×

 

AcadeMedia’s Year-end Report July 2020 – June 2021

Fourth quarter (April – June 2021)

  • Net sales increased by 13.8 percent and amounted to SEK 3,672 million (3,227). Organic growth, including bolt-on acquisitions and adjusted for currency effects, was 10.4 percent.
  • Operating profit (EBIT) amounted to SEK 329 million (334).
  • Adjusted operating profit, adjusted for items affecting comparability and effects of IFRS 16, amounted to SEK 280 million (279). Items affecting comparability amounted to SEK -14 million (0).
  • Net profit for the period amounted to SEK 180 million (179).
  • Diluted earnings per share was SEK 1.70 (1.70). Adjusted for IFRS 16, diluted earnings per share was SEK 1.90 (1.95).
  • The average number of children and students in preschool, compulsory school, and upper secondary school during the fourth quarter was 90,032 (82,999), representing an increase of 8.5 percent. Adjusted for the acquisition of Swedish Education Group, the increase was 5.4 percent.
  • Operations have gradually returned to normal with less distance education and previously postponed activities have to a larger extent been conducted.

Full year (July 2020 – June 2021)

  • Net sales increased by 8.7 percent to SEK 13,340 million (12,271). Organic growth, including bolt-on acquisitions and adjusted for currency effects, amounted to 8.1 percent.
  • Operating profit (EBIT) amounted to SEK 1,169 million (973).
  • Operating profit, adjusted for items affecting comparability and effects of IFRS 16, amounted to SEK 934 million (728). Items affecting comparability amounted to SEK -8 million (36).
  • Net profit for the period amounted to SEK 594 million (431).
  • Diluted earnings per share was SEK 5.62 (4.09). Adjusted for IFRS 16, diluted earnings per share was SEK 6.52 (5.21).
  • The average number of children and students in preschool, compulsory school, and upper secondary school during the year was 87,823 (82,433), representing an increase of 6.5 percent. Adjusted for the acquisition of Swedish Education Group, the increase was 5.0 percent.
  • The Board of Directors proposes a dividend of SEK 1.75 per share (1.50) for the 2020/21 financial year.

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

Comments from CEO Marcus Strömberg

The 2020/21 financial year was from many perspectives AcadeMedia’s best and most stable year so far. Despite many challenges in our environment our quality results are good, growth is high, and the financial development strong. The number of students in the school segments increases steadily, reaching 6.5 percent growth for the full year and 8.5 percent in the fourth quarter. AcadeMedia has strengthened its position as the leading education provider.

In the fourth quarter, some of the previously postponed activities could take place and lower annual leave resulted in higher costs. All in all, operating profit for the quarter was in line with last year. Over the full year 2020/21, sales and operating profit developed positively and we are reaching our financial targets. The main explanation for the improved earnings was the increased demand for adult education. Our business model has stood firm in these tumultuous times and we have been able to continue the strategic work focusing on acquisitions and organic growth of our core business. Going forward, these areas will continue to be a priority.

The impact of the pandemic has been significant for daily operations, but the hope is that it fades, and we plan for a normal start of the autumn term. At the same time, the consequences of the pandemic will be felt for a long time. In Sweden, we see an increase in mental health issues among young people, and there is uncertainty regarding the actual knowledge acquisition of students – two issues that AcadeMedia and our industry colleagues will need to work on for a long time. I am grateful that we have highly skilled and capable employees to take on these tasks, and that we have the necessary financial resources to act. The pandemic has had a major impact on our operations in all countries, but the financial impact has been limited.

Adult education has never been stronger
Our Adult Education Segment performed strongly over the past financial year. Just over a year ago, many pieces started to fall into place – a relatively young contract portfolio and high demand ahead of the autumn term, while unprofitable contracts were being phased out. We also observed that further investment in adult education was imminent. Even before the pandemic, we experienced rising demand for our services, driven by skills shortages in the labour market. The rapid rise in unemployment in the wake of the pandemic further fuelled demand. As a result, our adult education programmes had more participants than we anticipated. More places were added, and capacity utilisation was higher. One year on, our contract portfolio is still relatively young, and we have no major renegotiations or procurements for the next two years. The labour market is now improving and more of our participants will resume work. Even though volumes might be affected, the need for retraining remains. During the pandemic we have also strengthened our position as the leading on-line educator, a position which we aim to keep and manage.

The school segments return to normal activities
Operations in Sweden and Norway have largely been open during the year, although much of our upper secondary school education and parts of our compulsory school education have been run as distance education. It has been stressful for many and a number of activities that take place during a normal school year were cancelled or postponed. This resulted in lower costs during the second and third quarter of the fiscal year. During the fourth quarter, some corona-related directives were revised, enabling many of the cancelled and postponed activities to resume. We were also able to do more extensive maintenance work, including improvements to outdoor areas at both preschools and compulsory schools. This has of course impacted earnings.

In Germany, operations are also returning to normal
In Germany, the pandemic put pressure on our operations when society was impacted by varying degrees of lockdowns. Our new establishments were delayed, and it has been more difficult to recruit staff, as many people are cautious about changing jobs. We now see a change and capacity utilisation improved during the fiscal year’s final quarter compared to last year. For the full year, capacity utilisation will amount to 90.1 percent, which is higher than 2019/20 (89.7), but somewhat lower than 2018/19 (90.2). The need for preschool places remains high.

18 new units planned for 2021/22 financial year
The number of students increased by 6.5 percent during the year, as a result of acquisitions, new starts and organic growth in student numbers. In total, we opened 17 new units during the year. In Sweden, the independent school segment has expanded and there are now more children and students attending an independent school than ever before.

The potential for growth remains encouraging, with a significant shortage of preschool places in Germany and a favourable demographic trend in the Upper Secondary School Segment. Although we expect a slowdown in the Adult Education Segment in the year ahead, the reform in the Public Employment Service and its labour market training programme will bring new opportunities. As previously indicated, we are approaching this new market with some caution, as there is a high degree of uncertainty in the forecasts provided by the Public Employment Service.

The plan for organic growth is clearly defined, with a focus on preschools in Germany and the Swedish upper secondary school market. In 2021/22, we look forward to executing our plan to open the doors at 18 new units, comprising three upper secondary schools in Sweden and 15 preschools in Germany. A compulsory school with an integrated preschool with 175 students was acquired at the beginning of the financial year 2021/22. Looking even further ahead to 2022/23, the construction of two state-of-the-art upper secondary school campuses in Stockholm will be completed, as well as a new compulsory school in Örebro.

So, there is major potential for growth in our core business. High quality preschools, compulsory schools, upper secondary schools and adult education will always be in demand.

Preliminary student figures autumn 2021
Preliminary student numbers for the autumn show an aggregate average growth of around 7 percent in AcadeMedia’s three school segments, reaching approximately 91,600 children and students. Almost 16,000 of them attends the first year in upper secondary school. It is gratifying that so many have shown confidence in us, and we look forward to following all of them during their schooling years.

Marcus Strömberg
President and CEO 
AcadeMedia AB (publ)

Presentation of the report

A web-cast telephone conference will be held at 09:30 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 8 566 426 95
UK: +44 3 333 009 273
US: +1 646 722 4956

You can follow the presentation and the conference on the following page:
https://tv.streamfabriken.com/academedia-q4-2021

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

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.