INTERIM REPORT
NOHO PARTNERS PLC’S INTERIM REPORT 1 JANUARY–31 MARCH 2022
Restaurant demand recovery faster than expected – the company expects its turnover to increase to approximately MEUR 300 already this year
JANUARY–MARCH 2022 IN BRIEF
- Turnover increased by 140.6% to MEUR 48.5 (MEUR 20.2).
- EBIT increased by 86.6% to MEUR -1.3 (MEUR -9.7).
- The EBIT percentage was -2.7% (-48.3%).
- The result for the financial period was MEUR -3.6 (MEUR -10.8), an increase of 66.9%.
- Earnings per share were
EUR -0.18 (EUR -0.49 ), an increase of 63.4%. - The operational EBITDA* increased by 116.0% to MEUR 1.1 (MEUR -6.7).
Finnish operations
- Turnover increased by 86.2% to MEUR 37.3 (MEUR 20.1).
- EBIT increased by 69.1% to MEUR -2.4 (MEUR -7.6).
- The EBIT percentage was -6.3% (-38.1%).
- Operational EBITDA* increased by 85.6% to MEUR -0.8 (MEUR -5.5).
International business
- Turnover increased by 8,014.6% to MEUR 11.2 (MEUR 0.1).
- EBIT increased by 150.1% to MEUR 1.1 (MEUR -2.1).
- The EBIT percentage was 9.4% (-1,517.4%).
- Operational EBITDA* increased by 250.6% to MEUR 1.9 (MEUR -1.2).
Unless otherwise stated, figures in parentheses refer to the corresponding period last year.
(MEUR) | 1 Jan.- | 1 Jan.- | Change | 1 Jan.- |
Turnover | 48.5 | 20.2 | 140.6% | 186.1 |
Operational EBITDA* | 1.1 | -6.7 | 116.0% | 11.3 |
EBIT | -1.3 | -9.7 | 86.6% | -0.9 |
EBIT, % | -2.7% | -48.3% | -0.5% | |
Result of the financial period | -3.6 | -10.8 | 66.9% | -10.3 |
Earnings per share (EUR) for the review period attributable to the owners of the company | -0.18 | -0.49 | 63.4% | -0.55 |
Interest-bearing net liabilities excluding IFRS 16 impact | 148.7 | 169.9 | -12.5% | 151.9 |
Gearing ratio excluding IFRS 16 impact, % | 208.0% | 227.4% | 203.1% | |
Material margin, % | 74.1% | 70.8% | 74.4% | |
Personnel expenses, % | 37.8% | 48.3% | 36.0% |
*The company will use the term operational EBITDA for the operating cash flow in the future. The calculation formula is shown in the section “Calculation formulas for key figures” at the end of the interim report.
FUTURE OUTLOOK
Profit guidance as of 10
The Group aims to achieve a turnover of approximately MEUR 400 and an EBIT margin of approximately 10% during 2024. The company aims for the ratio of net debt to operational EBITDA, adjusted for IFRS 16 lease liability, to be under 3 and for dividends to be paid during the strategy period 2022–2024.
The Group will update the estimate for the next financial period on an annual basis in conjunction with the publication of the financial statements release. The company will also provide monthly reports on the development of its business during the second quarter of 2022.
Previous profit guidance (as of 17 February 2022):
The company will issue its turnover and profitability forecast for 2022 at the latest in connection with the January–March 2022 interim report.
The company will also provide monthly reports on the development of its business under these exceptional circumstances until further notice.
The market
The COVID-19 pandemic has had a considerable impact on the company’s market and the restaurant industry as a whole, and it has significantly affected the company’s operations. In the first quarter of 2022, the company operated in a strictly restricted or closed business environment in all of its operating countries. Following the lifting of the restrictions, private consumption recovered rapidly and demand has been strong, exceeding the level of the year before the pandemic.
The business outlook for the tourism and catering sector has clearly improved as the pandemic eased. However, consumer confidence in financial development has been undermined by the tightening geopolitical situation and the general rise in costs. The company expects consumer demand to remain at a good level during the financial period 2022, business and event sales to gradually recover and the market to return to normal during the second quarter of 2022.
REVIEW BY THE CEO
The beginning of 2022 was overshadowed by strict restaurant restrictions in all of our operating countries. However, as the restrictions were gradually lifted, our business was already cash flow positive in mid-February, and in March, when the market opened up, we were already making a good profit. It did not save the result for the first quarter, but this provides a good starting point for the recovery, which was further strengthened by April’s sales and operational EBITDA.
On the whole, I look at the rest of the year with confidence, even though the uncertainty in the general economic situation created by the crisis in
In line with our growth strategy 2024, we aim to achieve a turnover of approximately MEUR 400. This year, we are seeking a turnover of approximately MEUR 300 and, therefore, the objective for the next two years is to continue to grow by approximately MEUR 100. Growth comes mainly from three strategic priorities: 1. From
Our profitable growth is fuelled mainly by strong cash flow and negative working capital fed by growth. Over the next 12 months, the focus in terms of cash flow will be on the framework we have set for the normalisation of our loan level (net debt to EBITDA ratio), and already next year, we will be able to invest even more strongly in financing growth with our free cash flow. In addition, we still aim to divest Eezy Plc’s ownership once we feel that the company’s valuation is at a sufficient level. From the point of view of our company’s value creation, we see the reinvestment of this asset in our international growth as a sensible strategy.
For this year, we expect the market to accelerate in the second quarter and believe that our portfolio will be relatively resilient to weakening purchasing power of domestic consumption. After two difficult years, Finnish restaurant culture has started to flourish, but it is clear that only excellent customer experience and good price-performance ratio can guarantee success in competition. We will invest in customer-oriented training of our personnel, immediate supervisor work and remuneration structures. It is estimated that this year’s turnover will be approximately MEUR 300 and the EBIT will be approximately 7%. For the rest of the year, this represents a turnover of more than MEUR 250 and EBIT of approximately 9%.
Aku Vikström
CEO,
IMPLEMENTATION OF THE STRATEGY
When the restrictions were lifted in February–March 2022, the company turned its attention back to implementing its profitable growth strategy.
Strategic priorities:
- Profitable growth in the Norwegian restaurant market through acquisitions
- Scaling up the Friends & Brgrs chain to a national level
- Large and profitable urban projects
The return of the Norwegian business to a strong profit performance following the lifting of the restrictions provides a strong starting point for future growth in the Norwegian restaurant market. The company’s goal is to accelerate growth in
In accordance with its strategy, the company has continued to scale the Friends & Brgrs chain by opening four new restaurants during the first half of the year 2022. The company’s goal is to scale around 10 new restaurants in the chain on an annual basis.
For large and profitable urban projects, the full capacity of
TURNOVER AND INCOME
January–March 2022
The Group’s turnover in January–March 2022 was MEUR 48.5, representing growth of 140.6 per cent compared to the corresponding period in 2021 and amounting to roughly 91 per cent of the turnover in the corresponding period in 2019, before the COVID-19 pandemic. In January–February, the operations took place in a partially restricted business environment during both the review period and the comparison period. In
The operational EBITDA turned positive in February after the partial lifting of the restrictions, and after the total lifting of the restrictions in March, it was
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. The second quarter of 2022 is expected to be stronger than usual due to the pent-up demand and the Ice Hockey World Championship to be played in the company’s main domestic markets,
The Group’s turnover for
Outlook for May–June 2022
Turnover in
BUSINESS SEGMENTS
As of
- Finnish operations
- International business
TURNOVERS BY BUSINESS AREAS
FINNISH OPERATIONS | 1 Jan.- | 1 Jan.- | 1 Jan.- |
Restaurants | |||
Turnover (MEUR) | 15.3 | 8.7 | 68.7 |
Percentage of the total turnover | 31.6% | 43.2% | 36.9% |
Change in turnover | 76.8% | ||
Units, number | 76 | 80 | 75 |
Entertainment venues | |||
Turnover (MEUR) | 11.4 | 3.1 | 49.5 |
Percentage of the total turnover | 23.6% | 15.3% | 26.6% |
Change in turnover | 263.2% | ||
Units, number | 72 | 64 | 72 |
Fast casual restaurants | |||
Turnover (MEUR) | 10.5 | 8.2 | 39.9 |
Percentage of the total turnover | 21.7% | 40.9% | 21.4% |
Change in turnover | 28.1% | ||
Units, number | 64 | 50 | 66 |
INTERNATIONAL BUSINESS | 1 Jan.- | 1 Jan.- | 1 Jan.- |
Turnover (MEUR) | 11.2 | 0.1 | 28.0 |
Percentage of the total turnover | 23.1% | 0.7% | 15.1% |
Change in turnover | 8,014.6% | ||
Units, number | 38 | 39 | 40 |
FINNISH OPERATIONS
In
No grants from the Finnish state were recorded in the review period. Support for the period during which business was restricted or completely blocked as a result of the orders of the authorities is still under consideration by the Finnish parliament.
Finnish operations | ||||
(MEUR) | 1 Jan.- | 1 Jan.- | Change | 1 Jan.- |
Turnover | 37.3 | 20.1 | 86.2% | 158.1 |
Operational EBITDA | -0.8 | -5.5 | 85.6% | 9.3 |
EBIT | -2.4 | -7.6 | 69.1% | 1.0 |
EBIT, % | -6.3% | -38.1% | 0.6% | |
Material margin, % | 73.5% | 72.2% | 74.6% | |
Personnel expenses, % | 36.3% | 42.2% | 34.7% |
INTERNATIONAL BUSINESS
In January, international business activities were limited both in
International business | ||||
(MEUR) | 1 Jan.- | 1 Jan.- | Change | 1 Jan.- |
Turnover | 11.2 | 0.1 | 8,014.6% | 28.0 |
Operational EBITDA | 1.9 | -1.2 | 250.6% | 2.0 |
EBIT | 1.1 | -2.1 | 150.1% | -1.9 |
EBIT, % | 9.4% | -1,517.4% | 100.6% | -6.6% |
Material margin, % | 76.3% | -128.0% | 73.4% | |
Personnel expenses, % | 42.5% | 945.0% | 43.7% |
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
In
In
In
A report on the impacts of the pandemic and changes in restaurant restrictions for the comparison period 2021 is presented in the section Accounting principles, Note 1 of the Financial statements release 2021.
Government assistance during the state of emergency
The company did not receive government grants from the Finnish state during the review period. On
The support received from the Danish state in January–March 2022 amounted to approximately MEUR 0.7 and the support received from the Norwegian state amounted to MEUR 1.3. The financial support received by the Group totalled approximately MEUR 2.1.
A more detailed account of government assistance and the distribution thereof is presented in Note 4 Government grants in the interim report.
CASH FLOW, INVESTMENTS AND FINANCING
The Group’s operating net cash flow in January–March 2022 was MEUR 8.7 (MEUR 0.3). There was no significant change in working capital when comparing the situation between the beginning and the end of the review period, although an exceptionally large change occurred when restaurants reopened during the review period.
The investment net cash flow in January–March 2022 was MEUR 1.8 (MEUR -0.2) including MEUR 4.2 of positive cash flow from the sale of Eezy Plc’s shares, which were classified as held for sale. The investment net cash flow included the opening of two new Friends & Brgrs restaurants and the acquisition of the restaurant Origo in Hanko,
The Group’s interest-bearing net liabilities, excluding the impact of IFRS 16 liabilities, continued to decline to MEUR 148.7 and, when adjusted by the market value of Eezy’s holding at the end of the review period, to less than MEUR 120. IFRS 16 liabilities totalled MEUR 170.3. The Group’s gearing ratio excluding the impact of IFRS 16 liabilities was 208.0%. Adjusted net finance costs in January–March were MEUR 3.4 (MEUR 3.0), of which the share of IFRS 16 interest expenses was MEUR 1.8 (MEUR 1.4).
BRIEFING FOR THE MEDIA, ANALYSTS AND INVESTORS AT
A briefing for the media, analysts and investors will be organised today, Tuesday
The briefing is available as a live webcast at https://noho.videosync.fi/2022-q1-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–March 2022 is attached to this release as a PDF file. The Interim Report is also available at www.noho.fi.
Board of Directors
ATTACHMENT:
More information available from:
Aku Vikström, CEO,
Hatanpään valtatie 1 B
FI-33100
www.noho.fi/en
Attachment
- NoHo_Partners_Plc_Interim_Report_Q1_2022
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