STABLE NET SALES, STRONG CASH FLOW AND LAUNCHED PROFITABILITY PROGRAMME TO ACCELERATE PATH TO PROFITABILITY
Words from our CEO and deputy CEO
As we close the first quarter of 2024, we look back on a period of stable net sales and improved cash flow. In line with our expectations, the EBITA decreased compared to the previous quarter as well as to the corresponding quarter last year, but should start improving from the second quarter and onwards as the profitability programme goes into effect.
Net sales for the quarter remained consistent with the corresponding quarter last year, amounting to 41.6 million SEK. The outcome aligns with our strategic objectives of maintaining sales while prioritising profitability and structural enhancements. Compared to the previous quarter, sales decreased slightly, which was anticipated given a strong performance in December by Swedish Film.
In terms of sales to the education sector (B2B), we have secured significant contracts in the US for our Strawbees product. In the United Kingdom, we are proud to conclude that 450 schools purchased new or repeat subscriptions to the Sumdog service. Additionally, progress has been made in streamlining B2B sales efforts between Strawbees and Sumdog in the United Kingdom, paving the way for promising opportunities for the quarters to come.
Our consumer sales (B2C) have shown a slight increase compared to the fourth quarter and a decrease compared to the corresponding quarter last year. Customer conversion rates and churn are stable, and the differences in sales are due to changes in marketing expenditure. Our strategic emphasis on the French and Polish markets has yielded encouraging results, particularly with Holy Owly Math gaining traction in France and Albert Junior in Poland. Notably, the launch of a new product bundle in Sweden featuring Albert Junior, Albert Teen, Jaramba, and Holy Owly has been well-received, leading to an uptick in revenue per user.
Our commitment to profitability and cash flow remains unwavering. During the first quarter, we initiated a profitability programme aimed at capturing synergies, reducing personnel costs (primarily in B2C), and boosting revenues from B2B operations. Looking at the EBITA for the first quarter it was -13.6 million SEK; in addition, we had one-time costs related to the profitability programme of 2.7 million SEK, resulting in a total of -16.4 million SEK. The main drivers of the lower EBITA are partly an increase in personnel costs, which have been addressed in the profitability programme and will decrease going forward, and partly a decrease in revenues from capitalised R&D expenses. The effect of the decreased capitalisation has no cash flow effect and will remain going forward. This explains the cash flow moving in the opposite direction from EBITA, being stronger compared to the corresponding quarter the previous year with 7.8 million SEK compared to 2.4 million SEK. In addition, an earlier than expected invoicing programme by Swedish Film improved cash flow, although this will affect cash flow in the second quarter negatively.
One important building block of the profitability programme is the launch of a new organisational structure, transitioning from standalone units to a more integrated set up led by a unified senior management team. The reorganisation enhances our ability to capture synergies, optimise operations, and deploy resources efficiently. Moreover, it positions us for scalability and facilitates seamless integration of future acquisitions.
Looking at the education market, the long-term trend for education in general and edtech products in particular remains positive as governments and private players continue to invest in education. The rapid evolution of the edtech market owes much to the utilisation of data and data analytics, which empowers the creation of highly personalised, efficient, and scalable educational solutions. This trend significantly impacts society, enhancing learning outcomes for students. At the Albert Group, we are committed to remaining at the forefront of educational sector development, leveraging these technologies to drive innovation and maximise educational impact.
The consolidation continues in the edtech industry, as small players seek to become part of bigger edtech groups. This opens up interesting opportunities for the Albert Group, as we continue our journey towards becoming a leading European edtech player.
Looking forward, we remain optimistic about our outlook. The strength of our sales pipeline, combined with a successful implementation of the profitability programme, position us well for sustained growth and improved profitability in the coming quarters.
We extend our sincere gratitude to our dedicated teams, loyal customers, and supportive shareholders, whose collective efforts continue to drive our company forward towards achieving our mission.
Yours sincerely,
Jonas Mårtensson, CEO and Anne-Louise Wirén, deputy CEO
January - 31 March 2024
- Annual Recurring Revenue (ARR) amounted to 166.5 (196.0) MKR, a 15 percent decrease. Net sales amounted to 41,602 (42,040) TSEK, corresponding to a decrease of 1 percent compared to the same period in the previous year of which -8 percent was related to organic growth and 7 percent to acquired growth.
- EBITA amounted to -16,361 (-10,175) TSEK. Nonrecurring items affected EBITA with -2,683 TSEK.
- The result after financial items amounted to -28,411 (-22,187) TSEK.
- Profit/loss for the period amounted to -27,146 (-20,311) TSEK.
- Earnings per share amounted to -1.08 (-0.81) SEK, before and after dilution.
- Cash flow from operating activities amounted to 7,751 (2,423) TSEK.
- Cash and cash equivalents at the end of the period amounted to 86,082 (116,319) TSEK.
Significant events during the first quarter 2024
- Albert introduced a profitability programme with the ambition to achieve positive EBITDA by 2025.
- Albert announced an organisational restructuring to enhance efficiency and accelerate the integration of acquired companies. The new structure is scheduled for implementation on 1 April 2024.
- Deputy CEO Anne-Louise Wirén has announced her departure from her position at Albert. She will remain in her role throughout the spring to ensure a smooth transition to the new organisational structure.
- Albert announced that founders Salman and Arta will leave their operational roles in the company during the first quarter.
Significant events after the end of the period
- As previously communicated, the company has identified a structural error in eEducation Albert AB in connection with preparing the annual report for 2023. This error has led to incorrect income reporting related to subscriptions where payment has not been received. For Q1 2023, net sales and external costs have been reduced by 5.4 MSEK, and for the full year of 2023, the correction is a reduction of 17.2 MSEK. The correction has no effect on profit or cash flow.
For additional information, please contact:
Jonas Mårtensson, CEO
Mobile: +46 (0) 729 70 70 84
Email: jonas@hejalbert.se
For additional information, please contact:
Katarina Strivall, CFO
Mobile: +46 (0) 706 840074
Email: katarina.strivall@hejalbert.se
About eEducation Albert AB (publ)
The Albert Group develops and sells edtech products for schools and consumers. The company was founded in 2015 with the goal of democratizing education and providing every child the opportunity to reach their full potential. The product portfolio includes educational apps, educational videos, and physical learning products under the brands Albert, Jaramba, Holy Owly, Film & Skola, Strawbees, and Sumdog. Since the products were launched, they have helped more than ten million children make learning engaging and personalized. The company is headquartered in Gothenburg, Sweden, and operates actively in several countries in Europe, the USA, and Asia. Albert is listed on Nasdaq First North Growth Market with the ticker symbol ALBERT. The company's certified adviser is Carnegie Investment Bank AB (publ), +46 (0) 73 856 42 65, certifiedadviser@carnegie.se.
Read more at investors.hejalbert.se
This information is information that eEducation Albert is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2024-05-08 07:30 CEST.
