AcadeMedia's quarterly report July-September 2016/17

First quarter (July 2016 – September 2016)

  • Net sales increased by 10.9 percent to SEK 1,862 million (1,679).
  • Operating profit (EBIT) increased by 119.4 percent to SEK 68 million (31). Adjusted for items affecting comparability the operating profit was SEK 69 million (34).
  • Profit for the period was SEK 41 million (2).
  • Cash flow from operating activities amounted to SEK 131 million (-13).
  • The average number of children and students in preschool, compulsory school and upper secondary school during the quarter was 65,143 (62,103), which was an increase of 4.9 percent.
  • Basic earnings per share amounted to 0.44 (0.02) SEK and after dilution 0.44 (0.02).

Significant events after the end of the reporting period
No significant events have occurred since the end of the reporting period.

The complete report will be made available at https://corporate.academedia.se/en/financials/reports-presentations/

Comments from CEO Marcus Strömberg
AcadeMedia has started the financial year in a stable way with robust growth. Sales increased by over ten percent during the first quarter of 2016. Growth is driven by the increased number of students and the continued solid performance of the Adult Education segment. Preschool operations expanded during the quarter with the opening of three new preschools in Norway and one in Sweden, and through the acquisition of one preschool in Norway.

Growth in school operations
The best evidence that our units provide good quality is that more people choose our schools. When the fall term began this year, over 3,000 more children and students enrolled in AcadeMedia’s preschools, compulsory schools and upper secondary schools, an increase of 4.9 percent for the first quarter. The average number of students in the first quarter of 2016/17 was 65,143, compared to 62,103 in the first quarter of 2015/16.  We see a steadily growing need for preschools and schools. Many new schools need to be built. There is also potential for continued growth through acquisitions.

Each year, about 100,000 students apply for admission to upper secondary school. Although the Upper Secondary Schools segment is at its lowest level demographically, enrollment at AcadeMedia schools has reached new highs. Student year groups in upper secondary schools will grow over the next few years and with its strong brand strategy AcadeMedia is well-positioned to continue to capture market share.

New establishment strategy yielding continued growth
Many of the new children and students at AcadeMedia’s schools attend one of our newly opened units or one of last year’s newly acquired units. We opened a total of 14 new units in 2015/16. In addition, one new preschool in Sweden and three preschools in Norway opened at the start of the 2016 fall semester. Several of our units have also increased their capacity and are admitting more children. We are actively pursuing possible new establishments. Currently one new establishment in Sweden during the fiscal year 2016/17 and one in Norway in the fall of 2017 have been approved.

20 percent growth in Adult Education segment
AcadeMedia’s Adult Education segment holds a leading position in essentially all it’s market subsectors. This quarter revenue increased by over 20 percent with stable and good profitability. We have a broad contract portfolio and are doing well with our integration projects. Our internal evaluation also shows that an investment in adult education is producing beneficial results for society.

Currently many new contracts are being tendered. The outcome of these tenders will affect the development of the Adult Education segment, which has a faster pupil turnover than school operations due to shorter education periods. Irregular seasonality in Adult Education also makes it difficult to compare financial performance with corresponding quarter last year.

AcadeMedia is Sweden’s leading language education provider. Sweden’s integration challenge will require continued investments in education – both within Swedish as a second language, and in the form of various initiatives for higher studies where immigrants often need to supplement their foreign education.

Education helps society to develop
In Sweden, everyone has the right to their choose school, regardless of where they live or their financial standing.  Norway and Germany have similar systems for preschools. The opportunity for citizens to influence their own future in this way is vital for society.

Many parents believe that it is so important for their children to attend a good school that they are willing to pay substantially, or even to move, in order to achieve this objective. In Sweden this is not necessary.

It is very satisfying to see that year after year, parents, young people and adults choose our education programs. One important reason for this is our systematic quality management, combined with our desire to constantly improve our operations. Our mission is to create the best possible conditions for everyone who chooses our services, in order that each student can achieve the objectives of the program, irrespective of whether it is a family needing child care, or an adult enrolled in higher vocational education courses in preparation for a career change.

We express this by declaring our aim to be: “100% goal achievement” for our students. This may be too ambitious; not everyone will succeed. But everyone should have a chance at success and this goal in itself drives quality. Setting a lower standard is not an option.

The education system is perhaps the most important component of all social systems.

Marcus Strömberg
President and CEO
AcadeMedia AB (publ)

Presentation of the report
A web-cast telephone conference will be held at 09:00 CET today, where CEO Marcus Strömberg and CFO Eola Änggård Runsten will present the report.

You can follow the presentation and the conference on the following page: https://wonderland.videosync.fi/academedia-q1-report-2016-17

Or call one of the following numbers at least ten minutes before the start of the call:
SE: +46 8 5664 2698
UK: +44 20 3008 9808

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

For more information
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

Christian Hall, Investor Relations
Telephone: +46 763-111 242
E-mail: christian.hall@academedia.se

About AcadeMedia
AcadeMedia is the leading and single largest independent education provider in northern Europe. In 2015/16, approximately 63 000 children and students attended AcadeMedia’s preschools, compulsory schools and upper secondary schools. An additional 80 000 individuals participated in AcadeMedia’s adult education courses. In 2015/16, AcadeMedia had approximately 425 preschools, compulsory schools and upper secondary schools in Sweden and Norway and approximately 150 adult education units in Sweden. Since February 2016 AcadeMedia also operates seven preschools in the Munich region of Germany. AcadeMedia has operations throughout the education chain, from preschool, compulsory school and upper secondary school to adult education. 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 and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 07:30 CET on 8 November 2016.