Internationella Engelska Skolan Annual General Meeting 20 November - - PowerPoint PPT Presentation

1

Internationella Engelska Skolan Annual General Meeting 20 November 2018

A growing school market in a growing Sweden

2

Rapid increase in population

• + 350,000 children by 2030

Approximately 1,000 new schools needed by 2030 High demand on municipalities

• e.g. city of Stockholm - 50 new 900 student

sized primary schools and more than 100 preschools by 2040

• The situation is similar all over Sweden

Teacher shortage imminent

• 80 000 missing by 2030

25% of students and 18-24% of teachers feel constant stress

We are part of the solution

3

• 185,000 registrations in the queue,

+20%

• IES is well positioned
• Where teachers can teach and

students learn – order and safety is the foundation

• Clear model for high quality

education

• English is the key to the world
• Actively working with preventive

measures to ensure energy and passion in the classroom

• 50% of teachers recruited outside

Sweden

• Successful cooperation with property

companies

• Building an organisation to support

growth

Our way forward in Sweden - Grow in cooperation with municipalities

• 4 new schools opened in 2017 (1,600 students)
• Helsingborg
• Landskrona
• Södertälje
• Årsta
• 2 new schools opened in 2018 (600 students)
• Länna
• Sundbyberg
• Far-reaching discussions to open schools in

many locations in coming years, including Österåker, Vallentuna, Kungsbacka, Staffanstorp, Värmdö, Sigtuna, Skellefteå, Växsjö, Upplands-Bro, and Gothenburg

• 2-4 years to start a school - Premises and

zoning plans is key

4

Short-term - a challenging environment

• School voucher funding from

municipalities does not reflect increasing teacher salaries

• No homework support granted to

IES for the calendar year 2018

• Costs for students with special

needs increased - not covered by supplements from municipalities

• Shortage of teachers
• increasing salaries
• less continuity - potentially a

negative impact on quality

5

95 100 105 110 115 120 125 130 2013/14 2014/15 2015/16 2016/17 2017/18

Revenue and cost per student (indexed)

Total revenue per student Total operating cost per student Total personnel cost per student (part of total operating cost)

Madrid

High demand for bilingual eduation in Spain

• 8.8 million students in Spain
• Many state schools teach in English but

according to Spanish curriculum and by Spanish teachers without a degree in English

• Parents wish for a better future for their

children

• High quality education in bilingual

schools (English and Spanish)

• Fee-paying schools
• 78,000 attending UK curriculum schools
• Largest bilingual market in Europe
• Growing market – 20% more

students in two years

• 127 schools licensed to teach

according to UK curriculum

6

Foundation for continued expansion created

• IES can benefit from key strengths:
• Teaching in English as one of two

languages

• Recruiting English-speaking teachers
• Proven track-record to enhance

quality

• IES owner of four schools in Spain (3 of 4

schools are fully owned by IES since July 2018)

• Have created the foundation for

continued expansion in Spain

• Expected to contribute to total operating

income with 160 MSEK and to EBIT with 21 MSEK in 18/19

7

July – June 2017/2018 Financial highlights

• Operating income increased 14.9% to MSEK 2 347.9
• Total income per student increased by 2.8%
• Total costs per student, increased by 6.3%
• Profit (EBIT) decreased 23.1%, to MSEK 152.4 (198.0)
• Net profit per share amounted to SEK 2.91 (3.80)
• The board’s proposal to the AGM is SEK 0 (1.14) per share.
• Great need for new schools in Sweden
• Potential for further acquisitions in Spain
• Does not reflect a change in the dividend policy

8

Target Q1-Q4, 2017/18 Rolling 12 months Annual organic growth 10% 14.9% 14.9% Operating margin (EBIT) 8% 6.5% 6.5% Equity/assets ratio 40% 72.9% 72.9%

July-September 2018/2019 Financial highlights

• MSEK 10.9 will be accounted for in Q2 instead of Q1 as a result of IFRS 15
• Operating income for the Group increased 13.2% to MSEK 555.8 (491.1)
• Sweden +7.5% to MSEK 528.1 (491.1)
• Spain MSEK 27.7 (-)
• UK MSEK 0.3 (0.3)
• Continued discrepancy between voucher and actual cost in Sweden
• Total revenue per student in Sweden increased by only 0.5%
• Personnel costs per student increased 5.8%
• Total costs per student increased 4.0%
• Operating profit (EBIT) for the Group decreased by MSEK 12.0 to MSEK 23.3

(35.3)

• Sweden MSEK 30.4 (40.9)
• Spain MSEK -6.9 (-)
• UK MSEK 0.0 (0.1)

9

Our focus coming years – provide quality education to more children

• Attract and recruit the best leaders

and teachers

• Nurture IES culture and ensure

standards of quality are maintained across all our schools

• Develop growth opportunities in

Sweden and Spain

• Continued cost awareness
• Standardize
• Leverage on economies of scale
• Secure increase in teacher

salaries are fully reflected in the vouchers (and retroactively)

• Create high aspirations for coming

generations!

10

11

Thank you!