AcadeMedia’s year-end report July 2022 – June 2023

Fourth quarter (April – June 2023)

• Net sales increased by 9.0 percent and amounted to SEK 4,199 million (3,851). Organic growth, including bolt-on acquisitions, was 7.2 percent.
• Operating profit (EBIT) amounted to SEK 404 million (337).
• Adjusted operating profit, adjusted for items affecting comparability and effects of IFRS 16, amounted to SEK 333 million (279). Items affecting comparability amounted to SEK -23 million (-14).
• Net profit for the period amounted to SEK 205 million (164).
• Earnings per share was SEK 1.94 (1.55) after dilution. Adjusted for IFRS 16, earnings per share was SEK 2.19 (1.77) after dilution.
• The average number of children and students in preschool, compulsory school, and upper secondary school during the fourth quarter was 98,988 (93,308), representing an increase of 6.1 percent.
• The actual result, published in this report, is in line with the preliminary result published 19 July 2023.  

Full year (July 2022 – June 2023)

• Net sales increased by 8.4 percent to SEK 15,539 million (14,339). Organic growth, including bolt-on acquisitions, was 6.0 percent.
• Operating profit (EBIT) amounted to SEK 1,270 million (1,224).
• Operating profit, adjusted for items affecting comparability and effects of IFRS 16, amounted to SEK 964 million (1,001). Items affecting comparability amounted to SEK -45 million (-64).
• Net profit for the period amounted to SEK 578 million (605).
• Diluted earnings per share was SEK 5.47 (5.72). Adjusted for IFRS 16, diluted earnings per share was SEK 6.39 (6.54).
• The average number of children and students in preschool, compulsory school, and upper secondary school during the year was 97,916 (92,549), representing an increase of 5.8 percent.
• The Board proposes dividend of 1.75 SEK (1.75) per share.

The complete report will be made available at

https://academedia.se/en/investors/reports-and-presentations/

Comments from CEO Marcus Strömberg

In the 2022/23 financial year, AcadeMedia showed continued strong growth and a stable economic development despite many societal challenges. Thanks to investments in capacity and quality, the number of children and students in the school segments increased by 5.8 percent and net sales grew by 8.4 percent. The organic sales growth was 6.0 percent. The international business continued to grow and accounted for 23 percent (20) of AcadeMedia’s total net sales during the year.

Operating profit in the fourth quarter increased compared to last year as we are now seeing the results of previous actions and investments. Profitability in the Norwegian business improved as the cost increases of previous years have to some extent been compensated through the annual school voucher revision. In the Compulsory- and Upper Secondary School Segments, student numbers increased and tight cost control in a period of high inflation had a positive impact on profitability. In the Adult Education Segment, the number of participants in Municipal Adult Education continued to decline, while the Higher Vocational Education continues to perform well. We can summarise a year with continued high demand and stable economic development. This is a sign of strength that provides a very solid foundation for further progress.

Continued international expansion

For many years, AcadeMedia has maintained the strategy of offering all age groups – from young children to adults – a variety of programmes and pedagogical specialisations, a strategy that delivers a high degree of stability and flexibility. The same applies to our strategy of continuing to grow abroad, which enable us to make AcadeMedia even more robust. Today, 23 percent of our operations are located outside Sweden's borders: in Norway, Germany, and the Netherlands. The aim is to expand our international business and we have identified attractive opportunities, not only in countries where we are already established but also in other prioritised markets.

In Germany, new preschools are opening according to plan, and we now approach 100 units. After the fiscal year-end, our adult education business in Germany expanded through the acquisition of MediaDesign Academy, in Munich. Our current adult education programme, within FAWZ, is comparable to Sweden’s Komvux vocational training. The MediaDesign Academy is more comparable to Sweden’s Higher Vocational Education.

After the end of the reporting period, AcadeMedia acquired the Dutch company Winford consisting of ten compulsory- and upper secondary schools. As a result, we now operate in three of the four types of education in the Netherlands: preschool, compulsory school, and upper secondary school.

Adult education – leader in Higher Vocational Education

AcadeMedia’s Higher Vocational Education (HVE) continues to develop well, with net sales increasing 10 percent over the financial year. We are the market leader and as labour shortages increase, investments in HVE will continue. Just as applications to universities and colleges are rising to record levels for autumn 2023, interest in retraining in HVE is high and the level of applications is good. We will continue to strengthen our position.

Participation volumes in Municipal Adult Education were stable in the fourth quarter, but still lower than last year.

Demand for labour in certain sectors such as industry and transport are high. To address this demand, the Swedish government has set up an inquiry to review how vocational training in Komvux can be made more effective and better adapted to the needs of both labour market and individuals. A well-functioning vocational training programme for adults plays a pivotal role in business’ supply of skilled labour.

AcadeMedia is a market leader in Vocational training, and we see further good opportunities for growth and development, and thereby contribute to solving Sweden's labour market problems.

Long-term focus on grading and assessment has effect

One of the biggest challenges in all of Sweden's schools is the long-standing discrepancy between student´s grades and results in national tests. This has recently attracted much attention. AcadeMedia has focused on this issue for a long time. We have not only worked on our own organisation and governance, but also on addressing the underlying systemic failure, by setting out proposals that we believe would help solve the problem. 

During the fiscal year, we commissioned an external party to review our work on grades and assessments in the Upper Secondary School Segment. The aim was to investigate whether there is pressure on teachers to award higher grades than is justified. One of the conclusions drawn by the external reviewers was that governance in AcadeMedia’s upper secondary schools does not create undue pressure to award higher grades than the students' level of knowledge. The full report is published on our website.

In order to reduce the discrepancies, we have introduced a package of measures and placed great emphasis on increased equivalence in assessment and grading. We can conclude that the proportion of students who received a higher grade than their performance in the national tests fell during the past academic year. Read more on pages 12 and 13. 

Enrolment figures indicate more than 100,000 children and students for the autumn.

Preliminary student numbers for autumn 2023 show an overall average growth of approximately five percent and we now exceed 100,000 (95,834) children and students at our three school segments. More than 16,000 of these are in the first year of upper secondary school.

Four anniversaries celebrated

Looking at the full year 2023, we can see that no less than four of our organisations celebrate their anniversaries. The oldest is our adult education programme Hermods, which was founded in 1898 by Hans Svensson Hermod in Malmö. His vision was that all Swedes, including those living in rural areas, should be able to take courses that suited them. That formulation is a bit dated, but the idea behind it can still be applied to AcadeMedia as a whole. We want everyone to be able to find an education with us that suits them. Other anniversaries include Vittra compulsory schools, and the upper secondary schools LBS Kreativa Gymnasiet and Rytmus, all of which are celebrating 30 years.

I would like to conclude by expressing my sincere thank you to the nearly 20,000 employees in AcadeMedia in Sweden, Norway, Germany and the Netherlands

Marcus Strömberg
President and CEO 
AcadeMedia AB (publ) 

Presentation of the report

A web-cast telephone conference will be held at 09:30 CEST today, where CEO Marcus Strömberg and COO Katarina Wilson will present the report.

To participate in the conference call please register via this link:

https://conference.financialhearings.com/teleconference/?id=5002854

After registration, you will be provided with telephone numbers and a conference ID to access the conference. You can ask questions verbally via the telephone conference.

To follow the presentation webcast on the following page: https://ir.financialhearings.com/academedia-q4-2023

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

It will also be possible to access the recorded version of the webcast after it is finished on this page.

For more information, please contact:
Marcus Strömberg, CEO
Telephone: +46 8 794 4200
E-mail: [email protected]

Katarina Wilson, COO and deputy CEO
Telephone: +46 8 794 42 91
E-mail: [email protected]

About AcadeMedia
AcadeMedia creates opportunities for people to develop. The 19,400 employees at our 730 preschools, compulsory schools, upper secondary schools and adult education centres share a common focus on quality and development. Our 198,000 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, Germany, and Netherlands. 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 08:00 CEST August 30, 2023