RESTAMAX PLC INTERIM REPORT BETWEEN 1 JANUARY AND 30 JUNE

Restamax Plc INTERIM REPORT 8 AUGUST 2014, 10:00 RESTAMAX PLC INTERIM REPORT BETWEEN 1 JANUARY AND 30 JUNE 2014 Despite poor early summer, Restamax improved its income: The turnover grew 19.8 per cent in January-June 2014 TURNOVER AND INCOME The Group's income for the second quarter of 2014 The turnover of Restamax's second quarter of 2014 was MEUR 20.5 (MEUR 15.2), a growth of 34.7 per cent over last year. The EBITDA was MEUR 2.1 (MEUR 1.6), growth of 29.0 per cent. The Group's operating profit was EUR 479,100 (EUR 406,000), growth of 18.0 per cent. The Group's income for January-June 2014 Restamax's turnover for the period of six months was MEUR 36.4 (MEUR 30.4), an increase of 19.8 per cent over last year. The EBITDA was MEUR 3.5 (MEUR 2.9), growth of 22.0 per cent. The Group's operating profit was EUR 566,400 (EUR 383,400), growth of 47.7 per cent. As expected, the income of the review period was slightly better than that of last year. The EBITDA also increased slightly from the same period last year. The reasons behind the increase in turnover are the Rengasravintolat and Gastromax investments made in the first quarter of the year. A significant number new of openings took place in the first half of 2014, so most of their profits will be made in the latter half of the year. Due to the seasonal nature of the restaurant business, most of the profits are made at the end of the year. Prospects for 2014 Profit guidance (unchanged since 5 March 2014): Restamax estimates that the 2014 turnover will increase to MEUR 86-97. The company estimates that the 2014 EBITDA will increase to MEUR 14.5-16.3 and the operating profit to MEUR 8.7-10.4. The company's goal is to reach a turnover of MEUR 100 by the end of 2015. With the corporate investments made during the two first quarters of 2014, the company estimates it will come close to meeting this goal already in 2014. KEY FIGURES (TEUR)   4-6/14 4-6/13 1-6/14 1-6/13 1-12/13 Turnover 20,528 15,241 36,442 30,419 65,033 EBITDA   2,095   1,623  3,510  2,876   9,146 EBITDA, %     10.2     10.7      9.6     9.5     14.1 Operating profit      479      406     566    383  4,051 Operating profit, %       2.3      2.7     1.6    1.3      6.2 Review period income      200     458    271     60  2,908 To shareholders of the parent company       313    445 415    -31  2,565 To minority shareholders      -113    13 -144     90     344 Earnings per share for parent company shareholders (EUR)     0.02 0.04 0.03 0.00    0.24 Interest-bearing net liabilities     12,039 8,810  6,184 Gearing ratio, %     33.1 68.4  21.9 Equity ratio, %     57.8 39.6  60.9 SIGNIFICANT FIGURES Material margin, % 73.4 72.7 73.9 72.6  73.9 Staff expenses, % (incl. hired staff) 30.6 31.9 30.1 32.0  30.1 Return on investment, %     1.3 1.6  10.7 CEO MARKKU VIRTANEN The growth speed of Restamax has been upbeat throughout its history. Last year's focus on stock exchange listing slowed our growth slightly. The two first quarters of 2014 demonstrate that our restaurant company will once more see growth this year. The listing supporting our growth strategy and the related share issue have enabled investments that bring us competitive advantage in the future. A significant amount of these investments will be realised during 2014. Significant investments in the first half of 2014 In March 2014, the biggest corporate acquisition in the company history complemented the restaurant portfolio of Restamax with 16 new restaurants, when the company acquired the Rengasravintolat Group. With this acquisition, we strengthened our position, among other things, in the Helsinki metropolitan area and expanded our operations to a new market area, Pori. The most significant step towards growth taken in the second quarter of 2014 was concluding a preliminary agreement for a joint venture company with the Rukakeskus Group in June. With the agreement, the restaurant operations of Rukakeskus Plc and its subsidiary Pyhätunturi Plc at Rukatunturi in Kuusamo and at Pyhätunturi in Pelkosenniemi will be transferred to the ownership of the joint venture company in October 2014. Restamax will own 65 per cent of the Tunturiravintolat joint venture company and Rukakeskus 35 per cent. This acquisition solidly supports the company's strategic expansion to the touristic attraction centres of the north. Other significant events of the period include new restaurant openings, such as Restaurant Villisika in Hämeenlinna, the Chicago Food Park restaurant mix in the new Lielahti Centre in Tampere, the Richard's Gastropub and Välimäki restaurants in Helsinki and the Little Joe restaurant boat and the Daddy's Gelato ice cream bar in Tampere. In addition, with the establishment of Soolo Max Plc, we expanded our operations to Kotka. The economic downturn of the restaurant business continues The restaurant business is struggling in a downturn and the demand for tourism and restaurant services has clearly decreased in comparison with last year. The share of alcohol consumption in restaurants has dropped to a historically low level and the increase in the alcohol tax that took effect at the beginning of this year has further decreased the domestic serving demand of alcohol. Furthermore, food sales in restaurants licensed to serve alcohol is decreasing and the poor weather in the early summer has impacted the operations of summer restaurants negatively. Reasons behind the field's weakening profitability and dropping sales include not only the loss in purchasing power of households but also weakening company sales. In addition, the decrease in the numbers of foreign and domestic travellers, heavy cost structure and continuously tightening taxation create challenges for the field. According to forecasts by the Finnish Hospitality Association (MaRa), no quick recovery is in sight and the field's downturn will continue at least until the end of the year. A turn for the positive can, however, be seen in the reinstitution of deductible representation expenses that allows companies to deduct half of their representation expenses starting next year. This decision will support the demand for tourism and restaurant services, increase employment and, thus, bring tax revenues to the state. Supporting employment as a goal The tourism and restaurant field is a significant employer in Finland. In this field, the share of labour costs is approximately 30 per cent of the turnover. Weak demand especially increases the unemployment of young people, since nearly one third of the industry's labour is under the age of 26. The Extraordinary General Meeting of Restamax held on 29 July 2014 approved the Board of Directors' proposal regarding the purchase of the Staff Invest Group's labour hire service operations and also of certain of its subsidiaries that provide labour hire services. The corporate acquisition covers approximately 75 per cent of the business operations of the whole Staff Invest Group, and the entity acquired will be joined to the Restamax Group starting 1 August 2014 and reported as a segment of its own in the future. The General Meeting also confirmed the changing of Restamax's Articles of Association so that labour hire services are added to the company's field of operations. We want to do our share in supporting the employment of young people and we see great business potential in the field of labour hire services in the future. Restamax has solid competence in the restaurant business and also plenty of experience in part-time employment relationships that are typical in the industry. With the Staff Invest corporate acquisition, Restamax will become a bigger employer than before. We want to offer our employees better opportunities to advance in their careers and to work in a goal-oriented fashion. The company owns several restaurants in many cities, which allows us to offer same employees more work in different restaurants. With the Staff Invest corporate acquisition, we ensure the sufficient availability of staff in future and strengthen the growth of our company. Restamax has been the biggest customer of Staff Invest Plc and, with the corporate acquisition, the profit margin of the hired labour working in Restamax's own restaurants remains in the Group. Upcoming events Although the general financial situation in Finland has continued to be unstable and costs have continued to climb, their effects on the demand of the company's products and services have been relatively small. Despite the challenging general economic situation, Restamax has been able to maintain good profitability, clearly above the average profitability within the industry. Today, our Group comprises over 80 restaurants all over Finland; night clubs, restaurants, pubs and cafés. In June 2014, Restamax purchased the Matkailutalo property, forming an essential part of the Tampere city centre milieu, for office and commercial building purposes. We are anticipating the transfer of our head office to this protected building in the heart of the city this autumn. Besides office facilities, we will open two high-class restaurants in the property in the near future. This building important in terms of cultural history designed by Carl Höijer in 1896 to serve as the office building of Tampereen Verkatehdas is, thus, given new life. Restaurant openings of the following period include the expansion of the Space Bowling & Billiards concept to Pori and the Stefan's Steakhouse restaurant opening in the heart of Jyväskylä. Our goal is to reach a turnover of MEUR 100 by the end of 2015. The two first quarters of 2014 have shown that we are getting close to this goal already this year. Markku Virtanen CEO The full Restamax interim report for April-June 2014 is appended to this release in PDF format. The interim report is also available on the company's website at www.restamax.fi. RESTAMAX PLC Board of Directors Markku Virtanen, CEO APPENDIX: Restamax Plc Interim Financial Report Q2 2014 Additional information: Markku Virtanen, CEO, Restamax Plc, tel. +358 400 836 477 Jarno Suominen, CFO, Restamax Plc, tel. +358 40 721 5655 Distribution: NASDAQ OMX Helsinki Major media www.restamax.fi Restamax Plc is a Finnish restaurant business group established in 1996 that also offers labour hire services. The company, which listed at NASDAQ OMX Helsinki Oy in 2013 and became the first Finnish listed restaurant company, has continued to grow steadily throughout its history. The Group's companies include over 80 restaurants and nightclubs all over Finland. Well-known restaurant concepts of the Group include Gringos Locos, Bodega Salud, Viihdemaailma Ilona, Classic American Diner, Daddy's Diner, Stefan's Steakhouse and Wayne's Coffee Finland. Restamax Plc employs approximately 900 people, the Group's pro forma turnover in 2013 was MEUR 87.0 and EBITDA MEUR 13.3. Restamax company website: www.restamax.fi, Restamax consumer website: www.ravintola.fi [HUG#1847264]