0QI6 Restamax Oyj

NOHO PARTNERS PLC’S INTERIM REPORT 1 JANUARY–30 SEPTEMBER 2021: EBIT turned positive – a strong outlook for the rest of the year

NoHo Partners PlcINTERIM REPORT 9 November 2021 at 8:15NOHO PARTNERS PLC’S INTERIM REPORT 1 JANUARY–30 SEPTEMBER 2021EBIT turned positive – a strong outlook for the rest of the yearNoHo Partners achieved a good result in the third quarter of 2021 in spite of the restaurant restrictions that were in effect. As restrictions were gradually lifted, customer demand recovered quickly in all of the Group’s operating countries. Turnover in July-September 2021 grew by 10 per cent year-on-year and amounted to more than 80 per cent of the turnover in the pre-pandemic comparison period in 2019. Operating cash flow was positive in each month and totalled approximately MEUR 7.5 for the review period. EBIT amounted to MEUR 3.9 representing 6.4 per cent of turnover.

Turnover in October 2021 exceeded the level of October 2019 and operating cash flow doubled compared to the reference period in 2019 and exceeded MEUR 3. Based on consumer demand and the good advance booking situation of the Group’s restaurants, NoHo Partners estimates that turnover for the final quarter of the year 2021 will be approximately MEUR 70 and operating cash flow will exceed MEUR 10.JULY–SEPTEMBER 2021 IN BRIEF

• Turnover increased by 10.5% to MEUR 61.9 (MEUR 56.0).
• EBIT increased by 34.5% to MEUR 3.9 (MEUR 2.9).
• The EBIT percentage was 6.4% (5.2%), an increase of 21.8%.
• The result for the financial period was MEUR 1.3 (MEUR 0.4), an increase of 200.5%.
• Earnings per share were EUR 0.04 (EUR 0.01), an increase of 323.3%.
• Operating cash flow increased by 36.6% to MEUR 7.5 (MEUR 5.5).

JANUARY–SEPTEMBER 2021 IN BRIEF

• Turnover declined by 6.9% to MEUR 116.5 (MEUR 125.2).
• EBIT increased by 37.2% to MEUR -7.6 (MEUR -12.1).
• The EBIT percentage was -6.5% (-9.7%), an increase of 32.6%.
• The result for the financial period was MEUR -13.7 (MEUR -17.6), an increase of 22.3%.
• Earnings per share were EUR -0.63 (EUR -0.90), an increase of 29.7%.
• Operating cash flow fell by 25.4% to MEUR 1.5 (MEUR 2.0).
• The gearing ratio excluding the impact of IFRS 16 liabilities was 223.7%. Interest-bearing net liabilities excluding the impact of IFRS 16 amounted to MEUR 159.2. IFRS 16 liabilities totalled MEUR 158.9. The gearing ratio including the impact of IFRS 16 was 481.6%.
• Government grants for January–September 2021 totalled approximately MEUR 9.2: Finland approximately MEUR 3.8, Denmark approximately MEUR 2.5 and Norway approximately MEUR 2.9.

SIGNIFICANT EVENTS IN THE REVIEW PERIOD

• Restaurant restrictions in Finland were tightened again in July, when several regions were classified as being in the acceleration phase. Uusimaa, Pirkanmaa and Southwest Finland were classified as being in the acceleration phase at the beginning of August. Restrictions were eased regionally in September.
• In Denmark, restaurant restrictions were lifted completely on 10 September 2021.
• In Norway, restaurant restrictions were lifted completely on 25 September 2021.

SIGNIFICANT EVENTS AFTER THE REVIEW PERIOD

• Restaurant restrictions were eased in Finland at the beginning of October 2021. In regions in the acceleration phase, restrictions on alcohol service hours, opening hours and customer capacity were lifted completely. In regions in the community transmission phase, alcohol service hours and opening hours were extended and the prohibition of karaoke and dancing was lifted throughout the country.
• A COVID-19 passport was implemented in Finland on 16 October 2021. NoHo Partners started using the COVID-19 passport at a few of its nightclubs as an alternative to the restaurant restrictions in the community transmission phase.
• The Finnish Government extended the validity of the decree restricting the operations of restaurants until 15 November 2021.

SUMMARYThe market changes caused by the COVID-19 pandemic and the strict restriction measures concerning the restaurant industry had a significant impact on the Group’s result in January–September 2021. In the third quarter, when the restrictions were gradually lifted, demand was strong in all of the Group’s operating countries.

The Group’s turnover in July–September 2021 was approximately MEUR 61.9, representing growth of about 10.5 per cent compared to the corresponding period in 2020 and amounting to roughly 80.7 per cent of the turnover in the corresponding period in 2019, before the COVID-19 pandemic. Turnover in January–September 2021 was MEUR 116.5, which represents 93.1 per cent of the corresponding period in 2020 and 59.0 per cent of the corresponding period in 2019. The Group estimates that it lost approximately MEUR 90 in turnover due to the COVID-19 pandemic in January–September 2021.

Operating cash flow was MEUR 7.5 in July–September 2021 and MEUR 1.5 in January–September. In July–September 2021, the Group’s EBIT turned positive, amounting to approximately MEUR 3.9, with the EBIT percentage being 6.4%. The Group’s EBIT for January–September 2021 was approximately MEUR 7.6 in the negative. The cost saving measures implemented in response to the pandemic are reflected in a clear improvement in relative profitability compared to the reference periods in 2019 and 2020.

The Group recognised approximately MEUR 0.7 in financial support from the Finnish, Danish and Norwegian governments for the period 1 July–30 September 2021 and approximately MEUR 9.2 for the period 1 January–30 September 2021. Reductions in rent totalled approximately MEUR 2.0 in January–September 2021.

The Group’s turnover in October 2021 was approximately MEUR 24, which is an increase of roughly 95 per cent compared to the corresponding period in 2020 and exceeds the turnover of the corresponding period in 2019 by more than 10 per cent. Operating cash flow exceeded MEUR 3 in in October.

Based on the current estimate on the development of the operating environment, turnover in November 2021 is expected to be more than MEUR 23 and operating cash flow is expected to be more than MEUR 3.

Turnover in December 2021 is expected to be more than MEUR 23 and operating cash flow is expected to be more than MEUR 3.

In a normal operating environment in the restaurant business, most of the profits are made during the second half of the year due to the seasonal nature of the business.

REVIEW BY THE CEO: AKU VIKSTRÖM

Our business continued its recovery in the third quarter and we achieved a good result thanks to demand being stronger than expected. Turnover grew by 10 per cent year-on-year and amounted to more than 80 per cent of the turnover in the pre-pandemic comparison period in 2019. Operating cash flow was positive in each month and totalled approximately MEUR 7.5 for the review period. EBIT for the quarter turned positive and was 6.4 per cent of turnover, which can be considered a good level in light of the circumstances.

The entertainment venue business resumed during the review period after restrictions on alcohol service were lifted in Finland. The much-discussed COVID-19 passport was implemented at a few of our nightclubs and the experiences around it were positive for the most part. It will be an important tool for the future should there be a need to tighten restaurant restrictions due to the COVID-19 situation. We now know that we will be able to operate our business relatively normally when the COVID-19 passport is in use.

There has been a clear turn in our international business. As the restrictions were lifted, our business in Norway returned to strong profit performance. Opening in Oslo has got off to a great start and the rest of the year looks promising. We also achieved a long-awaited turnaround in Denmark, where we achieved an operationally good EBITDA level for the second consecutive quarter. Our portfolio renewal and cost saving measures are reflected in the improved business model in Denmark.

We have been able to start reducing our debt thanks to our positive cash flow and the continued sale of our holdings in Eezy. During the past quarter, we sold shareholdings in Eezy for MEUR 2.4 and recognised a capital gain of MEUR 0.6 for the quarter from these sales. Our net debt fell below MEUR 160 at the end of the third quarter. After the review period, we made an additional loan repayment of MEUR 8.7, which means that our loan amortisation programme is ahead of schedule.

The outlook and expectations for the high season at the end of the year are positive. At the beginning of November, our booking situation represented 76% of the actual figures for 2019. Thanks to the promising booking situation and good consumer demand, we estimate that our turnover for the final quarter will be approximately MEUR 70 and our operating cash flow will exceed MEUR 10. Nevertheless, we remain prepared to react to quick changes in the market environment.

Last but not least, I want to take this opportunity to put the spotlight on all of the NoHo employees who have made an important contribution during the difficult period that has lasted almost two years. In our personnel survey conducted in September, 86 per cent of the respondents were very satisfied or fairly satisfied with NoHo as a workplace. Our high job satisfaction, along with the competence and commitment of our people, are our most important competitive advantages as we enter the most important season of the year.

Aku Vikström, CEO

FUTURE OUTLOOK

The Market

Demand recovered quickly in the third quarter as restaurant restrictions were gradually lifted. Nevertheless, the year has been very difficult for the restaurant industry and the determined adjustment of costs has continued. Customer demand has been strong as restrictions have been gradually lifted. The Group’s future profit performance will be influenced by the development of the epidemiological situation, the restrictions imposed by the authorities and the vaccination coverage.

New Profit Guidance Effective from 9 November 2021:

NoHo Partners estimates that, in the final quarter of 2021, the Group will achieve a total turnover of approximately MEUR 70 and the turnover for the full financial year 2021 will amount to approximately MEUR 190.

The Group’s operating cash flow is estimated to be more than MEUR 10 in the positive in the final quarter of 2021 and approximately MEUR 12 in the positive for the full financial year 2021.

NoHo Partners will update its guidance for 2022 in connection with the financial statements release for 2021.

Restrictions on business activities, potential changes to the restrictions and their effect on customer demand, the development of vaccination coverage as well as the global economic uncertainty may have an impact on the Group’s turnover and financial result in the near future.

Previous Profit Guidance (10 August 2021):

At this time, the company will not issue a turnover and profitability forecast for 2021 due to the uncertain market situation. The financial impact of the pandemic on the Group’s business and outlook cannot be fully determined at present.

The profit guidance for 2021 will be updated when visibility is improved and the overall impact of the COVID-19 pandemic on the operating environment and the Group’s business can be assessed more accurately. Restrictions on business activities, potential changes to the restrictions and their effect on customer demand, vaccination coverage as well as the global economic uncertainty will have a significant impact on the Group’s turnover and financial result for the remainder of 2021.

The company will also provide monthly reports on the development of its business during these exceptional circumstances.Financial TargetsThe Group’s long-term financial targets for the strategy period 2022–2024 were published on 11 June 2021.

The Group aims to achieve a turnover of approximately MEUR 400 and an EBIT margin of approximately 10 per cent during 2024. At the same time, the aim of the company is for the ratio of net debt to operating cash flow, adjusted for IFRS 16 lease liability, to be under 3. The objective of the company is to pay dividends during the strategy period.

According to a management estimate published on 11 June 2021, the turnover of NoHo Partners Group in 2022 will be approximately MEUR 280 with the current units and approximately MEUR 400 as a whole in 2024. It is estimated that approximately MEUR 50 of the expected growth of approximately MEUR 120 will come from Norway, approximately MEUR 30 from the scaling of Friends & Brgrs business operations, approximately MEUR 30 from large and profitable urban projects and approximately MEUR 10 from the Group’s other businesses.

KEY FIGURES
NoHo Partners Group, total
(EUR 1,000)	1 Jul.–30 Sep. 2021	1 Jul.–30 Sep. 2020	1 Jan.–30 Sep. 2021	1 Jan.–30 Sep. 2020	1 Jan.–31 Dec. 2020
KEY FIGURES, ENTIRE GROUP
Turnover	61,888	56,024	116,540	125,156	156,771
EBIT	3,938	2,928	-7,600	-12,108	-23,880
EBIT, %	6.4%	5.2%	-6.5%	-9.7%	-15.2%
Result of the financial period	1,347	448	-13,665	-17,582	-29,469
Earnings per share (EUR) for the review period attributable to the owners of the Company	0.04	0.01	-0.63	-0.90	-1.44
Operating cash flow, EUR	7,531	5,512	1,520	2,037	-5,124
Interest-bearing net liabilities excluding IFRS 16 impact, EUR			159,248	148,570	163,431
Gearing ratio excluding IFRS 16 impact, %			223.7%	156.6%	192.0%
Interest-bearing net liabilities, EUR			318,168	296,464	316,621
Gearing ratio, %			481.6%	317.5%	391.0%
Equity ratio, %			14.6%	20.5%	18.1%
Return on investment, % (p.a.)			-2.4%	-4.0%	-5.9%
Adjusted net finance costs*, EUR	3,138	2,492	9,472	6,926	10,197
Material margin, %	74.1%	73.3%	73.5%	72.8%	72.0%
Personnel expenses, %	32.1%	32.5%	36.4%	37.1%	38.0%

* The changed calculation formula is shown in the section “Calculation formulas for key figures” at the end of the interim report.

TURNOVER IN THE BUSINESS AREAS OF THE RESTAURANT BUSINESS
	1 Jul.–30 Sep. 2021	1 Jul.–30 Sep. 2020	1 Jan.–30 Sep. 2021	1 Jan.–30 Sep. 2020	1 Jan.–31 Dec. 2020
Restaurants
Turnover (MEUR)	22.5	20.0	43.5	44.3	58.0
Percentage of the total turnover	36.4%	35.7%	37.3%	35.4%	37.0%
Change in turnover	12.5%		-1.8%
Units, number	76	75	76	75	77
Turnover/unit (MEUR)	0.30	0.27	0.57	0.59	0.75
Entertainment venues
Turnover (MEUR)	18.1	19.1	29.9	38.2	43.9
Percentage of the total turnover	29.3%	34.1%	25.6%	30.6%	28.0%
Change in turnover	-5.1%		-21.8%
Units, number	63	63	63	63	67
Turnover/unit (MEUR)	0.29	0.30	0.47	0.61	0.66
Fast casual restaurants
Turnover (MEUR)	11.3	9.9	28.4	22.3	31.2
Percentage of the total turnover	18.2%	17.7%	24.4%	17.8%	19.9%
Change in turnover	14.1%		27.5%
Units, number	52	54	52	54	53
Turnover/unit (MEUR)	0.22	0.18	0.55	0.41	0.59
International restaurants
Turnover (MEUR)	10.0	7.0	14.7	20.3	23.6
Percentage of the total turnover	16.1%	12.5%	12.6%	16.2%	15.1%
Change in turnover	42.4%		-27.5%
Units, number	39	40	39	40	40
Turnover/unit (MEUR)	0.26	0.18	0.38	0.51	0.59

CASH FLOW, INVESTMENTS AND FINANCING

The Group’s operating net cash flow in January–September 2021 was MEUR 26.3 (MEUR 12.9).

Growth investments made in the third quarter of 2021 included the opening of the restaurants Hook and Haukilahden Helmi in Espoo, the opening of Restaurant Chéri in Helsinki and the opening of entertainment venue Campingen in Stavanger, Norway.

The Group’s gearing ratio excluding the impact of IFRS 16 liabilities was 223.7%. Interest-bearing net liabilities excluding the impact of IFRS 16 amounted to MEUR 159.2. IFRS 16 liabilities totalled MEUR 158.9. The Group’s interest-bearing net liabilities (including IFRS 16 liabilities) at the end of September 2021 were MEUR 318.2 (MEUR 296.5). Adjusted net finance costs in January–September 2021 were MEUR 9.5 (MEUR 6.9). The equity ratio was 14.6% (20.5%) and the gearing ratio was 481.6% (317.5%).

THE IMPACT OF THE COVID-19 PANDEMIC ON THE GROUP’S BUSINESS

The COVID-19 pandemic has had a significant impact on the Group’s business since March 2020. The spread of the pandemic, the restrictions imposed by the Finnish Government on the restaurant industry to mitigate it and the impacts of the pandemic on customer demand have had a highly negative effect on NoHo Partners’ business operations and financial results. As the ultimate duration and overall impacts of the pandemic are difficult to predict, its effects on NoHo Partners’ future turnover, result, cash flow and financial position may deviate from the current estimates and assumptions of the management. The Group has taken determined action to reduce the pandemic’s impacts, uncertainties and risks and to secure the Group’s financial position and sufficient financing.

In the first half of 2021, the Group operated in a strictly restricted or closed business environment in all of its operating countries. In the third quarter, the restrictions were relaxed in Finland and gradually lifted in Denmark and Norway.

In Finland, the strict restaurant restrictions were eased at the end of June, when the restrictions on the number of customers, alcohol service hours and opening hours were lifted for areas in the baseline phase of the pandemic. Only Uusimaa remained in the acceleration phase, where alcohol service in restaurants was allowed until midnight and restaurants could stay open until 1:00 a.m. Restaurant restrictions were tightened again in late July, when several regions were classified as being in the acceleration phase. In the beginning of August, Uusimaa and Pirkanmaa, among others, were designated as being in the community transmission phase.

Restaurant restrictions were eased effective from the beginning of October. In regions in the acceleration phase of the pandemic, restrictions on opening hours and alcohol service hours were lifted completely. Consequently, regions in the baseline and acceleration phases only have general obligations concerning hygiene and safe distances. In regions in the community transmission phase – such as Uusimaa, Ostrobothnia, South Ostrobothnia and Southwest Finland – alcohol service hours and opening hours were extended by one hour to midnight and 1:00 a.m. respectively, and the prohibition of karaoke and dancing was lifted throughout the country. Restaurants serving alcohol are allowed to use half of their customer capacity both indoors and outdoors, while other restaurants are allowed to use 75% of their customer capacity.

The Group did not receive government grants from the Finnish state during the third quarter of 2021.

In Denmark, in response to the improved pandemic situation, restaurants were allowed to open, subject to restrictions, on 21 April 2021 after a shutdown of five months. Starting from 1 June 2021, the opening hours of restaurants serving food and bars were extended until midnight and, starting from 15 July 2021, until 02:00. A COVID-19 passport and table reservation were required for admission to restaurants. Safe distances of 1.5 metres also needed to be ensured. The COVID-19 passport requirement was lifted and nightclubs were allowed to reopen on 1 September 2021. Restaurant restrictions were lifted throughout the country on 10 September 2021.

In Denmark, the state has supported companies in the restaurant industry during the crisis by covering 80 per cent of their fixed expenses, relative to the decline in turnover. Starting from the beginning of July 2021, a cost support model entered into force in Denmark, whereby fixed cost support was extended for restaurants whose turnover is less than 40 per cent of their turnover in the corresponding period in 2019.

In Norway, the prohibition of alcohol service that had been in effect since November 2020 in Oslo was lifted at the end of May 2021. The national restrictions on restaurants were lifted at the end of June. Since then, the restrictions were municipality-specific. For example, in Oslo, restaurants serving food and bars were allowed to stay open until 3:00 a.m., but additional customers could not be allowed in after midnight. In indoor areas of restaurants, customers were required to have a seat, table service was required and safe distances of 1.5 metres needed to be ensured. Nightclubs remained closed. Society was reopened and restaurant restrictions were lifted throughout the country on 25 September 2021.

The Norwegian state’s 80% compensation for fixed costs remained in effect until the end of September 2021, when restaurant restrictions were lifted.Government assistance during the state of emergency In January–September 2021, the Group received support amounting to approximately MEUR 3.8 from the Finnish state, approximately MEUR 2.5 from the Danish state and approximately MEUR 2.9 from the Norwegian state. The financial support received by the Group from the Danish and Norwegian governments for the period 1 July–30 September 2021 totalled approximately MEUR 0.7. The Group did not receive support from the Finnish state in the third quarter.

A more detailed account of government assistance and the distribution thereof is presented in Note 3 Government grants in the interim report.BRIEFING FOR THE MEDIA, ANALYSTS AND INVESTORS AT 10:00 A.M.

A briefing for the media, analysts and investors will be organised today, Tuesday 9 November 2021 at 10:00 a.m. at restaurant Davai Davai, Helsinki. In the briefing, NoHo Partners CEO Aku Vikström will review NoHo Partners Plc's Q3/2021 financial performance, key events, the current state of business and the outlook.

The briefing is available as a live webcast at https://noho.videosync.fi/2021-q3-tulos. The briefing will be held in Finnish. The presentation materials and a recording of the briefing will be available on the company’s website later today.

NoHo Partners’ full Interim Report for January–September 2021 is attached to this release as a PDF file. The Interim Report is also available at www.noho.fi.Tampere, 9 November 2021NOHO PARTNERS PLCBoard of Directors

ATTACHMENT: NoHo Partners Plc Interim Report Q3/2021More information available from:Aku Vikström, CEO, tel. +358 44 011 1989Jarno Suominen, Deputy CEO, tel. +358 40 721 5655NoHo Partners PlcHatanpään valtatie 1 BFI-33100 Tamperewww.noho.fiDistribution:Nasdaq HelsinkiMajor mediawww.noho.fi/enNoHo Partners Plc is a Finnish group established in 1996, specialising in restaurant services. The company, which was listed on NASDAQ Helsinki in 2013 and became the first Finnish listed restaurant company, has continued to grow strongly throughout its history. The Group companies include some 250 restaurants in Finland, Denmark and Norway. The well-known restaurant concepts of the company include Elite, Savoy, Teatteri, Stefan’s Steakhouse, Palace, Löyly, Hanko Sushi, Friends & Brgrs and Cock’s & Cows. Depending on the season, the Group employs approximately 2,100 people converted into full-time employees. The Group aims to achieve turnover of MEUR 400 by the end of 2024. The company’s vision is to be the leading restaurant company in Northern Europe.

 

Attachment

• NoHo_Partners_Plc_Interim_Report_Q3_2021