Restamax Oyj - Half Year financial report

RESTAMAX SIX-MONTHLY REPORT FOR 1 JANUARY-30 JUNE 2017: Strong development in turnover - Restamax specifies its results management guidelines for 2017

Restamax Plc

SIX-MONTHLY REPORT 8 Aug 2017 at 8:00 a.m.

RESTAMAX SIX-MONTHLY REPORT FOR 1 JANUARY-30 JUNE 2017

Strong development in turnover - Restamax specifies its results management
guidelines for 2017

TURNOVER AND INCOME

Group's result for April-June 2017

Entire Group:
The Group's turnover was MEUR 43.6 (MEUR 31.9), growth of 36.4 per cent. EBITDA
was MEUR 3.9 (MEUR 4.3), decrease of 8.7 per cent. Operating profit was MEUR
1.2 (MEUR 1.5), decrease of 16.0 per cent.

Restaurant business:
The turnover of the restaurant business segment was MEUR 29.0 (MEUR 26.5),
growth of 9.5 per cent. EBITDA was MEUR 2.8 (MEUR 3.6), decrease of 20.6 per
cent. Operating profit was MEUR 0.4 (MEUR 1.3), decrease of 70.4 per cent.

Labour hire business:
The turnover of the labour hire business segment was MEUR 17.5 (MEUR 8.5),
growth of 104.8 per cent. EBITDA was MEUR 1.2 (MEUR 0.8), growth of 49.2 per
cent. Operating profit was MEUR 0.8 (MEUR 0.1), growth of 530.0 per cent.

Group's result for January-June 2017

Entire Group:
The Group's turnover was MEUR 75.6 (MEUR 59.2), growth of 27.7 per cent. EBITDA
was MEUR 7.2 (MEUR 7.1), growth of 1.7 per cent. Operating profit was MEUR 2.0
(MEUR 1.7), growth of 18.3 per cent.

Restaurant business:
The turnover of the restaurant business segment was MEUR 54.6 (MEUR 49.6),
growth of 10.0 per cent. EBITDA was MEUR 5.5 (MEUR 5.9), decrease of 7.1 per
cent. Operating profit was MEUR 0.8 (MEUR 1.4), decrease of 44.1 per cent.

Labour hire business:
The turnover of the labour hire business segment was MEUR 26.1 (MEUR 15.1),
growth of 73.5 per cent. EBITDA was MEUR 2.0 (MEUR 1.4), growth of 44.0 per
cent. Operating profit was MEUR 1.2 (MEUR 0.3), growth of 288.0 per cent.

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

Restamax Plc's result and profitability level for the second quarter of 2017 did
not fully meet expectations. The turnover for the entire Group increased by
27.7 per cent from the previous year. The increase in EBITDA was 1.7 per cent
compared to the previous year, while operating profit increased by 18.3 per
cent. As a result of the increase in turnover, the Group will specify its
results management for the 2017 financial period.

The Group's restaurant business was affected by the exceptionally cold weather
in early summer, along with numerous restaurant investments and openings for the
summer season. In the labour hire segment, the corporate restructurings resulted
in significant non-recurring items and integration costs. These factors
influenced the relative profitability of the entire Group.

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 2017

Results management (as of 8 August 2017):

Restamax expects the Group's turnover to increase by approximately 30 per cent
from the previous year to approximately MEUR 170 in the 2017 financial period.

The Company's long-term strategic goal is to reach a turnover of MEUR 180 by the
end of 2018.

Previous results management (as of 21 February 2017):

Restamax expects the Group's turnover to increase and profitability to remain on
a good level in the 2017 financial year.

The Company's long-term strategic goal is to reach a turnover of MEUR 180 by the
end of 2018.

+--------------------------------+--------+--------+--------+--------+---------+
|KEY FIGURES                     |        |        |        |        |         |
+--------------------------------+--------+--------+--------+--------+---------+
|Restamax Group in total         |        |        |        |        |         |
+--------------------------------+--------+--------+--------+--------+---------+
|(EUR thousand)                  |4-6/2017|4-6/2016|1-6/2017|1-6/2016|1-12/2016|
+--------------------------------+--------+--------+--------+--------+---------+
|KEY FIGURES, entire Group       |        |        |        |        |         |
+--------------------------------+--------+--------+--------+--------+---------+
|Turnover                        |  43,587|  31,946|  75,556|  59,158|  130,072|
+--------------------------------+--------+--------+--------+--------+---------+
|EBITDA                          |   3,903|   4,275|   7,174|   7,053|   19,399|
+--------------------------------+--------+--------+--------+--------+---------+
|EBITDA, %                       |    9.0%|   13.4%|    9.5%|   11.9%|    14.9%|
+--------------------------------+--------+--------+--------+--------+---------+
|Operating profit                |   1,238|   1,474|   1,985|   1,677|    8,998|
+--------------------------------+--------+--------+--------+--------+---------+
|Operating profit, %             |    2.8%|   4.6 %|    2.6%|    2.8%|     6.9%|
+--------------------------------+--------+--------+--------+--------+---------+
|Review period result            |     550|     783|     902|     709|    5,864|
+--------------------------------+--------+--------+--------+--------+---------+
|To shareholders of the parent   |     305|     603|     792|     745|    5,608|
|company                         |        |        |        |        |         |
+--------------------------------+--------+--------+--------+--------+---------+
|To minority shareholders        |     244|     179|     110|     -37|      256|
+--------------------------------+--------+--------+--------+--------+---------+
|Earnings per share (euros) to   |    0.02|    0.04|    0.05|    0.05|     0.35|
|the shareholders of the parent  |        |        |        |        |         |
|company                         |        |        |        |        |         |
+--------------------------------+--------+--------+--------+--------+---------+
|Interest-bearing net liabilities|        |        |  47,306|  36,119|   30,377|
+--------------------------------+--------+--------+--------+--------+---------+
|Gearing ratio, %                |        |        |  115.1%|   99.8%|    69.1%|
+--------------------------------+--------+--------+--------+--------+---------+
|Equity ratio, %                 |        |        |   35.3%|   38.0%|    45.2%|
+--------------------------------+--------+--------+--------+--------+---------+
|Return on investment, % (p.a.)  |        |        |    4.9%|    4.8%|    11.9%|
+--------------------------------+--------+--------+--------+--------+---------+
|Net financial expenses          |     404|     317|     583|     527|      953|
+--------------------------------+--------+--------+--------+--------+---------+

+-------------------+--------+--------+--------+--------+---------+
|Restaurant business|        |        |        |        |         |
+-------------------+--------+--------+--------+--------+---------+
|(EUR thousand)     |4-6/2017|4-6/2016|1-6/2017|1-6/2016|1-12/2016|
+-------------------+--------+--------+--------+--------+---------+
|Turnover           |  29,048|  26,524|  54,609|  49,648|  107,544|
+-------------------+--------+--------+--------+--------+---------+
|EBITDA             |   2,830|   3,564|   5,463|   5,880|   16,475|
+-------------------+--------+--------+--------+--------+---------+
|EBITDA, %          |    9.7%|   13.4%|   10.0%|   11.8%|    15.3%|
+-------------------+--------+--------+--------+--------+---------+
|Operating profit   |     396|   1,340|     762|   1,362|    7,401|
+-------------------+--------+--------+--------+--------+---------+
|Operating profit, %|    1.4%|    5.1%|    1.4%|    2.7%|     6.9%|
+-------------------+--------+--------+--------+--------+---------+
|                   |        |        |        |        |         |
+-------------------+--------+--------+--------+--------+---------+
|KEY FIGURES        |        |        |        |        |         |
+-------------------+--------+--------+--------+--------+---------+
|Material margin, % |   73.4%|   73.5%|   73.6%|   73.7%|    74.6%|
+-------------------+--------+--------+--------+--------+---------+
|Staff expenses, %  |   29.2%|   29.1%|   29.3%|   29.7%|    28.1%|
+-------------------+--------+--------+--------+--------+---------+

+--------------------+--------+--------+--------+--------+---------+
|Labour hire business|        |        |        |        |         |
+--------------------+--------+--------+--------+--------+---------+
|(TEUR)              |4-6/2017|4-6/2016|1-6/2017|1-6/2016|1-12/2016|
+--------------------+--------+--------+--------+--------+---------+
|Turnover            |  17,460|   8,524|  26,120|  15,051|   34,129|
+--------------------+--------+--------+--------+--------+---------+
|EBITDA              |   1,217|     816|   1,978|   1,373|    3,441|
+--------------------+--------+--------+--------+--------+---------+
|EBITDA, %           |    7.0%|    9.6%|    7.6%|    9.1%|    10.1%|
+--------------------+--------+--------+--------+--------+---------+
|Operating profit    |     841|     134|   1,223|     315|    1,597|
+--------------------+--------+--------+--------+--------+---------+
|Operating profit, % |    4.8%|    1.6%|    4.7%|    2.1%|     4.7%|
+--------------------+--------+--------+--------+--------+---------+
|                    |        |        |        |        |         |
+--------------------+--------+--------+--------+--------+---------+
|KEY FIGURES         |        |        |        |        |         |
+--------------------+--------+--------+--------+--------+---------+
|Staff expenses, %   |   85.1%|   86.2%|   85.0%|   86.6%|    85.5%|
+--------------------+--------+--------+--------+--------+---------+

TEMPORARY CEO JARNO SUOMINEN

Strong development in turnover between January and June 2017 - specifications to
the profit forecast

In terms of profit, the second quarter of 2017 did not meet our expectations.
The growth in turnover was good, but profitability deteriorated in relation to
the previous year. As regards the labour hire business, the review period was
successful despite strong growth and related integration costs. The restaurant
business suffered significantly due to the exceptionally poor weather in early
summer. Between January and June 2017, the turnover of the entire Group
increased by 27.7 per cent, EBITDA by 1.7 per cent and operating profit by 18.3
per cent from last year.

Despite the challenging start to the summer, we achieved a moderate result and
the long-term outlook is good. We will get close to the 2018 turnover goal of
MEUR 180 over the course of the 2017 financial period. As a result, we will be
specifying our results management scheme by virtue of this six-monthly report.
We estimate the turnover for the 2017 financial period to be approximately MEUR
170, indicating a growth of approximately 30 per cent. Furthermore, the
profitability is expected to remain at a good level. Furthermore, the
profitability is expected to remain at a good level.

Cold weather in early summer weakens profitability

The exceptionally cold and rainy weather in early summer hampered our summer
restaurant operations, which is clearly evident in the relative profitability of
the review period. According to statistics, the month of May was coldest in
decades, and early June is normally this cold only once every ten years on
average. In June, rainfall in central and southern Finland was 1.5-2 times
higher than the average.

The weather conditions had a significant impact on the demand for our summer
restaurant services as well as the turnover and EBITDA of our entire restaurant
sector, which fell well behind the levels of the corresponding period of last
year. About 70 of the 120 restaurants owned by our Group feature terraces. This
translates to nearly 15,000 outdoor seats. We made significant growth
investments in our seasonal restaurant operations, with regard to which we are
expecting profits to materialise later in the summer and upcoming seasons.

In April we expanded our restaurant operations by acquiring the business
operations of Ruoveden Rantaravintola and Muroleen Kesäkahvila. Over the course
of May and June, we opened Restaurant Enso in Helsinki, the wings restaurant
Hook in Turku, the Pepe Lopez terrace restaurant in Pori as well as the Ranta
restaurant complex in Tampere. In addition to this, we purchased the majority
shareholding in Pub Harry's, which operates in Jyväskylä.

Growth in the restaurant sector continues still driven by food sales

During the first half of the year, the sales of the hospitality companies
continued the steady growth that was sparked last year. Although accommodation
providers have grown faster than restaurants, the development in the restaurant
sector also looks cautiously promising. The growth is supported by an increase
in both foreign and domestic tourism and the positive general trend in the
Finnish economy. In addition to this, the prospects are bolstered by the
relatively high consumer confidence.

However, the demand for restaurant services was encumbered by the poor weather
conditions early in the summer. According to a turnover forecast by the Finnish
Hospitality Association MaRa, restaurant turnover increased by 5.4 per cent in
the second quarter of this year. During the second quarter, the turnover of
Restamax's restaurant operations increased by 10 per cent. The turnover of the
entire hospitality sector is expected to stand at 6,7 per cent for the first
half-year period.

Although the sales of restaurants licenced to serve alcohol increased in the
second quarter of the year, the favourable development is increasingly
attributable to food sales; people consume as much alcoholic drinks as before
but largely at home and outdoors. Passenger import remains dominant among sales
channels.

Despite the positive overall trend, the hospitality field continues to be marred
by poor profitability. Companies' costs have skyrocketed due to the increase of
the wholesale prices of food and alcoholic drinks as well as labour costs. In
addition to this, high tax rates are holding back any improvements in
profitability. However, the economic barometer for the field indicates that
steady growth will continue and even increase slightly in the coming months.

Another season of strong growth in labour hire

For the labour hire business, the review period was successful. Labour hire is
an increasingly important part of our Group's operations, and growth and
development in the sector are stronger than in our restaurant business.

During the review period, the growth of Smile Henkilöstöpalvelut was accelerated
by an acquisition in April, through which Pasianssi Oy (Banssi
Henkilöstöpalvelut) was incorporated into the Group. The subsidiary, which
currently operates under the name Smile Banssi Oy, has operations in 14 cities.
The acquisition strengthens our labour hire operations nationwide, especially in
the fields of industry and construction. In the beginning of July after the
review period, Smile acquired the share capital of Job Services One Oy. The
labour hire company operating in Tampere and Turku focuses on direct
recruitment, providing staffing services for construction, industry and the
service sector. The acquisition lends itself to bolstering our labour hire
operations even further in the Pirkanmaa and Southwest Finland regions. In
addition to corporate acquisitions, organic growth was strong due to successful
acquisition of new customers and increased customer purchases.

The consolidation of operations and the corporate restructurings have generated
approximately EUR 150,000 in non-recurring items and integration costs, which
affect the segment's result for the review period. The result is encumbered by
the development of other operations, in relation to which the synergy benefits
will be fully achieved at a later time. The decreased demand for restaurant
services is naturally also mirrored by the Group's labour hire services.

Generally speaking, the labour hire business has been able to successfully adapt
to the changes in the employment climate by consolidating a variety of
fragmented opportunities to form more expansive arrangements. This is evident in
the strong growth of the labour hire business. Sales numbers and staff numbers
in the field have remained at a good level, as have the expectations of
companies.

The clearest indicator of the promising development is turnover. According to
the Private Employment Agencies' Association HPL, the increase of turnover in
the field between January and April in 2017 was 14 per cent compared to the
corresponding period of the previous year. The growth rate of the employment
services has only been trumped by the construction sector. The turnover of Smile
Henkilöstöpalvelut for the January-June period increased by 73.5 per cent over
the previous year. Smile also aims to contribute to the strong growth through
the Pasianssi and Job Services acquisitions.

Expanding the organisation's pool of competence

We will strengthen our management during the latter part of the year through new
appointments. Juha Helminen will assume his duties as our new CEO in September
from his previous position as Vice President of Trade at Oy Sinebrychoff Ab. At
that point, I will step down from my position as temporary CEO to continue as
the CFO for the Group.

We will also strengthen our Executive Team with two new appointments. Tomi
Söderström will begin as the Director of Operations on 18 September 2017. He
will transfer to our Group from the HYY Group, where he has served as the
Director of Hospitality Business. Previously, he was in charge of restaurant
operations on Tallink Silja cruise ships. Tero Kaikkonen, who has served as the
Product Line Director for food restaurants in our Group since 2013, will step in
as the Group's Development Director on 1 September 2017. These additions to our
roster will increase our competence and international expertise, which will
support our grown and goals of expanding our business abroad.

Peak share price

Our share price development has been very good in recent years and particularly
during the past review period. In addition to dividends, we have been able to
provide our investors with excellent returns thanks to our increased share
price. Our share price has increased by approximately 70 per cent since our
listing in 2013 and the beginning of trade. The highest peak in share price
occurred in mid-June, at which point the price stood at EUR 9.16. This is an
indication of strong confidence in our operations among investors and the
market.

In both of our business segments, profits are largely made late in the year.
Although the result for January-June 2017 did not meet our expectations, we will
continue our significant growth in turnover and maintain our good profitability
during the latter half of 2017.

Jarno Suominen, temporary CEO

The full Restamax six-monthly report for January-June 2017 is appended to this
release in PDF format. The six-monthly report is also available on the company's
website at www.restamax.fi.

RESTAMAX PLC

Board of Directors

APPENDIX: Restamax Plc Six-monthly Report Q2/2017

Additional information:
Jarno Suominen, temporary CEO, CFO, Restamax Plc, tel. +358 40 721 5655
Timo Laine, Chairman of the Board of Directors, Restamax Plc, tel.
+358 400 626 064


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 120
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 2016, Restamax Plc's
turnover was MEUR 130.1 and EBITDA MEUR 19.4. Depending on the season, the Group
employs some 1,600 persons, converted into full-time employees. Restamax
subsidiary Smile Henkilöstöpalvelut Oy employs about 6,500 on a monthly basis.

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

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Liitteet:

Restamax Plc Six-monthly Report Q2/2017.pdf