Good morning everybody, and welcome to this presentation of our Q4 report, and we will also sum up the full year for AcadeMedia. This time of the year is really fantastic for AcadeMedia.

We have all the school starts in Sweden, and we plan the school start internationally. We have never had so many students, children, parents choosing our school.

When you talk about election, they are election in different countries every fourth year, we have election every year. A lot of parents choose our schools.

I will just give a short summarize of the quarter. 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, 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 for more sports schools, and that is also something that we really believe in in the future.

The quarter four, 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 parents 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 rating. We are more accurate to grading than the municipality schools, it's check when it comes to grading.

We also have developed the numbers when it comes to qualified teachers, you could say that we have a better numbers when it comes to the teachers, qualified teachers in math, Swedish, English, and the overall picture are that we are on the same level as the municipalities. The third area here is something that we are really interested in, it how do we perform when it comes to the socioeconomic weaker students?

We made report just before the summer, and it was very good results because that we could say that we really outperform a lot of the work that other schools when it comes to these children. Good principals, good teachers, it's possible to have good results even at socioeconomic weak 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. AcadeMedia outperforms on almost every key quality metric.

I must also mention reading, that is one area that we really had 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'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.

If you look in the bigger cities, we are talking about 50% of the students in upper secondary that go to independent operators. 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's around 25%.

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. We have also continued to have this acquisition strategy.

This is illustration of that AcadeMedia have a long history of making acquisition. That's a little bit unique with AcadeMedia is that we could grow through small bolt-on acquisition, bigger mergers, new starts, but this picture shows the number of acquisitions that we have done.

We have taken care of the brands, we have improved the brand, we have made them better tomorrow than they were when we made acquisition, and that is real value creation. We have also managed to do that international.

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 UK for many, many years, where I met a lot of companies, and we think that Chestnut is a very interesting platform, and it was reasonable valued, but very enthusiastic management, and they really wanted to be a part of us, and now they recommend us to others, and they also have new starts that is being planned, a good platform to start to learn the UK market. Then we also have entered Poland.

Poland, the company Kids&Co., is people that we have known for 5 years. 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.

We will continue to grow in Poland, new starts, bolt-on acquisitions, and we also in September now start primary school, not just the preschools in Poland, and as all of Poland is an interesting market coming in Europe. Also to make some extra bolt-on acquisition, and I think Netherlands is quite interesting because we started with Winford, is a company that we known for a long time.

We then went to preschools, we entered adult education, and this is a sort of bolt-on acquisition when it comes to Winford. Schools come to us, we try to make them better, working together with Winford, this is a small but interesting acquisition.

If you look at the profit, and we have a very stable margin, stable profit development, and we have really had focus, and the driver here is all of the segments, but of course international development and the adult education is really driving the performance here. I must say that transformation that we have done when it comes to adult education is quite interesting, and 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, and here the development has been really, really good. If you look into an acquisition, it's even better than these numbers, 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.

We have the target of 50%, and we have a lot of possibilities coming in the platform countries that we just have acquired.

Thank you, Marcus. I take over.

Good morning, everyone. Petter Sylvan here.

I will start to give an update of the regulatory landscape in Sweden. As we see in this page, the school voucher inquiry has been withdrawn.

We have talked about that before. While the principle of publicity and the profit regulation remain or has just been passed as laws.

For AcadeMedia, for both these reforms, we estimate they will have a limited financial impact. However, of course, it will be a significant administrative change and burden for us to manage.

We have have estimated before that to fulfill the requirement of the principle of publicity will requirements investments in IT-related system up to 25 million Swedish krona. At the time being, we have one FTE that is managing to give you a quantified indication of what it means in terms of headcounts.

For the other reform, the profit regulation, it is to be seen, but we think the 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 fourth quarter.

Net sales increased by 10.6% to 5.7 billion Swedish krona, while adjusted EBITA increased by 16.2% to 552 million. The adjusted EBITA 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 354 million compared with 532 million last years. This lower cash flow was primarily driven by an acquisition-related payments in the quarter and to 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, the preschool and international delivered the largest positive contribution.

They added 43 million in the adjusted EBITA. The improvement was driven by increased volumes and revenue in Germany, together with improved efficiency in Norway.

Compulsory school added 40 million, supported by the annual school voucher revision and acquisitions. Upper secondary school contributed 12 million, primarily due to lower rental cost and improved capacity utilization.

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

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 20.4 billion, while adjusted EBITA increased by 15.3% to 1.5 billion. The adjusted EBITA margin improved to 7.4% from 6.9% and was within our financial target range of 7% to 8%, 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 1.1 billion. Free cash flow amounted to 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, and we start with Preschool International. The number of children increased by 8.1%, driven by international expansion, while net sales increased by 16% to 2.3 billion.

Adjusted EBITA increased by 24.9% to 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 summarize to 30 new units, and this continue to support growth during the period. Next, Compulsory School.

The student numbers increased by 8.3%, and net sales increased by 12.9% to 1.4 billion. The acquisition of Olimpia had a positive impact on student numbers, sales, and earnings.

The adjusted EBITA increased by 13.2% to 129 million, while the margin remained stable at 9.5%. The quarter therefore combined acquisition-driven growth with maintained profitability.

We move on to Upper Secondary, and student numbers increased by 0.6%, and net sales increased by 3.1% to 1.5 billion, supported by more students and the annual voucher revision. Adjusted EBITA increased by 6.5% to 197 million, and the margin improved to 12.7% from 12.3%.

The result benefited from lower rental cost following the lower rent indexation, reduced costs for leased computers, and improved capacity utilization. We now move on to Adult Education.

They continue to improve its profitability in the quarter. Net sales increased by 5.3% to 478 million, while adjusted EBITA increased by 27% to 47 million.

The adjusted EBITA 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 EBITA margin of 13.7%. As previously communicated, the second half of the reporting year include more completed courses resulting in lower capacity utilization with a main impact in the fourth quarter.

We now move on to the financial positions on the group, and 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 1.3 billion for the year, and this corresponds to 62% of adjusted EBITDA. Increase in other external CapEx is driven by acquisition 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 continue growth.

Larger acquisitions may still require external financing. Let's continue to next slide, the financial position leverage.

It remains strong despite acquisitions that we have completed during the year. The net debt excluding IFRS 16 amounted to 1.9 billion compared with 953 million last year.

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.

This remains well below our financial target of a maximum of 3 times. Property-related lease liabilities amounted to 12 billion, and the book value of the properties was 1.6 billion at the end of the year.

Key message here, the balance sheet retains substantially financial flexibility after a year of active M&A. Finally, if we flip to next page, our performance against the financial targets.

The adjusted EBITA margin was 7.4%, which is, as I mentioned, well within the range target range of 7% to 8%. 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 3 times. With that, we conclude the presentation, and we open up for questions.

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, yeah, is a little bit unusual given your seasonal pattern. I know that you attribute this to two things: partly the acquisition payments completed after balance sheet date, and secondly, the, yeah, calendar of payments in the international business.

My first question is basically, what was this sort of effect from acquisition payments in the quarter if you could maybe, yeah, help us quantify that first effect, please?

The effect from the acquisition-related was 140 million Swedish krona. That contributed the main difference to compared to last year.

That's your first question. Yeah.

All right, that's clear. 140 million from the acquisition.

Then secondly, the calendar effect in the international business, could you also, yes, quantify that effect as well, and also elaborate if this is sort of a pure calendar effect this year or is it more of sort of a structural shift which you expect in cash flow as you grow the international business?

It's directed directly to the Norwegian business. There they have the majority of the municipality payment.

Most is paid there by municipalities or the significant part. A significant sums of their payments is made in the end of quarters.

When we close the year, we always get a higher degree than the rest of the years. We used to have this swing effects that differ year by year, specifically in Norway.

The difference compared to last year related to this, depending on the municipalities pays on the other side of the quarter or the end of the quarter, the difference this year was -70 million Swedish krona. It could also flip the other way around and be positive the next year.

Understood, understood. Maybe that's sort of temporary this year and will normalize coming quarters, I expect.

Exactly. If you look over years, it would normalize between the years.

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

Yeah.

Understood. Yes, thank you.

That was very helpful. Then moving on to a quick question here on the adult business.

Now we also see some signs of stronger economy in Sweden here. Do you see sort of signs of lower volumes in the adult business now, or how has, yeah, the new fiscal year started for you in the adult business specifically?

Now, we continue to see still strong volume development in adult education. As Jonny, we had significant increase of programs that we were allotted in 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 don't finalize yet how many students they actually will apply. We have a good momentum in the beginning of start of the year, and we still conclude that unemployment rate is high, and we don't see any change in that as of today.

Maybe, Jonny, there is one thing that you should look at also, and it's the application to university and higher education in Sweden, and that was top level in the spring. We have never seen so many application.

The number of students that could start were taking down, there are a number of students that couldn't start university. 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 don't take so much study loans. 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.

Yes, understood. Sounds promising.

We'll see. Then just one final question for me is more of 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?

It's total including M&A.

That's clear. Sort of if you would give an proxy to what is organic of that?

We don't We don't disclose that at this time of the year. We used to disclose later during the year the actual number of No, we don't disclose the number of students.

No. No.

Okay. What

we have did is as an indicative figures, I mean we used to disclose how much the voucher increase are per segment and so later during the year, but we never used to disclose exactly which student, how they split.

Understood. Thank you.

That was all for me. Have a great day.

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?

Poland is not included.

That would add say 2,000 to 3,000 more students if that comes through, so? That's

correct. Excellent,

excellent.

Just so Karl-Johan, we always when we report children, it's full-time equivalents. If there are 2,000 Polish students, they won't be full-time equivalents in our reporting when you read the numbers until we have held them for 1 year.

Excellent. Just on Poland then, I saw you talk about the number of places Kids represent.

What is the utilization of that when you are looking at the places?

The utilization rate?

Yes. No, yes, I think you talked about that was 3,000 places in Kids Poland, but obviously that is not the number of students, I guess, so.

No, exactly. I honestly don't know the utilization rate.

I don't know if anyone know else. No.

We can check it up and return if you like.

The overall picture when it comes to Poland, it's a little bit alike 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.

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 four to six, 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 go to preschool.

We have a lot of schools. We take the children from early ages and then they continue with us.

The demand in Poland is something that we really really believe in. We also see middle class that want to invest in education.

Do I understand it right that Kids have quite a good density of preschools in the larger cities in Poland?

When it comes to the older age groups, it's the same as in Germany in what we call kindergarten. 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 don't 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.

Coming back to the student numbers, earlier, Marcus, you have alluded a little to how you see the start-up 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?

I think I can't comment on that, but as we have invested a lot in campuses. I must say that the situation is very good so far.

I'm not sleeping bad over upper secondary.

Sounds excellent. Then just one more question looking at the strong developments in Preschool 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?

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

In Norway, we had renegotiated the leases to a significant degree to much favorable terms, and we also been better compensated during the year for pensions. In Germany, there was time lag of the voucher compensations and the inflation cost, which has had in all countries, but the delay has been most severe in Germany.

During last year, we got most fully compensated in Germany. 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 have done internationally.

Then furthermore, we don't start the year with this 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.

Good to hear or good to know. Just one final group cost that was quite substantial increase in Q4, is that the new level or was there some sort of temporary things in there?

The group cost?

Yes. Yeah.

The group cost increased by 3 million Swedish krona. While it is an increase and noticeable, one can debate if it's substantial.

We will always expect an increase in the group overhead cost, and one is that some of those increase to a high degree relates to our international expansion. Having said that, specifically in the Q4, most of the difference is related to one-off related restructuring costs of layoffs and change of position personnel.

Oh, one final I saw here. Looking at the UK and Polish market entry, does those acquisition also include any properties or is that all in lease properties?

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

Thank you very much, and all the best out there.

Thanks.

Thank you very much for your question, and you can always call us if you have any complementary questions. Thank you very much.

Have a good day.