seven schools in Spain, of which the fees not invoiced for transport, food and related activities account for the largest share. In a normal year, transport, food and related activities account for approximately 30% of the total revenue in Spain.

The personnel groups who are not teachers and needed for distance teaching have been temporarily laid off. Lay-off payments are being made by the government. It is estimated that a total of 50% of the revenue loss can be offset by reduced costs.

Accordingly, the full-year forecast provided for Spain in the six-month report in February no longer applies.

For more information, please contact:

Emma Rheborg, Head of Communication and IR, IES
Telephone: +46 (0)768-511 540
E-mail: emma.rheborg@engelska.se

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 above contact, on 23 April 2020 at 14:00 CEST.

About Internationella Engelska Skolan

Internationella Engelska Skolan, IES, is one of the leading free school operators in Sweden with some 26,800 students at 37 schools. IES also owns seven bilingual schools in Spain with approximately 4,800 students.

IES Sweden conducts school operations from “förskoleklass” (grade F) up to the third and final year of upper secondary school (grade 12). Its main focus is grades 4-9, what is often called “middle school.” Within the compulsory school system in Sweden, IES is the leading independent operator, with 17 of the 20 largest free schools. The academic results of IES schools on the national tests in grade 9 are far above average in Sweden.

Internationella Engelska Skolan was founded in 1993 and is in its 27th year of operation. Throughout this period, its schools have been defined by the three core convictions of its founder, Mrs. Barbara Bergström:

• A safe and orderly environment, where teachers can teach and students learn.
• To command the English language – the key to the world.
• High academic expectations and aspirations.

Up to half of teaching is conducted in English by teachers whose native language is English. Over 900 teachers with qualified foreign teaching degrees are currently teaching in IES schools. They are mainly recruited from Canada, the USA, the UK and South Africa.

The IES student base is growing strongly. Over the past ten years, total operating income has increased by an average of 19% per year. In the most recent financial year 2018/19, which concluded on 30 June 2019, total operating income was MSEK 2,781.1, an increase of some 18% year on year. As of 31 December 2019, there were approximately 208,900 applications in the queue to secure a place in the Swedish schools for the current and forthcoming years.

Internationella Engelska Skolan has been listed on Nasdaq Stockholm Mid Cap, with the ticker ENG, since 2016.

The largest (indirect) shareholders of IES are TA Associates of the US, which has close affiliations to leading universities and trusts in the US, Barbara Bergström, the founder of IES, and Paradigm Capital AG through different funds. At the end of March 2020, the ten largest shareholders also included Swedbank Robur fonder and Handelsbanken fonder.