1 April – 30 June 2023

• Net sales amounted to SEK 51,077 (31,159) thousand, corresponding to an increase of 64 percent, of which -5 percent relates to organic growth and 69 percent acquired growth.
• EBITA amounted to SEK -6,947 (-12,636) thousand.
• Result before tax for the period amounted to SEK -20,325 (-19,489) thousand.
• Result after tax for the period amounted to SEK -18,156 (-18,408) thousand.
• Earnings per share amounted to SEK -0.72 (-1.04), before and after dilution.
• Cash flow from operating activities amounted to SEK -5,194 (-21,491) thousand.
• Net cash (-) / debt (+) at the end of the period amounted to SEK -94,899 (-131,288) thousand.
• Cash and cash equivalents at the end of the period amounted to SEK 106,110 (131,288) thousand.
• Annual recurring revenue (ARR) amounted to SEK 206.1 (130.6) million, which represents an increase of 58 percent, of which -4 percent relates to organic growth and 62 percent acquired growth.

1 January – 30 June 2023

• Net sales amounted to SEK 98,539 (55,759) thousand, which represents an increase of 77 percent, of which 11 percent relates to organic growth and 66 percent acquired growth.
• EBITA amounted to SEK -17,122 (-34,564) thousand. Nonrecurring items affected EBITA with SEK -3,104 thousand which related to transaction costs in connection with the acquisition of ARPU Management AB, Strawbees AB and Kids MBA SAS during January 2023.
• Result before tax for the period amounted to SEK -42,512 (-44,671) thousand.
• Result after tax for the period amounted to SEK -38,467 (-43,017) thousand.
• Earnings per share amounted to SEK -1.53 (-2.43), before and after dilution.
• Cash flow from operating activities amounted to SEK -2,771 (-46,449) thousand.
• Net cash (-) / debt (+) at the end of the period amounted to SEK -94,899 (-131,288) thousand.
• Cash and cash equivalents at the end of the period amounted to SEK 106,110 (131,288) thousand.
• Annual recurring revenue (ARR) amounted to SEK 206.1 (130.6) million, which represents an increase of 58 percent, of which -4 percent relates to organic growth and 62 percent acquired growth.

Significant events during the second quarter 2023

• Several started collaborations with the aim of increasing brand awareness and lowering customer acquisition costs.
• Completed pre-study with the aim of launching Strawbees in the UK via Sumdog with positive indications.
• Katarina Strivall has been recruited as CFO and will assume the position on 21 August 2023.
• At the end of the quarter, the first major integration project was finalized with the release of Holy Owly’s language learning platform in Sweden.
• During June, Albert and Bonnier launched a mathematics book for the age category 6- 9 years.

Significant events after the end of the period
No significant events occured after the end of the period.

Founders’ comments
We are delighted to report another satisfying quarter where we continue to focus on profitability. Both the B2C and B2B businesses are performing according to plan, and we continue to improve profitability of the group. We have also invested in product development, market development and partnerships that we believe will yield results in the upcoming quarters.

To reach profitability more quickly, the focus has increased towards B2B. The result of this is demonstrated by the fact that B2B revenues have grown steadily from the previous quarter, while B2C revenues have decreased due to the rebalancing of resources and focus on profitability. This development is in line with the strategy to reach profitability more quickly.

Regarding B2C, sales to households, the focus is on profitability and cash flow over growth. We therefore reduced investments in paid marketing, took less risk and prioritized activating and retaining the existing customers with good results. The strong focus on annual subscriptions in Sweden has paid off, with approximately 40% of new web customers in Sweden choosing an annual plan. This has a positive cash flow effect. Looking ahead, we target to replicate the success on all B2C markets.

During the quarter, we optimized the customer acquisition model, took market shares in Sweden and the UK, and launched new segments such as physical books. The flagship product Albert Junior has been featured by Apple, which has contributed to a higher number of new customers via organic (non-paid) traffic. The Albert Teen product has been released as a web version of the mobile app that helps teenagers prepare for GCSE (national exams), which has led to a significant increase in the number of users in the UK market. In addition to the above, we have entered and communicated several commercial partnerships that will increase brand awareness.

We are also very proud that our first major B2C synergy project has been completed as the language product Holy Owly, which was acquired in January, has been localized and launched in Sweden. We also successfully took the first step towards physical Albert products by releasing the exercise book "Albert Math Adventure" in collaboration with the publisher Bonnier. It is now available in bookstores, supermarkets and online stores across Sweden and works both as a standalone book but also as a link between the book and the Albert Junior app. All in all, these major releases in B2C help in acquiring customers at a lower cost, taking market share in important market segments, and capturing group synergies.

In B2B, sales to schools, we continue to increase our market share in the UK. This includes taking a significant share of the Scottish market for Sumdog and strengthening the position in England. In England, our sales are mainly focused on MATs (Multi-Academy Trusts) which is a group of academies that work together under a single legal framework to improve educational outcomes and share resources and expertise. Several larger MAT deals are in the process, and some have been closed during the quarter securing important and long-term business. An important B2B synergy project is to launch Strawbees in the UK by leveraging Sumdog’s distribution channels. The pre study has been finalized during the spring and we are now gearing up for entering the market in the fall.

B2C is focused on the important summer months for customer acquisition and preparing children for the school start in August. In B2B, we are preparing for the important back-to- school period in August and September where a lot of sales are expected to come. We also work on several synergy projects, where some of them are scheduled to be launched during the fall to capture more group synergies.

In Sweden, like many other countries, the debate surrounding children's difficulties in school and the growing teacher shortage has blossomed again. With the long-term vision of giving each child a custom learning experience as a basis, our products have been developed to be able to address the problems that exist today. With the use of data and powerful algorithms, we adapt the learning experience based on the curriculum and the children's level of knowledge, saving time for teachers in the classroom. This has been noticed in the B2B deals made during the spring in the US and the UK. We are well equipped with the product portfolio available to take an important and significant role in addressing the market need.

Summarizing the quarter and looking ahead, the focus on profitability and cash-flow remains, leveraging synergies within the group to grow efficiently. We would like to thank all our colleagues, customers and shareholders who continue to contribute to our vision of giving every child a custom learning experience.

Link to the report
The report is attached to this press release and is available at:
https://investors.hejalbert.se/uk/reports

Presentation of the report
Today at 09.00 CET, founders Arta Mandegari and Salman Eskandari will hold a presentation of the report via webcast. Link: https://www.finwire.tv/webcast/albert/q2- 2023/