RESTAMAX PLC INTERIM REPORT BETWEEN 1 JANUARY AND 30 SEPTEMBER 2014: Group turnover increased by 28.1% and profitability improved

Restamax Plc

INTERIM FINANCIAL REPORT 7 NOVEMBER 2014 at 10:00



INTERIM FINANCIAL REPORT FOR RESTAMAX PLC, 1 JANUARY-30 SEPTEMBER 2014

Group turnover increased by 28.1% and profitability improved in January-September 2014

TURNOVER AND INCOME

Group income for July-September 2014

Entire group:
The Group's turnover was MEUR 23.9 (MEUR 16.7), growth of 43.1 per cent.
EBITDA was MEUR 4.0 (MEUR 2.9), growth of 35.8 per cent. Operating profit was MEUR 2.4 (MEUR 1.6), growth of 46.9 per cent.

Restaurant business:
The turnover for the restaurant business was MEUR 22.7 (MEUR 16.7), growth of 36.0 per cent. EBITDA was MEUR 3.8 (MEUR 2.9), growth of 30.1 per cent. Operating profit was MEUR 2.2 (MEUR 1.6), growth of 37.6 per cent.

Labour hire business:
The turnover for the labour hire business segment was MEUR 2.6. EBITDA was EUR 166,000. Operating profit was EUR 151,000. (New business segment, no reference figures.) The figures include a one-off transfer tax of approximately €103,000 due to a corporate acquisition.

The group's income for January-September 2014


Entire group:
The Group's turnover was MEUR 60.3 (MEUR 47.1), growth of 28.1 per cent.
EBITDA was MEUR 7.5 (MEUR 5.8), growth of 29.0 per cent. Operating profit was MEUR 3.0 (MEUR 2.0), growth of 47.1 per cent.

Restaurant business:
The turnover for the restaurant business segment was MEUR 59.1 (MEUR 47.1), growth 25.5 per cent. EBITDA was MEUR 7.3 (MEUR 5.8), growth of 26.1 per cent. Operating profit was MEUR 2.8 (MEUR 2.0), growth of 39.5 per cent.

Labour hire business:
The turnover for the labour hire business segment was MEUR 2.6. EBITDA was EUR 166,000. Operating profit was EUR 151,000. (New business segment, no reference figures.) The figures include a one-off transfer tax of approximately €103,000 due to a corporate acquisition.

As expected, the income for the period under review was slightly better than that of last year. EBITDA for the entire group also increased slightly from the same period last year. Investments made during the first half of the year laid the foundation for the turnover growth. Non-recurring items due to company arrangements affected the income for the period under review. The integration of a new business segment as part of the group's business is in its early stages, which can be seen in the level of profitability for the labour hire business during the period under review.

Due to the seasonal nature of the restaurant and labour hire businesses, most of the profits are made at the end of the year.

BUSINESS SEGMENTS

Restamax expanded its business segments over the past quarter. The General Meeting confirmed and approved the Board of Directors' proposals regarding the company's new Articles of Association and the purchase of Staff Invest Group's labour hire service operations and also of certain subsidiaries that provide labour hire services on 29 July 2014. The labour hire business became part of the Restamax Group on 1 August 2014, and it will be reported as a separate segment going forward.

From 1 August 2014 onwards, Restamax will consist of two business areas that will be reported as separate segments:

- Restaurant business
- Labour hire business

Restamax is reporting its third quarter income for 2014 according to the new segment structure.

PROSPECTS FOR 2014

Restamax updated its profit guidance on 24 October 2014.

Profit guidance (since 24/10/2014):
Restamax estimates that the 2014 turnover will increase to MEUR 84.0-90.0. The company estimates that the 2014 EBITDA will increase to MEUR 11.5-13.0 and the operating profit to MEUR 5.5-7.0.

The company's goal is to reach a turnover of MEUR 100 by the end of 2015. Although the company's financial results this year will be good in view of the general circumstances, the development of the company's results in September has been substantially weaker than expected, and this has resulted in a downgrade of the profit guidance.

Earlier profit guidance (since 5/3/2014): Restamax estimates that the 2014 turnover will increase to MEUR 86.0-97.0. 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 figures include a one-off transfer tax of approximately €103,000 due to a corporate acquisition.
The Staff Invest corporate acquisition was completed on 1 August 2014, the Huippu Henkilöstöpalvelut one on 15 September 2014.

CEO MARKKU VIRTANEN

Results for September weaker than expected

Restamax has been on a path of accelerating growth throughout its history. The listing that supports our growth strategy and the related share issue make possible investments that will bring us a significant competitive advantage in the future. A significant amount of these investments will be realised during 2014.

The three quarters of 2014 indicate that our company will continue to grow even in the current year, even though the end of the period under review has not met our expectations. We are pleased with our results for July-August, but the results for September have been substantially weaker than expected.

September's results were affected by the weak overall financial situation and a decrease in the purchasing power of consumers and the overall demand. Clear changes in customer behaviour are also visible: although the customers visit the restaurants as before, they are consuming less and their average purchases are smaller than before.

The strong growth of our company has also caused more non-recurring items than anticipated. These include consulting fees and asset transfer taxes, which have amounted to approximately EUR 600,000 for this year. The results are also burdened by the indirect integration costs of the new business introduced into the group, and the opening of several new restaurants.

The general increase in the cost level has had a higher impact on the investments than was anticipated, and this has affected the operating profit significantly. Labour costs have also increased due to the new collective labour agreement that entered into force at the beginning of September.

As a positive turn in the industry, the tax deductibility of entertainment expenses will be reinstated, allowing companies to deduct half their entertainment expenses from the beginning of next year. The decision supports the demand in the travel and restaurant business, promotes employment and adds to tax revenue.

Introducing labour hire operations

At the beginning of August, our business expanded into a new segment as we began offering labour hire services as part of our operations. I look forward to starting and developing the new business together with our subsidiary Smile Henkilöstöpalvelut Oy. I see immense growth potential in the labour hire business, and I believe that, due to the current financial situation, more and more companies will be utilising hired labour.

Labour hire operations will make Restamax an even larger employer. We want to do our part in providing employment and offering our employees even better opportunities to progress on their careers and to work towards clear goals. Our company has many customers in many cities, which allows us to offer our employees improved opportunities for more work in different restaurants.

Restaurant portfolio expanded, good profitability maintained

Despite the challenging general economic situation, Restamax has been able to maintain good profitability, clearly above the average profitability of the field. Today, our group consists of over 80 restaurants from different parts of Finland: nightclubs, restaurants, pubs and cafés. During the period under review, we supplemented our restaurant portfolio by expanding the Space Bowling & Billiards gaming restaurant concept into Pori and opening a Stefan's Steakhouse restaurant in Jyväskylä.

Although Restamax had to issue a profit warning on 24 October 2014 and lower its earnings forecast, this year's financial results will be good in view of the general economic situation. The goal is to reach a turnover of MEUR 100 by the end of 2015. I firmly believe that our goals will be met.

Markku Virtanen
CEO

The full Restamax interim report for Janyary-September 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 Q3/2014

Further 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 companies include over 80 restaurants, cafés, pubs and nightclubs all over Finland. Well-known restaurant concepts of the group include, among others, 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