AcadeMedia (ACAD) Q1 24/25 earnings summary

Executive summary

• Net sales increased by 12% year-over-year to SEK 3,842 million, with 6% organic growth and strong international expansion, especially in Germany where student numbers rose 15%.

• Student numbers grew 8.5% to 109,281, driven by acquisitions and new establishments.

• Maintained leadership in Swedish vocational and adult education, benefiting from increased government investment and student demand.

• Quality results remain above national averages, with strong performance in school inspections and ongoing focus on reading and mathematics improvement.

• The Board proposes a voluntary share redemption program of up to SEK 300 million.

Financial highlights

• Adjusted EBIT was SEK 157 million (up from 151), with an adjusted EBIT margin of 4.1% (down from 4.4%).

• Free cash flow was -225 million SEK, more negative than last year's -127 million SEK, due to unfavorable net working capital.

• Net sales for Q1 2024/25 were SEK 3,842 million, up 12% year-over-year.

• Earnings per share before dilution increased 24.5% to SEK 1.09.

• Net debt including IFRS 16 increased to SEK 12,634 million; net debt/adjusted EBITDA (excl. IFRS 16) stable at 0.9x.

Outlook and guidance

• Management expects seasonal effects in preschool profitability to normalize over the year, with full-year expectations unchanged.

• Plan to open the 100th preschool in Germany during Q2, with a total of 8 new preschools planned for the year.

• Adult education margins are expected to be around 10%, in line with the last twelve months' trend.

• Swedish adult education expected to benefit from increased government funding and high demand for vocational training.

• Adjusted EBIT margin remains below the 7-8% target, mainly due to inflation.