Q4 2025 AcadeMedia AB Earnings Call

August 31, 2026

Speaker #2: Your line is muted.

Speaker #3: Call recording is on.

Operator 2: Welcome to AcadeMedia Q4 2025 conference call. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing #5 on their telephone keypad. Now, I will hand the conference over to the speakers, CEO Marcus Strömberg and CFO Petter Sylvan. Please go ahead.

Operator: Welcome to AcadeMedia Q4 2025 Conference Call. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing pound key on their telephone keypad. Now, I will hand the conference over to the speakers, CEO Marcus Strömberg and CFO Petter Sylvan. Please go ahead.

Speaker #4: Welcome to the AcadeMedia Q4 2025 conference call. For the first part of the conference call, participants will be in listen-only mode. During the question-and-answer session, participants are able to ask questions by dialing #Q5 on their telephone keypad. Now, I will hand the conference over to the speakers.

Speaker #4: CEO Marcus Strömberg and CFO Petar Silvin, please go ahead.

Speaker #5: So good morning, everybody, and welcome to this presentation of our Q4 report, and we will also sum up the full year for AcadeMedia. And this time of the year is really fantastic for AcadeMedia, we have all the schools start in Sweden and we planned the schools start international, and we have never had so many students children parents choosing our school, and when you talk about election, there are election in different countries every fourth year, we have election every year, and a lot of parents choose our schools.

Marcus Strömberg: Good morning, everybody, and welcome to this presentation of our Q4 report. We will also sum up the full year for AcadeMedia. This time of the year is really fantastic for AcadeMedia. We have all the schools start in Sweden, and we plan the school start international. We have never had so many students, children, parents choosing our school. When you talk about election, there are election in different countries every fourth year. We have election every year, and a lot of parents choose our schools. I will just give a short summaries of the quarters. You can take the next page. We can say that this quarter and this year has been a very good year for AcadeMedia. We have increased the turnover. We have increased the profit.

Speaker #5: So I will ask you for a short summary of the quarters. You can take the next page. We can say that this quarter, and this year, have been very good for AcadeMedia. We have increased turnover, we have increased profit, we have seen a lot of organic growth, as you can see in the numbers, and we have a very stable position to continue to grow.

Marcus Strömberg: We have a lot of organic growth, as you can see in the numbers, and we have a very stable position to continue to grow. We see improvement when it comes to quality in all parts of AcadeMedia, and they have also been a part of improving the earnings. We see improvement of earnings in all our different segments. We have also had focus on the international strategy of AcadeMedia. We made three acquisitions in the period, and after the period, we have continued. What is maybe interesting to see now that we have opened up two new countries, both Poland and UK, and we have continued to grow and develop in our existing market. In Sweden, we have opened up four more sports schools, and that is also something that we really believe in the future.

Speaker #5: And we see improvement when it comes to quality in all parts of AcadeMedia, and they have also been a part of improving the earnings.

Speaker #5: We see improvement of earnings in all our different segments. We have also focused on the international strategy of AcadeMedia. We made three acquisitions in the period, and after the period we have continued.

Speaker #5: And what is maybe interesting to see now is that we have opened up two new countries—both Poland and the UK—and we have continued to grow and develop in our existing market.

Speaker #5: And in Sweden, we have opened up four more sports schools, and that is also something that we really believe in for the future. So, the fourth quarter was a record quarter for AcadeMedia, driven by quality, driven by investment, and by a stable and good development.

Marcus Strömberg: So the Q4, a record quarter for AcadeMedia, driven by quality, driven by investment, and a stable and good development. As I started to mention, quality is really focus for AcadeMedia. What we see when people could choose, when parent could choose, quality is also a driver for growth. One thing that is debated a lot in Sweden, not so much in other countries because they have other system, is about the grading. I must say that AcadeMedia has the best grading. We are more accurate to grading than the municipality schools. So it is check when it comes to grading. We also have developed the numbers when it comes to qualified teachers.

Speaker #5: And as I started to mention, quality is really a focus for AcadeMedia, and what we see is that when people can choose, when parents can choose, quality is also a driver for growth.

Speaker #5: And one thing that is debated a lot in Sweden, not so much in other countries because they have other systems, is about the grading.

Speaker #5: And I must say that AcadeMedia has the best grading. We are more accurate in grading than the municipal schools, so it's checked when it comes to grading.

Speaker #5: We have also developed the numbers when it comes to qualified teachers, so you could say that we have better numbers when it comes to qualified teachers in math, Swedish, English, and the overall picture is that we are on the same level as the municipalities.

Marcus Strömberg: You could say that we have better numbers when it comes to the qualified teachers in math, Swedish, English, and the overall picture that we are on the same level as the municipalities. The third area here is something that we are really interested in. It is how do we perform when it comes to the socioeconomic weaker students? We made report just before the summer, and it was very good result because we could say that we really outperformed a lot of the work that other schools when it comes to these children. So good principals, good teachers, it is possible to have good results even at weak socioeconomic schools. The number, if you go to the school inspection and see how do we came out from the different inspection that they are doing, we also perform in a very good way.

Speaker #5: And the third area here, which we are really interested in, is how we perform when it comes to socioeconomically weaker students. We made a report just before the summer, and it was a very good result, because we could say that we really outperform a lot of the work that other schools do when it comes to these children.

Speaker #5: So, good principals, good teachers—it’s possible to have good results, even at socio-economically weak schools. And the numbers, if you go to the school inspection and see how we came out from the different inspections that they are doing, we also perform in a very good way.

Speaker #5: So AcadeMedia outperforms on almost every key quality metric. And I must also mention reading—that is one area where we have really had focus, and we keep on improving the number of students, children, that can read in the early stages.

Marcus Strömberg: AcadeMedia outperforms on almost every key quality metric. I must also mention reading. That is one area that we really have focus on, and we keep on improving the number of students, children that could read in early stages. One question that I could get also is how big is this sector? You could say that it is around 430,000 children that go to independent schools. We are talking about 1 million parents year after year after year after year choosing independent schools. If you look in the bigger cities, we are talking about 50% of the students in upper secondary that go to independent operators. So in Stockholm, Gothenburg, Malmö, Helsingborg, Örebro, a lot of the bigger cities, we have 50% of the share that is private. In Stockholm, 25% is AcadeMedia's market share. If we go to primary schools, it is around 25%.

Speaker #5: And one question that I could get also is, how big is this sector? And you could say that it's around 430,000 children that go to independent schools. We're talking about 1 million parents, year after year after year after year, choosing independent schools.

Speaker #5: And if you look in the bigger cities, we are talking about 50% of the students in upper secondary that go to independent operators. So in Stockholm, Gothenburg, Malmö, Helsingborg, Örebro—a lot of the bigger cities—we have 50% of the share that is private.

Speaker #5: And in Stockholm, 25% is AcadeMedia's market share. And if we go to primary schools, it's around 25%. So you have to keep in mind, when you look at this sector, it's a big sector, it's an important sector, and when the students make their choice, they choose independent schools.

Marcus Strömberg: You have to keep in mind when you look at this sector, it is a big sector, it is an important sector, and when the students make their choice, they choose independent schools. We have also continued to have this acquisition strategy. This is illustration of that AcadeMedia have a long history of making acquisition. That is a little bit unique with AcadeMedia, is that we could grow through small bolt-on acquisition, bigger mergers, new starts. This picture shows the number of acquisitions that we have done, and we have taken care of the brands. We have improved the brands. We have made them better tomorrow than they were when we made the acquisition. That is real value creation. We have also managed to do that international.

Speaker #5: And we have also continued to have this acquisition strategy. So this is an illustration that AcadeMedia has a long history of making acquisitions. What's a little bit unique with AcadeMedia is that we can grow through small bolt-on acquisitions, bigger mergers, and new starts. This picture shows the number of acquisitions that we have done, and we have taken care of the brands, we have improved the brands, and we have made them better tomorrow than they were when we made the acquisition.

Speaker #5: And that is real value creation. And we have also managed to do that internationally. And if we look at some of the acquisitions that we have done now, we have entered the UK market, and we have followed preschools in the UK for many, many years, where I met a lot of companies.

Marcus Strömberg: And if we look at some of the acquisitions that we have done now, we have entered the UK market. We have followed preschools in UK for many, many years. We met a lot of companies. We think that Chestnut Nursery School is a very interesting platform. It was reasonably valued, but very enthusiastic management. They really wanted to be a part of us. Now they recommend us to others. They also have new starts that is being planned. So a good platform to start to learn the UK market. Then we also have entered Poland. Poland and the company Kids&Co. is people that we have known for five years. We met them, visited the schools, spent a lot of time together. We think that the right time to take this step into Poland is now.

Speaker #5: We think that Chestnut is a very interesting platform. It was reasonably valued, with very enthusiastic management. And they really wanted to be a part of us, and now they recommend us to others. They also have new starts that are being planned.

Speaker #5: So a good platform to start to learn the UK market. And then we also have entered Poland. In Poland, the company Kids & Co. is operated by people that we have known for five years.

Speaker #5: We have met them, visited the schools, spent a lot of time together, and we think that the right time to take this step into Poland is now.

Speaker #5: So we will continue to grow in Poland—new starts, bolt-on acquisitions—and we also, in September, now start primary schools, not just the preschools, in Poland.

Marcus Strömberg: So we will continue to grow in Poland, new starts, bolt-on acquisitions. We also in September now start a primary school, not just the preschools in Poland. As all of you know, Poland is an interesting market coming in Europe. Also to make some extra bolt-on acquisition. I think Netherlands is quite interesting because we started with Winford College, a company that we have known for a long time. We then went to preschools. We entered the adult education. This is a sort of bolt-on acquisition when it comes to Winford College. So schools come to us. We try to make them better working together with Winford College. So this is a small but interesting acquisition. If you look at the profit, we have a very stable margin, stable profit development. We have really had focus.

Speaker #5: And as all of you know, Poland is an interesting market coming in Europe. Also, to make some extra bolt-on acquisitions, I think the Netherlands is quite interesting because we started with Winford, a company that we've known for a long time.

Speaker #5: We then went to preschools, we entered other dedications, and this is a sort of bolt-on acquisition when it comes to Winford. So schools come to us, we try to make them better, working together with Winford.

Speaker #5: So, this is a small but interesting acquisition. If you look at the profit, we have a very stable margin, stable profit development, and we have really had focus.

Speaker #5: And the driver here is all of the segments, but of course International Development and the other dedication is really driving the performance here. And I must say that the...

Marcus Strömberg: The driver here is all of the segments, but of course, international development and adult education is really driving the performance here. I must say the transformation that we have done when it comes to adult education is quite interesting. We have also started to have adult education outside Sweden. One key, what we are working against is that 50% should be the business that is adult education and international business. Here the development has been really good. If you look into the acquisition, it is even better than these numbers. So you can say that we are now passing 40%, around 41%. If you look pro forma of the acquisition that we have done, it is even higher. So we have the target of 50%. We have a lot of possibilities coming in the platform countries that we just have acquired.

Speaker #5: What we have done when it comes to adult education is quite interesting. We have also started to have adult education outside Sweden. And one key target we are working towards is that 50% should be the business that is adult education and international business.

Speaker #5: And here, the development has been really, really good. If you look into the acquisition, it's even better than these numbers. So you can say that we are now passing 40%, around 41%, and if you look pro forma of the acquisition that we have done, it's even higher.

Speaker #5: So, we have the target of 50%, and we have a lot of possibilities coming in the platform countries that we just have acquired.

Speaker #1: Thank you, Marcus. I'll take over. Good morning, everyone. Dr. Silvan here. I will start by giving an update on the regulatory landscape in Sweden.

Petter Sylvan: Thank you, Marcus. I take over. Good morning, everyone. Petter Sylvan here. So I will start to give an update of the regulatory landscape in Sweden. As we see on this page, the school voucher inquiry has been withdrawn. We have talked about that before. While the principle of public access to official documents and the profit regulation remain or has just been passed as laws. For AcadeMedia, for both these reforms, we estimate that it will have a limited financial impact. However, of course, it will be a significant administrative change and burden for us to manage. We have estimated before that fulfilling requirements of the principle of public access to official documents will requirement investment in isolated system up to 25 million SEK. At the time being, we have one FTE that is managing to give you a quantified indication of what this means in terms of headcounts.

Speaker #1: And as we see on this page, the school voucher inquiry has been withdrawn. We have talked about that before. And while the principle of publicity and the profit regulation remain, or have just been passed, as laws.

Speaker #1: And for AcadeMedia, for both of these reforms, we estimate that there will be a limited financial impact. However, of course, it will be a significant administrative change and burden for us to manage.

Speaker #1: We have estimated before that fulfilling the requirement of the principle of publicity will require investment in IT-related systems of up to 25 million Swedish krona.

Speaker #1: And at the time being, we have one FTE. That is just to give you a quantified indication of what it means in terms of headcount.

Speaker #1: For the other reform, the profit regulation, it is to be seen, but we think operational changes will be limited for large actors like us. And we continue to assess that the greater regulatory complexity may contribute to further consolidation in the sector, which could favor larger providers like us with established compliance capabilities.

Petter Sylvan: For the other reform, the profit regulation, it is to be seen, but we think operational changes will be limited for large actors as us. We continue to assess that the greater regulatory complexity may contribute to further consolidation in the sector, which could favor larger providers as us with established compliance capabilities. Please go to next slide. As Marcus mentioned, we conclude a great year with a record Q4. Net sales increased by 10.6% to SEK 5.7 billion, while adjusted EBITDA increased by 16.2% to SEK 552 million. The adjusted EBITDA margin improved to 9.8% from 9.3% last year. Student numbers increased by 5.2%, and organic growth was 10.2% in the quarter. All segments contributed to the improvement in earnings, with the international operations serving as the primary driver. Free cash flow amounted to SEK 354 million compared with SEK 532 million last year.

Speaker #1: So, please go to the next slide. As Marcus mentioned, we conclude a great year with a record fourth quarter. Net sales increased by 10.6% to SEK 5.7 billion.

Speaker #1: While adjusted EBITDA increased by 16.2% to SEK 552 million, the adjusted EBITDA margin improved to 9.8% from 9.3% last year, due to numbers increasing by 5.2%. Organic growth was 10.2% in the quarter.

Speaker #1: All segments contributed to the improvement in earnings, with the international operations serving as the primary driver. Free cash flow amounted to SEK 354 million, compared with SEK 532 million last year.

Speaker #1: And this lower cash flow was primarily driven by acquisition-related payments in the quarter, and to a much lesser degree, the timing of municipal payments.

Petter Sylvan: This lower cash flow was primarily driven by an acquisition related payments in the quarter and to a much less degree, timing of municipal payments. Let's continue to next page. We see that the main contributor to the year-on-year earnings improvement in the quarter here and the preschool and international delivered the largest positive contribution. They added SEK 43 million in the adjusted EBITDA. The improvement was driven by increased volumes and revenue in Germany, together with improved efficiency in Norway. Compulsory school added SEK 40 million, supported by the annual school voucher revision and acquisitions. Upper secondary school contributed SEK 12 million, primarily due to lower rental costs and improved capacity utilization. Adult education added SEK 10 million, supported by higher vocational education and labor market services. Group costs increased by SEK 10 million compared with the same period last year. We can continue to next page.

Speaker #1: Okay, let's continue to the next page. We see that the main contributor to the year-on-year earnings improvement in the quarter here is the preschool and international, which deliver the largest positive contribution.

Speaker #1: The added €43 million in the adjusted EBITDA, and the improvement was driven by increased volumes and revenue in Germany, together with improved efficiency in Norway.

Speaker #1: Compulsory School added SEK 40 million, supported by the annual school voucher revision and acquisitions. Upper Secondary School contributed SEK 12 million, primarily due to lower rental costs and improved capacity utilization.

Speaker #1: Adult education added 10 million, supported by higher vocational education and labor market services. Group cost increased by 10 million compared with the same period last year.

Speaker #1: We can continue to the next page. Turning to the full year's picture, we delivered both growth and a clear improvement in profitability. Net sales increased by 7% to SEK 20.4 billion.

Petter Sylvan: Turning to the full year's picture, we delivered both growth and a clear improvement in profitability. Net sales increased by 7% to SEK 20.4 billion, while adjusted EBITDA increased by 15.3% to SEK 1.5 billion. The adjusted EBITDA margin improved to 7.4% from 6.9%, and was within our financial target range of 7% to 8%. That is the first year since a couple of years back that we are within our profitability margin. Earnings after tax increased by 19.2% to SEK 1.1 billion. Free cash flow amounted to SEK 1.3 billion, up 14.2% year-on-year. Overall, earning growth materially faster than sales, resulting in a margin improvement of 0.5% for the year. Now we move on to page 17, and we will look at each segment. If you continue. We start with preschool and international.

Speaker #1: While adjusted EBITDA increased by 15.3% to SEK 1.5 billion, the adjusted EBITDA margin improved to 7.4% from 6.9% and was within our financial target range of 7 to 8%.

Speaker #1: And that's the first year since a couple of years back that we are within our profitability margin. Earnings after tax increased by 19.2% to SEK 1.1 billion.

Speaker #1: Free cash flow amounted to €1.3 billion, up 14.2% year on year. Overall earnings grew materially faster than sales, resulting in a margin improvement of 0.5% for the year.

Speaker #1: So, now we move on to page 17, and we will look at each segment. So, if you continue, we'll start with the preschool and international.

Speaker #1: The number of children increased by 8.1%, driven by international expansion, while net sales increased by 16% to SEK 2.3 billion. Adjusted EBITDA increased by 24.9% to SEK 216 million.

Petter Sylvan: The number of children increased by 8.1%, driven by international expansion, while net sales increased by 16% to SEK 2.3 billion. Adjusted EBITDA increased by 24.9% to SEK 216 million, and the margin improvement to 9.5% from 8.8%. The improvement in profitability was largely driven by increased volumes and higher school voucher funding in Germany, together with temporarily lower cost levels in Norway. We had four acquisitions, which summarized to 30 new units, and this continued to support growth during the period. Next, compulsory school. The student numbers increased by 8.3%, and net sales increased by 12.9% to SEK 1.4 billion. The acquisition of Prolympia had a positive impact on student numbers, sales, and earnings. The adjusted EBITDA increased by 13.2% to SEK 129 million, while the margin remained stable at 9.5%. The quarter therefore combined acquisition-driven growth with maintained profitability.

Speaker #1: And the margin improved to 9.5% from 8.8%. The improvement in profitability was largely driven by increased volumes and higher school voucher funding in Germany, together with temporarily lower cost levels in Norway.

Speaker #1: We had four acquisitions, which summarized to 30 new units, and this continued to support growth during the period. Next, Compulsory School: the student numbers increased by 8.3%, and net sales increased by 12.9% to SEK 1.4 billion.

Speaker #1: The acquisition of Prolimpia had a positive impact on student numbers, sales, and earnings. The adjusted EBITDA increased by 13.2% to SEK 129 million, while the margin remained stable at 9.5%.

Speaker #1: The quarter, therefore, combined acquisition-driven growth with maintained profitability. We move on to upper secondary. Student numbers increased by 0.6%, and net sales increased by 3.1% to SEK 1.5 billion, supported by more students and the annual voucher revision.

Petter Sylvan: We move on to upper secondary, and student numbers increased by 0.6%, and net sales increased by 3.1% to SEK 1.5 billion, supported by more students and the annual voucher provision. Adjusted EBITDA increased by 6.5% to SEK 197 million, and the margin improved to 12.7% from 12.3%. The result benefited from lower rental costs following the lower rent indexation, reduced costs for leased computers, and improved capacity utilization. We now move on to adult education. They continued to improve its profitability in the quarter. Net sales increased by 5.33% to SEK 478 million, while adjusted EBITDA increased by 27% to SEK 47 million. The adjusted EBITDA margin improved to 9.8% from 8.1%. The improvement was mainly attributable to higher volumes in labor market services and municipal adult education. On a rolling 12-month basis, profitability has now improved for 12 consecutive quarters, with an adjusted EBITDA margin of 13.7%.

Speaker #1: Adjusted EBITDA increased by 6.5% to SEK 197 million, and the margin improved to 12.7% from 12.3%. The results benefited from lower rental costs following the lower rent indexation, reduced cost for leased computers, and improved capacity utilization.

Speaker #1: And we now move on to Adult Education. They continued to improve its profitability in the quarter. Net sales increased by 5.3% to SEK 478 million, while adjusted EBITDA increased by 27% to SEK 47 million.

Speaker #1: The adjusted EBITDA margin improved to 9.8% from 8.1%. The improvement was mainly attributable to higher volumes in Labor Market Services and municipal adult education.

Speaker #1: On a rolling 12-month basis, profitability has now improved for 12 consecutive quarters, with an adjusted EBITDA margin of 13.7%. As previously communicated, the second half of the reporting year includes more completed courses, resulting in lower capacity utilization, with the main impact in the fourth quarter.

Petter Sylvan: As previously communicated, the H2 of the reporting year include more completed courses, resulting in lower capacity utilization with a main impact in Q4. We now move on to the financial positions on the group. Let's start with the free cash flow on page 22. AcadeMedia maintains a strong cash generation. Free cash flow before expansion investments amounted to approximately SEK 1.3 billion for the year, and this corresponds to 62% of adjusted EBITDA. Increase in other external CapEx is driven by acquisitions that were completed in Q3 and Q4. Maintenance CapEx amounted to approximately 1.4% of net sales, following an increase in new openings and expansion units compared with previous years. The strong cash generation supports investment in existing operations and continued growth. Larger acquisitions may still require external financing. Let's continue to the next slide. The financial position and leverage.

Speaker #1: We now move on to the financial positions of the group, and let's start with the free cash flow on page 22. AcadeMedia maintains strong cash generation. Free cash flow before expansion investments amounted to approximately SEK 1.3 billion for the year.

Speaker #1: And this corresponds to 62% of adjusted EBITDA. The increase in other external capex is driven by acquisitions that were completed in Q3 and Q4. Maintenance capex amounted to approximately 1.4% of net sales, following an increase in new openings and expansion units compared with previous years.

Speaker #1: The strong cash generation supports investment in existing operations and continued growth. Larger acquisitions may still require external financing. Let's continue to the next slide: the financial position leverage.

Speaker #1: And it remains strong despite the acquisitions that we have completed during the year. The net debt, excluding IFRS 16, amounted to SEK 1.9 billion, compared with SEK 953 million last year.

Petter Sylvan: It remains strong despite the acquisitions that we have completed during the year. The net debt excluding IFRS 16 amounted to SEK 1.9 billion compared with SEK 953 million last year, and the increase is mainly an effect of acquisitions completed during the year. Leverage excluding IFRS 16 was 0.9x adjusted EBITDA compared with 0.5x last year. This remains well below our financial target of a maximum of 3x. Property-related lease liabilities amounted to SEK 12 billion, and the book value of the properties was SEK 1.6 billion at the end of the year. Key message here, the balance sheet retains substantial financial flexibility after a year of active M&A. Finally, if you flip to the next page, our performance against the financial targets. The adjusted EBITDA margin was 7.4%, which is, as I mentioned, well within the range, target range of 7% to 8%.

Speaker #1: And the increase is mainly an effect of acquisitions completed during the year. Leverage excluding IFRS 16 was 0.9 times adjusted EBITDA, compared with 0.5 times last year.

Speaker #1: And this remains well below our financial target of a maximum of three times. Property-related lease liabilities amounted to SEK 12 billion, and the book value of the properties was SEK 1.6 billion at the end of the year.

Speaker #1: Key message here: the balance sheet retains substantial financial flexibility after a year of active M&A. And finally, if we flip to the next page, our performance against the financial targets.

Speaker #1: The adjusted EBITDA margin was 7.4%, which is, as I mentioned, well within the target range of 7% to 8%. Revenue growth, according to the target definition, was 5.8%.

Petter Sylvan: Revenue growth according to the target definition was 5.8%, and this is also within the target range of 5% to 7%. Leverage excluding IFRS 16 was 0.9%, well below the maximum level of 3x. With that, we conclude the presentation, and we open up for questions.

Speaker #1: And this is also within the target range of 5% to 7%. Leverage excluding IFRS 16 was 0.9x, well below the maximum level of three times.

Speaker #1: And with that, we conclude the presentation and we open up for questions.

Speaker #2: If you wish to ask a question, please dial pound key five (#5) on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six (#6) on your telephone keypad.

Operator 2: If you wish to ask a question, please dial #5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial #6 on your telephone keypad. The next question comes from Jonny Jin from SEB. Please go ahead.

Operator: If you wish to ask a question, please dial #5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial #6 on your telephone keypad. The next question comes from Jonny Jin from SEB. Please go ahead.

Speaker #2: The next question comes from Johnny Jin from SEB. Please go ahead.

Speaker #3: Yes, good morning, Marcus and Petter. A couple of questions from my side. I want to start with the cash flow, and the change in working capital is negative in this quarter, which is a little bit unusual given your seasonal pattern.

Jonny Jin: Yes. Good morning, Marcus and Petter. A couple of questions from my side. I want to start with cash flow and the change in working capital is negative in this quarter, which is a little bit unusual given your seasonal pattern. I know that you attribute this to two things. Partly the acquisition payment completed off the balance sheet date, and secondly, the calendar of payment in the international business. My first question is basically, what was the effect from acquisition payment in the quarter? If you could maybe help us quantify that first effect, please.

Speaker #3: And I know that you attribute this to two things: partly the acquisition payment completed after the balance sheet date, and secondly, the calendar of payment in the international business.

Speaker #3: So, my first question is basically, what was the sort of effect from the acquisition payment in the quarter? If you could maybe, yeah, help us quantify that first effect, please.

Speaker #1: So, the effect from the acquisition-related item was SEK 140 million. So, that contributed to the main difference compared to last year. That's the third question.

Petter Sylvan: The effect from the acquisition related was SEK 140 million. That contributes to the main difference compared to last year. But your second question?

Speaker #1: Yeah.

Jonny Jin: That's okay. SEK 140 million from the acquisition. Then secondly, the calendar effect in the international business. Could you also quantify that effect as well? Also elaborate if this is a pure calendar effect this year, or is it more of a structural shift we should expect in cash flow as you grow the international business?

Speaker #3: I'd ask you about the 140 million from the acquisition. And then secondly, the calendar effect in the international business—could you also, yes, quantify that effect as well?

Speaker #3: And also, could you elaborate if this is purely a calendar effect this year, or is it more of a structural shift we should expect in cash flow as you grow the international business?

Petter Sylvan: It's directly to the Norwegian business. There they have the majority of the municipality payments mostly paid there by municipalities or the significant part, but a significant sum of their payment is made at the end of quarters. When we close the year, we always get a higher degree than the rest of the year. So we used to have this swing effect that differed year by year, specifically in Norway. The difference compared to last year related to this, depending on the municipality pays on the other side of the quarter or the end of the quarter. The difference this year was -70 million SEK. But it could also flip the other way around and be positive the next year.

Speaker #1: It's directed directly to the Norwegian business. And there, they have the majority of the municipality payments, mostly paid by municipalities or a significant part.

Speaker #1: But a significant sum of their payments is made at the end of quarters, and when we close the year, we always get a higher degree than the rest of the quarters.

Speaker #1: So we used to have this swing effect that differs year by year, specifically in Norway. The last, the difference compared to last year, related to this, depending on whether the municipalities pay on the other side of the quarter or at the end of the quarter.

Speaker #1: This year, the difference was minus 70 million Swedish kronor. But it could also flip the other way around and be positive next year.

Speaker #3: Understood. Understood. So maybe that's sort of temporary this year and will normalize in the coming quarters, I expect.

Jonny Jin: Understood. So maybe that's temporary this year and will normalize coming quarters, I expect.

Speaker #1: Yeah, exactly. And if you look over years, it would normalize between years.

Petter Sylvan: Yeah, exactly. If you would look over years, it would normalize between the years.

Speaker #4: So it's very important to say that there is no change in the way that the cash flow is developed in the company. It just depends on these two questions.

Marcus Strömberg: It's very important to say that there is no change in the way that the cash flow is developing in the company. It just depends on these two questions and when you get paid.

Speaker #4: And when you get paid.

Speaker #1: Yeah.

Petter Sylvan: Yeah.

Speaker #3: Understood. Yes, thank you; that was very helpful. Moving on to a quick question here about the adult business: we are now also seeing some signs of a stronger economy in Sweden.

Jonny Jin: Understood. Thank you. That was very helpful. Moving on to a quick question here on the adult business. We also see some signs of stronger economy in Sweden here. Do you see signs of lower volumes in the adult business now? Or how has the new fiscal year started for you in the adult business specifically?

Speaker #3: So, do you see any signs of lower volumes in the adult business now, or how has the new fiscal year started for you in the adult business specifically?

Speaker #1: Now, we continue to see still strong volume development in adult education. And as you know, Johnny, we had a significant increase in the number of programs that we were allotted at the beginning of the year.

Petter Sylvan: We continue to see still strong volume development in the adult education. As you know, Jonny Jin, we had a significant increase of programs that we were allotted at the beginning of the year. Now they are to be signed up in the start of the school year, and we only have positive signs, although we do not finalize yet how many students they actually will apply. But we have a good momentum in the beginning of the start of the year, and we still conclude that the unemployment rate is high, and we do not see any change in that as of today.

Speaker #1: Now they are to be signed up at the start of the school year, and we only have positive signs, although we haven't finalized yet how many students will actually apply.

Speaker #1: But we have a good momentum in the beginning of the start of the year. And we still conclude that the unemployment rate is is high and we don't see any change in that as of today.

Speaker #4: So maybe one thing, maybe Johnny—there is one thing that you should look at also, and it's the application to university and higher education in Sweden.

Jonny Jin: Okay.

Marcus Strömberg: Maybe, Jonny Jin, there is one thing that you should look at also, and it is the application to university and higher education in Sweden. That was top level in this. We have never seen so many applications. But the number of students that could start was taken down. So there are a number of students that could not start to university. So you have a lot of people that want to retrain. A lot of these people are looking at vocational schools because they are shorter and they help you in a better way to job, and you do not take so much study loans. So the driver, I think, when it comes to adult education, upskill, reskill, it is not just unemployment, it is the change in the labor market.

Speaker #4: And that was top level in this. We have never seen so many applications. But the number of students that could start was taken down.

Speaker #4: So, there are a number of students that couldn't start university. So, you have a lot of people that want to retrain. And a lot of these people are looking at vocational schools because they are shorter, and they help you in a better way to get a job, and you don't take so much in study loans.

Speaker #4: So the driver, I think, when it comes to adult education, upskill, reskill—it is not just unemployment, it's the change in the labor market.

Speaker #3: Yes, understood. Sounds promising. We'll see. Then just one final question from me, which is more of a clarification. I think you mentioned in the report that the preliminary student enrollment figures for the upcoming year are up 8% year over year.

Jonny Jin: Yes. Understood. Sounds promising. We will see. Just one final question from me is more of a sort of a clarification question. I think you mentioned in the report that the preliminary student enrollment figures for the upcoming year is up 8% year-over-year. Is that purely organic, or is it total including M&A?

Speaker #3: Is that purely organic, or is it total including M&A?

Speaker #1: It's total including M&A.

Petter Sylvan: It is the total including M&A.

Speaker #3: Okay, that's clear. And, sort of, if you would give a proxy to what this organic of that.

Jonny Jin: Okay, that is clear. If you would give a proxy to what is organic of that?

Speaker #1: We don't, we don't disclose that. At this time of the year, we've used to disclose later during the year the actual number. No, we don't disclose the number of students.

Petter Sylvan: We do not disclose that at this time of the year. We used to disclose later during the year the actual number of. We do not disclose the number of students. No.

Speaker #1: No no.

Speaker #3: Okay.

Jonny Jin: Okay.

Petter Sylvan: These are figures. We used to disclose how much the voucher increased our per segment later during the year, but we never used to disclose exactly which student, how they fit.

Speaker #1: Okay. Figures—I mean, we used to disclose how much the voucher increased per segment, and so later during the year, but we never used to disclose exactly which student, how they fit.

Petter Sylvan: These are figures. We used to disclose how much the voucher increased our per segment later during the year, but we never used to disclose exactly which student, how they fit.

Speaker #3: Understood. Thank you. That was all from me. Have a great day.

Jonny Jin: Understood. Thank you. That was all from me. Have a great day.

Speaker #2: As a reminder, if you wish to ask a question, please dial the pound key followed by five on your telephone keypad. The next question comes from Carl Johan Bonneville from DNB Carnegie.

Operator 2: As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Karl-Johan Bonnevier from DNB Carnegie. Please go ahead.

Operator: As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Karl-Johan Bonnevier from DNB Carnegie. Please go ahead.

Speaker #2: Please go ahead.

Speaker #5: Yes, good morning, Marcus. I'm Petter. Just to continue on the last topic, the 122,100 students you see starting in your school this...

Karl-Johan Bonnevier: Yes, good morning, Marcus and Petter. Just to continue on the last topic, the 122,100 students you see starting in your school this. I understand. Is Poland included in that, or is that just the structure awaiting the clearance of the competitive authorities in Poland?

Speaker #5: I understand. Is Poland included in that, or is that just the structure—the waiting, the clearance of the competitive authorities in Poland?

Petter Sylvan: Poland is not included.

Speaker #1: Poland is not included.

Speaker #5: So that would add, say, 2-3,000 more students if that comes through, so.

Karl-Johan Bonnevier: That would add, say, 2,000, 3,000 more students if that comes through as well.

Speaker #1: That's correct.

Petter Sylvan: That is correct.

Speaker #5: Excellent. Excellent.

Karl-Johan Bonnevier: Excellent.

Speaker #1: And it's also just so you know, we always—when we support children, it's full-time equivalence. So, if there are 2,000 Polish students, they won't be full-time equivalent in our reporting.

Petter Sylvan: It is also just so you know, Karl-Johan, we always when we support children, it is full-time equivalents. If there are 2,000 Polish students, they will not be full-time equivalents in our reporting when you read the numbers until we have held them for one year.

Speaker #1: When you read the numbers, until we have held them for one year.

Speaker #5: Excellent. And just on Poland, then—I saw you talked about the number of places kids represent. What is the utilization of that when you are looking at the places?

Karl-Johan Bonnevier: Excellent. Just on Poland then, I saw you talked about the number of places Kids&Co. represent. What is the utilization of that when you are looking at the places?

Speaker #1: The utilization rate?

Petter Sylvan: The utilization rate?

Speaker #5: Yes. No, I think you talked about there were 3,000 places in Kids Poland, but obviously that is not the number of students, I guess.

Karl-Johan Bonnevier: Yes. I think you talked about there were 3,000 places in Kids&Co. Poland, but obviously that is not the number of students, I guess.

Speaker #1: Not exactly. I honestly don't know the utilization rate. I don't know if anyone knows yet. We can check it and return if you like.

Petter Sylvan: No, exactly. I honestly don't know the utilization rate. I don't know if anyone else knows. We can check it up and return it to us.

Marcus Strömberg: The overall picture when it comes to Poland, it's a little bit like how it was in Germany. We have a lot of families that need preschool to get to work, and the unemployment rate is in fact quite low in Poland. So the demand of preschool is high. You see also the same development as it was in Germany, because if you take the older children from 4 to 6, they in the East state went to the kindergarten, as it's called. It's the same name in Poland. When it comes to the lower age group, almost no one goes to preschool. So if we have a lot of schools, we take the children from early ages, and then they continue with us.

Speaker #4: But the overall picture when it comes to Poland, it's a little bit like how it was in Germany. You know, we have a lot of families that need preschool to get to work, and the unemployment rate is in fact quite low in Poland.

Speaker #4: So so the the demand of preschool is high but you see also the same development as it was in Germany because if you take the older children from four to six they they in the east state went to the kindergarten as it's called it's it's the same name in Poland but when it comes to the low age group almost no one go to preschool.

Speaker #4: So, if you— we have a lot of schools, we take the children from early ages, and then they continue with us. So the demand in Poland is something that we really, really believe in.

Marcus Strömberg: The demand in Poland is something that we really believe in, and we also see a middle class that want to invest in education.

Speaker #4: And we also see the middle class that wants to invest in education.

Speaker #5: And do I understand it right that kids have quite a good density of preschools in the larger cities in Poland?

Karl-Johan Bonnevier: Do I understand it right that Kids&Co. have quite a good density of preschools in the larger cities in Poland?

Speaker #4: When it comes to the older age groups, it's the same as in Germany, in what we call kindergarten. But to be honest, the quality there is quite bad.

Marcus Strömberg: When it comes to the older age groups, it is the same as in Germany in what we call kindergarten. But to be honest, the quality there is quite bad. It is as in East Germany, because if you visit the kindergarten in East Germany, you do not want to take your children there. We see modern families wanted a good preschool, and I think we could present them a very good offer.

Speaker #4: And it is as in East Germany, because if you visit the kindergarten in East Germany, you don't want to—you don't want to take your children there.

Speaker #4: So, we see modern families want a good preschool, and I think we could present them with a very good offer.

Speaker #5: And coming back to the student numbers earlier, Marcus, you have alluded to how you see the startup of the upper secondary segment in that.

Karl-Johan Bonnevier: Coming back to the student numbers. Earlier, Marcus, you have alluded a little to how you see the startup of the upper secondary segment in that. Do you see stable students base starting in the new year compared to last year or is there a growth in the first-year students?

Speaker #5: Do you see a stable student base starting in the new year compared to last year, or is there growth in the first-year students?

Speaker #4: I think—I think I can't comment on that, but as you know, we have invested a lot in campuses, and I must say that the situation is very good.

Marcus Strömberg: I can't comment on that, but as you know, we have invested a lot in campuses, and I must say that the situation is very good so far. I'm not sleeping bad over upper secondary.

Speaker #4: So far, so—so I—I'm not losing sleep over upper secondary.

Speaker #5: Sounds excellent. Then, just one more question. Looking at the strong development in Preschool International, with the margins coming up quite substantially during the last fiscal year.

Karl-Johan Bonnevier: Sounds excellent. Just one more question. Looking at the strong development in preschool and international with the margins coming up quite substantially during the last fiscal year, is that mainly a situation where you have closed the gap now between the performance of the Swedish unit and the international units, or what is happening underlying?

Speaker #5: Is that mainly a situation where you have closed the gap now between the performance of the Swedish unit and the international units, or what is happening underlying?

Petter Sylvan: The underlying reasons are multiple, and we started to talk about them in the beginning of last year that we had various plans in various countries for improvement. In Finland, they are on restructuring work from the restructuring they came from at the low profitability, and they developed according to plan. In Norway, we had renegotiated the leases to a significant degree to much favorable terms, and we've also been debt compensated during the year for pensions. In Germany, there was a time lag of the voucher compensations and the inflation cost, which have had in all countries, but the delay has been most aware in Germany. During last year, we got most fully compensated in Germany. On one hand, we conclude that we ended the year margin-wise in the international segment pretty much as we expected, and also gaining some contributions in average from the acquisition.

Speaker #1: The the underlying reasons are are multiple and we started to talk about them in the beginning of last year that we had various plans in various countries for improvements in in Finland they are on on a restructuring work from the restruction they came from at the low profitability and they developed according to plan.

Speaker #1: In Norway, we have been—we had renegotiated the leases to significant degrees, to much more favorable terms, and we have also been better compensated during the year for pensions. In Germany, there was a time lag of the voucher compensations and the inflation cost, which we have had in all countries, but the delay has been most severe in Germany. During last year, we got mostly fully compensated in Germany.

Speaker #1: So at one hand we conclude that we ended the year margin wise in the international segment pretty much as we expected and also gaining some contributions from some in average from the acquisitions looking forward for this year we think this will be more of a consolidation year we will need to spend quite significant time to consolidate the number of acquisitions we are done internationally and and then furthermore we don't start the year with these improvement conditions that we had last year.

Petter Sylvan: Looking forward for this year, we think this will be more of a consolidation year. We will need to spend quite significant time to consolidate the number of acquisitions we have done internationally. Furthermore, we don't start the year with the improvement conditions that we had last year. We will defend our margin for the year to come, but we don't expect any similar margin increase.

Speaker #1: So, we will defend our margin for the year to come, but we don't expect any similar margin increase.

Speaker #5: Good to hear. Good to hear, or good to know. Just one final question: Looking at group costs, I saw quite a substantial increase in Q4. Is that a new level, or was there some sort of temporary factor in there?

Karl-Johan Bonnevier: Good to hear. Good to know. Just one final. Looking at group cost, that was quite substantial increase in Q4. Is that a new level or was there some sort of temporary things in there?

Speaker #1: The group cost? What was yeah yeah the group cost increased by 3 million Swedish krona and while it is increase a notable one can debate if it's substantial and we we will always expect an increase in the group overhead first and one is that some of those increase to high degree relates to our international expansion but having said that specifically in the Q4 we had most of the difference is related to one of related restructuring costs of layoffs and change of position personnel.

Petter Sylvan: The group cost?

Karl-Johan Bonnevier: Yes.

Petter Sylvan: Yeah. The group cost increased by 3 million SEK. While it is an increase, a notable, one can debate if it is substantial. We will always expect an increase in the group overhead. One is that some of those increase to a high degree relates to our international expansion. Having said that, specifically in the Q4, we had most of the difference is related to one-off related restructuring costs of layoffs and change of position personnel.

Speaker #5: Thank you. Oh, one final question I saw here. So, looking at the UK and Polish market entry, do those acquisitions also include any properties, or is that all in leased properties?

Karl-Johan Bonnevier: Thank you. One final as well. Looking at the UK and Polish market entry, do those acquisition also include any properties or is that all in lease properties?

Petter Sylvan: For both of them, there are only leases, no properties.

Speaker #4: For you, both of them, there are only leases—no properties.

Speaker #5: Thank you very much, and all the best out there.

Karl-Johan Bonnevier: Thank you very much and all the best out there.

Speaker #4: Thanks.

Petter Sylvan: Thanks.

Operator 2: There are no more questions at this time. I hand the conference back to the speakers for any written questions and closing comments.

Operator: There are no more questions at this time. I hand the conference back to the speakers for any written questions and closing comments.

Speaker #2: There are no more questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Speaker #4: Well, thank you very much for your question, and you can always call us if you have any follow-up questions. So, thank you very much.

Marcus Strömberg: Thank you very much for your question, and you can always call us if you have any complimentary questions. Thank you very much. Have a good day.

Speaker #4: Have a good day.

Operator 2: The host has ended this call. Goodbye.

Operator: The host has ended this call. Goodbye.