Restamax Oyj - Interim report (Q1 and Q3)

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.

RESTAMAX PLC INTERIM REPORT FOR 1 JANUARY-31 MARCH 2016

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

TURNOVER AND INCOME

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.

PROSPECTS FOR 2016

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.

+-------------------------------------------------+---------+---------+--------+
|KEY FIGURES                                      |         |         |        |
+-------------------------------------------------+---------+---------+--------+
|                                                 |         |         |        |
+-------------------------------------------------+---------+---------+--------+
|Restamax Group in total                          |         |         |        |
+-------------------------------------------------+---------+---------+--------+
|(EUR thousand)                                   | 1-3/2016| 1-3/2015| 1-12/15|
+-------------------------------------------------+---------+---------+--------+
|KEY FIGURES, entire Group                        |         |         |        |
+-------------------------------------------------+---------+---------+--------+
|Turnover                                         |   27,212|   24,450| 113,618|
+-------------------------------------------------+---------+---------+--------+
|EBITDA                                           |    2,778|    2,895|  16,536|
+-------------------------------------------------+---------+---------+--------+
|EBITDA, %                                        |    10.2%|    11.8%|   14.6%|
+-------------------------------------------------+---------+---------+--------+
|Operating profit                                 |      204|      788|   7,266|
+-------------------------------------------------+---------+---------+--------+
|Operating profit, %                              |     0.7%|     3.2%|    6.4%|
+-------------------------------------------------+---------+---------+--------+
|Review period result                             |      -74|      488|   4,809|
+-------------------------------------------------+---------+---------+--------+
|To shareholders of the parent company            |      142|      638|   5,050|
+-------------------------------------------------+---------+---------+--------+
|To minority shareholders                         |     -216|     -150|    -241|
+-------------------------------------------------+---------+---------+--------+
|Earnings per share (euros) to the shareholders of|     0.01|     0.04|    0.31|
|the parent company                               |         |         |        |
+-------------------------------------------------+---------+---------+--------+
|Interest-bearing net liabilities                 |   28,838|   21,405|  29,313|
+-------------------------------------------------+---------+---------+--------+
|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 expenses                           |      209|      170|   1,195|
+-------------------------------------------------+---------+---------+--------+
|                                                 |         |         |        |
+-------------------------------------------------+---------+---------+--------+
|Restaurant business                              |         |         |        |
+-------------------------------------------------+---------+---------+--------+
|(EUR thousand)                                   | 1-3/2016| 1-3/2015| 1-12/15|
+-------------------------------------------------+---------+---------+--------+
|Turnover                                         |   23,124|   22,443| 100,315|
+-------------------------------------------------+---------+---------+--------+
|EBITDA                                           |    2,316|    2,562|  14,801|
+-------------------------------------------------+---------+---------+--------+
|EBITDA, %                                        |    10.0%|    11.4%|   14.8%|
+-------------------------------------------------+---------+---------+--------+
|Operating profit                                 |       22|      654|   6,492|
+-------------------------------------------------+---------+---------+--------+
|Operating profit, %                              |     0.1%|     2.9%|    6.5%|
+-------------------------------------------------+---------+---------+--------+
|                                                 |         |         |        |
+-------------------------------------------------+---------+---------+--------+
|KEY FIGURES                                      |         |         |        |
+-------------------------------------------------+---------+---------+--------+
|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|
+-------------------------------------------------+---------+---------+--------+
|Turnover                                         |    6,527|    4,316|  24,151|
+-------------------------------------------------+---------+---------+--------+
|EBITDA                                           |      558|      427|   2,161|
+-------------------------------------------------+---------+---------+--------+
|EBITDA, %                                        |     8.5%|     9.9%|    8.9%|
+-------------------------------------------------+---------+---------+--------+
|Operating profit                                 |      182|      134|     775|
+-------------------------------------------------+---------+---------+--------+
|Operating profit, %                              |     2.8%|     3.1%|    3.2%|
+-------------------------------------------------+---------+---------+--------+
|                                                 |         |         |        |
+-------------------------------------------------+---------+---------+--------+
|KEY FIGURES                                      |         |         |        |
+-------------------------------------------------+---------+---------+--------+
|Staff expenses, %                                |    87.1%|    85.9%|   85.2%|
+-------------------------------------------------+---------+---------+--------+


CEO MARKKU VIRTANEN

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 www.restamax.fi.

RESTAMAX PLC

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

Distribution:
NASDAQ OMX Helsinki
Major media
www.restamax.fi

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

[HUG#2010838]

Attachments:

Restamax Plc Interim Report Q1/2016.pdf