Restamax Oyj - Interim report (Q1 and Q3)

RESTAMAX PLC INTERIM REPORT FOR 1 JANUARY-30 SEPTEMBER 2016: Turnover increased by 16.5 per cent and profitability improved

Restamax Plc

INTERIM REPORT 8 Nov 2016 at 8:00 a.m.

RESTAMAX PLC INTERIM REPORT FOR 1 JANUARY-30 SEPTEMBER 2016

Turnover increased by 16.5 per cent and profitability improved in January-
September 2016

TURNOVER AND INCOME

Group's result for July-September 2016

Entire Group:
The Group's turnover was MEUR 36.6 (MEUR 31.3), growth of 16.9 per cent. EBITDA
was MEUR 6.4 (MEUR 5.4), growth of 19.5 per cent. Operating profit was MEUR 3.8
(MEUR 3.0), growth of 26.8 per cent.

Restaurant business:
The turnover of the restaurant business segment was MEUR 29.4 (MEUR 26.6),
growth of 10.4 per cent. EBITDA was MEUR 5.5 (MEUR 4.7), growth of 17.5 per
cent. Operating profit was MEUR 3.1 (MEUR 2.5), growth of 20.1 per cent.

Labour hire business:
The turnover of the labour hire business was MEUR 10.5 (MEUR 7.8), growth of
34.6 per cent. EBITDA was MEUR 1.1 (MEUR 0.8), growth of 31.4 per cent.
Operating profit was MEUR 0.7 (MEUR 0.4), growth of 64.9 per cent.

Group's result for January-September 2016

Entire Group:
The Group's turnover was MEUR 95.7 (MEUR 82.1), growth of 16.5 per cent. EBITDA
was MEUR 13.5 (MEUR 11.0), growth of 22.5 per cent. Operating profit was MEUR
5.5 (MEUR 4.3), growth of 27.6 per cent.

Restaurant business:
The turnover of the restaurant business segment was MEUR 79.1 (MEUR 72.8),
growth of 8.6 per cent. EBITDA was MEUR 11.3 (MEUR 9.5), growth of 19.5 per
cent. Operating profit was MEUR 4.4 (MEUR 3.5), growth of 25.2 per cent.

Labour hire business:
The turnover of the labour hire business was MEUR 25.5 (MEUR 17.5), growth of
45.8 per cent. EBITDA was MEUR 2.5 (MEUR 1.8), growth of 34.9 per cent.
Operating profit was MEUR 1.1 (MEUR 0.8), growth of 38.6 per cent.

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

Weather conditions have a significant impact on the business of the Restamax
Group. Although the weather in late summer was not very good, the Group's result
for January to September 2016 is considerably better than the previous year. The
turnover of the entire Group increased by 16.5 per cent from the previous year,
EBITDA by 22.5 per cent and operating profit by almost 28 per cent.

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

PROSPECTS FOR 2016

Result management (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)             | 7-9/2016| 7-9/2015| 1-9/2016| 1-9/2015| 1-12/2015|
+---------------------------+---------+---------+---------+---------+----------+
|KEY FIGURES, entire Group  |         |         |         |         |          |
+---------------------------+---------+---------+---------+---------+----------+
|Turnover                   |   36,559|   31,279|   95,717|   82,148|   113,618|
+---------------------------+---------+---------+---------+---------+----------+
|EBITDA                     |    6,405|    5,360|   13,458|   10,988|    16,536|
+---------------------------+---------+---------+---------+---------+----------+
|EBITDA, %                  |   17.5 %|    17.1%|   14.1 %|   13.4 %|    14.6 %|
+---------------------------+---------+---------+---------+---------+----------+
|Operating profit           |    3,798|    2,995|    5,476|    4,292|     7,266|
+---------------------------+---------+---------+---------+---------+----------+
|Operating profit, %        |   10.4 %|    9.6 %|    5.7 %|    5.2 %|     6.4 %|
+---------------------------+---------+---------+---------+---------+----------+
|Review period result       |    2,534|    2,204|    3,243|    2,760|     4,809|
+---------------------------+---------+---------+---------+---------+----------+
|To shareholders of the     |         |         |         |         |          |
|parent company             |    2,378|    2,178|    3,123|    3,031|     5,050|
+---------------------------+---------+---------+---------+---------+----------+
|To minority shareholders   |      156|       26|      120|     -271|      -241|
+---------------------------+---------+---------+---------+---------+----------+
|Earnings per share (euros) |         |         |         |         |          |
|to the shareholders of the |     0.15|     0.13|     0.19|     0.19|      0.31|
|parent company             |         |         |         |         |          |
+---------------------------+---------+---------+---------+---------+----------+
|Interest-bearing net       |         |         |         |         |          |
|liabilities                |         |         |   35,256|   26,869|    29,313|
+---------------------------+---------+---------+---------+---------+----------+
|Gearing ratio, %           |         |         |   91.6 %|   71.3 %|    73.2 %|
+---------------------------+---------+---------+---------+---------+----------+
|Equity ratio, %            |         |         |   41.2 %|   43.9 %|    44.4 %|
+---------------------------+---------+---------+---------+---------+----------+
|Return on investment, %    |         |         |         |         |          |
|(p.a.)                     |         |         |    9.7 %|    8.8 %|    10.8 %|
+---------------------------+---------+---------+---------+---------+----------+
|Net financial expenses     |         |         |      630|      860|     1,195|
+---------------------------+---------+---------+---------+---------+----------+

+-------------------+---------+---------+---------+---------+--------+
|Restaurant business|         |         |         |         |        |
+-------------------+---------+---------+---------+---------+--------+
|(EUR thousand)     | 7-9/2016| 7-9/2015| 1-9/2016| 1-9/2015| 1-12/15|
+-------------------+---------+---------+---------+---------+--------+
|Turnover           |   29,423|   26,648|   79,070|   72,799| 100,315|
+-------------------+---------+---------+---------+---------+--------+
|EBITDA             |    5,464|    4,651|   11,344|    9,490|  14,801|
+-------------------+---------+---------+---------+---------+--------+
|EBITDA, %          |   18.6 %|   17.5 %|   14.3 %|   13.0 %|  14.8 %|
+-------------------+---------+---------+---------+---------+--------+
|Operating profit   |    3,059|    2,547|    4,421|    3,531|   6,492|
+-------------------+---------+---------+---------+---------+--------+
|Operating profit, %|   10.4 %|    9.6 %|    5.6 %|    4.9 %|   6.5 %|
+-------------------+---------+---------+---------+---------+--------+
|                   |         |         |         |         |        |
+-------------------+---------+---------+---------+---------+--------+
|KEY FIGURES        |         |         |         |         |        |
+-------------------+---------+---------+---------+---------+--------+
|Material margin, % |   74.0 %|   73.3 %|   73.8 %|   73.6 %|  74.3 %|
+-------------------+---------+---------+---------+---------+--------+
|Staff expenses, %  |   25.8 %|   27.5 %|   28.2 %|   29.2 %|  28.5 %|
+-------------------+---------+---------+---------+---------+--------+

+--------------------+---------+---------+---------+---------+--------+
|Labour hire business|         |         |         |         |        |
+--------------------+---------+---------+---------+---------+--------+
|(TEUR)              | 7-9/2016| 7-9/2015| 1-9/2016| 1-9/2015| 1-12/15|
+--------------------+---------+---------+---------+---------+--------+
|Turnover            |   10,465|    7,775|   25,516|   17,504|  24,151|
+--------------------+---------+---------+---------+---------+--------+
|EBITDA              |    1,080|      822|    2,454|    1,819|   2,161|
+--------------------+---------+---------+---------+---------+--------+
|EBITDA, %           |   10.3 %|   10.6 %|    9.6 %|   10.4 %|   8.9 %|
+--------------------+---------+---------+---------+---------+--------+
|Operating profit    |      739|      448|    1,054|      761|     775|
+--------------------+---------+---------+---------+---------+--------+
|Operating profit, % |    7.1 %|    5.8 %|    4.1 %|    4.3 %|   3.2 %|
+--------------------+---------+---------+---------+---------+--------+
|                    |         |         |         |         |        |
+--------------------+---------+---------+---------+---------+--------+
|KEY FIGURES         |         |         |         |         |        |
+--------------------+---------+---------+---------+---------+--------+
|Staff expenses, %   |   85.3 %|   83.9 %|   86.0 %|   84.9 %|  85.2 %|
+--------------------+---------+---------+---------+---------+--------+

CEO MARKKU VIRTANEN

A strong result in the third quarter

As expected, the third-quarter result for our Group was strong. Between January
and September 2016, turnover increased by 16.5 per cent, EBITDA by 22.5 per cent
and operating profit by almost 28 per cent from the corresponding period the
previous year.

In spite of unsettled weather conditions in late summer, the growth in our
turnover and increase in profit were strong. We were able to respond to consumer
demand thanks to a comprehensive range of summer restaurants and our diverse
restaurant portfolio. Our main market area had many successful summer events,
which not only boosted our summer sales but also provided plenty of employment
for our staff. According to a forecast by the Finnish Hospitality Association
(MaRa), the summer was better than the previous year for festivals.

The adaptability and quick reactions of our staff to changes in demand for sales
during the summer season demonstrated a commendable flexibility from our
employees.

According to a forecast by MaRa, in the third quarter the number of visitors to
and increase in sales of amusement parks suffered from unsettled weather and
smaller average purchases. The results of our restaurants located at the
Linnanmäki and Särkänniemi amusement parks were, however, good, although no
general increase in sales was evident at these units.

During the period under review, we opened a Georgian restaurant in Helsinki in
cooperation with actor-presenter Ville Haapasalo. In addition to this, we also
renovated several of our restaurants. The first Viihdemaailma Ilona Nightclub
opened in Seinäjoki in 2010 underwent complete renovation in September. In
Tampere, two restaurants that have achieved legendary status, Wanha Posti that
has been serving since 1993 and Henry's Pub operating since 1997, were also
renovated from floor to ceiling. Mexican restaurant Cholo in Helsinki was also
renovated and expanded.

Partner business - one of the cornerstones of growth

From the perspective of the development of our restaurant concepts, the role of
partners in our subsidiaries is very important and cooperation with them is
close. The commitment brought by their ownership and their investments in the
planning and implementation of business ideas and the diversification of
operations are significant. Each one of our partners puts a strong and
individual mark on our restaurant business. Restamax's role on the other hand is
focused on operational management, financing and expertise in the restaurant
business.

Examples of the subsidiaries that we operate with our partners are the Georgian
restaurant opened with Ville Haapasalo, the Mexican restaurant run with Mehdi
Younes, the restaurant business engaged in with Hans Välimäki, Hernesaaren Ranta
and the nightclub business operated with Seppo Koskinen, Stefan Richter's
Stefan's Steakhouse restaurants, the pubs managed with Louie So, the gaming
restaurant business engaged in with Hannu Lahtinen and the restaurant business
in Rauma operated with Riku Räsänen.

Facelessness is traditionally associated with the restaurant chains in Finland.
Our operations, however, are not characterised by traditional chain thinking.
Our company has more than 60 different and unique concepts, and new ones are
constantly being developed to suit different market areas. The richness of ideas
and creativity of our partners combined with the support of a large company and
solid management experience create good prerequisites for successful and high-
quality restaurant business. Without such activity, Finnish restaurant culture
would be considerably more homogeneous.

The owner-operators responsible for managing our subsidiaries create special
added value for our business. We believe in domestic entrepreneurship and we
also encourage our staff to engage in entrepreneurial activity. For us, growth
based on the joint venture model together with our subsidiaries is quite a nice
way to grow. In the future, the importance of partner activity to growth will
become increasingly accentuated.

Brighter economic outlook than before

The economic prospects for the tourism and restaurant business that have been
gloomy for years are now looking brighter. According to forecasts by the Finnish
Hospitality Association (MaRa), in the third quarter of 2016 the turnover of
restaurants increased by 5.8 per cent and by 5.9 per cent over the whole MaRa
sector. In the corresponding period last year, the increase in the restaurant
turnover was about 4 per cent. Food sales are continuing to rise while sales of
alcohol lag behind.

Growth prospects for the restaurant business are particularly focused on centres
of growth and commerce, and fast food restaurants in the capital region are
expected to create thousands of new jobs in the coming years. We shall also be
taking these prospects into account in our strategic growth.

Companies in the tourism and restaurant sector describe their economic situation
as having slightly improved. According to a seasonal forecast by MaRa, almost
70 per cent of companies say that their summer sales have increased, most of
them by 2-4 per cent. Companies in the sector feel that the economic situation
has improved slightly but still by less than the average. From now until the end
of 2016, the economy is expected to strengthen slightly. Of the companies who
replied to MaRa's seasonal survey, 60 per cent estimated that the Christmas
party period sales will grow in comparison with the previous year. According to
an economic review by the Research Institute of the Finnish Economy (ETLA),
Finland's GDP will grow by about 1 per cent this year and, in the following
years, growth is expected to strengthen.

In addition to modest development in the overall economy, positive prospects can
also be seen from the beginning of next year when the reform of alcohol
legislation comes into force. The planned reform of food legislation, which
concerns Finnish laws that are more stringent than EU regulations and their
abolition, will bring relief to the sector and so positively affect the business
of food restaurants. I am still strongly of the opinion that, from a point of
view of the development of the restaurant business, economic growth and
improvement in purchasing power and employment, the tax concessions offered by
the Competitiveness Pact will be indispensable next year.

Growth in turnover of labour hire continues

Between January and September 2016, the growth in the turnover of the labour
hire segment was strong. Compared to the previous year, turnover increased by
almost 46 per cent, EBITDA by almost 35 per cent and operating profit by almost
39 per cent.

This year, labour hire has been introduced to new sectors and the acquisition of
new customers has been active. For example, the purchase of a majority
shareholding in Seinäjoki-based Make My Solutions Oy, which took place in the
previous quarter, has created the opportunity to increase business in the fields
of industry, construction and logistics. During the quarter under review,
opportunities for geographical expansion have been studied in these fields. In
order to support the growth of Smile Doctors Oy and the health care side, the
organisation has been strengthened through management recruitment. The
integration of new sectors and companies into the business is partially
incomplete, which affected the result of the segment in the period under review.

Strong growth in the employment agencies' sector Finland continues. The overall
market value of the sector is about €1.5 billion and total turnover in 2015 was
more than €1 billion. Total turnover for the employment agencies' sector in
August 2016 increased by about 22% over the previous year and turnover for
labour hire services by 14%. The value of the cumulative turnover of the labour
hire business between January­­­ and August 2016 was €546.66 million, an
increase of about 13% over the previous year.

Our growth is substantially stronger than that of the sector. Labour hire has
established a position in the present labour market and the sector is a
significant employer. Strong seasonal fluctuations, difficult-to-forecast future
prospects and an increasing need for labour in growth sectors are driving the
growth in labour hire. Labour hire companies offer many young people their first
experience of working life and make the challenging employment situation easier
for them. Labour hire is also clearly seen as a growth area of the future.

Market confidence increasing - share price at an all-time high

The target set by our company's Board of Directors to expand the restaurant
business abroad in the strategy period 2016-2018 is at the market survey stage.
At the same time, we will also grow our business in the domestic market and try
to take it into new market areas between now and the end of the year.

The growth in our turnover and our better-than-average profitability are
considerably stronger than the general level for the market. In October, our
share price climbed to an all-time high and, for the first time, we exceeded a
valuation of €100 million. The rise in our share price shows that market
confidence in our business has strengthened, and this is also shown by our
result. I am very happy about this trend and I believe that development will
continue in the same vein.

The generation of profit towards the end of the year is typical of the
restaurant and labour hire sectors. As a result of general market development,
consumer behaviour and the growth in and diversification of our operations,
expectations for the end of the year and the Christmas party period are
favourable.

Markku Virtanen, CEO

The full Restamax interim report for January-September 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

Markku Virtanen, CEO

APPENDIX: Restamax Plc Interim Report Q3/2016

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
Key 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
113.6 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
over 3,000.

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

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Attachments:

Restamax Plc Interim Report Q3/2016.pdf