Release Date: October 24, 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 12% growth in the first quarter, with 6% being organic growth.
- The company is expanding internationally, nearing 100 units in Germany, indicating strong international development.
- AcadeMedia AB is recognized as a leading vocational trainer in Sweden, benefiting from government investments in vocational training.
- The company's quality model is considered a role model in Sweden, with strong performance in school inspections.
- The adult education segment showed a significant increase in adjusted EBIT, driven by higher demand in vocational education.
Negative Points
- The first quarter is seasonally small, impacting net sales and profit margins negatively.
- Free cash flow was negative at SEK225 million, worse than the previous year's SEK127 million, due to unfavorable working capital development.
- Adjusted EBIT decreased in the preschool, international, and compulsory school segments.
- The preschool segment faced a negative margin of -0.8%, affected by seasonal closures and acquisition impacts.
- Higher personnel and maintenance costs led to a decrease in operating profit in the compulsory school segment.
Q & A Highlights
Q: Can you comment on the preschool profitability, given the lower results in Q1 compared to expectations?
A: Petter Sylvan, CFO: The lower profitability in Q1 is due to normal seasonal effects, particularly in the preschool segment, which is typically weaker as they are closed to a high degree. This aligns with our expectations and previous communications. Marcus Stromberg, CEO: The major change from last year is the absence of certain grants, which affected the numbers.
Q: What are the expectations for non-compulsory school profitability, given the 1.3 percentage point decrease this quarter?
A: Petter Sylvan, CFO: The decrease is due to temporary costs related to maintenance and other spendings. We expect these costs to be lower in later periods, and we maintain our full-year expectations. Marcus Stromberg, CEO: It's important to note that Q1 is a small quarter, so even minor changes can have a significant impact.
Q: Are you satisfied with the student intake in the upper secondary school segment?
A: Petter Sylvan, CFO: Yes, we are happy with the growth in student numbers across all segments, except for a decline in the Swedish preschool business due to demographic changes. Marcus Stromberg, CEO: The vocational program is performing well, although the technical program is facing challenges, which presents potential for future growth.
Q: Does the acquisition of Tula in Finland meet your expectations in terms of potential?
A: Marcus Stromberg, CEO: Yes, Tula has the potential we anticipated, similar to our operations in Sweden. We are taking steps to improve its performance. Petter Sylvan, CFO: We expect Tula to deliver a margin in the range of 3% to 4% this year, with plans to increase it over time.
Q: How do you view the adult education segment's margin, given the strong performance in Q1?
A: Petter Sylvan, CFO: We expect the margin to be in the 9% to 11% range, likely around 10%. The strong Q1 performance is partly due to temporary effects. Marcus Stromberg, CEO: The Swedish government's investment in adult education presents a good opportunity for us, given our strong position in the market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
