After a few challenging quarters, we can now confirm that the second quarter of 2024 has seen a strong performance. We have good momentum in sales and costs have been reduced thanks to the profitability programme. As a result, the business has almost reached EBITDA breakeven. The new organisation structure is already performing well after the major overhaul. 

We entered the year with a clear goal to reach positive EBITDA during 2025 and set a plan that would take us there by slightly increasing sales while reducing costs. The profitability programme, which was launched in the first quarter, now yields results and losses in the second quarter have been reduced to 1.1 million SEK in negative EBITDA, without any positive one-time effects. In short, we are following our plan to profitability. 

The improvement in EBITDA comes from both the revenue and cost sides. Net revenue was 49.5 million SEK which is 3 percent increase on last year, all of which is organic. The main driver of this is a breakthrough in the US with our Strawbees products. After a long period of concentrated work to build brand awareness, to strengthen relationships with schools, and to develop the product, the word is now spreading and we have broken three sales records during the quarter by landing three orders of over 100,000 USD each. The organic growth is a positive shift after several quarters of negative organic growth. 

On the cost side, the profitability programme included a major restructure which resulted in personnel expenses being reduced by 10%. The new organisation structure went live in April and during the quarter significant effort has been made to ensure workflows and teams are fully operational and effective. The new structure is already allowing us to capture synergies and to streamline and optimise operations across the business portfolio. 

Looking forward we continue to focus on reaching positive EBITDA by growing the business mainly in B2B but also in B2C. In B2B, we have entered into a distribution partnership with the UK’s biggest school distributor YPO, where our Sumdog product will be offered as one of the core products in YPO’s edtech bundle “Learning Box’. The bundle will be sold to all schools in England starting in September 2024. This will accelerate our growth in the England schools market by building brand awareness of the Sumdog brand and being highly visible to more educators. In the US, we see potential to sell more to existing customers, but also to new ones. Having been present in the US market for several years now, we built significant brand awareness, and visits to recent education fairs have resulted in more leads than in previous years. The multiple record orders during the second quarter is clear evidence of our increased profile in the sector. To continue this strong momentum, we will increase investments in B2B during Q3 and Q4 to further grow in the UK, the US and in the Nordics. 

In B2C, in the second quarter we reached our highest ever revenue per user and our lowest ever churn rate for paying subscribers. Together this resulted in that customer lifetime value reached an all-time high. One reason for this was the bundling and cross-selling of all our B2C products together into the Nordic markets. The challenge was driving new customer acquisition. Our pre-summer marketing campaign, which normally is the weakest one of the year, was, as expected, slow to generate new customers. To mitigate this, we are now optimising our existing markets and will be expanding to new markets. The ongoing summer marketing campaign has started really well with high free trial volumes and low customer acquisition cost, in all our existing markets. These customers will convert to paid subscriptions at the end of August. We have also resumed the expansion of Albert Junior to new markets and after a few experiments during the second quarter, we will launch in new markets during the autumn and onwards. If all goes as planned, we will see growth in the subscriber portfolio, at low CAC while preserving the strong LTV. This will put B2C on a path for profitable growth. 

In summary, our commitment to profitability and cash flow remains steadfast. This quarter, we saw a significant improvement in EBITDA, driven by strong B2B sales and cost-saving initiatives. Although cash flow was negative, this was primarily due to working capital adjustments, including inventory buildup to support B2B sales, settlement of supplier liabilities, and paying for one-time restructuring costs. These developments align with our strategic plan to achieve positive EBITDA by 2025 and positive cash flow by 2026, utilising our existing cash reserves. To accelerate our progress, we are currently conducting a strategic review of all our brands, products, and markets, and we will reallocate resources to the highest-performing areas. 

Finally, I would like to express my gratitude to all our employees for their hard work in successfully executing the profitability programme while simultaneously growing the business. I also want to thank our shareholders for their continued support. I look forward to continuing our journey towards profitability and beyond, while making learning engaging and personalised for children around the world. 

Yours sincerely, 
Jonas Mårtensson, CEO 

1 April–30 June

• Net sales amounted to SEK 49,500 (47,830) thousand, which corresponds to an increase of 3 percent compared to the same period last year.

• EBITDA amounted to SEK -1,153 (-3,160) thousand.

• EBITA amounted to SEK -4,908 (-6,947) thousand. Items affecting comparability affected EBITA by SEK -206 thousand.

• The result after financial items amounted to SEK -17,805 (-20,325) thousand.

• The result for the period amounted to SEK -16,541 (-18,156) thousand.

• Earnings per share amounted to SEK -0.66 (-0.72), before and after dilution.

• Cash flow from current operations amounted to SEK -17,826 (-5,194) thousand.

• Cash and cash equivalents at the end of the period amounted to SEK 65,284 (106,110) thousand.

1 January–30 June

• Net sales amounted to SEK 91,102 (89,869) thousand, which corresponds to an increase of 1 percent compared to the same period last year.

• EBITDA amounted to SEK -13,919 (-10,194) thousand.

• EBITA amounted to SEK -21,269 (-17,122) thousand. Items affecting comparability affected EBITA by SEK -2,889 thousand.

• The result after financial items amounted to SEK -46,215 (-42,515) thousand.

• The result for the period amounted to SEK -43,687 (-38,467) thousand.

• Earnings per share amounted to SEK -1.74 (-1.53), before and after dilution.

• Cash flow from current operations amounted to SEK -10,419 (-2,771) thousand.

• Cash and cash equivalents at the end of the period amounted to SEK 65,284 (106,110) thousand.

Significant events in the second quarter of 2024

• A new organisational structure was implemented on 1st April as part of the profitability program. The purpose was to increase efficiency and expedite the integration of the acquired companies.

• The Albert Group announced a correction of an error not affecting profit and cash flow in the income and expense reporting for the financial years 2022 and 2023. The error has not affected the company’s operations or decisions, and the correction was made in consultation with the company’s auditors.

Significant events after the end of the period

• The Albert Group announced that one of its B2B companies, Sumdog Ltd, entered into a strategic partnership with YPO (Yorkshire Purchasing Organisation), a leading UK distributor to schools. The partnership will see Sumdog’s mathematics platform included as one of the core products in YPO’s new education technology package, ‘LearningBox,’ significantly enhancing the Albert Group’s market presence in England.