We facilitate lifelong learning
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.
Sonans — market leader within private candidate exams
Oslo Nye Høyskole
— National Student Survey: overall student satisfaction (2021)
Oslo Nye Høyskole — National Student Survey: Online educational offer (2021)
Top 1 Top 1
Highlights for the quarter
Cost programmes on track. Gross savings of NOK 14 million for the Group in the fourth quarter driven by a significant reduction in personnel, marketing, and overhead costs. 14
Operating revenue 126
Campus to online
Adjusted EBIT 23
Strong credit control measures NOK mill. (134) (24)
Decision made to close an additional three campuses in Sonans from the second half of 2023 by consolidating the Greater Oslo region.
Gross savings Adjusted EBIT negatively affected by NOK 6 million in additional provision for bad debt. Strong credit control measures implemented to reduce bad debt and to improve credit quality going forward.
NTECH approved by NOKUT, with launch and marketing campaign planned for Q1 2023, targeting its first enrolment of students for the school year 23/24.
Key financial and operational figures
LUMI GROUP KEY FIGURES
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.
Costs reduced, prepared for a likely market recovery
For our candidate business in Sonans, 2022 was an extraordinary year, with the post-Covid driven market setback. This affected revenue negatively in the fourth quarter as expected. Oslo Nye Høyskole (ONH) continued to grow well, whereas the new technology trade school NTECH was approved by NOKUT. Lumi Gruppen has acted forcefully to adapt to the new market situation, and our announced cost reduction programmes were executed as planned in the fourth quarter. Operating expenses were reduced gross by 14 percent. While maintaining a relentless focus on quality, our organisation is now well trimmed and adapted to the current market environment. Application volumes for the first half of 2023 indicate a stabilisation of the market, and as the market leader in Norway, we are now positioned for a likely short-term recovery, rapidly translating into profit improvement. In the longer term, we see growth opportunities in the planned NTECH launch as well as ONH, which is growing and gaining market share.
Fourth quarter 2022 review
Total operating revenue was NOK 126 million compared to NOK 134 million last year and represents a decline of 5.6 per cent. The decline was driven by the post-Covid market setback for the private candidate business in Sonans.
Oslo Nye Høyskole (ONH) had a strong performance in the fourth quarter with 18.0 per cent growth driven by new study programmes. Reported revenue included, as in the third quarter, higher online revenue from Sonans as result of changed commercial terms.
Operating expenses (OpEx) decreased by 6.4 per cent in the fourth quarter compared to the same period last year. The decrease was driven by the cost programmes implemented for both Sonans and ONH and strict cost focus throughout the organisation. When excluding an additional provision for bad debt and higher campus operation expenses driven by electricity prices and shared utility expenses, the actual decrease in OpEx was 14.2 per cent compared to the same period last year. The largest contributor to reduced OpEx was personnel expenses, which decreased by 16.9 per cent from NOK 71.5 million to NOK 59.5 million.
The adjusted EBIT in the fourth quarter was NOK 23 million (24). The adjusted EBIT margin was in line with the margin in the same period last year as a result of the cost programmes in combination with higher revenue for ONH.
Lumi Gruppen had a total liquidity reserve including the revolving credit facility of NOK 99 million (134) and a net interest-bearing debt excl. IFRS 16 of NOK 401 million (376) at the end of the fourth quarter. As previously announced, Lumi Gruppen received a waiver from its leverage covenant in the fourth quarter of 2022 and has agreed on a new covenant for the first and second quarter of 2023.
During the fourth quarter, the key priority for the Group has been to execute on the decided cost programmes for both Sonans and ONH, including a completion of the turnaround strategy for Sonans. The Group has now taken the necessary steps to align operations with the current market conditions without reducing its educational programme offering. It has been important for the Group to identify and implement efficiency measures that are persistent over time and will contribute to increased profitability for the Group’s operations when the market recovers. This includes, among others, development of the digital education platforms and centralised operations across business units.
The Group’s reporting structure comprises two operational segments: Sonans and Oslo Nye Høyskole (ONH).
Operating revenue decreased by 17.3 per cent to NOK 71.6 million (86.6). The decline in revenue is mainly a result of lower student volumes for the campus offering. Of the NOK 71.6 million in reported revenue, around NOK 10 million is related to new commercial terms for online and change in distribution of new student contracts (the “online effect”), which has led to a different accrual of revenue than in previous years. The amount this quarter was in line with the amount in the third quarter of 2022.
In the fourth quarter, campus revenue declined by 39.7 per cent. Online revenue grew by 41.1 per cent and flat development when excluding the “online effect”. For the first half of the school year 22/23 and excluding the “online effect”, the reported revenue showed a decline of 28.8 per cent compared to the same period last year.
To compensate for the higher share of online students this school year, Sonans increased its prices for the online offering by 10 per cent in the second quarter of 2022. In addition, the new Live offering was launched with the same pricing as campus. All in all, this has compensated for the decline in revenue from lower volumes and migration to online in the fourth quarter.
Total operating expenses excluding depreciation and impairment losses equalled NOK 49.1 million (60.6) in the fourth quarter. This represents a decrease of 18.9 per cent and NOK 11.4 million compared to last year. Total savings from the cost programme were NOK 17.4 in the fourth quarter, but that was reduced by NOK 4 million from an additional bad debt provision and NOK 2 million from higher campus operations expenses.
The development of bad debt is not satisfactory, and the Group implemented strong credit measures starting in the fourth quarter to reduce the share of students with low payment ability. These measures have already yielded a positive impact in the spring intake sales cycle and will most likely result in lower provisions for bad debt going forward. As a result of the changing circumstances with respect to student payment ability, the Group has decided not to recognise a share of the expected revenue from full-year student contracts. Normally, a 50 per cent share of the full year student contract value would have been distributed into the second half of the school year 22/23. On 31 December 2022, the effect of this decision was
estimated to constitute NOK 8-10 million in lower revenue for the second half of the school year 22/23 (i.e., first half of the reporting year 2023). The student contracts will however be recognised when payment is received. The net effect on profit is not certain as this will reduce the need for a continued increase in the bad debt provision and hence lower bad debt expenses in the profit and loss.
Depreciation and amortisation expenses ended at NOK 10.4 million (10.1) in the fourth quarter. This excludes the impairment of the right-of-use asset for the campus in Ski and Sandvika with a write-down of NOK 4.0 million. The impairment represents the remaining net liability for the premises. The Group assumes that it is very likely to be able to sub-lease the premises and a process for this was started at the end of the fourth quarter.
The adjusted EBIT for Sonans in the fourth quarter was NOK 12.1 million (15.9). The adjusted EBIT margin in the fourth quarter was 1.5 percentage points lower compared to the same period last year as the reduction in expenses due to the increased bad debt expenses did not fully offset the decline in revenue.
During the fourth quarter, Sonans completed its turnaround strategy, which has now resulted in a stronger digital offering and a reduced number of campuses from 15 to 12, with a further reduction to 9 by the end of the second quarter of 2023. The campus operations will in the future be concentrated in the largest cities in Norway and the new education offering Live will provide students with the campus quality experience in the areas without a physical campus. The online offering remains strong and meets the student segment with the needs for a more flexible way of studying.
At the end of the fourth quarter, the number of full-time employees (FTEs) was 106 (139), as forecasted and communicated in the last quarterly report. Following the closure of an additional three campuses by mid-2023, the number of FTEs is expected to end around 95 for Sonans.
OSLO NYE HØYSKOLE (ONH)
Operating revenue increased by 18 per cent to NOK 54.4 million (46.1). Sales growth to a large extent was driven by the new programmes launched at ONH and the growth in revenues was a combination of higher recurring revenues and volume growth.
Total operating expenses excluding depreciation and impairment losses equalled NOK 38.2 million (32.8) in the fourth quarter. The increase in OpEx in the fourth quarter compared to last year is mainly a result of higher marketing expenses and a higher bad debt provision of NOK 2.1 million. Unlike Sonans, the increased provision for bad debt is more a consequence of a generally higher credit risk and still constitutes a relatively low share of total revenues. For the financial year 2022, bad debt constituted around 1 per cent of total operating revenue.
Depreciation and amortisation expenses was NOK 2.5 million (2.6) in the fourth quarter.
The adjusted EBIT for ONH in the fourth quarter was NOK 13.7 million (10.7). The adjusted EBIT margin was 2.0 percentage points higher compared to the same period last year as result of higher revenue and a stable development in payroll expenses.
At the end of the fourth quarter, the number of FTEs was 119 (128), which is a reduction of 7 per cent.
CONSOLIDATED INCOME STATEMENT FOURTH QUARTER
Total operating revenue decreased by 5.6 per cent to NOK 126 million (134). The reported revenue includes a NOK 10 million positive “online effect” as a result of different accruals compared to the same period in 2021 as a consequence of changes in commercial terms in Sonans for online contracts.
Total operating expenses excluding depreciation and impairment losses equalled NOK 90.1 million (96.3) in the fourth quarter. Gross savings from the cost programmes were NOK 14.0 million in the quarter compared to last year. These savings are mainly related to a significant reduction in personnel expenses for Sonans. As a result of the higher provision for bad debt in the fourth quarter for both Sonans and ONH, combined with inflation in campus operation expenses, the net reduction in OpEx was NOK 6.1 million. Please see the operating segments review for more details on this.
Depreciation, amortisation, and impairment expenses ended at NOK 12.8 million (13.4) in the fourth quarter. The reduction was due to lower IFRS 16 depreciations.
Lumi Gruppen has impaired its right-of-use assets by closing an additional three campuses in the Greater Oslo region from 2H 2023 with a write-down of NOK 4 million. The write-down was excluded in the adjusted EBIT for the fourth quarter and reported as part of non-recurring items.
The adjusted EBIT for the Group ended at NOK 23.1 million (24) in the fourth quarter with a corresponding margin of 18.3 per cent vs. 18.0 per cent in the same period last year. The margin in the fourth quarter remained on the same level as last year, held up by the cost programmes, sales growth for ONH and the “online effect” from new commercial terms in Sonans.
Reported non-recurring items in the fourth quarter were NOK 11.0 million (5.0). The following items were classified and reported as non-recurring in the fourth quarter:
Impairment and write-down of right-of-use assets in Sonans from closing three campuses = NOK 4.0 million
Severance payments and severance accruals in the fourth quarter related to downsizing of the organisation = NOK 2.5 million
License fee and final settlement for the Qybele LMS system = NOK 3.0 million
Legal and consultant fees in connection with the restructuring and interim resources supporting the outsourcing of accounting and payroll = NOK 1.5 million
Non-recurring items and adjustment of EBITDA and EBIT are expected to be limited from 2023 as the cost programmes are close to fully implemented in both Sonans and ONH. Further, the agreement and the annual license fee of NOK 8-10 million for Qybele LMS in ONH has now expired. The fee represented 25 per cent of the nonrecurring items in 2022 and will from 2023 improve the cash flow by the same amount.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION — FOURTH QUARTER
The Group’s assets totalled NOK 1 199 million at the end of fourth quarter, a decrease of NOK 77 million from the same period last year. The Group’s equity amounted to NOK 547 million, an increase of NOK 2.4 million compared to the same period last year. The equity ratio was 46 per cent (43 per cent). Current and non-current liabilities to financial institutions were NOK 428 million at the end of the fourth quarter compared to NOK 437 million in the same period last year.
CONSOLIDATED STATEMENT OF CASH FLOWS — FOURTH QUARTER
Net cash flow from the Group’s operations during the fourth quarter was NOK -21.9 million (-18.7). The difference between net cash flow from operations and profit before tax 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 the first and third quarters), and in the latter part of the semester the cash is used for ongoing operations.
The net cash outflow from investing activities amounted to NOK 4.4 million (5.2) in the fourth quarter. The majority of this relates to development of new study programmes for Sonans, ONH and NTECH. The net cash outflow from financing activities was NOK 12.0 million (20.4) in the fourth quarter. This consists of the principal portion of lease liabilities in accordance with IFRS 16. The net cash outflow from investing activities is lower this year due to the waiver received which included no amortisation of the loan for the school year 22/23.
During the fourth quarter, the Group had a net decrease in cash and cash equivalents of NOK 38.4 million (44.1). As of the balance sheet date, the Group had cash and cash equivalents of NOK 29.0 million, compared to NOK 63.5 million at the same time last year.
FINANCING AND BANK COVENANT
The Group received a waiver from its leverage covenant as of 31 December 2022. The leverage ratio at the end of fourth quarter was 3.4. The calculation of leverage according to the new terms allowed a non-recurring item adjustment of 30 per cent of the NGAAP EBITDA excl. IFRS 16. The actual adjustment of was 24.6 per cent.
The Group’s share capital was NOK 15.2 million as of 31 December 2022, consisting of 36 193 814 ordinary shares, each with a par value of NOK 0.42. All the shares have been fully paid and have equal rights. Lumi Gruppen owned 193 814 treasury shares as at the balance sheet date. The number of shareholders as at 31 December 2022 was 1 880, where the top 20 shareholders constituted 66 per cent of the shares.
DIVIDEND PROPOSAL FOR 2022
No dividend will be proposed for 2022.
Lumi Gruppen is of the opinion that a market recovery is possible as early as the next school year. This is based on the understanding of the drivers that led to the market set-back for the private candidate business and which also reduced the expected volume growth for bachelor programmes at ONH.
Lumi’s business model is characterised by a large degree of fixed costs and operational gearing. Following the successful efficiency programme with significant cost reductions, a more favourable market situation for the Group will rapidly improve the financial performance and profitability of the Group’s operations.
The market development for Lumi Gruppen is correlated and connected to several macroeconomic drivers including the demand gap in public higher education in Norway and thus the significant share of students without a place of admission. The number of applicants to higher education will be announced by the Norwegian Universities and Colleges Administration Services (NUCAS) in mid-April and the result of the intake will be announced 20 July.
The cancellation of exams in high schools three years in a row has affected the private candidate market, and the re-introduction of the exams will likely contribute to a more normal market situation going forward.
The demand for education, both private candidate and higher education, is also partly depending on the labour market. The labour market has been strong the last year, and this partly explained the decline in applicants for higher education. The current macroeconomic situation, including a softer labour market, could lead to higher demand for education in 2023.
Lumi Gruppen is closely following the process following the recommendations published by the Admission Committee in December. At this stage, these are suggestions that are likely to be modified through the political process before a potential implementation, which in any case will not occur for several years. While the outcome of the process may affect the current offering of Sonans, Lumi Gruppen believes this will also create new business opportunities. As long as access to attractive university programmes is limited, there will be a market for services that help students qualify. Lumi Gruppen is actively planning to adapt to any changes, based on various scenarios.
SONANS 1H 2023
The sales for the spring intake ended around 30 per cent below the spring intake the previous school year. This is in line with the sales in the autumn intake this school year, which ended down 28 per cent.
With the combined sales from the autumn and the spring intake, revenue is expected to come in at NOK 118-120 million for the first half of 2023 and NOK 110-112 when deferring contract revenue of around NOK 8-10 million from contracts with low likelihood of receiving a payment.
OSLO NYE HØYSKOLE 1H 2023
ONH completed a strong student intake last spring with 17 per cent growth compared to last year. The intake is for online programmes only and is proof of the strong online position for the college.
With the combined sales from the autumn and the spring intake, revenue is expected to come in at NOK 95-97 million for the first half of 2023.
NORWEGIAN SCHOOL OF TECHNOLOGY (NTECH)
NTECH was approved by NOKUT in December 2022. The Group will launch a marketing campaign already in Q1 2023, targeting its first enrolment of students for the school year 23/24. NTECH represent a new growth opportunity for Lumi Gruppe in a market segment growing rapidly recent years. The Group will continue to develop programmes to increase volume of student the coming years. NTECH will offer courses both on online and campus.
We confirm, to the best of our knowledge, that the condensed set of financial statements for the period 1 January to 31 December 2022 has been prepared in accordance with IAS 34 Interim Financial Reporting and gives a true and fair view of the Group’s assets, liabilities, financial position and profit or loss. We also confirm, to the best of our knowledge, that the interim management report includes a fair review of important events that have occurred during the financial year and their impact on the condensed set of financial statements, a description of the principal risks and uncertainties for the remaining six months of the financial year, and major related parties’ transactions.
This report includes forward-looking statements which are based on our current expectations and projections about future events. Statements herein, other than statements of historical facts, regarding future events or prospects, are forward-looking statements. All such statements are subject to inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating substantially from what has been expressed or implied in such statements. As a result, you should not place undue reliance on these forward-looking statements.
Oslo, 17 February, 2023
Approved by the Board of Directors and ManagementHelge Midttun Harald Arnet Anne Dahle Frode Eilertsen Chair Erik Brandt Martin Prytz CEO CFO
Condensed interim financial statement and notes
Consolidated statement of profit or loss
Consolidated statement of financial position
Consolidated statement of financial position
Consolidated statement of cash flows
CASH FLOW FROM FINANCING
Consolidated statement of changes in equity
Notes to the Condensed interim financial statements
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. 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, unless otherwise stated.
Lumi Gruppen earns revenue from educational services including one university college and private candidate schools across Norway. Services are delivered both on campus and online, and 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.
Estimates, judgements and assumptions
The preparation of interim condensed financial statements involves the use of accounting estimates. Actual results may differ from these estimates. Management is required to exercise judgment in applying the group’s accounting policies.
Management has used estimates and assumptions that have affected assets, liabilities, revenues, expenses, and information on potential liabilities. Future events may lead to these estimates being changed. Estimates and their underlying assumptions are reviewed on a regular basis and are based on best estimates and historical experience. Changes in accounting estimates are recognized during the period when the changes take place. If the changes also apply to future periods, the effect is divided among the present and future periods. Management has, when preparing the interim financial statements; made certain significant assessments based on critical estimates and significant judgment when it comes to application of the accounting principles.
Invoicing for the educational services is commenced at the beginning of each school semester, in August/September and January. Invoices sent in August/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.
3 Operating segments
4 Intangible assets IFRS
As described in the annual report for 2021, goodwill is tested for impairment at annual basis, and, as per IAS 36, more frequently if indicators of possible impairment are identified.
As announced 21 September 2022, the student intake for the school year 22/23 came in 28% below last year’s intake for Sonans. The decrease in market value that occurred in the third quarter and the reduction in revenue following the decrease in student intake are by management, and according to IAS 36, treated as an impairment indicator.
Goodwill is assessed for impairment on 31 December 2022. The CGUs assessed are in line with the CGUs described in the annual report. The key assumptions are updated to reflect the current situation, and the DCF to reflect updated forecast. With respect to the impairment testing made for the goodwill allocated to the CGU Sonans, the DCF is based upon the assumption that the private candidate market over the next years will normalize and eventually return towards historical levels in terms of student volumes. Further, it is expected that a material share of the cost reduction programme implemented in 2022 will continue to yield effect the coming years since this programme includes changes in operation that is not temporary in nature. At last, Sonans will continue to develop its educational offering, and this will also include
commercial aspects that will reduce impact of migration cross distribution channels. Impairment testing has indicated no existing impairment requirements for goodwill.
Key assumptions with the measurement of value in use (enterprise value)
Measurement of the enterprise value for the CGUs is most sensitive for the following assumptions:
The discount rate is based on a weighted average cost of capital methodology (WACC). The nominal discount rate is based on the Group’s estimated capital cost measured as the weighted average of the costs for the Group’s equity and debt. The WACC considers the interest rate of the debt, the risk-free interest rate, the debt to total assets ratio, risk premium and an equity risk premium. Beta and debt ratio is based on an average of applied industry group and a peer group.
Growth rates applied in the impairment testing for goodwill are based on management’s expectations on the market development and are in line with the risk-free interest rate (based on 10-year Norwegian government bond observed at 30.12.2022) used in the calculation of WACC.
Based on available information and management’s market expertise, the expectation is a slight increase in growth over the coming years with a flat and moderate growth when calculating the terminal value in the DCF model. Management expectations are based on historical trends and publicly available industry analyses. As is the case with expectations with an element of uncertainty, there can be a need for adjustments to the estimates in future periods.
The key assumptions of WACC (after tax) and the terminal growth rate were used for the value-in-use calculations. The following key assumptions were used for the value-inuse calculations for the CGUs:
— WACC (after tax): 11.3%
— Terminal growth rate: 3.2%
Other intangible assets
The Group has prepared a sensitivity analysis of the impairment tests to changes in the key assumptions which are terminal growth rate and WACC. This analysis indicates that reasonable changes in the assumptions will not cause the aggregate carrying amount to exceed the recoverable amount. Impairment testing has indicated no existing impairment requirements for goodwill.
5 Property, plants and equipment
The Group leases are primarily office and school buildings and office equipment. Short-term and low-value leases are excluded from the financial lease accounting. Right-of-use assets are leased assets recognized in the statement of financial position in accordance with IFRS 16 and are primarily buildings and office equipment. Right-of-use assets are depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. The right-of-use assets are reviewed for potential impairment whenever events or changes in circumstances indicate that the carrying amount of the asset exceeds its recoverable amount.
In the fourth quarter of 2022, an impairment of NOK 4.0 million is recognised in the statement of profit or loss. The impairment is related to change in use of leased buildings following the decision to close two campuses after the end of the school year 22/23.
The group has entered into a significant lease agreement with commencement date in 2023. This agreement will be recognised as an IFRS 16 lease obligation at the commencement date, and right-of-use asset is estimated to approx. NOK 120 million when recognised.
recognised in the balance sheet
recognised in the statement of profit or loss
7 Trade receivables
Trade receivable is a financial asset initially recognized at transaction price, subsequently accounted for at amortized cost and are reviewed for impairment on an ongoing basis based on an expected credit loss model (ECL). The Group’s business model for trade receivable is to hold the receivables to collect the contractual cash flows.
The Group applies the simplified lifetime approach to measuring expected credit losses (ECL) which uses a lifetime expected loss allowance for all trade receivables. The expected loss rates are based on payment profiles and customer contracts in previous periods. Most of the Group’s revenue is invoiced at the beginning of each school semester with receivables due mid-September and midJanuary.
Trade receivables are grouped into aging categories and the expected loss rates assigned to each overdue category reflect the Group’s ability on collecting the receivables. Sonans accounts for approximately 79% of the total gross trade receivable for the Group and has a loss allowance that constitutes approximately 81% of the total loss allowance. A detailed ECL model has been developed for Lumi Gruppen with expected credit losses by aging category. These credit-loss percentages are shown in the tables below.
The ECL model applied at 31.12.2022 is based on historical loss rates for Sonans and Oslo Nye Høyskole in
the period 2017-2022. Sales of uncollected receivables to Intrum Capital at the end of the schoolyear are included in the ECL model. The loss rates calculated at 31.12.2022 differs from the loss rates calculated at 31.12.2021, as the 2022 loss rates are calculated including 2022 data. The aging categories applied on 31 December 2022 are calculated based on average time from a receivable is due until it is transferred to debt collection is 41 days.
Note that some of the aging categories have been changed compared to what was presented in the financial statement for 2021. The reason for this is that is the updated ECL-model at 31.12.2022.
— Previous applied aging categories: current, more than 1 day, more than 30 days, more than 90 days, and more than 180 days
— Current applied aging categories: current, more than 1 day, more than 40 days, more than 70 days, and more than 130 days
8 Other receivables
9 Share capital and shareholder information
Parent company (Lumi Gruppen AS)
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.
As announced 26 September 2022, Lumi Gruppen AS reached an agreement with the bank (Nordea), and the new financing terms are as follows:
— Waiver for the leverage covenant in Q3 and Q4 2022
— New leverage (NIBD/EBITDA) covenant for Q1 2023 of 4.0 and for Q2 2023 of 5.0
— Allowable adjustment of EBITDA of up to 30%
— No amortisation the next 12 months
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
13 Contingent liabilities
There are no contingent liabilities as of 31 December 2022.
significant related party transactions for Lumi Gruppen as of 31 December 2022.
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:
Adjusted EBITDA before impact of IFRS 16
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.
Adjusted EBITDA margin
Adjusted EBITDA divided by total revenue.
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 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 subsidiaries 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 underlying profit generation in the Group’s operating activities.
Adjusted EBIT margin
Adjusted EBIT divided by total revenue.
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.
Net debt divided by last twelve months Adjusted EBITDA before impact of IFRS 16.
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.
LUMI SERVICES AS
SONANS PRIVATGYMNAS AS
OSLO NYE HØYSKOLE AS NORWEGIAN SCHOOL OF TECHNOLOGY AS
ONH EDUCATION AS
Both local presence with campuses and online offering
Lillestrøm Oslo Ski Sandvika
Oslo Campus — Oslo Nye Høyskole