LUMI GRUPPEN Operating revenueNOK 104 million (121) - EBITNOK 10.7million (20.1) - Strong growth and profitability for Oslo Nye Høyskole (ONH) due to increased student intake and stable cost development - ONH receives recognition for its quality system which was formally approved by NOKUT - Revenue decline for Sonans partly explained by stricter credit control measures and accounting effects, indicating underlying reduction in revenue of about 10 per cent in Q3 "The third quarter, as the preceding one, showed a very different picture for our two operating segments. At ONH, a combination of top-line growth and cost initiatives led to strong margins. For Sonans, the market continues to be weak. We see no indication that Sonans has lost material market share, but we have to adapt to the current market by implementing further cost initiatives," says CEOErik Brandt . ONH ONH's revenues grew by 23 per cent from the corresponding quarter last year. The positive development for ONH continued, with strong profitability due to a combination of top-line growth and cost initiatives. ONH has now become our most significant operating segment. Sales growth was mostly driven by the new programmes launched at ONH and online in particular. The growth in revenues is also a combination of a higher share of recurring revenues and volume growth. The Group is also pleased to announce the approval of the quality system at ONH by NOKUT. ONH received recognition as well for its development of the quality system and how it is integrated in the organisation. The quality system is key for maintaining the accreditation of study programmes and will also contribute to an improved competitive position with a strong reputation and brand.Lumi Gruppen has decided to restructure the NTech vocational initiative and integrate it with ONH, with 12 new programmes in the pipeline. This makes the model more scalable and offers synergies with ONH, which will be the common brand. The courses are expected to be offered for the 2024/2025 school year. Sonans Revenues for Sonans decreased by 39 per cent from the corresponding quarter last year, as expected. However, the revenue decline for Sonans is partly explained by stricter credit control measures and accounting effects, indicating an underlying revenue reduction of about 10 per cent in the quarter. The expected post-Covid normalisation of our private candidate business in Sonans has not yet materialised. The labour market for young people inNorway has been strong, which has probably contributed to fewer applications for higher education and, hence, lower demand in the private candidate market in general.Lumi Gruppen has taken significant measures to adapt to the market situation for Sonans. The cost reduction programme in Sonans is well on track, with additional savings ofNOK 10 million expected to be realised in the second half of 2023. Further cost measures will be implemented, with an effect in the range ofNOK 12-18 million . Most of this will have effect from the school year 2024/2025. Group financials Revenues in the third quarter wereNOK 104 million , compared toNOK 121 million in the same quarter of 2022. A lower number of students at Sonans negatively impacted revenues, but this was partially offset by an increase at ONH. EBIT wasNOK 10.7 million , compared toNOK 20.1 million in the same quarter the year before. The decrease in EBIT and lower margin in the quarter was a result of reduced student volumes and lower revenue for Sonans, partially offset by revenue growth and margin expansion for ONH. Net profit for the quarter wasNOK 1.3 million , compared to a profit ofNOK 8.2 million the year before. Earnings per share wereNOK 0.02 , compared toNOK 0.23 the year before.Lumi Gruppen has strengthened its order-to-cash process by implementing credit checks and tighter follow-up of students who are late with payments. This has resulted in a stronger credit quality and hence a stronger cash flow. Outlook Lumi's business model has been transformed during the last year, with a more flexible and scalable business model with a lower share of fixed costs. Given the market conditions for Sonans, the transformation process will continue this school year as well to further improve profitability through organisational changes and pure cost measures. Oslo Nye Høyskole 2023/2024 Based on the autumn intake and a forecast for the spring intake, revenue is expected to end in the range ofNOK 227-232 million for ONH for the school year 2023/2024. Sonans 2023/2024 Based on the autumn intake and a forecast for the spring intake, revenue is expected to end in the range ofNOK 170-175 million for Sonans for the school year 2023/2024. Profitability for Sonans is expected to be weak in the 2023-2024 school year.Lumi Gruppen will continue to adapt the cost structure to the current market situation. Report and presentation Please see attached the third-quarter report and presentation for further information. CEOErik Brandt and CFOMartin Prytz will present the company's results today at 09:00. The digital presentation will be held in English and can be accessed here: https://bit.ly/479xlOQ For further information please contact:Martin Prytz , CFO and Head of Investor Relations E-mail: IR@lumigruppen.no Mobile: +47 480 14 078 About Lumi:Lumi Gruppen is a leading Norwegian education provider founded in 1989. Today,Lumi Gruppen consists of two main divisions: Sonans and Oslo Nye Høyskole. Sonans is the market leader inNorway within private candidate exam preparation courses, and Oslo Nye Høyskole offers high quality bachelor's degrees within health, social sciences, psychology and business and administration, both on campus and online.
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