AcadeMedia (ACAD) Q1 25/26 earnings summary

Executive summary

• Net sales increased by 6.7% year-over-year to SEK 4,101 million, with 6.2% organic growth including bolt-on acquisitions and strong student enrollment across segments.

• Student numbers grew by 3.5% to 113,082, despite a declining demographic trend, with continued growth expected for the new school year.

• The Board proposes a voluntary share redemption program of up to SEK 400 million and has revised financial targets and dividend policy to focus on growth and EBITA.

• Initiatives in reading and language development are showing clear results, with 9 out of 10 students able to read by the end of first grade.

• International expansion remains strong, with over 500 new preschool places approved in Germany and a pipeline of 2,000–2,500 new places over three years.

Financial highlights

• Adjusted EBITA for Q1 was SEK 182 million, up from SEK 166 million year-over-year; margin improved to 4.4% from 4.3%.

• Rolling 12-month adjusted EBITA reached SEK 1,332 million, margin at 6.9%, just below the 7%-8% target.

• Free cash flow for the last 12 months was SEK 1.222 billion, 67% of EBITDA; Q1 free cash flow improved to SEK -111 million from SEK -225 million.

• Earnings per share after dilution was SEK 0.82 (up from SEK 0.79); adjusted for IFRS 16, EPS was SEK 1.13 (up from SEK 1.09).

• Net debt (excl. IFRS 16) decreased by SEK 222 million year-over-year, leverage ratio at 0.7, well below the threshold of 3.

Outlook and guidance

• Expectation to maintain or improve margins in preschool and international segments, aiming for the 7%-8% margin target.

• Upper secondary school margins expected to remain stable due to persistent higher costs from reforms.

• Adult education margins likely to be slightly below last year but could exceed long-term target of 9%-11% if current trends persist.

• Continued focus on international expansion, especially in Germany and the Netherlands, with about 10 new preschools planned in 2025/26.

• Revised financial targets set annual sales growth at 5-7% and adjusted EBITA margin at 7-8% over time.