Swedish Education Group Sees Parent Support as Shield Against Reforms

Swedish education group AcadeMedia AB played down the risk of sweeping reforms to the country’s independent schools after next month’s election, arguing strong support among parents will make radical changes politically difficult.

“A lot of the most radical proposals as suggested by the left, all I can say is that over one million Swedish parents have children in independently run schools,” Chief Financial Officer Petter Sylvan said in an interview, citing positive results in customer satisfaction surveys.

His comments come as Stockholm-based AcadeMedia faces heightened political risk from the general election, with the opposition Social Democrats campaigning to ban profits in publicly funded schools during the next parliamentary term. Parties to the left of the Social Democrats have argued for even tougher reforms.

The company’s international and adult-education businesses currently account for about 44% of pro forma revenue, leaving more than half tied to its Swedish preschool and school operations. On Wednesday it reported results for the fourth quarter where net sales of 5.66 billion kronor ($590 million) were in line with analyst estimates polled by Bloomberg.

“Independent schools have existed in Sweden for 30 years and their existence and profits have been a matter of debate every election year since,” the CFO said.

Sylvan also said reforms introduced by the current center-right government have added administrative load across the whole sector, and that this will accelerate consolidation in the Swedish independent schools category. That, however, is unlikely to impact AcadeMedia to a meaningful extent given its goal of expanding abroad, according to the CFO.

“Our strategy is focused on acquiring units outside of Sweden,” Sylvan said, adding that the company could even opportunistically snatch up a “hidden gem” in its homeland.