Comment from our deputy CEO and CEO

Albert Group specializes in the development and sale of edtech products for schools (B2B) and households (B2C). Our mission is to democratize learning and help every child reach their full potential. Over the past years, our strategy has been to expand the business into more products and markets, a strategy that involves both organic expansion and the acquisition of new business. For a little over a year now, profitability has been our overarching focus, and our financial results for the third quarter is clear evidence of this commitment.
 
In spite of the challenging macroeconomic conditions, our losses are decreasing, while net sales are on the rise. EBITA improved by SEK 14.5 million, reaching SEK -6.9 million, compared to SEK -21.4 million in the corresponding quarter of 2022. Simultaneously, net sales during the period have increased by 46 percent compared to the same quarter of the previous year, totaling SEK 48.3 million. This significant improvement in profitability is the outcome of a number of successful initiatives:

• Increased Focus on B2B: Given the current macroeconomic climate, we have chosen to allocate a larger portion of our resources to B2B, which now constitutes 51% of net sales. Despite tough competition, we have managed to retain key customers in our strategic markets while expanding through new business sales. Our focus on larger accounts remains, and during the quarter, Sumdog secured contracts with several school groups in the United Kingdom.

• Optimized B2C: Our diverse portfolio featuring five B2C brands and a presence in several markets allows us to continually fine-tune our marketing efforts towards the brands and markets yielding the best profitability at any given moment. As a result, with less than one-third of the marketing costs in the third quarter of 2023 compared to the corresponding quarter in 2022, we have managed to maintain the same level of sales.

• Executed on revenue synergies within the group: Throughout the quarter, we have executed a series of synergy projects where existing products have been launched in new markets through the collaboration of our local organizations. For instance, Holy Owly has been introduced in Sweden, Albert Junior has been launched in France under the Holy Owly brand, and Strawbees has been introduced in the United Kingdom
  
• Cost-efficiency through group collaborations: Leveraging existing competencies and resources within the group has allowed for a reduction in external costs.

In the education sector, the digital transformation continues, and in the majority of the markets where we operate, there is a clear political commitment supporting this development. In Sweden, the government has recently chosen to remove the requirement for the use of digital screens from the preschool curriculum. As only a very small portion of our sales is directed towards Swedish preschools, this does not pose a threat to Albert. However, we believe that the Swedish digitalization discourse has taken an unfortunate turn that does not benefit children, teachers, or parents. Digital tools have significant potential to be part of the solution to the challenges within the education sector, and we play a crucial role in this regard.
 
Our journey towards profitability continues, and we assess that we are well-positioned in both the current and future macroeconomic climates. We extend our gratitude to our dedicated teams, loyal users, and shareholders, who collectively continue to contribute to our mission to democratize learning and help every child reach their full potential.

 Anne-Louise Wirén deputy CEO and Jonas Mårtensson CEO
 
 

FOCUS ON IMPROVED PROFITABILITY
 
Interim report January – September 2023
 
1 July – 30 September 2023

● Annual recurring revenue (ARR) amounted to SEK 203.8 (152.0) million, corresponding to an increase of 34 percent, of which -21 percent relates to organic growth and 55 percent acquired growth.
● Net sales amounted to SEK 48,259 TSEK (33,118) thousand, corresponding to an increase of 46 percent, of which -11 percent relates to organic growth and 57 percent acquired growth.
● EBITA amounted to SEK -6,884 (-21,428) thousand.
● Result after financial items amounted to SEK -20,034 (-28,225) thousand.
● Profit/loss for the period amounted to SEK -17,832 (-26,795) thousand.
● Earnings per share amounted to SEK -0.71 (-1.52), before and after dilution.
● Cash flow from operating activities amounted to SEK -10,020 (-7,441) thousand.
● Net cash (-) / debt (+) at the end of the period amounted to -84,074 (-131,288) thousand.
● Cash and cash equivalents at the end of the period amounted to SEK 94,465 (120,129) thousand.
 
1 January – 30 September

● Net sales amounted to SEK 146,799 (88,876) thousand, corresponding to an increase of 65 percent, of which 3 percent relates to organic growth and 62 percent to acquired growth.
● EBITA amounted to SEK -24,006 (-55,992) thousand. Nonrecurring items affected EBITA with SEK -3,104 thousand which related to transaction costs in connection with the acquisition of ARPU Management AB (Swedish Film), Strawbees AB and Kids MBA SAS during January 2023.
● Result after financial items amounted to SEK -62,546 (-72,897) thousand.
● Profit/loss for the period amounted to SEK -56,299 (-69,814) thousand.
● Earnings per share amounted to SEK -2.24 (-3.95), before and after dilution.
● Cash flow from operating activities amounted to SEK -12,790 (-53,890) thousand.
● Net cash (-) / debt (+) at the end of the period amounted to -84,074 (-131,228) thousand.
● Cash and cash equivalents at the end of the period amounted to SEK 94,465 (120,129) thousand.
 
Significant events during the third quarter 2023

● On 1 September, Jonas Mårtensson took office as new CEO and Anne-Louise Wirén as deputy CEO.
● On August 23, Katarina Strivall took office as new Group CFO.
● The language app Holy Owly was launched in Sweden.
● A new math app in the Holy Owly suite was launched in France.
● Strawbees has was launched in the UK.
● A third option program was launched during Q3.
 
Significant events after the end of the period

● Albert and Akelius deepen their collaboration in a larger project that aims to evaluate the commercial viability of Akelius’ products and Albert’s ability to market these to new target group.