Release Date: August 28, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- AcadeMedia AB (FRA:V8T, Financial) reported a strong quarter with net sales growth of over 15%, half of which was organic.
- The company achieved a 50% growth in international operations, contributing significantly to increased profitability.
- Adjusted profit margin improved to 8.5% from last year's 7.9%, with operating profit reaching SEK450 million.
- The preschool segment saw a 33% increase in the number of children, driven by acquisitions and new openings.
- Free cash flow increased by SEK332 million compared to last year, attributed to higher profits and favorable net working capital development.
Negative Points
- The Swedish preschool segment was affected by the closure of six preschools in the past 12 months.
- The upper secondary school segment's school voucher revision was insufficient to fully offset inflation cost increases.
- Net debt, excluding IFRS 16, increased by SEK1 billion compared to last year, partly due to acquisitions.
- The adjusted EBITDA margin of 6.3% for the year fell below the target range of 7.8%.
- The company faces challenges in maintaining margins in the preschool segment due to potential dilutive effects of recent acquisitions.
Q & A Highlights
Q: Can you provide insights on the preschool business margins and expectations for next year?
A: Petter Sylvan, CFO: The current margins are expected to be sustainable into next year. The margins seen in Q4 and Q3 are indicative of future expectations, assuming no significant changes in compensation levels.
Q: What are your growth ambitions for new preschool openings in Germany this year?
A: Petter Sylvan, CFO: We plan to open 10 new schools this year, slightly fewer than the 13 opened last year. This is part of a strategy to focus on increasing capacity utilization and profitability of existing schools.
Q: How do you view the acquisition pipeline, and are there new areas of interest?
A: Marcus Stromberg, CEO: We aim to deepen our presence in Germany, particularly in schools, and see potential in the Netherlands' preschool market. We are also exploring opportunities in Poland.
Q: What is the outlook for Adult Education margins, and how does the voucher system impact your business model?
A: Marcus Stromberg, CEO: We aim to maintain margins within our target range. The shift towards a voucher system in Adult Education aligns well with our business model, offering more stability and growth potential.
Q: Can you comment on cost expectations for salaries and rents next fiscal year?
A: Marcus Stromberg, CEO: We anticipate lower salary and rent increases due to reduced inflation. School vouchers will also reflect this lower inflation, impacting our planning and financial strategies.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
