Q2 QUARTERLY REPORT Q2 2022 learninglifelongfacilitateWe
2 LUMI GRUPPEN quarterly report Q2 22 3 This is Lumi Gruppen 4 Highlights Q2 22 — Lumi Gruppen 5 Key financial and operational figures 6 Interim report — Lumi Gruppen 1 3 Sonans 1 7 Oslo Nye Høyskole 2 0 Condensed interim financial statement and notes 3 5 Alternative performance measures 3 6 Company Contentsinformation
3 LUMI GRUPPEN quarterly report Q2 22 This is Lumi Gruppen Lumi Gruppen is a leading education provider in Norway, offering high-quality educational services. The group consists of two main operating segments: Sonans and Oslo Nye Høyskole (ONH). Sonans is Norway’s market leader within high school private candidate exam preparation courses, primarily to help former high school students achieve better exam results and/or complete their high school diploma to enter higher education. ONH is a private university college established in 2007, acquired by Lumi Gruppen in 2019. ONH has one campus located in central Oslo, in addition to a strong online offering. —Sonansmarket leader within private candidate exams Oslo Nye Høyskole — National Student Survey: overall student satisfaction (2021) Adj. EBIT% 2021 Top 3 Oslo Nye Høyskole — National Student Survey: Online educational offer (2021) 25 % Revenue 2021 (NOK million) 532 Adj. EBIT 2021 (NOK million) 133 Top 1Top 1
4 LUMI GRUPPEN quarterly report Q2 22 Revenue NOKm per quarter/year to date NOKm per quarter/year to date Adjusted EBIT REVENUE STABLE AT NOK 134 MILLION FOR THE SECOND QUARTER (+0.2 PER CENT) — Sonans with growth in online revenue while campus revenue is 20 per cent below last year — Oslo Nye Høyskole with 20 per cent growth in revenues EBIT AT NOK 38.5 MILLION FOR THE SECOND QUARTER (-19.1 PER CENT) — Cost programme implemented, but lower average price per student due to online shift affects margins — Full-year effect of ramp-up in costs related to new programmes at Oslo Nye Høyskole SONANS COST REDUCTIONS TOTALLING NOK 60 65 MILLION TO REFLECT LOWER CAMPUS VOLUMES AND ONLINE SH IFT — Online sales in combination with the new offering Live shows double digit growth — Challenging market conditions with campus sales for the school year 2022/2023 43 per cent behind last year’s intake as of week 31 — Additional cost measures to be implemented from Q3 2022 OSLO NYE HØYSKOLE — Performance better than the overall market development in the autumn student intake so far — Bachelor and master’s programme with 9 per cent growth as of week 31 for the school year 2022/2023 Highlights Q2 22 Lumi Gruppen Q2 as expected. Challenging quarters ahead due to post-Covid effects in the education market 150225300750 267.0 134.4 Q2 22 21 22 21 YTD 134.1 267.4 1007550250 59.1 38.5 Q2 22 21 22 21 YTD 47.6 77.2
5 LUMI GRUPPEN quarterly report Q2 22 Key financial and operational figures QUARTERS YEAR TO DATE CHANGE 21 - 22 NOK MILLION Q2 22 Q2 21 2022 20 21 Q2 YR INCOME STATEMENT Revenue 134.4 134.1 267.0 267.4 0.2% -0.2% Payroll expenses 48.1 48.7 115.1 110.5 -1.3% 4.2% Payroll expenses in % of revenue 36.0% 36.0% 43.0% 41.0% -1.5% 4.3% Total other operating expenses 33.1 24.8 64.4 53.9 33.3% 19.3% Operating expenses in % of revenue 25.0% 19.0% 24.0% 20.0% 33.0% 19.5% Adjusted EBITDA 53.2 60.3 87.6 102.7 -11.7% -15.0% Adjusted EBITDA margin 40.0% 45.0% 33.0% 38.0% -11.9% -14.9% Adjusted EBIT 38.5 47.6 59.1 77.2 -19.1% -23.4% Adjusted EBIT margin 29.0% 35.0% 22.0% 29.0% -19.3% -23.3% Non-recurring Items 7.8 4.6 14.2 12.4 69.2% 14.3% Net financial items 6.4 6.3 12.7 24.1 2.8% -47.3% Profit/(loss) before income tax 24.2 36.7 32.3 40.7 -33.9% -20.7% Tax 4.7 7.7 6.3 8.5 -39.3% -25.7% Profit/(loss) for the year 19.6 29.0 26.0 32.3 -32.5% -19.7% Earnings per share (excl. treasury shares) 0.5 0.8 0.7 0.9 -32.5% -19.7% FINANCIAL POSITION Capex (fixed assets and development cost) 5.0 1.9 9.2 4.3 383.0% 114.0% Adjusted operating cash flow -73.9 -80.0 38.3 35.3 -8.0% 8.0% Adj. cash conversion (relative to adjusted PTP) -247.0% -198.0% 62.0% 58.0% 25.0% 7.0% Total assets 1 187 1 199 1 187 1 199 -1.0% -1.0% Equity 536 517 536 517 4.0% 4.0% Equity % 45.0% 43.0% 45.0% 43.0% 5.0% 5.0% Cash position 32 37 32 37 -13.0% -13.0% Net (interest bearing) debt 398 413 398 413 -4.0% -4.0% OPERATIONAL KPIS Number of employees (FTEs) 268 270 268 270 -1.0% -1.0% Sick-leave 5.9% 3.3% 5.5% 3.4% 79.0% 62.0% Number of campuses Sonans 15 15 15 15 0% 0% Number of campuses ONH 1 1 1 1 0% 0% Number of students Sonans 8 249 8 492 8 249 8 492 -3.0% -3.0% — of which online 3 701 2 658 3 701 2 658 39.0% 39.0% Number of students ONH 2 549 2 415 2 549 2 415 6.0% 6.0% — of which online 1 751 1 538 1 751 1 538 14.0% 14.0%
6 LUMI GRUPPEN quarterly report Q2 22 Interim Report — Lumi Gruppen During the intake cycle for the school year 2022/2023 the decline in students that have signed up for private candidate courses at Sonans has accelerated and as of week 31 total sales are approximately 30 per cent behind last year’s student intake. For Oslo Nye Høyskole, the total number of signed contracts is slightly behind last year as of week 31, but bachelor and master’s contracts are up by a strong 9 per cent. 2500500075000 Total Operating Expenses NOKm Number of active students Students — Campus vs. Online (2022)Operating Revenue NOKm 4196 6711 5452online5346 campus 50% online 50% campusQ222 Q221 10 798 students Adjusted EBIT %Adjusted EBIT NOKm 150225300750 267.0 134.4 Q2 22 21 22 21 YTD 134.1 267.4 100150200500 179.4 81.2 Q2 22 21 22 21 YTD 73.5 164.4 1007550250 59.1 38.5 Q2 22 21 22 21 YTD 47.6 77.2 102030400 22.2 28.6 Q2 22 21 22 21 YTD 35.5 28.9
1 Source: The Norwegian Directorate for Higher Education and Skills
The current market development for Sonans is mainly a consequence of fewer students without a place of admission in higher education. The total number of applicants to higher education in Norway fell by 12.6 1 per cent for the student intake autumn 2022, resulting in applicants without a study programme offer are down almost 43 per cent versus 2021. Further, 49 per cent of the students have received an offer corresponding to their first choice compared to 40 per cent in 2021. The higher education market has been stable for many years with a CAGR of 3 per cent from 2013 to 2019 prior to Covid19 and 4 per cent when including 2020 and 2021. The significant drop in applicants to higher education is to some extent unexpectedly high and has resulted in more challenging market conditions for Sonans. Lumi Gruppen already announced a weaker development in the student intake for 2022/2023 in the Q1 report and was prepared for a slower market compared to last year. However, the accelerated decline in the student intake from 20 July was surprisingly high. Market indicators Lumi Gruppen follow would rather suggest a decline in the range of 10-20 per cent. In addition to the development in the higher education market, cancelled high school exams three years in a row have also contributed to the market decline together with a strong labour market. These significant market changes temporarily affect the market for private candidate courses. Lumi Gruppen believes that the key drivers explaining the market development could be described as post-Covid effects and are therefore expected to be more short-term in nature. Based on the recent development it is difficult to make precise projections for the coming years, but the fundamentals for the education market seem to be unchanged and hence it is likely there will be a market recovery as soon as next year.
Operational Review
The Group will now execute on additional efficiency measures aiming to significantly mitigate the effect of the decline in sales and they are expected to show an impact starting in Q3 2022. This will include all parts of Lumi Gruppen, but a significant part of the measures will have a direct impact on the Sonans cost base.
Lumi Gruppen has already implemented several revenue and cost measures in Sonans to improve margins and reduce the cost base in response to the changes in market conditions. In February 2022, Lumi Gruppen announced, among other, price increases for online courses and annual cost savings totalling NOK 26 million.
7 LUMI GRUPPEN quarterly report Q2 22
The decline in sales for the school year 2022/2023 at Sonans is mainly affecting campus with a 43 per cent decline compared to last year as of week 31. Online sales combined with the new offering “Live” show a double-digit growth of 14 per cent in the same period. The student intake for this school year will be completed by 15 September 2022.
Measures for Sonans will include, among others, rightsizing of the organisation, improved classroom efficiency, reduced administrative costs including group functions and improved marketing efficiency. Total new annual cost savings add up to around NOK 35-39 million in addition to the already announced cost measures of NOK 26 million. The target is to reduce the cost base for Sonans for the school year 2022/2023 with approximately NOK 60-65 million. This amount does not include savings from closing additional campuses. The campus structure will be reviewed and given the continued online shift it is likely that additional campuses will be closed as early as the next school year.
Unlike public universities, ONH has an important sales period during the summer, especially after the 20th of July. Students not admitted to public universities will look for other alternatives, and ONH has a strong portfolio including psychology and business administration which is attractive for many students. The ONH intake is therefore not concluded before the middle of September. However, the proportion of students without an admission place in public universities is, as mentioned earlier, 43 per cent lower than last year. Consequently, the market trends that have affected the intake for Sonans, will also affect ONH and could potentially reduce the demand for the ONH programmes in the remaining sales period.
2 Source: The Directorate for Higher Education and Skills
In addition to reducing costs as a response to the shift in market conditions, Sonans has implemented several strategic initiatives to compensate for the declining campus revenue. During the first half of 2022, Sonans introduced a new digital campus product named Live. Live will utilise existing teaching capacity at the physical campus and the courses will be structured in line with existing campus courses. Facilitating interactions between teachers and students will be crucial for structuring the new student offering. Live has been well received in the market and is the main reason why Sonans so far in the student intake has double digit sales growth on the online platform. Live is expanding student reach and is over time more scalable and efficient than the campus model. Sonans will also be the leading private candidate school in Norway with a full-scale learning concept where the students can choose between physical campus, online learning, or digital campus. To better reflect the value of Sonans’ various student offerings, an adjustment of the online commercial terms was successfully implemented in the first half of 2022. Prices on online courses have been increased by on average 10 per cent and prices for Live are on par with campus courses, increasing revenue contribution from onlineInfurther.amarket with a 12.6 per cent drop in the number of applicants for higher education in Norway 2, Oslo Nye Høyskole (ONH) continues to perform better than the market for the school year 2022/2023. The growth in applicants to ONH has led to a 6 per cent increase in the number of signed contracts for bachelor students and 9 percent increase when including the master’s programme. The primary driver behind this development has been the launch of new programmes well adapted to students’ focus and needs.Bycontinuing to increase multi-year bachelor programmes’ share of revenue, revenue visibility will increase in the business model and reduce operational risk for ONH. The key priority is still to increase the number of students for the new programmes, but new annual programmes will also be launched. These programmes will be derived from multi-year bachelor programmes. In addition, new bachelor programmes will be developed in the coming years. As of week 31, the total number of signed contracts at ONH for the school year 2022/2023 are 6 per cent behind last year. However, despite the decline in signed contracts, revenue will continue to grow in the second half of 2022 due to the rollover effect from an additional bachelor cohort together with a higher share of new sales on multiyear programmes with a higher value per student.
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Even if the overall number of student applications to NUCAS (“Samordna opptak”) in Norway is declining, the demand for online programmes increased by 34 percent. A strong online offering will therefore be a key differentiator in the education market of tomorrow. ONH is well positioned as the leading provider of higher online education in Norway and has a clear strategy to further strengthen the online education offering and expand student reach. The online platform will also provide ONH with the potential to scale operations further using its current infrastructure.
9 LUMI GRUPPEN quarterly report Q2 22 Key figures QUARTERS YEAR TO DATE CHANGE 21 - 22 NOK MILLION Q2 22 Q2 21 2022 20 21 Q2 YR Operating Revenue 134.4 134.1 267.0 267.4 0.2% -0.2% — Campus 81.3 93.5 159.4 185.7 -13.1% -14.2% — Online 53.1 40.3 107.5 81.3 31.8% 32.1% Total operating revenue 134.4 134.1 267.0 267.4 0.2% -0.1% Payroll expenses 48.1 48.7 115.1 110.5 -1.3% 4.2% Payroll expenses in % of operating revenue 36.0% 36.0% 43.0% 41.0% -1.5% 4.3% Other expenses 33.1 24.8 64.4 53.9 33.3% 19.3% Other expenses in % of operating revenue 25.0% 19.0% 24.0% 20.0% 33.0% 19.5% Total operating expenses 81.2 73.5 179.4 164.4 10.4% 9.2% Adjusted EBITDA 53.2 60.3 87.5 102.7 -11.7% -14.8% Adjusted EBITDA % 40.0% 45.0% 33.0% 38.0% -11.9% -14.7% Depreciation and amortization 14.8 12.8 28.3 25.6 15.9% 10.5% Adjusted EBIT 38.5 47.6 59.1 77.2 -19.1% -23.4% Adjusted EBIT % 28.6% 35.5% 22.2% 28.9% -19.3% -23.3% Non-recurring items 7.8 4.6 14.2 12.4 69.2% 14.3% Number of FTEs 268 270 267.7 270.48 -1.0% -1.0% Sick-leave 5.9% 3.5% 5.5% 3.4% 68.6% 61.8%
Outlook Because of the challenging market conditions, Lumi Gruppen will accelerate the ongoing efficiency programmes during the second half of 2022. This includes, among other things, rightsizing of the organisation, improved classroom efficiency, reduced administrative costs and improved marketing efficiency. Lumi Gruppen estimates that these new initiatives will reduce the Sonans cost base further by NOK 35-39 million. When completed, the operating cost base will be reduced by NOK 60-65 million for the school year 2022/2023. To fully compensate for the decline in sales, more measures will be implemented, targeting an additionally NOK 20-25 million in savings. These will include savings from all parts of the Group. As of week 31, Sonans’ sales for the school year 2022/2023 are approximately 30 per cent behind last year. Based on the sales trend for Sonans in recent weeks, a continued decline in campus sales is expected for the rest of the sales period. Sonans is therefore proactively transforming its business towards a more scalable business model, which more rapidly can adapt to changes in market conditions. This represents an opportunity for Sonans longer term, as the online model is significantly more scalable and efficient than the campus model. Further, it also opens for additional opportunities for new business and innovation. The new digital campus initiative Live has also been well received and will expand geographical reach and improve margins for Sonans. Live has very attractive financial metrics with limited investments and fixed costs combined with pricing on par with campus.
As of week 31, Oslo Nye Høyskole (ONH) has a growth of 9% for bachelor and master’s programmes. The total number of signed contracts is down 6 per cent for the school year 2022/2023 mainly as result of fewer single subject contracts. The market trends that affect the intake for Sonans, seems to be affecting the intake for ONH as well. ONH has traditionally received many students after the 20th of July intake for public universities, but less students without an admission place also creates some uncertainty for the remaining sales cycle for ONH.
A school year normally commences in August and is completed in June the following year where the autumn intake constitutes approximately 70 per cent of total annual school year sales. Consequently, the autumn student intake 2022 will also affect revenues for the first half 2023 for Lumi Gruppen and result in significant lower revenues for the school year 2022/2023. This will put pressure on margins and liquidity for the Group and, as stated above, additional measures will be taken to mitigate the consequences of this. Despite significant cost measures already implemented or under implementation, there is still a risk of breach of the bank covenant. This is due to a decline in operating revenues not being fully offset by cost measures. Furthermore, the full cash effect of measures will be from Q4 2022 while incoming payments from student contracts will decline already from Q3 2022. Lumi Gruppen has started discussions with its bank aiming to secure necessary headroom under the existing loan agreement to complete its transformation and restructuring process. So far the discussions are constructive and positive from the Group’sLongerperspective.term,Lumi Gruppen believes that the market will normalise as the underlying fundamentals for the education sector are still strong when excluding post-Covid effects. The need for higher education in Norway is still high and Lumi Gruppen is well positioned as a market leading provider of private education. Through a combination of high student satisfaction and a unique learning concept, the Company has established a competitive edge and is well positioned to exploit the market opportunities in the new normal post-Covid.
10 LUMI GRUPPEN quarterly report Q2 22
11 LUMI GRUPPEN quarterly report Q2 22 Financial Review
NON-RECURRING ITEMS
Revenues increased by 0.2 per cent to NOK 134.4 million in Q2 2022, compared to NOK 134.1 million in Q2 2021. Revenue was positively impacted by a significant increase in the number of students at Oslo Nye Høyskole (ONH), with NOK 7.7 million in higher sales for the quarter corresponding to 20.0 per cent growth. For Sonans, online sales have been strong with NOK 28.9 million for the quarter and the online revenue share increased from 23% in Q2 2021 to 33% in Q2 2022. The increase is in part driven by the new commercial terms for online from 1 January 2022. For campus, volumes are unchanged from Q1 and ended at NOK 59.1 million compared to NOK 73.7 million in Q2 2021. Adjusted total operating expenses increased by 10.4 per cent to NOK 81.2 million in Q2 2022, compared to NOK 73.5 million in Q2 2021. The increase is explained by the investments made for new programmes at ONH together with higher bad debt and marketing costs for Sonans. For ONH, the investments are mainly additional employees required for the accreditation and launch of the new programmes and additional marketing costs to support the launch. In total, the increase amounts to approximately NOK 2.6 million for the quarter and NOK 11.4 million year to date. With respect to the personnel costs, most employees started in the second half of 2021, so for the second half of 2022, costs are expected to be more in line with second half of 2021. For Sonans, cost measures were implemented with effect from January 2022 to compensate for lower campus volumes and the online shift. The measures are expected to contribute with NOK 10 12 million this financial year. For Q2 2022, Sonans had savings of NOK 4.7 million related to personnel costs and total savings for personnel cost were NOK 7.3 million as of 2H 2022. In addition to these cost measures, it has been decided to close three campuses from the school year 2022/2023. This will give an additional NOK 7 million in savings in 2022 and NOK 14 million annually. Other operating expenses for Sonans ended at NOK 33.4 million compared to NOK 26.1 million in Q2 2022 representing an increase of 27.7 per cent. The reasons for the increase in expenses are higher bad debt accrual (NOK 3 million), IFRS adjustment of bad debt cost in 2021 numbers (NOK 3 million) and higher marketing costs for the school year 2021/2022 (NOK 2 million). See more comments on this in the segment information on Sonans in this report.Adjusted depreciation and amortisation expenses were NOK 14.8 million in Q2 2022 compared to NOK 12.8 million in Q2 2021. The increase is mainly a result of slightly higher non-lease related depreciation. Adjusted EBIT ended at NOK 38.5 million, a decrease of 19.1 per cent compared to the same period last year. Reported EBIT ended at NOK 30.7 million, a decrease of 28.6 per cent compared to the same period last year. The deviation between adjusted EBIT and reported EBIT is explained by the non-recurring items. The net financial expense in Q2 2022 was NOK 6.4 million compared to NOK 6.3 million in Q2 2021. Income tax expense in Q2 2022 was NOK 4.7 million compared to NOK 7.7 million in Q2 2021. Profit was NOK 19.6 million in Q2 2022 compared to NOK 29.0 million in Q2 2021.
CONSOLIDATED INCOME STATEMENT
For the second quarter, the Group reported NOK 7.8 million in non-recurring items. Of this, NOK 1.9 million was related to the Qybele LMS license fee that will expire December 31, 2022. Further, NOK 1.7 million in legal fees were expensed due to the legal dispute with Nettskolen Eureka AS and Oslo Nye Høyskole on the calculation of the license fee. Oslo Nye Høyskole AS was acquitted of all claims, but the parties were ordered to bear their own legal costs and share the arbitral tribunal’s fees.
The financial statement presented as part of the Operational and Financial review, has been adjusted for non recurring items. A non recurring item is by definition an entry that appears in the Company’s or the Group’s financial statements that is unlikely to happen again and is infrequent or unusual. Non-recurring items are commented separately as part of the Financial Review. The condensed interim financial statement and notes for Q2 and 2H of 2022 are unaudited.
Net cash flow from the Group’s operations during Q2 2022 was NOK -70.2 million. The difference between net cash flow from operations and profit before tax of NOK 24.2 million is mainly due to changes in working capital. For both Sonans and Oslo Nye Høyskole, most students pay tuition fees early in the semester (resulting in a very positive cash flow in Q1 and Q3), and the latter part of the semester the cash is used for ongoing operations. The net cash outflow from investing activities amounted to NOK 4.9 million during Q2 2022. Of that, NOK 4.5 million relates to capitalised development costs for new programmes at Oslo Nye Høyskole and NTech and NOK 0.4 million relates to investments in fixed assets such as IT equipment and computers. The net cash outflow from financing was NOK 57.0 million during Q2 2022. This consists of the principal portion of lease liabilities in accordance with IFRS 16, repayment of debt and dividend payment.During Q2 2022, the Group had a net decrease in cash and cash equivalents of NOK 132.2 million. As at the balance sheet date, the Group had cash and cash equivalents of NOK 32.3 million, compared to NOK 37.3 million in the same period last year.
On 3 August 2022, Lumi Gruppen published an announcement stating that the student intake for the coming school year is approximately 30% behind last year for Sonans and in line with last year for Oslo Nye Høyskole. The lower intake for Sonans will result in significant lower revenues for the school year 2022/2023. This will put pressure on margins and liquidity for the Group. Measures are already implemented, and additional measures will be implemented. Together this will contribute with significant savings annually. However, timing will be a challenge as the full cash effect of the savings will not be fully implemented before year-end 2022. This would therefore, in addition to the lower EBITDA, lead to a higher leverage with potentially a risk for breach of the bank covenant. The bank covenant (leverage ratio) is 3.5 as at 31 October 2022, 3.75 as at 31 December 2022 and 3.5 as at 31 March and thereafter. Leverage ratio is calculated based on the EBITDA and net debt excluding IFRS 16 leases.
12 LUMI GRUPPEN quarterly report Q2 22 Oslo, August 16, 2022
EVENTS AFTER THE BALANCE SHEET DATE
CONSOLIDATED STATEMENT OF CASH FLOWS
The Group’s assets totalled NOK 1 187 million in Q2 2022, a decrease of NOK 12.5 million from Q2 2021. The Group’s equity amounted to NOK 536.1 million, a decrease of NOK 8.7 million since Q2 2021. The decrease is a result of the dividend payment of NOK 36 million in Q2 2022 not fully offset by the net profit in the period from Q2 last year. The equity ratio was 45 per cent in Q2 2022, compared to 43 per cent in Q2 2021. Current and non-current liabilities to financial institutions were NOK 427.6 million in Q2 2022 compared to NOK 446.6 million in Q2 2021.
Helge Midttun Harald Arnet Anne Dahle Frode Eilertsen
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Approved by the Board of Directors and Management Sonans reported NOK 2.8 million in non-recurring costs for the quarter that relate to termination of employees in Sonans including severance pay agreements. The amount also includes NOK 1.2 million in payments to cancel the lease agreement for the campus in Bodø one year before the end of the agreement. The Group reported NOK 1.5 million in non-recurring costs that includes finance interim resources supporting the ongoing outsourcing process of the payroll and finance function in Lumi Gruppen.
Chair Bente Sollid Storehaug Sylvie Milverton Erik Brandt Martin Prytz CEO CFO
We are an important part of the Norwegian educational system and provide opportunities for people who want to take higher education and participate in the workforce. 13 LUMI GRUPPEN quarterly report Q2 22
14 LUMI GRUPPEN quarterly report Q2 22 2500500075000 Total Operating Expenses NOKm Number of active students Students — Campus vs. Online (2022)Operating Revenue NOKm 2658 5834 3701online4548 campus 55% campus 45% onlineQ222 Q221 8249 students Adjusted EBIT %Adjusted EBIT NOKm Sonans Utdanning is the largest operating segment of the Group and constitutes 66 per cent of the total revenues and had 8 249 students in the spring semester. Sonans is a well-known brand in Norway and the largest private candidate educator. Sonans 100150200500 175.7 88.0 Q2 22 21 22 21 YTD 95.2 190.2 12016080400 115.0 53.0 Q2 22 21 22 21 YTD 50.4 115.9 153045600 37.4 22.7 Q2 22 21 22 21 YTD 34.8 54.3 102030400 21.3 25.8 Q2 22 21 22 21 YTD 36.5 28.6
Total revenues ended at NOK 88.0 million in the second quarter, a 7.5 per cent decrease from the same period last year. Online revenues grew by 34.7 per cent in the second quarter while campus revenues decreased by 19.8 per cent. The growth for online is driven by an online shift in the market and the effect of changes in commercial terms from January 1, 2022. Due to the Covid-19 pandemic, Sonans experienced an extraordinary shift from students attending classes on campus to online studies. This has led pressure on margins and lower sales as result of 25-30% lower prices for online compared to campus. Because of this, several measures have been implemented including among other a price increase for online courses by 10 per cent in average effective from the school year 2022/2023. In addition, prices for campus courses have been adjusted up by 3.5 per cent. Total operating expenses increased by NOK 2.6 million in Q2 2022 compared to the same period last year and ended at NOK 53.0 million. Personnel expenses decreased by NOK 4.7 million due to the announced downsizing of the organisation with a target of NOK 12 million in savings for 2022. At end Q2 2022, total savings are NOK 7.3 million. The reason for the increase in other expenses is explained by a higher bad debt accrual (NOK 3 million), IFRS adjustment of bad debt cost in 2021 numbers (NOK 3 million) and higher marketing costs for the school year 2021/2022 (NOK 2 million).
Key figures QUARTERS YEAR TO DATE CHANGE 21 - 22 NOK MILLION Q2 22 Q2 21 2022 20 21 Q2 YR Operating revenue 88.0 95.2 175.7 190.2 -7.5% -7.6% — Campus 59.1 73.7 117.7 149.0 -19.8% -21.0% — Online 28.9 21.5 58.0 41.1 34.7% 40.9% Total operating revenue 88.0 95.2 175.7 190.2 -7.5% -7.6% Payroll expenses 19.6 24.3 52.1 59.4 -19.3% -12.3% Payroll expenses in % of operating revenue 22.3% 25.5% 29.7% 31.2% -12.7% -5.0% Other expenses 33.4 26.1 62.9 56.5 27.7% 11.3% Other expenses in % of operating revenue 38.0% 27.0% 36.0% 30.0% 38.1% 20.5% Total operating expenses 53.0 50.4 115.0 115.9 5.1% -0.8% Adjusted EBITDA 35.1 44.8 60.6 74.2 -21.7% -18.3% Adjusted EBITDA % 39.8% 47.0% 34.5% 39.0% -15.3% -11.6% Depreciation and amortization 12.3 10.0 23.3 19.9 23.2% 16.8% Adjusted EBIT 22.7 34.8 37.4 54.3 -34.6% -31.2% Adjusted EBIT % 25.8% 36.5% 21.3% 28.6 % -29.3% -25.5% Non-recurring items 2.8 - 5.4 Number of FTEs 121.7 139.0 121.7 139.0 -12.4% Sick-leave 7.5% 4.5% 6.9% 4.1% 66.7%
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The bad debt accrual is a result of a relatively higher share of students not paying for their courses. There are no obvious reasons that can explain this, but the same trend has been observed for ONH even though the effect is not as significant. A higher share of online sales is however a part of the explanation, but the development is more negative compared to what would be expected. As a result of this, several measures have been implemented to reduce credit risk and the bad debt cost going forward. In addition to the higher bad debt accrual, an IFRS adjustment was made in Q2 2021 resulting in NOK 3 million lower other operating expenses. The adjustment is related to the implementation of IFRS from 1 January 2021 and represents a reversal of an accrual made on 31 December 2020. Please also see comments on this item in the annual report for 2021 (note 3, page 24).
Adjusted EBIT ended at NOK 22.7 million, compared to NOK 34.8 million last year, with a corresponding EBIT margin of 25.8 per cent in Q2 2022 compared to 36.5 per cent in Q2 2021. The decline in students that have signed up for private candidate courses at Sonans for the school year 2022/2023 has accelerated, and total sales are approximately 30 per cent below last year as of week 31. The current market development is mainly a consequence of fewer students without an admission place in higher education, cancelled high school exams and a strong labour market. As a result, Sonans has initiated a new significant cost programme with effect from Q3 2022. The cost programme will include rightsizing of the organisation, improved classroom efficiency, reduced administrative costs and improved marketing efficiency. Total new annual cost savings are in the range NOK 35-39 million in addition to the already announced cost measures of NOK 26 million. Together this will reduce the cost base for the school year 2022/2023 by NOK 60-65 million compared to 2021/2022.
16 LUMI GRUPPEN quarterly report Q2 22
Longer term, Sonans believes that the underlying market and demand for private candidate courses are strong, and that the current market development is more short term in nature. Consequently, the current shift represents an opportunity for Sonans as online is a more flexible and efficient business model. This is already demonstrated by the launch of Live with very attractive financial metrics that also compensate significantly for lost revenue from closed campuses. Sonans will therefore proactively transform and develop its business to maintain a strong position within the private candidate market.
17 LUMI GRUPPEN quarterly report Q2 22 We strive to ensure that our education programmes are of the very best quality, and that our students reach the goals they have set for themselves.
18 LUMI GRUPPEN quarterly report Q2 22 1000150020005000 Oslo Nye Høyskole (ONH) is a university college with a campus in Oslo and a large share of online students. Currently, online revenues constitute 54 per cent of ONH revenues. The school has 2 549 students in the spring semester. Oslo Nye Høyskole Total Operating Expenses NOKm Number of active students Students — Campus vs. Online (2022)Operating Revenue NOKm 1538 877 1751 online798 campus 31% campus 69% onlineQ222 Q221 2549 students Adjusted EBIT %Adjusted EBIT NOKm 1007550250 91.2 46.3 Q2 22 21 22 21 YTD 38.6 76.9 204060800 62.7 28.4 Q2 22 21 22 21 YTD 25.8 51.3 1015202550 23.7 15.5 Q2 22 21 22 21 YTD 10.8 21.5 102030400 25.9 33.4 Q2 22 21 22 21 YTD 28.0 28.0
Total number of signed contracts is 6 per cent behind last year mainly as result of fewer single subject contracts. The market trends that affect the intake for Sonans seem to be affecting the intake for ONH as well. ONH has traditionally received many students after the 20th of July intake for public universities, but fewer students without an admission place also creates some uncertainty for the remaining sales cycle for ONH.
19 LUMI GRUPPEN quarterly report Q2 22 Key figures QUARTERS YEAR TO DATE CHANGE 21 - 22 NOK MILLION Q2 22 Q2 21 2022 20 21 Q2 YR Operating revenue 46.3 38.6 91.2 76.9 20.0% 18.6% — Campus 22.2 19.8 41.7 36.7 11.9% 13.7% — Online 24.2 18.8 49.5 40.2 28.5% 23.1% Total operating revenue 46.3 38.6 91.2 76.9 20.0% 18.6% Payroll expenses 20.4 18.7 46.2 37.5 9.1% 23.2% Payroll expenses in % of operating revenue 44.0% 48.0% 51.0% 49.0% -9.1% 3.8% Other expenses 8.0 7.1 16.5 13.8 12.9% 19.3% Other expenses in % of operating revenue 17.0% 18.0% 18.0% 18.0% -5.9 % 0.6% Total operating expenses 28.4 25.8 62.7 51.3 10.1% 22.1% Adjusted EBITDA 17.9 12.8 28.6 25.6 39.9 % 11.6% Adjusted EBITDA % 38.7% 33.2% 31.3% 33.3% 16.6% -5.9% Depreciation and amortization 2.4 2.0 4.9 4.1 22.1% 19.4% Adjusted EBIT 15.5 10.8 23.7 21.5 43.2% 10.1% Adjusted EBIT % 33.4% 28.0% 25.9% 28.0% 19.3% -7.2% Non-recurring items 3.6 1.9 5.4 3.8 192.5% 41.9% Number of FTEs 124.0 102.4 124.0 102.4 21.1% 21.1% Sick-leave 3.7% 2.9% 3.9% 2.9% 27.6% 34.5% Total revenues ended at NOK 46.3 million in the second quarter, an increase of 20.0 per cent compared to the corresponding quarter last year. The growth is mainly driven by new programmes with a higher share of students taking a three-year bachelor’s degree. The continued growth will enable the school to achieve scale, which will positively impact the profitability this year and following years.
Operating expenses at ONH increased by NOK 2.6 million in Q2 2022 compared to the same period last year, predominantly caused by a payroll increase of NOK 1.7 million due to the addition of new employees from the second half of last year. The growth in headcount is a result of the investment in new programmes. Other expenses increased by NOK 0.9 million and is mainly related to higher expenses for marketing and other student volume related costs. Adjusted EBIT ended at NOK 15.5 million, compared to NOK 10.8 million during the same period last year, with a corresponding EBIT margin of 33.4 per cent in Q2 2022 compared to 28.0 per cent in Q2 2021. This represents a margin expansion of 5.4 percentage points and shows the effect of the revenue growth on the P&L when the ramp-up costs are fully implemented. From second half of 2022, costs are expected to be more in line with last year and the margin will increase from the continued revenue growth. As of week 31, ONH has a growth of 9% for bachelor and master’s programmes for the school year 2022/2023.
Condensed interim financial statement and notes LUMI GRUPPEN quarterly report Q2 2220
21 LUMI GRUPPEN quarterly report Q2 22 Consolidated statement of profit or loss NOK 1000 Note Q2 22 Q2 21 YTD 22 YTD 21 2021 Revenue 2,3 134 375 134 120 267 032 267 459 530 102 Government grants - - - - 1 049 Other operating income - - - - 922 Total revenue 134 375 134 120 267 032 267 459 532 073 Payroll expenses 50 766 48 652 120 183 110 427 248 697 Depreciation and amortisation expenses 4,5,6 14 839 13 657 29 129 27 233 55 435 Other operating expenses 38 097 28 857 72 704 65 010 116 277 Total operating expenses 3 103 702 91 166 222 016 202 670 420 409 Operating profit/(loss) (EBIT) 30 673 42 954 45 016 64 789 111 664 Interest income - - - - 1 136 Financial income 94 175 275 367 93 Interest expense -6 205 -4 393 -12 106 -9 524 -36 206 Financial expense -323 -2 041 -842 -14 893 -1 443 Net financial items -6 434 -6 259 -12 673 -24 050 -36 420 Profit/(loss) before income tax 24 239 36 695 32 343 40 739 75 244 Income tax 4 681 7 706 6 295 8 471 16 174 Profit/(loss) for the year 19 558 28 989 26 048 32 268 59 070
22 LUMI GRUPPEN quarterly report Q2 22 Consolidated statement of financial position ASSETS NOK 1000 N ote 30.06. 22 30.06. 21 31.12. 21 NON-CURRENT ASSETS Deferred tax asset 2 713 280 2 657 Goodwill 4 957 032 957 032 957 032 Other intangible assets 4 22 453 8 123 18 248 Total intangible assets 982 198 965 435 977 937 Leasehold improvements - 3 339 1 098 Financial leasing Right-of-use assets 6 118 637 130 401 136 160 Office machinery and equipment 5 12 308 12 077 11 965 Total tangible assets 130 945 145 817 149 223 Investments in shares 1 619 1 559 1 559 Other non-current receivables - -Total non-current financial assets 1 619 1 559 1 559 Total non-current assets 1 114 762 1 112 811 1 128 718 CURRENT ASSETS Accounts receivables 7 22 877 23 306 22 345 Earned, not invoiced 2 888 1 497 40 541 Other current receivables 8 14 455 24 928 20 655 Cash and bank deposits 32 260 37 254 63 505 Total current assets 72 480 86 985 147 046 Total assets 1 187 242 1 199 796 1 275 765
23 LUMI GRUPPEN quarterly report Q2 22 Consolidated statement of financial position EQUITY AND LIABILITIES NOK 1000 N ote 30.06. 22 30.06. 21 31.12. 21 EQUITY Share capital 9 15 201 15 201 15 201 Share premium 434 218 479 465 470 218 Treasury stock -81 -81 -81 Other reserves - -1 236 -1 224 Retained earnings 86 774 24 024 60 697 Total equity 536 112 517 373 544 811 NON-CURRENT LIABILITIES Pension liabilities - 2 201 2 319 Deferred tax - -Liabilities to financial institutions 10 417 617 426 642 437 292 Non-current lease liabilities 6 82 108 97 253 99 426 Other non-current liabilities - -Total non-current liabilities 499 725 526 096 539 037 CURRENT LIABILITIES Liabilities to financial institutions 10 10 000 20 000Current lease liabilities 6 47 818 41 568 46 200 Derivatives - 18Trade creditors 10 855 5 820 2 052 Tax payable 6 020 8 697 15 815 Public duties payable 14 169 13 609 18 189 Unearned revenue 29 495 35 225 76 462 Contingent consideration - -Other current debt 33 048 31 390 33 199 Total current liabilities 151 405 156 327 191 917 Total liabilities 651 130 682 423 730 954 Total equity and liabilities 1 187 242 1 199 796 1 275 765
24 LUMI GRUPPEN quarterly report Q2 22 Consolidated statement of cash flows NOK 1000 At 31 December Q2 22 Q2 21 YTD 22 YTD 21 CASH FLOW FROM OPERATIONS Profit before income taxes 24 239 36 695 32 343 40 739 Taxes paid in the period -16 500 -22 577 -16 500 -22 790 Gain/loss from sale of fixed assets Interest expense 6 096 6 493 12 322 24 134 Interest paid -5 772 -4 393 -11 675 -9 526 Depreciation 14 839 13 657 29 129 27 232 Interest lease payment - -Change in trade debtors 20 287 14 812 -532 663 Change in other debtors 3 648 -7 388 6 200 -8 735 Change in trade creditors 9 463 35 8 803 260 Differences in expensed pensions and payments in/out of the pension scheme - - -749 Items classified as investments or financing 613 613 Change in other current assets and liabilities -126 509 -109 541 -13 485 6 006 Net cash flow from operations -70 211 -72 821 45 854 57 371 CASH FLOW FROM INVESTMENTS Proceeds from sale of fixed assets Purchase of fixed assets -4 993 -1 905 -9 219 -4 302 Purchase of intangible assets - -Payment to buy shares in other companies - - -60 -60 Payment to buy subsidiaries (Bjørknes Education and Bjørknes Høyskole) 30 000 30 000 Net cash derecognised upon sale of subsidiary - -Net cash flow from investments -4 993 -31 905 -9 279 -34 362 CASH FLOW FROM FINANCING Proceeds from the issuance of new liabilities - -Payment of principal portion of lease liabilities -11 034 -10 323 -21 820 -20 523 Repayment of liabilities to financial institutions -10 000 - -10 000 -156 200 Repayment of other loans - - - -3 900 Net change in bank overdraft - -New equity received - - - 200 000 Transaction costs - -11 125 - -22 979 Payment of dividend -36 000 - -36 000 Purchase of treasury shares - -Net cash flow from financing -57 034 -21 448 -67 820 -3 602 Exchange gains / (losses) on cash and cash equivalentsNet change in cash and cash equivalents -132 238 -126 174 -31 245 19 407 Cash and cash equivalents at the beginning of the period 164 498 163 428 63 505 17 846 Cash and cash equivalents at the end of the period 32 260 37 254 32 260 37 253 Unused operational credit facilities in addition 70 000 70 000 70 000 70 000
25 LUMI GRUPPEN quarterly report Q2 22 Consolidated statement of changes in equity SHARE SHARE TREASURY OTHER RETAINED NOK 1000 CAPITAL PREMIUM STOCK RESERVES EARNINGS TOTAL Balance2021 at 31 December 2021 15 201 470 218 -81 -1 224 60 697 544 811 Retrospective adjustment of balance at 1 January 2021Balance at 1 January 2022 15 201 470 218 -81 -1 224 60 697 544 811 Issued share capital - - - - -IFRS Adjustments 1 224 0 1 224 Profit/(loss) for the year 26 048 26 048 Other equity changes -36 000 27 -35 973 Equity at 30 June 2022 15 201 434 218 -81 - 86 774 536 112 Balance at 1 January 2021 2 995 291 632 -42 -1 236 1 586 294 934 Issued share capital - - - - -Transfer from distributable equity 15.02.2021 10 526 -10 487 -39Capital increase 16.02.2021 1 680 198 320 - - - 200 000 Costs directly booked in equity - -9 246 -9 246 Ordinary dividends - - - - -OCI - - 12 - 12 Profit/(loss) for the year 59 070 59 070 Other equity changes - - - - 41 41 Equity at 31 December 2021 15 201 470 218 -81 -1 224 60 697 544 811
Q2 22 Q1 22 YTD 22 2021 DISAGGRETATING OF REVENUE Education 134 360 133 791 266 867 530 103 — of which campus 80 457 94 446 159 328 355 884 — of which online 53 903 39 345 107 539 174 219 Government grants 1 048 Other income 15 329 165 922 Total revenue 134 375 134 120 267 460 532 073 — of which discontinued operations - -Total revenue from continuing operations 134 375 134 120 267 032 532 073
26 LUMI GRUPPEN quarterly report Q2 22
2 Revenue Lumi Gruppen earns revenue from educational services. The educational services include one university college and private candidate schools across Norway. Services are delivered both on campus and online. Services are delivered over time to the students. Educational service revenue is distributed according to the individual course sold. Courses for a single semester is distributed over 4 to 6 months while courses running over two semesters are distributed over 10 to 12 months. Invoicing for the educational services is done at the beginning of each school semester, in September and January. Invoices sent in September are for both the semester and for the entire school year fees. This creates the posting of the deferred revenue in the balance sheet (a contract liability). This contract liability is always current, as the revenue will be earned within a maximum of 9 months after the date of the invoice. 1000
The Company is listed on Euronext Growth stock exchange in Oslo, Norway and has the ticker “LUMI”. Lumi Gruppen is a leading player in the education market in Norway. The Group consists of the parent company Lumi Gruppen AS and its subsidiaries Lumi Bidco AS, Lumi Services AS, Sonans Privatgymnas AS, Oslo Nye Høyskole AS, ONH Education AS, and Norwegian School of Technology AS. The operating companies in the Group are Sonans Privatgymnas AS, Oslo Nye Høyskole AS and ONH Education AS. Lumi Services AS is a company that organizes shared services like IT, marketing and finance on behalf of the operating companies. The accounting policies applied by the Group in these consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements for the year ended 31 December 2021. Discontinued operations Discontinued operations are defined as a component of the Lumi Group or Group entity that has been disposed of and represents a separate major line of business.
Notes to the Condensed interim financial statements NOK
1 Organisation and basis of preparation Lumi Gruppen AS (the Company or Lumi Gruppen), is the parent company of the Lumi Gruppen (Lumi or the Group) and is a limited liability company incorporated and domiciled in Norway, with its head office in Nydalen, Oslo.
27 LUMI GRUPPEN quarterly report Q2 22 3 Operating segments OTHER/ TOTAL OSLO NYE HEAD- ELIMINATIONS CONTINUING NOK 1000 SONANS HØYSKOLE NTECH QUARTER AND IFRS OPERATIONS Q2 2022 * * * Total revenue 88 037 46 324 - 10 144 -10 130 134 375 — of which management fee - - - 10 130 - 10 130 Total expenses 55 745 31 998 668 10 596 -10 144 88 863 — of which management fee - - - - -Depreciation and amortisation 12 321 2 442 - 76 - 14 839 EBIT 19 971 11 884 -668 -528 14 30 673 * Reported including IFRS 16, excluding non recurring Items. YTD 2022 * * Total revenue 175 660 91 207 - 21 200 -21 035 267 032 — of which management fee 21 035 21 035 Total expenses 120 389 68 090 1 666 23 842 -21 104 192 883 — of which management feeDepreciation and amortisation 23 266 4 894 - 164 809 29 129 EBIT 32 005 18 223 -1 666 -2 806 -713 45 016 * Reported including IFRS 16, excluding non recurring Items. Q2 2021 * * * Total revenue 95 167 38 600 - 11 056 -10 703 134 120 — of which management fee -10 703 -10 703 Total expenses 50 409 27 660 380 10 644 -11 574 77 519 — of which management feeDepreciation and amortisation 9 998 2 000 - 699 860 13 657 EBIT 34 760 8 940 -380 -287 11 42 954 * Reported including IFRS, excluding non recurring Items. YTD 2021 * * Total revenue 190 163 76 895 - 22 056 -21 754 267 459 — of which management fee 21 754 21 754 Total expenses 115 925 55 134 813 25 317 -21 754 175 435 — of which management fee - - - - -Depreciation and amortisation 19 922 4 100 - 1 499 1 712 27 233 EBIT 54 316 17 661 -813 -4 760 -1 712 64 789 * Reported including IFRS, excluding non recurring Items.
28 LUMI GRUPPEN quarterly report Q2 22 4 Intangible assets IFRS Goodwill GOODWILL GOODWILL GOODWILL GOODWILL HELSE- OSLO NYE LUMI SONANS NOK 1000 HØYSKOLEN HØYSKOLE GRUPPEN EDUCATION TOTAL CostCOSTat 31 December 2021 2 834 208 854 591 500 153 844 957 032 AdditionsAdditions through acquisitions Disposals Cost at 30 June 2022 2 834 208 854 591 500 153 844 957 032 AMORTIZATION AND IMPAIRMENT Accumulated at 31 December 2021 Impairment for the year Accumulated amortization Accumulated at 30 June 2022 Carrying amount at 30 June 2022 2 834 208 854 591 500 153 844 957 032 Amortization method n/a n/a n/a n/a n/a Estimated useful life Impairment tests Impairment tests Impairment tests Impairment tests Impairment tests STUDENT CONSESSIONS, NOK 1000 CONTRACTS PATENTS ETC. TOTAL CostCOSTat 31 December 2021 33 000 19 437 52 437 Additions 6 719 6 719 Additions through acquisitions Reclassification Disposals Cost at 30 June 2022 33 000 26 156 59 156 AMORTIZATION AND IMPAIRMENT Accumulated at 31 December 2021 32 200 2 286 34 486 Amortization for the year 800 1 417 2 217 Impairment for the year Reclassification to leasehold improvements Accumulated at 30 June 2022 33 000 3 703 36 703 Carrying amount at 30 June 2022 - 22 453 22 453 Amortization method Degressive Linear Estimated useful life 2-4 years 5 years
29 LUMI GRUPPEN quarterly report Q2 22 5 Property, plants and equipment OFFICE LEASEHOLD MACHINERY & NOK 1000 IMPROVEMENTS ART EQUIPMENT TOTAL CostCOSTat 31 December 2021 12 948 376 42 800 56 124 Additions 323 - 2 151 2 474 Additions through acquisitions - - -Reclassification Disposals through sale - - -Cost at 30 June 2022 13 271 376 44 951 58 598 DEPRECIATIONS AND IMPAIRMENT Accumulated at 31 December 2021 11 850 - 31 212 43 062 Depreciations for the year 297 - 2 931 3 228 Reclassification Impairment - - -Disposals through sales - - -Accumulated at 30 June 2022 12 147 - 34 143 46 290 Carrying amount at 30 June 2022 1 124 376 10 808 12 308 Depreciation method Linear Linear Linear Estimated useful life 5-3 years In line with In line with lease contract lease contract
30 LUMI GRUPPEN quarterly report Q2 22 NOK 1000 30.06. 22 31.12. 21 AMOUNTS RECOGNISED IN THE BALANCE SHEET Right-of-use assets Premises 115 630 131 872 Equipment 3 007 4 289 Total 118 637 136 160 Useful Depreciationlife method Straight-line Straight-line Lease liabilities Current 47 818 46 200 Non-current 82 108 99 426 Total 129 926 145 626 AMOUNTS RECOGNISED IN THE STATEMENT OF PROFIT OR LOSS Depreciation of right of use asset 23 651 43 363 Settlement with termination -Interest expense 3 470 7 365 6 Leasing NOK 1000 RIGHT-OF-USE ASSETS TOTAL Cost at 31 December 2021 259 213 259 213 Additions 11 681 11 681 Additions through acquisitions Disposals -5 554 -5 554 Cost at 30 June 2022 265 340 265 340 DEPRECIATIONS AND IMPAIRMENT Accumulated at 31 December 2021 123 053 123 053 Depreciations for the year 23 651 23 650 DisposalsImpairmentthrough sales Accumulated at 30 June 2022 146 703 146 703 Carrying amount at 31 December 2021 136 160 136 160 Carrying amount at 30 June 2022 118 637 118 637 Depreciation method Linear Estimated useful life In line with lease contract
31 LUMI GRUPPEN quarterly report Q2 22 7 Trade receivables NOK 1000 30.06. 22 2021 Trade receivable 45 568 33 584 — of which Sonans 38 190 27 978 Loss allowance - 22 691 -11 239 — of which Sonans -19 460 -13 276 Total trade receivable, net 22 877 22 345 NOK 1000 30.06. 22 2021 Prepaid expenses 14 441 20 589 Other debtors 14 67 Total other receivables 14 455 20 655 8 Other receivables Accounting policies Other receivables consist of prepaid expenses and other debtors.
32 LUMI GRUPPEN quarterly report Q2 22 9 Share capital and shareholder information Parent company (Lumi Gruppen AS) NOK NUMBER PAR VALUE CAPITALISED SHARE CAPITAL Ordinary shares 36 193 814 0.42 15 201 402 Cost at 30 June 2022 36 193 814 15 201 402 TYPE OF ORDINARY % At 30 June 2022 ACCOUNT SHARES OWNERSHIP SHAREHOLDERS Pareto Aksje Norge Verdipapirfond Ordinary 3 390 153 9.4 JPMorgan Chase Bank, N.A., London Nominee 1 936 325 5.4 Avanza Bank AB Nominee 1 720 077 4.8 J.P. Morgan SE Nominee 1 701 550 4.7 Pershing LLC Nominee 1 527 705 4.2 The Northern Trust Comp, London Br Ordinary 1 376 318 3.8 Forsvarets Personellservice Ordinary 1 250 436 3.5 Verdipapirfondet Holberg Norge Nominee 1 200 000 3.3 Vevlen Gård AS Ordinary 1 010 000 2.8 Brandt Ordinary 969 978 2.7 Skandinaviska Enskilda Banken AB Nominee 926 032 2.6 Skandinaviska Enskilda Banken AB Nominee 805 853 2.2 Verdipapirfondet DNB SMB Ordinary 692 741 1.9 Aars AS Ordinary 633 977 1.8 BNP Paribas Securities Services Nominee 615 077 1.7 Goldman Sachs International Ordinary 607 263 1.7 J.P. Morgan SE Nominee 580 000 1.6 Clearstream Banking S.A. Nominee 562 500 1.6 Valorem AS Nominee 550 000 1.5 Verdipapirfondet KLP Aksjenorge Ordinary 526 953 1.5 Top 20 shareholder / nominee 22 582 938 62.4 Other 13 610 062 37.6
33 LUMI GRUPPEN quarterly report Q2 22 10 Liabilities to financial institutions Current and non current liabilities to financial institutions are financial liabilities, primarily bank loans, and are recognised initially at fair value and subsequently at amortised cost using the effective interest rate method to measure interest expense on the loans. The loan agreement is governed by a leverage ratio covenant. The group is compliant with this covenant as at 30 June 2022. NOK 1000 30.06.22 31.12.21 NON-CURRENT INTEREST-BEARING LIABILITIES AS PRESENTED IN THE STATEMENT OF FINANCIAL POSITION NNon current liabilities to financial institutions 417 617 437 292 Current liabilities to financial institutions 10 000Total liabilities to financial institutions 427 617 437 292 SPECIFICATION OF LIABILITIES TO FINANCIAL INSTITUTIONS Total amount borrowed 430 000 440 000 Capitalized bank fees -2 383 -2 708 Total liabilities to financial institutions 427 617 437 292 COLLATERAL AND GUARANTEES Nominal value of debt with collateral security Liabilities to financial institutions 430 000 440 000 Total 430 000 440 000 Book value of collateral pledged Accounts receivable 22 877 22 346 Office machinery and equipment 12 308 13 063 Total 35 185 35 409 Covenants — Leverage ratio (total net debt/EBITDA)
34 LUMI GRUPPEN quarterly report Q2 22 13 Contingent liabilities There are no contingent liabilities as of 30 June 2022. 11 Related parties Balances and transactions between the Company and its subsidiaries, which are related parties to the Company, have been eliminated on consolidation basis. There are no significant related party transactions for Lumi Gruppen as of 30 June 2022. OWNERSHIP/ NAME LOCATION VOTING RIGHT Lumi Bidco AS Oslo 100 Lumi Services AS Trondheim 100 Sonans Privatgymnas AS Trondheim 100 ONH Education AS (acquired 25.06.2019) Oslo 100 Oslo Nye Høyskole AS (acquired 25.06.2019) Oslo 100 Norwegian School of Technology AS Trondheim 100 12 Subsidiaries
Leverage ratio Net debt divided by last twelve months Adjusted EBITDA before impact of IFRS 16. Capital expenditure Capital expenditure (capex) is a measure of total investment in the period both in the operations and in development of new business. Capital expenditures consist of both maintenance capex and development capex and the source of capex is the Statement of cash flows.
Adjusted operating cash flow is based on Net Cash Flow from Operations excluding non-recurring items, interest cost and interest paid and including capex. The group has presented this APM because it considers it to be an important supplemental to understand the normalized cash flow of the Group when excluding non recurring items.
Adjusted operating cash flow
Adjusted cash conversion
Adjusted operating cash flow divided byprofit before income taxes (pre tax profits)
Adjusted EBIT margin Adjusted EBIT divided by total revenue. Net debt Current and non-current borrowings for the period (excluding property lease liabilities recognised under IFRS 16) less cash and cash equivalents for the period. Net debt is a non IFRS financial measure, which the Group considers to be an APM, and this measure should not be viewed as a substitute for any IFRS financial measure. The Group has presented this APM as it is a useful indicator of the Group’s indebtedness, financial flexibility and capital structure because it indicates the level of borrowings after taking into account cash and cash equivalents within the Group’s business that could be utilised to pay down the outstanding borrowings. Net Debt is also used as part of the assessment for financial covenant compliance.
Adjusted EBITDA before impact of IFRS 16 is a measure of EBITDA adjusted for (i) lease expenses applying IAS 17 Leases, (ii) revenue and cost from sold or acquired business, and (iii) certain extraordinary items affecting comparability, referred to as Non-Recurring items in this report. The Group has presented this APM because it considers it to be an important supplemental measure to understand the leverage ratio of the Group.
Pro Forma revenues are revenues for the Group adjusted for sold or acquired entities. Sonans Karriere AS was disposed from the Group in early June 2020, and the financials of Sonans Karriere AS are included in the reported consolidated reported revenues for the Group until and including May 2020.
Alternative performance measures
The Group reports its financial results in accordance with IFRS accounting principles as issued by the IASB and as endorsed by the EU. However, management believes that certain Alternative Performance Measures (APMs) provide management and other users with additional meaningful financial information that should be considered when assessing the Group’s ongoing performance. These APMs are non IFRS financial measures and should not be viewed as a substitute for any IFRS financial measure. Management, the board of directors and the long-term lenders regularly use APMs to understand, manage and evaluate the business and its operations. These APMs are among the factors used in planning for and forecasting future periods, including assessing compliance with financial covenants. Alternative Performance Measures reflect adjustments based on the following items: Pro Forma revenues
Adjusted EBITDA before impact of IFRS 16
35 LUMI GRUPPEN quarterly report Q2 22
Adjusted EBITDA margin Adjusted EBITDA divided by total revenue. EBIT EBIT is a measure of earnings before deducting net financial items and taxes. The Group has presented this APM because it considers it to be an important supplemental measure to understand the overall picture of profit generation in the Group’s operating activities.
Adjusted EBIT Adjusted EBIT is a measure of EBIT adjusted for (i) revenue and cost from sold or acquired business, and (ii) certain extraordinary items affecting comparability referred to as Non Recurring items in this report, and (iii) for the subsidiar ies of Lumi Gruppen AS, also including IFRS adjustments as these companies report on NGAAP. The Group has presented these APMs because it considers them to be important supplemental measures to understand the under lying profit generation in the Group’s operating activities.
36 LUMI GRUPPEN quarterly report Q2 22 Company information LillestrømOslo Ski SandvikaBergenStavanger KristiansandOslo Campus — Oslo Nye Høyskole TønsbergFredrikstad DrammenTrondheim Tromsø LUMI SERVICES AS PRIVATGYMNASSONANS AS OSLO HØYSKOLENYEAS NORWEGIAN SCHOOL OF TECHNOLOGY AS ONH EDUCATION AS Both local presence with campuses and online offering
37 LUMI GRUPPEN quarterly report Q2 22 Erik Brandt Chief Executive Officer Martin Prytz Chief Financial Officer & Investor Relations Marit Aamold Trysnes Managing Director Sonans Morten Danielsen Managing Director ONH Line Lunde Director of HR Lumi Gruppen Phone +47 915 04 070 Office Address Sandakerveien 116 0484 Oslo Post Address Postboks 943 7409 Trondheim Website www.lumigruppen.no IR contact ir@lumigruppen.no Board of directors Helge Midttun Chairperson Harald Arnet Director Frode Eilertsen Director Bente Sollid Storehaug Director Sylvie Milverton Director Anne Dahle Employee Representative Management Financial calendar Q3 22 04 November 2022 Q4 22 18 February 2023 kingdesign.noproduction:andDesign