RESTAMAX PLC INTERIM REPORT FOR 1 JANUARY-31 MARCH 2018: Turnover increased by 54.5 per cent and profitability remained at a good level

Restamax Plc

INTERIM REPORT 8 MAY 2018 at 8.00

RESTAMAX PLC INTERIM REPORT FOR 1 JANUARY-31 MARCH 2018

Turnover increased by 54.5 per cent and profitability remained at a good level in January-March 2018

TURNOVER AND INCOME

The Group's result for January-March 2018

Entire Group:

The Group's turnover was MEUR 49.4 (MEUR 32.0), growth of 54.5 per cent. EBITDA was MEUR 4.3 (MEUR 3.3), growth of 31.3 per cent. Operating profit was MEUR 0.9 (MEUR 0.7), growth of 22.0 per cent.

Restaurant business:

The turnover of the restaurant business segment was MEUR 30.9 (MEUR 25.6), growth of 20.9 per cent. EBITDA was MEUR 2.7 (MEUR 2.6), growth of 3.1 per cent. Operating profit was MEUR 0.1 (MEUR 0.4),
decrease of 62.0 per cent.

Labour hire business:

The turnover of the labour hire business segment was MEUR 21.8 (MEUR 8.7), growth of 151.4 per cent. EBITDA was MEUR 1.7 (MEUR 0.8), growth of 127.8 per cent. Operating profit was MEUR 0.8 (MEUR 0.4), growth of 102.3 per cent.

Figures in parentheses refer to the period last year, unless otherwise stated.

In January-March 2018, Restamax Group's turnover grew by 54.5 per cent, EBITDA by 31.3 percent and operating profit by 22.0 per cent compared to the corresponding period of the previous year.

During the first quarter of the year, the Group made several organisational changes and investments to carry out future growth plans. These changes started to reflect positively on the March result.

The turnover of the restaurant business segment grew as expected during the first quarter. The result of the labour hire business segment was considerably better than the previous year.

The Group's depreciation level has relatively stabilised, which has also started to reflect positively on the Group's operating profit level. Despite the preparations made to support future growth, in January-March 2018 the Group was able to keep its key figures, such as material margin and staff expenses, at a good level.

Especially in the restaurant business, most of the profits are made in the second half of the year due to the seasonal nature of the business.

PROSPECTS FOR 2018

Results management (as of 20 February 2018):

In accordance with its strategy, Restamax expects the Group's turnover to increase and profitability to remain on a good level in both segments in the 2018 financial period. The restaurant segment is expected to reach a turnover of approximately MEUR 140 and in labour hire, a turnover of approximately MEUR 110 is expected, the total turnover being some MEUR 240 after eliminations.

Restamax's goal is to reach a turnover of approximately MEUR 400 by the end of 2020 after internal eliminations. The goal of the restaurant segment is to reach a turnover of approximately MEUR 200, and the goal of the labour hire segment is to reach a turnover of approximately MEUR 220 by the end of 2020.

KEY FIGURES

CEO JUHA HELMINEN

Preparing for future growth

In January-March 2018, our Group's turnover grew by almost 55 per cent, EBITDA by more than 31 per cent and operating profit by 22 per cent compared to the corresponding period the previous year.

Early in the year, we made some significant organisational changes in order to reach our strategic growth targets. Our goal is to reach a turnover of approximately MEUR 400 by the end of 2020, of which the restaurant segment accounts for approximately MEUR 200, excluding the acquisition of the share capital of Royal Ravintolat Oy, and the labour hire segment approximately MEUR 220.

In January 2018, we updated our administration, and in future we will focus more strongly on managing our new business units, intensifying our acquisitions and ensuring our customer and employee satisfaction. Furthermore, we will invest more heavily in sales and marketing.

As concerns the restaurant business, the turnover of the first quarter grew as expected. The changes to our new organisational and operating model impacted the result of the first quarter and the positive effects started to show in March. In the labour hire business, we achieved a clearly better result during the first quarter than last year.

Even though early 2018 was a time of changes and investments, we were able to keep our key efficiency figures, including staff expenses and material margin, at a good level. Our depreciation level has relatively stabilised, which has started to reflect also on our operating profit level.

New concepts to respond to the growing demand of the restaurant business

During the review period, we boosted our position in our familiar market areas by opening both popular and brand new concepts. We opened a new Mango DiscoBar nightclub in Oulu and responded to the increased demand of different experiences by opening two new Run Out escape rooms in Seinäjoki and the Vihahuone rage room and pitch black Dark Room escape room in Tampere. To the best of our knowledge, these two are the first of their kind in Finland.

In March 2018, the reform of the Alcohol Act entered fully into force and boosted the industry. The change in the legislation allows, among other things, happy hour marketing, longer opening hours and take-away retail sales of alcohol at restaurants. Several of our restaurants have made use of the amendments, and we believe that they will continue to have a positive impact on the average size of customer purchases and on the flow of customers.

Generally speaking, according to the economic barometer by Confederation of Finnish Industries (EK), the expectations regarding the economic trends of the restaurant industry are positive, yet cautious. The estimated turnover of restaurants promises a growth of 4.4 per cent for the second quarter of the year. Consumer confidence in the economy is also at a good level. In February-March 2018, the readings of the confidence indicator were the highest measured during the 30 years of its history.

Becoming the leading restaurant operator in the Nordic countries

In March, we took our first step towards internationalisation. We expanded our restaurant business to Denmark by purchasing over 90 per cent of the popular Danish Cock's & Cows and The Bird restaurants. Cock's & Cows, with its award-winning premium burgers, and The Bird, famous for its gin and tonic, have established their positions in the restaurant industry of their homeland. The brands have a total of 11 restaurants in prime locations in Copenhagen and, during the summer, they will open new units at the Copenhagen international airport.

The highly interesting and fragmented markets both in Denmark and elsewhere in Northern Europe create potential for Restamax's strong growth in various segments of the restaurant business. Our aim is to grow aggressively on the international restaurant market in the next 3 to 5 years.

Our internationalisation is also supported by the acquisition of Royal Ravintolat Oy, which we announced in April 2018. Upon its realisation, the transaction will be the largest corporate transaction in the history of the restaurant industry in Finland. Royal Ravintolat has more than 70 restaurants all over Finland, and the company employs approximately one thousand people. Together, we will form one of the largest restaurant groups in the Nordic countries, and our goal is to become the leading restaurant operator in Northern Europe by 2020.

Royal Ravintolat is particularly well-known for its long-term and highly esteemed concepts in the Helsinki metropolitan area, whereas Restamax's casual restaurants have a strong market position elsewhere in Finland. Royal Ravintolat's brands include Savoy, Löyly, Elite, Palace and Teatteri and the scalable concepts of the Hanko Sushi, Pizzarium and Sandro. Upon the realisation of the share transaction, I will take charge of our company's foreign operations, and Royal Ravintolat CEO Aku Vikström will assume responsibility for the company's operations in Finland. The deal is expected to be realised during summer 2018.

The listing of Smile Henkilöstöpalvelut evaluated

The result of the labour hire business for the review period was rather good. Smile Henkilöstöpalvelut's growth continues to be stronger than the general growth of the industry, and the company is now among the largest labour hire companies operating in Finland. The company is actively seeking solutions for the labour shortage in Finland.

Its strong growth was facilitated, in addition to organic growth, by two major transactions: In February 2018, Smile Henkilöstöpalvelut purchased Kymppi Service Oy, operating in the sectors of industry, construction and logistics; and in March 2018, the majority of the national construction-sector labour hire company Adicio Oy, specialising in foreign manpower. With these transactions, the company gained a stronger foothold in the busy economic areas of Southwest Finland and Satakunta and became a part of the new national service concept solving the labour needs of Finnish companies by importing foreign manpower.

In March 2018, we announced that our Board of Directors is evaluating the listing of Smile Henkilöstöpalvelut on the Helsinki Stock Exchange. The evaluation process will be carried out during spring 2018. The potential listing would enable Smile Henkilöstöpalvelut to strengthen its own balance sheet and to grow even more quickly to the top of labour hire companies.

Share price at a record high

We enjoy strong confidence among investors and in the market. At the end of March 2017, the value of Restamax's share was EUR 6.70, whereas at the end of March this year it was EUR 8.70. The measures employed at the beginning of the year were also reflected in our target price, which equity research company Inderes increased to EUR 12.0 in mid-April. The investments made will help us achieve our target turnover.

We have positive expectations for the remainder of the year, a time when the majority of our result is traditionally made. We expect the Group's turnover to increase and profitability to remain on a good level in both segments in the 2018 financial period.

Juha Helminen, CEO

The full Restamax interim report for January-March 2018 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

APPENDIX: Restamax Plc Interim Report Q1/2018

Additional information:
Juha Helminen, CEO, tel. +358 40 535 5560
Jarno Suominen, CFO, tel. +358 40 721 5655

Distribution:
NASDAQ Helsinki
Major media
www.restamax.fi

Restamax Plc is a Finnish group established in 1996, specialising in restaurant services and labour hire. 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 more than 130 restaurants, nightclubs and entertainment centres all over Finland. Well-known restaurant concepts of the Group include Stefan's Steakhouse, Viihdemaailma Ilona, Classic American Diner and Colorado Bar & Grill. In 2017, Restamax Plc's turnover was MEUR 185.9 and EBITDA MEUR 22.4. Depending on the season, the Group employs some 2,400 persons, converted into full-time employees. Restamax subsidiary Smile Henkilöstöpalvelut Oy employs approximately 9,000 people on a monthly basis.

Restamax company website: www.restamax.fi, Restamax consumer website: www.ravintola.fi, Smile Henkilöstöpalvelut: www.smilepalvelut.fi