YEAR END REPORT & Q4 2015/16

Transcription

1 YEAR END REPORT & Q4 2015/16

2 Today s presenters Marcus Strömberg Chief Executive Officer Eola Änggård Runsten Chief Financial Officer With AcadeMedia since 2005 With AcadeMedia since

3 CEO introduction Improving student achievements Adult education maintains strong volumes Addressable market set to grow Strong growth forms good base

4 The largest independent education provider in Northern Europe Overview Geographical presence and selected brands (Q4) Largest independent educational services provider in Northern Europe Comprehensive educational offering Unique quality assurance model key for sustainable growth Multi-brand strategy International expansion initiated in 2014 through the acquisition of Espira and continued in 2016 as AcadeMedia entered the German market through its acquisition of Munich based preschool operator Joki Country Total Students ~136k¹ ~8,2k ~0.5k ~144k (1) FTEs ~8,0k ~1.9k ~0.1k ~10k Units Financial overview Net Sales Split 15/16² SEKm Financial Development 12/13-15/16 15,9% 16,0% 39,9% Pre- and compulsory school Upper secondary school Adult education Preschool International 28,1% 12/13 13/14 14/15 15/16 12/13 13/14 14/15 15/16 Net Sales Adj. EBIT Reported EBIT Note: 1) ~80,000 of which are students within adult education during a specific year, but not necessarily full-year students (due to e.g. shorter courses). 2) Excl. group related revenue of SEK 3 million. 4

5 Student s performance continues to improve Both Swedish school segments show increasing results Upper secondary Schools Upper secondary schools: % of students passed Higher proportion of students that graduate ,7 89,2 87 GPA increases from 14.5 to ,8 87, (national average 14.5) 13/14 14/15 15/16 prel. 14/15 SE avg 13/14 14/15 15/16 prel. 14/15 SE avg Compulsory Schools Increasing proportion of students in grade 9 pass in all subjects (grade E or higher) GPA increases from to (national average 224.7) Compulsory schools - % of students w/o any F 84,5 76,6 85,9 86,1 83,4 84,3 84,0 77,3 77,4 77,0 77,4 77,0 85,8 09/10 10/11 11/12 12/13 13/14 14/15 15/16 prel Academedia SE avg 5

6 Key highlights Q4 2015/16 Strong finish from adult education segment Stable volume and revenue growth High investment activity 4 preschools in Sweden 2 preschools in Norway 1 divested secondary school 3 new starts being completed for opening August 2016 in Norway as well as 3 expansions Adult segment had a strong finish Factors affecting adjusted EBIT: Social security rates -8 MSEK Start-ups/relocation -7 MSEK IPO completed Student performance shows healthy increase Key figures for Q4 2015/16 # of Students % Net Sales % EBIT % EBIT-margin 9.2% 7.3% 1.9 p.p. Adj. EBIT % Adj. EBIT margin Earnings after Tax 10.0% 10.8% -0.8 p.p % Earnings per share 1) % Cash Flow from Operations % 1) Earnings per share before dilution and based on average number of shares during the year. Based on number of shares on June 30 th the corresponding figures are 1.50 (0.85) 6

7 Key highlights FY 15/16 Stable volume and revenue growth Acquisition of Joki in Germany Many bolt-on acquisitions 9 preschools in Sweden 4 preschools in Norway 1 divested secondary school 14 new units established (4 units divested or closed) 3 new starts being completed for opening August 2016 in Norway as well as 3 expansions Efficiency measures in support org. Factors affecting adjusted EBIT: Social security rates -25 MSEK Fx SEK/NOK -7 MSEK Start-ups/relocation -26 MSEK Leases Norway -12 MSEK Key figures for FY 2015/16 # of Students % Net Sales % EBIT % EBIT-margin 6.2% 6.3% -0.1 p.p. Adj. EBIT % Adj. EBIT margin Earnings after Tax 6.6% 7.3% -0.7 p.p % Earnings per share 1) % Cash Flow from Operations % 1) Earnings per share before dilution and based on average number of shares during the year. Based on number of shares on June 30 th the corresponding figures are 3.39 (2.36) 7

8 Pre- and compulsory schools (Sweden) Strong growth supported by bolt-ons and new starts Comments for Q4 2015/16 Key figures for Q4 2015/16 Revenues Overall student increased numbers by 9,1 increased percent mainly by 6.0% because the number of students increased by 4 bolt-on preschools acquired 6,0 percent EBIT Revenue increased growth by 9.1% 9,8 percent and Adjusted EBIT and margins affected by new starts -7 MSEK and social security rates -6 MSEK Net Sales % EBIT % EBIT-margin 9.5% 9.4% 0.1 p.p. Adj. EBIT % Adj. EBIT-margin 9.0% 11.6% -2.6 p.p. # of Students % Comments for FY 2015/16 Overall student numbers increased by 4.8% 9 bolt-on preschools acquired 9 new establishments, affecting adjusted EBIT with -26 MSEK Social security rates affect EBIT with -19 MSEK Pass rate for 9 th graders increasing as well as GPA Key figures for FY 2015/16 Net Sales % EBIT % EBIT-margin 6.0% 6.1% -0.1 p.p. Adj. EBIT % Adj. EBIT-margin 5.9% 6.7% -0.8 p.p. # of Students % 8

9 Upper secondary schools (Sweden) Healthy revenue growth in fourth quarter Comments for Q4 2015/16 Key figures for Q4 2015/16 Revenues Ongoing closure increased of by 7 units, 9,1 percent of which mainly 1 because divestedthe number of students increased by 6,0 percent Overall student numbers increased by 1.6% EBIT increased by 9,8 percent and Revenues increased by 5.1% Adjusted EBIT affected by calendar effects and positive items last year-end Net Sales % EBIT % EBIT-margin 10.5% 3.7% 6.8 p.p. Adj. EBIT % Adj. EBIT-margin 10.5% 12.8% -2.3 p.p. # of Students % Comments for FY 2015/16 Restructuring underway: 7 units being discontinued and 1 unit divested, 1 further unit will close 1 new unit Overall student numbers increased by 1.1% Adjusted EBIT increases, but margin is flat Graduation rate increasing 89.7 % (87.4) as well as GPA 14.1 (13.9) Key figures for FY 2015/16 Net Sales % EBIT % EBIT-margin 8.2% 5.7% 2.5 p.p. Adj. EBIT % Adj. EBIT-margin 8.2% 8.2% 0 p.p. # of Students % 9

10 Adult education (Sweden) Strong fourth quarter renders healthy full year Comments for Q4 2015/16 Key figures for Q4 2015/16 Revenues Participant increased volumes by maintained, 9,1 percent rendering mainly because revenues the 18 number % higher of students than last increased year by 6,0 percent Cost adjustment of Eductus business area EBIT renders increased strong by profit 9,8 percent improvement and in Q4 Interim contracts signed with Stockholm City Net Sales % EBIT % EBIT-margin 14.4% 0.9% 13.5 p.p. Adj. EBIT % Adj. EBIT-margin 14.4% 5.6% 8.8 p.p. Comments for FY 2015/16 Stable growth for full year despite weak start Margins improved thanks to restructuring and certain contracts Opposite cyclicality compared to last year effecting Q on Q changes New segment head: Christer Hammar Positioned for growth in market Key figures for FY 2015/16 Net Sales % EBIT % EBIT-margin 10.8% 10.0% 0.8 p.e. Adj. EBIT % Adj. EBIT-margin 10.9% 11.2% -0.3 p.e. 10

11 Preschools (International) Strong growth, but EBIT affected negatively by various factors Comments Key figures for Q4 2015/16 Revenues Overall student increased numbers by 9,1 increased percent mainly by because 11.9% the number of students increased by 6,0 percent 2 bolt-on preschools acquired EBIT increased by 9,8 percent and Revenue growth 2.6% affected negatively by Fx Adjusted EBIT affected by increased rent and lower costs Net Sales % EBIT % EBIT-margin 10.3% 18.9% -8.9 p.e. Adj. EBIT % Adj. EBIT-margin 10.3% 14.7% -4.4 p.e. # of Students % Comments for FY 2015/16 Strong growth from Joki acquisition in Germany and in Norway 4 new and 4 bolton units Overall student numbers increased 8.1% Factors affecting adjusted EBIT Increased rent Fx SEK/NOK MSEK Retroactive revenues 2 (15) Key figures for FY 2015/16 Net Sales % EBIT % EBIT-margin 6.0% 9.1% -3.1 p.p. Adj. EBIT % Adj. EBIT-margin 5.6% 7.9% -2.3 p.e. # of Students % 11

12 Financial position Improved net debt and leverage ratio Net Debt and Net Debt / Adj. EBITDA Capital employed has increased by 46 MSEK due to growth through acquisitions and building pre-schools 3 properties sold in Norway New issue (334 MSEK net) used to repay debt Net Debt decreased by 287 MSEK Net Debt excluding real estate debt has decreased by 429 MSEK Leverage ratio approaching target 5,0 4,0 3,0 2,0 1,0 0,0 4,5 4,1 3,3 12/13 13/14 14/15 15/16 Key figures for Q4 2015/16 Target = 3.0 3, Net Debt Net Debt / Adj. EBITDA Total Equity % Net Debt % Adj. Net Debt 1) % Capital Employed % Equity Ratio p.p. 1) Adjusted Net Debt excludes real estate loans, purpose being to show the amount of net debt required to finance operations 12

13 Seasonality varies between segments Quarterly seasonality Net sales and adj. EBIT 2013/ /16 Comments SEKm ,8% 10,8% ,0% 8,6% 7,5% 7,7% 6,4% 5,6% 3,9% 4,2% 4,3% 2,0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013/ / /16 Net Sales Adj EBIT % 14% 12% 10% 8% 6% 4% 2% 0% School segments are an annual business with strong seasonality Adult segment is cyclical and without seasonality PRE-AND COMPULSORY SCHOOL 2,4% 1,3% 0,3% 5,2% 5,1% 3,9% 6,9% 7,2% 11,6% 11,0% 8,5% 9,0% Q1 Q2 Q3 Q4 UPPER SECONDARY SCHOOL ADULT EDUCATION PRESCHOOL INTERNATIONAL 6,4% 4,2% 4,5% 7,6% 6,7% 6,3% 13,6% 12,8% 10,5% 9,8% 10,5% 8,2% Q1 Q2 Q3 Q4 12,4% Adj. EBIT margin 2013/14 Adj. EBIT margin 2014/15 Adj. EBIT margin 2015/16 8,2% 4,4% 14,5% 14,6% 9,9% 12,6% 11,8% 8,1% Q1 Q2 Q3 Q4 14,4% 5,2% 0,9% 5,7% 3,1% 1,2% 0,6% 14,7% 10,3% 8,7% 7,4% Q1 Q2 Q3 Q4 Education programs are typically 3 months Student flows depend on awarded contract and allocated student flows 13

14 Financial performance according to plan Financial targets 15/16 Annual revenue growth rate of 5-7% including Growth 5-7% organic growth and smaller bolt-on acquisitions 5.5% but excluding larger strategic acquisitions Profitability 7-8% Adj. EBIT margin of 7-8% over time 6.6% Capital structure Net debt / adj. EBITDA below 3.0x <3.0x Leverage may temporarily, exceed the target 3.1x level Use of free cash flow n.a. Free cash flow primarily be reinvested Excess cash distributed to the shareholders while still maintaining quality and leverage targets No dividend 14

15 Summary of Strategic priorities and Questions Strategic priorities Continuous development of offering and quality level to remain the most attractive choice utilization Improved capacity in existing units and Establishment of new units bolt-on acquisitions Further strategic acquisitions possible longer term Build on German platform and continued international expansion 15