RESTAMAX PLC INTERIM REPORT FOR 1 JANUARY-31 MARCH 2016: Turnover grew by more than 11 per cent in January-March 2016

Restamax Plc

INTERIM REPORT 10 May 2016 at 8:00 a.m.


Turnover grew by more than 11 per cent in January-March 2016


Group's result for January-March 2016

Entire Group:
The Group's turnover was MEUR 27.2 (MEUR 24.5), growth of 11.3 per cent. EBITDA was MEUR 2.8 (MEUR 2.9), decrease of 4.0 per cent. Operating profit was MEUR 0.2 (MEUR 0.8), decrease of 74.1 per cent.

Restaurant business:
The turnover of the restaurant business segment was MEUR 23.1 (MEUR 22.4), growth of 3.0 per cent. EBITDA was MEUR 2.3 (MEUR 2.6), decrease of 9.6 per cent. Operating profit was MEUR 0.0 (MEUR 0.7), decrease of 96.6 per cent.

Labour hire business:
The turnover of the labour hire business was MEUR 6.5 (MEUR 4.3), growth of 51.2 per cent. EBITDA was MEUR 0.6 (MEUR 0.4), growth of 30.7 per cent. Operating profit was MEUR 0.2 (MEUR 0.1), growth of 35.7 per cent.

In January-March 2016, the turnover of the entire Restamax Group increased by over 11 per cent while EBITDA dropped by 4 per cent and operating profit declined by approximately 74 per cent. Factors affecting the result include the exceptionally cold weather in January, which influenced restaurant sales in January. The Group's seasonal restaurants in the north of the country achieved a reasonably good result, however. A challenging period for the restaurant business, Easter was in the first quarter of the year, and this reflected in a rise in the personnel costs, and in a decline in the turnover, of the Group. The operative management of the Group did not react quickly enough to the change that took place in the demand for services after year-end. The opening of new restaurants and the closure of some old ones also affected the result. Last year's reference period, i.e. the first quarter of 2015, was strong in terms of the result.


Profit guidance (as of 23 February 2016):

Restamax expects the Group's turnover to increase and profitability to remain on a good level in the 2016 financial year.

Restamax Group in total    
(EUR thousand)  1-3/2016  1-3/2015  1-12/15
KEY FIGURES, entire Group   
EBITDA, %10.2%11.8%14.6%
Operating profit2047887,266
Operating profit, %0.7%3.2%6.4%
Review period result-744884,809
To shareholders of the parent company1426385,050
To minority shareholders-216-150-241
Earnings per share (euros) to the shareholders of the parent company0.010.040.31
Interest-bearing net liabilities28,83821,40529,313
Gearing ratio, %72.2%53.9%73.2%
Equity ratio, %45.0%50.1%44.4%
Return on investment, % (p.a.)1.5%5.0%10.8%
Net financial expenses2091701,195
Restaurant business    
(EUR thousand)  1-3/2016  1-3/2015  1-12/15
EBITDA, %10.0%11.4%14.8%
Operating profit226546,492
Operating profit, %0.1%2.9%6.5%
Material margin, %74.0%74.1%74.3%
Staff expenses, %30.4%29.6%28.5%
Labour hire business    
(EUR thousand)  1-3/2016  1-3/2015  1-12/15
EBITDA, %8.5%9.9%8.9%
Operating profit182134775
Operating profit, %2.8%3.1%3.2%
Staff expenses, %87.1%85.9%85.2%


The first quarter of 2016 was challenging

Between January and March 2016, the turnover of the entire Group increased more than 11 per cent, EBITDA dropped by 4 per cent and operating profit declined by 74 per cent from the previous year. Last year's reference period, i.e. the first quarter of 2015, was good.

The unusually cold weather in January affected the sales of our restaurants in January. Our seasonal restaurants in the north of the country achieved a reasonably good result. Easter is a challenging period for the restaurant business, and this year it was within the first quarter. In part, this showed as an increase in the personnel costs and as a decrease in the turnover of our business operations. Moreover, our operational management was not prepared to react swiftly enough to the change in the demand of our services that took place at the beginning of the year. This was a good reminder of how susceptible the field is to shifts in economic trends and how situations on the restaurant markets can change very rapidly. Our result was also affected by the opening of new restaurants and the discontinuation of a number of old ones.

In both the restaurant and labour hire sector, the result is primarily made towards the end of the year, and the first quarter is always the weakest.

During the review period, we opened a Passion Food & Bar restaurant and Pizzeria Bella Roma in Jyväskylä, a Classic American Diner restaurant at the Jumbo Shopping Centre in Vantaa, and we purchased the business operations of the Namu and Showroom restaurants located in Helsinki. Expanding our operations to Southern Finland also supports our growth strategy. It is our goal to continue to improve our position in the Helsinki Metropolitan Area. The openings and investments carried out in the first quarter, along with the acquisition last year of a majority shareholding in Hernesaaren Ranta Oy, strongly support this objective.

Recovery and thousands of new jobs in the restaurant field

The economy is estimated to see some gradual growth in early 2016. Consumer expectations for the spring are low, which implies that the travel and restaurant sector will have a slow period at the beginning of the year. Consumer expectations collapsed by last summer, and overall confidence in the economy is currently clearly below the long-term average. However, there are signs of recovery over the long term. For example, according to forecasts prepared by ETLA, the Research Institute of the Finnish Economy, Finland's GDP will grow by slightly less than one per cent in 2016. This growth is expected to increase in 2017 and 2018.

The Finnish Hospitality Association MaRa's forecasts indicate that turnover in the restaurant field increased by about 4 per cent in the first quarter of 2016. Restaurant food sales are increasing but the sale of alcohol continues to decline. Up to 64 per cent of the turnover of the restaurant field comes from food sales. According to monitoring by MaRa, the turnover of fast food restaurants in Finland increased by as much as 7.1 per cent.

Thousands of new jobs are expected to emerge in the travel and restaurant sector by 2020. New restaurants are being opened particularly in growth centres and new shopping centres. Fast food restaurants in the Helsinki Metropolitan Area are expected to create up to 2,000 new jobs over the course of 2015 and 2016. The growth prospects are strong especially in growth centres, where the demand for restaurants and other companies providing experiences is high. These prospects are effectively supported by Restamax's investment in the SuperPark indoor activity parks at the turn of the year, the opening of the Classic American Diner at the Jumbo Shopping Centre in Vantaa in February, and the opening of the Lintsi American Diner at the Linnanmäki amusement park in April.

New goals guiding operations

We began 2016 by focusing our efforts on the new long-term goals set by our Board of Directors. Our goal is to expand our restaurant operations abroad. At the same time, we will also continue our profitable growth in Finland in the restaurant and labour hire businesses. Our turnover target for 2018 is to reach MEUR 180 by the end of that year. EBITDA and operating profit are expected to remain on a good level.

The expansion abroad gives us the opportunity to export our existing brands to new market areas. We can establish ourselves in other countries with our numerous restaurant concepts that are already exportable. We see immense potential in concepts like Stefan's Steakhouse, diners located in shopping centres and growth centres, and entertainment and game centres. These will allow us to succeed outside the Finnish borders.

There are some 10,000 restaurants in Finland, of which we own over 100. Therefore, we have not yet met the limits of domestic growth and still see significant potential on the Finnish market. We will continue our active efforts to survey the markets both in Finland and abroad.

Smile Henkilöstöpalvelut strengthened and expanded its operations

In January, Smile Henkilöstöpalvelut, our subsidiary that engages in the labour hire business, strengthened its position in Turku by acquiring the operations of TOR-Palvelut Oy, a labour hire company that specialises in the restaurant sector. At the same time, Smile signed a long-term cooperation agreement with Turun Oopperaravintolat Oy and Juhla-Ansa Oy, which are owned by Oldfellows Oy, on the provision of labour hire services.

In the review period in the labour hire segment, our turnover increased by over 50 per cent compared to the previous year, EBITDA increased by over 30 per cent, and operating profit increased by over 35 per cent. This is testament to the fact that labour hire operations have quickly grown into a significant part of our Group, and we now have a basis for comparing the development.

At the beginning of 2016, Smile also expanded its operations to a new field, retail trade. Smile Retail Oy supplies labour to various trade outlets from grocery shops to specialised shops. Factors such as the new longer opening hours ensure considerable growth potential in the sector. Expanding our operations to retail trade also makes it possible for us to offer restaurant workers more diverse employment and earning opportunities.

The total worth of the labour hire business in Finland is about EUR 1.5 billion, and the total turnover of the field was over a billion euros in 2015, with nearly 14 per cent growth from the preceding year. The turnover of the staffing services sector is expected to increase by 6.6 per cent over the first half of 2016. About two-thirds of the total turnover of the staffing services sector comes from labour hire. The prospects for the field remain rather positive. An increasing proportion of recruitment is made through labour hire arrangements.

Bright future despite the economic downturn

As said, the Finnish economy is expected to grow only slightly in 2016. In 2016, private consumption is estimated to increase slower than in 2015 as unemployment will remain high and the development of earnings is slow.

The growth challenges in the field are primarily caused by a lack in purchasing power, which the planned social contract would likely initially weaken. The contract is expected to specifically weaken the domestic market, as the positive effects will focus on exports. What would be needed alongside the possible social contract are tax reductions to increase purchasing power. This would ensure that customers could consume more and turn the domestic market to a much-awaited climb towards recovery. A reduction of income taxes would also have a positive effect on domestic demand and employment.

Politics and the overall reform of alcohol legislation will have a major impact on the restaurant sector in particular. If the new act enters into force in 2017, we can expect significant reductions in the regulation of alcohol sales.

Although the general economic situation has been challenging in Finland in recent years, Restamax has been able to increase its turnover more efficiently than the general developments would give reason to expect. At the same time, we have been able to maintain good profitability, which is clearly above the average profitability within the industry.

We believe that our profitable business and growth will continue despite the prevailing market situation.

Markku Virtanen, CEO

The full Restamax interim report for January-March 2016 is appended to this release in PDF format. The interim report is also available on the company's website at


Board of Directors

APPENDIX: Restamax Plc Interim Report Q1/2016

Further information :
Markku Virtanen, CEO, Restamax Plc, tel. +358 400 836 477
Jarno Suominen, CFO, Restamax Plc, tel. +358 40 721 5655

Major media

Restamax Plc is a Finnish restaurant business and labour hire services group established in 1996. The company, which listed on NASDAQ OMX Helsinki in 2013 and became the first Finnish listed restaurant company, has continued to grow strongly throughout its history. The group companies include over 100 restaurants, nightclubs and entertainment centres all over Finland. Well-known restaurant concepts of the group include Stefan's Steakhouse, Viihdemaailma Ilona and Classic American Diner. In 2015, Restamax Plc's turnover was MEUR 113.7 and EBITDA MEUR 16.5. Depending on the season, some 1,000 persons work at the group. The workforce of Restamax subsidiary Smile Henkilöstöpalvelut Oy is about 3,000.

Restamax company website:, Restamax consumer website:, S mile Henkilöstöpalvelut:

Restamax Plc Interim Report Q1/2016

This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.

The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Restamax Oyj via GlobeNewswire