Most of the first quarter of the Group’s financial year is during the schools’ summer vacation. During this period when the schools are closed, the Group’s revenue is lower than the other quarters. Costs are also lower as the employees are on vacation. This also applies to the Preschool Norway segment. Activity within the Adult Education segment and its revenue are lower during the summer months, and during the Christmas and New Year holidays. During the same periods a lot of people take out their vacation, which means lower personnel expenses.

The salaries of the Group’s employees are adjusted annually. The majority of the Group’s employees are teachers, for whom salary adjustments take effect on September 1 each year. After this date, personnel expenses increase without any corresponding increase in the school voucher. This means that margins are usually lower in the second quarter compared to the third and fourth quarters. The school voucher is not adjusted until the end of the calendar year in both Sweden and Norway. As a result, income increases in the third and fourth quarters without any significant change in the cost structure.

The fourth quarter is normally the strongest in terms of earnings, partly for the reason mentioned above and partly because direct costs for items such as meals provided and the beginning of the vacation period, while revenues usually remain at the same level or are higher than in the third quarter. In preschools the positive effect in the fourth quarter is reinforced by the fact that children join the preschools on an ongoing basis during the year, particularly in May and June, and revenue increases accordingly.

Seasonal trends for Preschool Norway are somewhat different, partly because of the Norwegian rules regarding the staff-child radio, with younger children requiring a higher staff-child ratio than older children. At the beginning of autumn the older children start compulsory school and younger children take their place. This results in increased staffing levels in order to meet the staff-child ratio requirements. At the end of the calendar year the childcare voucher increases and the required staff-child ratio is reduced, as the younger children are now considered one year older. The consequence of this is that the second quarter of the financial year is the weakest quarter within the International Preschool segment, with zero or even slightly negative earnings.