Video recording of the Tellus Group's Q&A session on October 30
Published: October 31, 2023
Miscellaneous
On October 30, Tellusgruppen hosted a live Q&A session with the company’s CEO, Bijan Fahimi, and CFO, Arnar Vidarsson. The session addressed both questions submitted in advance and those raised during the live event.
You can view the entire presentation below.
You can find the answers to the questions in the text here.
Highlights from the Q&A session
In which areas of your business do you plan to focus your growth the most going forward?
“We have invested heavily in opening new preschools. Over the past four years, we have doubled the number of preschools, which has been the primary driver of our organic growth. The preschools we’ve opened since 2019 now generate approximately 90 MSEK in revenue. We will reduce the number of new preschool openings because we’ve reached the critical mass needed to operate a high-quality and profitable business. However, the facilities we’ve opened will continue to generate high organic growth. The focus for growth will gradually shift to elementary schools and educational resources. We are analyzing and evaluating additional new segments to enter if the forecasts prove accurate.”
What is the company's debt and cash flow situation, and what are its outlook and plans for the future?
“At the end of the second quarter, the Group’s net interest-bearing debt amounted to SEK 40.9 million, corresponding to 2.7 times EBITDA, which can be considered somewhat on the high side, and our goal is to reduce this debt. In this context, it is worth noting that SEK 29.4 million of the Group’s long-term debt relates to a contingent additional purchase price that is due in the fall of 2025; alternatively, the additional purchase price may be converted into a loan with a 12-month term at that time. This will, of course, need to be addressed, but there is plenty of time to do so.
Our most recent acquisitions are companies that generate strong cash flows, and we are seeing an improvement in cash flows from operating activities at these companies.
"With a slower pace of new business establishment and a slower pace of investment going forward, we can expect an improvement in cash flow and a reduction in debt."
Why are you looking for investors with nerves of steel?
“In general, we want to attract more new investors and shareholders to broaden the shareholder base and increase trading liquidity. However, we are interested in the right kind of investors. Stability is important here, especially when political headwinds are blowing. We want to attract investors who see the long-term benefits of the education sector. It is an industry that is not sensitive to economic cycles and can withstand high inflation and high interest rates well.”
About the Tellus Group's Initiative
The Tellus Group’s email address, investerarfraga@tellusgruppen.se, is provided to improve accessibility for existing shareholders and new stakeholders. Submitted questions will be compiled and answered in connection with upcoming shareholder meetings or quarterly reports. Please note that questions sent tothe email address investerarfraga@tellusgruppen.se will notbe answered via email but will only be addressed in connection with upcoming quarterly reports or at separate shareholder meetings. Questions submitted that concern insider information or information that has already been disclosed will not be addressed.