Eeducation Albert Ab · OMXSTO:ALBERT
Eeducation Albert Ab — Q2 2024 Earnings Presentation
38 slides from Eeducation Albert Ab's earnings presentation, Aug 12, 2024
Slide 1: Albert Group Q2 2024 report presentation
Albert Group Q2 2024 report presentation 22 Aug 2024
Slide 2: Today’s presenters
Today’s presenters Jonas Mårtensson Katarina Strivall CEO CFO 2
Slide 3: Albert at a glance
Albert at a glance Leading Global B2B+B2C Nordic EdTech Group with 6 product brands with Dual revenue streams content in line with several sub-brands sold on for predictability and curriculum more than 10 markets scalability Organic Path to Funded growth profitability Cash at hand takes 3% organic gr
Slide 4: Agenda
Agenda 1 2 3 4 About Albert Q2 results Looking Q&A forward 4
Slide 5: Agenda
Agenda 1 2 3 4 About Albert Q2 results Looking Q&A forward 5
Slide 6: Formal education is facing challenges
Formal education is facing challenges Many children struggle with Lack of equal access to Not all children can get the school, especially maths qualified teachers help they need at home School results are declining and socioeconomic inequalities increase 6
Slide 7: Help every child reach their full potential through fun and personalised learning
Help every child reach their full potential through fun and personalised learning 7
Slide 8: Learning ecosystem for School and Home
Learning ecosystem for School and Home School Home Teacher Parents
Slide 9: Since 2022 - Focus on building the ecosystem
Since 2022 - Focus on building the ecosystem TARGET GROUP PRODUCTS MARKET & DISTRIBUTION School Teacher Sweden, Norway, Denmark, Finland, Maths, read & spell Poland, UK Home Parents
Slide 10: Since 2022 - Focus on building the ecosystem
Since 2022 - Focus on building the ecosystem TARGET GROUP PRODUCTS MARKET & DISTRIBUTION Maths, read & spell UK STEM US Films Sweden School Teacher Sweden, Norway, Denmark, Finland, Maths, read & spell Poland, UK Languages France Play learning Home Parents
Slide 11: Broad portfolio of learning products
Broad portfolio of learning products… Digital apps Books Construction & STEM* Films *STEM = Science, Technology, Engineering & Maths
Slide 12: Under 8 strong brands with global presence
…under 8 strong brands with global presence
Slide 13: Products loved by teachers, parents & children
Products loved by teachers, parents & children "My son has autism and ADHD. Your app is so far the only thing that makes him sit still and focus. He is 4 years old but has already learnt 20-22 letters of the alphabet after 4 days. So really, thank you so much!" - Parent to Diddi 4 years old, Sweden
Slide 14: Agenda
Agenda 1 2 3 4 About Albert Q2 results Looking Q&A forward 14
Slide 15: Profitability programme launched in Q1
RECAP FROM Q1 Profitability programme launched in Q1 Improve ● Find more efficient ways ● B2B close to profitability to organise Focus more on ● Risks lower efficiency & capture ● Decrease overhead costs B2B ● Revenue streams stabler synergies ● Reduce personnel costs ● Focus on current products ● Cost-
Slide 16: Timeline for execution and financial effects
RECAP FROM Q1 Timeline for execution and financial effects Profitability programme launched Most one-time restructuring costs taken Some one-time restructuring costs taken Q1 Q2 Q3 Q4 Q1 Q2 - Significant negative one-time impact - Minor negative one-time impact + Significant positive recurring impact +
Slide 17: Operational key points in Q2
Operational key points in Q2 17
Slide 18: New organisational structure fully operational
New organisational structure fully operational WHAT HAS HAPPENED? B2B B2C Marketing & Marketing & ■ A more united organisation with shared mission, sales sales vision and objectives was launched in April ■ Personnel costs reduced by 10% RoW RoW WHY IS IT IMPORTANT? Product ■ Stronger functions that
Slide 19: Strawbees breakthrough in the US
Strawbees breakthrough in the US WHAT HAS HAPPENED? ■ 90% sales increase for May 2024 vs May 2023 ■ 3 sales record orders for Strawbees, each being over 100 000 USD WHY IS IT IMPORTANT? ■ Proofpoint that the sales model in the US works: relationships with schools, repeat sales to existing customers,
Slide 20: YPO partnership to grow in England
YPO partnership to grow in England WHAT HAS HAPPENED? ■ Partnership with school distributor YPO in England ■ Sumdog to included as one of 3 core products in edtech bundle “Learning Box” ■ Sales to all schools in England, starting in Sep 2024 WHY IS IT IMPORTANT? ■ Build brand awareness and visibilit
Slide 21: Financial key points in Q2
Financial key points in Q2 21
Slide 22: Updates to the financial reporting
Updates to the financial reporting UPDATE REASON FOR UPDATE DESCRIPTION OF UPDATE Revenues come from several business models, Revenues will be reported per target group More detailed target groups and markets. (B2C, B2B), business model (subscription, reporting of sales Purpose to increase transparen
Slide 23: Recap: Profit programme starts to give impact
Recap: Profit programme starts to give impact Profitability programme launched Most one-time restructuring costs taken Some one-time restructuring costs taken Q1 Q2 Q3 Q4 Q1 Q2 - Significant negative one-time impact - Minor negative one-time impact + Significant positive recurring impact + + + + Signific
Slide 24: Net sales: a return to organic growth
Net sales: a return to organic growth ● Net sales 49.5 MSEK (47.8 MSEK) ● Growth in net sales was +3% from +3% Q2 2023 to Q2 2024 ● All growth is organic ● Recurring subscription sales stable ● Strawbees breakthrough in the US 24
Slide 25: Net sales: split by different segments
Net sales: split by different segments TARGET GROUP BUSINESS MODEL MARKET ● B2B grown from 57% to 62% ● Revenues from digital subscriptions ● Three main markets Nordics, US stand for 61% whereof B2C is 38% and UK stand for 93% of sales ● Driver is Strawbees US and B2B 33% ● US share is increasing du
Slide 26: EBITDA: Approaching breakeven
EBITDA: Approaching breakeven ● EBITDA -1 MSEK ● One time costs for profitability One time effect (profitability program) programme 0.2 MSEK ● EBITDA adjusted for one time costs -0.9 MSEK ● EBITDA increased YoY impacted by: -13.6 ○ Decreased staff costs => according to restructuring programme -6* -2.8
Slide 27: Cash flow: Negative due to working capital
Cash flow: Negative due to working capital ● Total cash flow -21 MSEK in Q2 ● Cash flow from operations -18 MSEK in Q2 ● Large amount of annual subscriptions were invoiced in Q1, which gave positive cash flow effect in Q1 but negative impact on cash flow during the rest of the year. ● Previously reserved
Slide 28: Cash flow: H1 YoY
Cash flow: H1 YoY (2023 H1 > 2024 H1) ● Main difference is the new share issue connected to the acquisitions in 2023 where the net effect gave 21 MSEK in H1 2023 ● Cash flow from operations slightly worse due to worse EBITDA in 2024 H1 and decrease in working capital (accounts receivable) 28
Slide 29: Cash flow: Q2 YoY
Cash flow: Q2 YoY (2023 Q2 > 2024 Q2) ● Extraordinary big payments for royalty debts in Swedish Film due to delayed invoicing from suppliers from the previous year ● Payment of one time reserved costs for the restructuring programme in 2024 Q1 ● Strawbees sales was successful and we invoiced sales th
Slide 30: Cash flow: Changes during 2024 Q2
Cash flow: Changes during 2024 Q2 ● Extraordinary big payments for royalty debts in Swedish Film due to delayed invoicing from suppliers from the previous year ● Payment of one time reserved costs for the restructuring programme in 2024 Q1 ● Strawbees sales was successful and we invoiced sales that w
Slide 31: Agenda
Agenda 1 2 3 4 About Albert Q2 results Looking Q&A forward 31
Slide 32: Four step plan to profitable growth
Four step plan to profitable growth Next: Now: Grow towards vision 2023: Reach profitability -2022: Lay solid foundation Build market position ● Grow existing business ● Switch from Growth to ● Sustain sales and adapt ● Become leading edtech through investments in Profitability focus cost structure pla
Slide 33: Updated financial objectives to clarify focus
Updated financial objectives to clarify focus Achieve positive Achieve positive cash flow Strive for double digit 1 2 3 EBITDA 2025 2026 with existing cash profitable growth To prove that the business ToAchieve ensurepositive we are cash financially flow To drive Strive long term for double digitprofitabl
Slide 34: Progress towards the financial objectives
Progress towards the financial objectives Net sales Next: EBITDA Now: Grow towards vision 2023: Reach profitability -2022: Lay solid foundation Build market position Strive for double digit 3 profitable growth Achieve positive cash flow 2 2026 with existing cash -10* Achieve positive 1 -7* EBITDA 2025 -
Slide 35: Actions to reach profitability
Actions to reach profitability ■ Reduce churn in Scotland by improving product and customer success ■ Win new business in England, accelerated by YPO partnership Revenues B2B ■ Capitalise on strong momentum in US Strawbees sales ■ Sales synergies Sumdog + Strawbees ■ Capture full potential of Albert
Slide 36: Takeaways
Summary Takeaways Clear financial objectives to achieve positive EBITDA and cash flow, with recent proof points that we are on track Sales has returned to organic growth, with Strawbees sales in the US as a recent breakthrough Several Group synergies captured. New organisational structure with one uni
Slide 37: Agenda
Agenda 1 2 3 4 About Albert Q2 results Looking Q&A forward 37
Slide 38: Questions & Answers
Questions & Answers 38