Restamax Oyj : RESTAMAX GROUP'S INTERIM REPORT FOR 1

Restamax Plc INTERIM REPORT 21 FEBRUARY 2014 10 AM RESTAMAX GROUP'S INTERIM REPORT FOR 1 JANUARY-31 DECEMBER 2013 Restamax Group's turnover continued to increase 2013 in brief In 2013, Restamax Group's turnover increased by 7.0 per cent. This growth was fuelled by the growth investments made in 2012. In 2013, the company listed on the Helsinki Stock Exchange as planned. The Group's turnover was MEUR 65.0 (MEUR 60.8), growth 7.0 per cent. EBITDA was MEUR 9.1 (MEUR 9.9), decrease 8.0 per cent. Operating profit was MEUR 4.1 (MEUR 5.7), decrease 29.2 per cent. The Board of Directors of the company proposes that dividend be paid at EUR 0.09 per share. October-December 2013 in brief The general economic situation has been weaker than forecast, and this affected sales in December in particular. Due to December being weaker than forecast, profitability decreased on the previous year. The Group's turnover in October-December was MEUR 17.9 (MEUR 18.7), decrease 3.9 per cent. EBITDA was MEUR 3.3 (MEUR 3.6), decrease 7.5 per cent. Operating profit was MEUR 2.0 (MEUR 2.5), decrease 17.0 per cent. Prospects for 2014 The company estimates that 2014 turnover will grow to MEUR 68-78. This growth is fuelled by the business transaction completed with Hans Välimäki in 2014 and the expansion projects on which decisions had been made previously and which will be realised during the first half of the year. The 2013 turnover was MEUR 65.0. The company estimates that the 2014 EBITDA will increase to MEUR 10.5-12 as a result of operational expansion and streamlining. The 2013 EBITDA was MEUR 9.1. The company estimates that the 2014 operating profit will be MEUR 5.1-6.5. The 2013 operating profit was MEUR 4.1. The company estimates that the earnings per share will increase significantly. CEO Markku Virtanen: 2013 was both historic and successful year for Restamax. Last November, Restamax became the first Finnish listed restaurant company. Restamax is a growth company, and the share issue and listing were integral parts of our growth strategy. Listing and the related share issue make possible investments that bring the company significant competitive advantage in the future. A significant amount of these investments will be realised during 2014 and 2015. The operating environment in 2013 was rather challenging even in the restaurant field. Over the last years, the restaurant field in Finland has grown approximately 3-4%, or somewhat stronger than the gross national product. Although the general financial situation in Finland continued to be unstable and costs continued to climb, their effects on the company's products and their demand were relatively small. Our operating environment is also significantly affected by the debate ongoing at Parliament on the alcohol legislation. The restaurant field is a major employer in Finland and promotes the employment of young people, especially. It is my wish that decision-makers would take this into consideration when discussing the alcohol policy guidelines and taxation guidelines. Despite the challenging general economic situation, Restamax was able to maintain excellent profitability, clearly above the average profitability of the field. The slight decrease in EBITDA is explained by the unsuccessful theatre restaurant concept launched in 2013. Another major reason was the weaker than expected demand during the festive season in December. Without these factors, our EBITDA in the period under review would have been at the level of the previous year. In addition to these factors, profitability has been slightly affected by the investments made in preparation for the listing. Our growth speed in 2013 was slightly calmer than in the previous years, as the company concentrated on the listing project. For this reason, we did not make significant new investments in 2013. 2014 will once again be a year of growth for Restamax. The basis of operational growth and profitability is in active product development and innovation, competent staff, operative accountability given to each unit and, on the other hand, real-time guidance and monitoring of operations. Centralised purchases as well as the management of staff resources and goods logistics are significant drivers for Restamax's profitability. Restamax can offer its customers more extensive supply of restaurant services and also boost its operations locally in terms of marketing, purchases and personnel management, for example. Personally, I am also delighted by the fact that our staff actively participated in the initial public offering. This shows that Restamax has strongly committed restaurant management and staff. This competent personnel will now be fully freed from the 2013 listing process to implement the company's growth strategy. Restamax's approach aims to develop a range of restaurant concepts to meet local demand and the provision of premises. Restamax's extensive restaurant concept portfolio makes possible the achieving of larger than before market shares in each city, yet retaining the unique characteristics of each establishment. The company's extensive portfolio offers an entire chain of experiences, including café, restaurant and entertainment services from early morning till late night. Restamax actively studies potential corporate transaction opportunities. We will use the equity accumulated in the initial public offering to expand business operations with corporate transactions supporting the growth strategy. Our aim is the objective outlined by our Board of Directors, turnover of MEUR 100 by the end of 2015. Markku Virtanen CEO KEY FIGURES (TEUR) +--------------------------------------------+--------+--------+-------+-------+ |  |10-12/13|10-12/12|1-12/13|1-12/12| +--------------------------------------------+--------+--------+-------+-------+ |Turnover |17,947 |18,680 |65,033 |60,773 | +--------------------------------------------+--------+--------+-------+-------+ |EBITDA |3,339 |3,611 |9,146 |9,939 | +--------------------------------------------+--------+--------+-------+-------+ |EBITDA % |18.6% |19.3% |14.1% |16.4% | +--------------------------------------------+--------+--------+-------+-------+ |Operating profit |2,041 |2,458 |4,051 |5,719 | +--------------------------------------------+--------+--------+-------+-------+ |Operating profit % |11.4% |13.2% |6.2% |9.4% | +--------------------------------------------+--------+--------+-------+-------+ |Review period result |1,727 |1,732 |2,908 |3,788 | +--------------------------------------------+--------+--------+-------+-------+ |To shareholders of the parent company |1,556 |1,480 |2,565 |3,076 | +--------------------------------------------+--------+--------+-------+-------+ |To minority shareholders |171 |252 |344 |712 | +--------------------------------------------+--------+--------+-------+-------+ |Earnings per share (euros) to the|0.11 |0.15 |0.18 |0.31 | |shareholders of the parent company | | | | | +--------------------------------------------+--------+--------+-------+-------+ |Interest-bearing net liabilities |  |  |6,184 |5,982 | +--------------------------------------------+--------+--------+-------+-------+ |Gearing ratio |  |  |21.9% |43.8% | +--------------------------------------------+--------+--------+-------+-------+ |Equity ratio |  |  |60.9% |38.1% | +--------------------------------------------+--------+--------+-------+-------+ Significant Figures +-----------------------------------------+--------+--------+-------+-------+ |  |10-12/13|10-12/12|1-12/13|1-12/12| +-----------------------------------------+--------+--------+-------+-------+ |Material margin % |75.4% |75.6% |73.9% |74.3% | +-----------------------------------------+--------+--------+-------+-------+ |Staff expenses % (incl. rented workforce)|25.8% |27.0% |30.1% |29.6% | +-----------------------------------------+--------+--------+-------+-------+ |Return on investment % |  |  |10.7% |24.2% | +-----------------------------------------+--------+--------+-------+-------+ TURNOVER AND INCOME The Group's income for the fourth quarter of 2013 Restamax's turnover for the fourth quarter was MEUR 17.9 (MEUR 18.7), slightly down from the previous year. EBITDA was MEUR 3.3 (MEUR 3.6). The Group's operating profit was MEUR 2.0 (MEUR 2.5). The Group's 2013 income Restamax's turnover for 2013 was MEUR 65.0 (MEUR 60.8), an increase of 7.0 per cent over the previous year. The EBITDA was MEUR 9.1 (MEUR 9.9). The Group's operating profit was MEUR 4.1 (MEUR 5.7). The growth is mostly explained by the restaurant investments made at the end of 2012, and demand was also good over the past summer. The company's growth rate has been somewhat slower than during the previous years, as during the review period the company has focused on a listing project and has therefore not completed any significant new investments. EBITDA decreased slightly from the same period last year. One of the factors explaining the decrease of the EBITDA is the unsuccessful theatre restaurant concept the company launched in January 2013. Without this launch, our EBITDA of the period under review would have been at the level of the previous year. In addition, profitability has been somewhat affected by the investments made in preparation for the company's listing. CASH FLOW, INVESTMENTS and FINANCING The Group's operating net cash flow in 2013 was TEUR 2,907 (TEUR 12,147). Restamax has not made any significant corporate acquisitions or growth investments during the present financial period, due to its focus on the listing process. The Group's interest-bearing net liabilities at year-end were MEUR 6.2 in comparison to the MEUR 6.0 at the end of 2012. The net financial expenses in 2013 were MEUR 0.5 (MEUR 0.5). The equity ratio was 60.9% (31 December 2012: 38.1 per cent) and gearing ratio 21.9 per cent (31 December 2012: 43.8 per cent). PIVOTAL EVENTS IN THE REVIEW PERIOD Restamax sold its share of the advertising agency Mainostoimisto Fuel Oy in August. At the same time, the company made an agreement with the advertising agency until 2015. The company extended its operations in Rauma and opened a nightclub called Panama Joe there in August. A game restaurant called Space Bowling & Billiard was opened in Tampere in September 2013. With a bill of sale signed on 27 September 2013, the company purchased the Beefmax Oy shares of a minority shareholder holding 24.68 per cent of the shares. As a result of this transaction, Beefmax Oy became a fully-owned subsidiary of the company. The Group's subsidiary JVP-Security Oy was sold with a bill of sale dated 30 September 2013. In October 2013, the company opened a restaurant called Pub Hopeakenkä in Orivesi. The premises of Gringos Locos and Celtic House, operating in Seinäjoki, were renovated and Daddy's Diner and Galaxie Sport & Billiard were opened on these premises. The company renovated the business idea of the nightclub operating in the Flamingo centre in Vantaa. In September 2013, the company listed on the main list maintained by NASDAQ OMX Helsinki Oy. STAFF In 1 January-31 December 2013, Restamax Group employed on average 159 full-time employees and 80 part-time employees converted into full-time employees as well as 203 rented employees converted into full-time employees (1 January-31 December 2012; 154/72/183). Depending on the season, some 700-900 persons work at the Group at the same time. EVENTS AFTER THE REVIEW PERIOD AND NEW PROJECTS The company has signed a new brewery agreement which entered into force on 1 January 2014. With the current purchase volumes, the annual income effect before income tax of the new contract is some EUR 800,000. The company opened a new Food Park restaurant mix in Ideapark in Lempäälä. It is one of the biggest restaurant mixes in a shopping centre in the Nordic Countries. In early 2014, the company updates the concept of the Flame restaurant located on Hämeenkatu in Tampere. The company and Hans Välimäki Oy owned by Hans Välimäki have founded the Gastromax Oy joint venture, of which Restamax owns 70% and Hans Välimäki 30%. Through various companies owned by Hans Välimäki in theme parks in Helsinki and Tampere, the joint venture has bought the Midhill restaurants as well as the operations of two other restaurants. The company is planning to open a new nightclub in Lahti during the first quarter of 2014. A new restaurant entity will be opened in the new Lielahti Centre in Tampere. A nightclub for young people will be opened in Tampere on Kirkkokatu in May. A summer restaurant will be constructed in Ratina bay, Tampere. This restaurant boat will feature a dining and drinking concept. In Tampere on 21 February 2014 RESTAMAX PLC Board of Directors Additional information: Markku Virtanen, CEO, tel. +358 400 836 477 Distribution: NASDAQ OMX Helsinki Key media www.restamax.fi Restamax Plc is a Finnish restaurant business group established in 1996. The company has continued to grow steadily throughout its history. The Group companies comprise over 60 restaurants, cafés, pubs and nightclubs all over Finland. Well-known restaurant concepts of the Group include Ristorante Bella Roma, Gringos Locos, Viihdemaailma Ilona, Daddy's Diner and Stefan's Steakhouse. Wayne's Coffee is also part of the company's portfolio. Restamax Plc employs approximately 700 people, turnover in 2013 was approximately MEUR 65 and EBITDA about MEUR 9. www.restamax.fi. [HUG#1763509]