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

Internationella Engelska Skolan Annual General Meeting 20 November 2018 1

A growing school market in a growing Sweden 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 2

We are part of the solution 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 3

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 • Revenue and cost per student (indexed) municipalities does not reflect 130 increasing teacher salaries 125 No homework support granted to • 120 IES for the calendar year 2018 115 110 Costs for students with special • needs increased - not covered by 105 supplements from municipalities 100 95 Shortage of teachers • 2013/14 2014/15 2015/16 2016/17 2017/18 increasing salaries • Total revenue per student less continuity - potentially a • Total operating cost per student Total personnel cost per student (part of total operating cost) negative impact on quality 5

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 Madrid 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 • Target Q1-Q4, 2017/18 Rolling 12 months Annual organic growth 10% 14.9% 14.9% Operating margin (EBIT) 8% 6.5% 6.5% 8 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

Thank you! 11