NOHO PARTNERS PLC’S FINANCIAL STATEMENTS RELEASE 1 JANUARY–31 DECEMBER 2022: Record year – the company returns to paying strong dividend

NoHo Partners Oyj

NoHo Partners Plc

FINANCIAL STATEMENTS RELEASE 16 February 2023 at 8.00 EET

NOHO PARTNERS PLC’S FINANCIAL STATEMENTS RELEASE 1 JANUARY–31 DECEMBER 2022: Record year – the company returns to paying strong dividend

OCTOBER–DECEMBER 2022 IN BRIEF

• Turnover increased by 26.7% and was MEUR 88.1 (69.5).

• EBIT increased by 26.3% and was MEUR 8.5 (6.7).

• EBIT margin was 9.6% (9.6%)

• The result for the period decreased by 78.3% and was MEUR 0.7 (3.3). The result adjusted by a fair value impairment of MEUR 2.9 due to the market value of Eezy Plc shares, classified as assets held for sale, was MEUR 3.6.

• Earnings per share decreased by 108.0% and were EUR -0.01 (0.08). Earnings per share adjusted by entries related to Eezy Plc shares was EUR 0.14.

• Operational EBITDA increased by 17.3% to MEUR 11.5 (9.8).

JANUARY–DECEMBER 2022 IN BRIEF

• Turnover increased by 68.1% and was MEUR 312.8 (186.1).

• EBIT increased by 3621.5% and was MEUR 31.6 (-0.9).

• EBIT margin was 10.1% (-0.5%)

• The result for the period increased by 147.3% and was MEUR 4.9 (-10.3). The result adjusted by a fair value impairment of MEUR 10.4 due to the market value of Eezy Plc shares, classified as assets held for sale, was MEUR 15.2.

• Earnings per share increased by 113.2% and were EUR 0.07 (-0.55). Earnings per share adjusted by entries related to Eezy Plc shares was EUR 0.56.

• Operational EBITDA increased by 268.1% to MEUR 41.6 (11.3).

Unless otherwise stated, figures in parentheses refer to the corresponding period last year.

KEY FIGURES

MEUR	Q4 2022	Q4 2021	Change, %	Q1–Q4 2022	Q1–Q4 2021	Change, %
Turnover	88.1	69.5	26.7	312.8	186.1	68.1
Operational EBITDA	11.5	9.8	17.3	41.6	11.3	268.1
EBIT	8.5	6.7	26.3	31.6	-0.9	3,621.5
EBIT, %	9.6	9.6		10.1	-0.5
Result of the financial period	0.7	3.3	-78.3	4.9	-10.3	147.3
Earnings per share for the review period attributable to the owners of the company, EUR	-0.01	0.08	-108.0	0.07	-0.55	113.2
Earnings per share adjusted by entries related to Eezy Plc shares	0.14			0.56
Interest-bearing net liabilities excluding IFRS 16 impact				121.0	151.9	-20.4
Gearing ratio excluding IFRS 16 impact, %				135.1	203.1
Adjusted equity ratio, %				29.1	24.0
Material margin, %	76.5	75.9		75.3	74.4
Personnel expenses, %	32.9	35.5		33.2	36.0

FUTURE OUTLOOK

PROFIT GUIDANCE AS OF 16 FEBRUARY 2023

NoHo Partners estimates that, during the financial year 2023, it will achieve total turnover of over MEUR 350 and EBIT margin of approximately 9% in the restaurant business.

FINANCIAL TARGETS FOR THE STRATEGY PERIOD 2022-2024

The company revises its long-term guidance as follows:

The Group aims to achieve turnover of approximately MEUR 400 and an EBIT margin of approximately 10% during 2024. In the long-term, the company aims to keep the ratio of net debt to operational EBITDA, adjusted for IFRS 16 lease liability, under 3 and distribute annually increasing dividend.

The previous long-term guidance was:

The Group aims to achieve 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.

MARKET ENVIRONMENT

The business outlook for the tourism and restaurant sector has improved from recent years to a pre-pandemic level, but the outlook and consumer confidence continue to be weakened by the uncertain geopolitical climate, consumers’ reduced purchasing power and the general rise in costs. The company continues to take active measures to prepare for potentially rapid changes in the market situation by actively monitoring operational efficiency and pricing, using centralised procurement agreements and engaging in regular dialogue with suppliers and other partners. Customer demand is estimated to continue at a good level during 2023.

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 demand for restaurant services is usually less susceptible to cyclical fluctuations compared to other service and retail industries. The company’s size and large portfolio protect it from the strongest fluctuations.

DIVIDEND

NoHo Partners Plc’s distributable assets on 31 December 2022 were EUR 111,470,394.44, of which the share of the financial period’s result is EUR 2,872,271.54.

NoHo Partners Plc’s Board of Directors proposes to the Annual General Meeting convening on 19 April 2023 that, based on the adopted balance sheet of the financial period ending on 31 December 2022, a dividend of EUR 0.40 (0.00) per share will be paid at the time of dividend payment on shares owned by external shareholders.

The Board of Directors proposes that the dividend be paid in two (2) instalments, such that the first instalment of EUR 0.20 per share is paid on 24 May 2023 to shareholders who have been recorded in the company’s shareholder list maintained by Euroclear Finland Oy by the record date of 11 May 2023. The second instalment of EUR 0.20 per share is paid on 20 October 2023 to shareholders who have been recorded in the company’s shareholder list maintained by Euroclear Finland Oy by the record date of 13 October 2023. The Board of Directors proposes that it be authorised to decide, if necessary, a new dividend payment record date and payment date for the second instalment of the dividend payment, if the rules or regulations of the Finnish book-entry system change or otherwise require it.

At the time of the financial statements on 31 December 2022, there were 20,699,801 externally owned shares.

CEO AKU VIKSTRÖM

The year 2022 was the best in NoHo Partners’ history when it comes to EBIT. After two challenging pandemic years, we were able to return to the targeted pace of the 2024 strategy and, for the first time, reach an EBIT margin exceeding 10%, the full year EBIT being MEUR 31.6 and EBIT margin 10.1%. The result for the financial period was negatively impacted by a fair value impairment of MEUR 10.4 due to the reduction of Eezy Plc’s market value, recognized as finance costs.

Profitability has clearly levelled up as a consequence of structural changes the company has made during the past two years. Our restaurant portfolio is now versatile and profitable, and the related investments are at a healthy level. Another factor that has significantly impacted profitability is the operational excellence that our restaurant managers execute every day in their work. The structural changes together with lower fixed costs and depreciation level ensure a good basis to maintain and increase profitability also in the future.

With a normalised working capital situation and a strong cash flow, we have, in the financial year, been able to repay MEUR 26 worth of loans taken during the pandemic. Therefore, the target level has also been reached when it comes to the ratio of net debt to operational EBITDA, net debt at the end of the year being MEUR 121 and under 3x annual operational EBITDA.

Good performance and stronger financial position enable investments in growth as well as paying dividend to shareholders. The dividend proposal by the Board of Directors to the Annual General Meeting is EUR 0.40 per share, which is proposed to be paid in two instalments.

The restaurant market has developed positively during the year 2022. New consumers are continuously coming into the market from among the young people as well as the age groups that are going into retirement. The share of consumers eating out as well as the average number of meals enjoyed continued to increase clearly (research on restaurant culture trends 2022). Based on the end of 2022 and the beginning of 2023, the development of the restaurant culture has been positive despite the pressure on the purchasing power. Turnover in January 2023 exceeded our estimates and increased by 23% compared to the corresponding pre-pandemic period in 2020. Restaurant demand has remained at a good level, especially on the weekends. When it comes to raw materials, we have successfully tackled inflation with timely actions. Material margin has increased from 74.3% to 75.3% compared to 2019.

We continue progressing in the profitable growth strategy. We give guidance on over MEUR 350 in turnover and approximately 9% in EBIT margin in 2023. In addition, our target is to keep our ratio of net debt to operational EBITDA under three and return to paying increasing dividend.

IMPLEMENTATION OF THE STRATEGY 

The Group aims to achieve turnover of approximately MEUR 400 and an EBIT margin of approximately 10% during 2024. In the long-term, the company aims to keep the ratio of net debt to operational EBITDA, adjusted for IFRS 16 lease liability, under 3 and distribute annually increasing dividend.

NoHo Partners’ growth strategy focuses on the following three key areas:

• Profitable growth in the Norwegian restaurant market through acquisitions (50 million growth target)

• Scaling up the Friends & Brgrs chain in Finland (30 million growth target)

• Large and profitable urban projects (30 million growth target)

During 2022, the company continued developing its restaurant portfolio and implementing its growth strategy through acquisitions in Finland and Norway. In Norway, as normal conditions recovered after the pandemic years, the company had to focus on managing the performance of the portfolio, causing delay in progressing the growth strategy.

The company continued scaling up the fast food business with restaurants in the Friends & Brgrs and Hook chains. During the reporting period, a total of 8 new restaurants were opened and during 2023, the intention is to further accelerate this scaling up.

The MEUR 30 strategic target for large urban projects was reached as the strategic partnership agreement with Helsinki Expo and Convention Centre was signed in early 2023. As one of the largest restaurant complexes in Finland, with its versatility Helsinki Expo and Convention Centre compares with Nokia Arena in Tampere, Finland, and the Kulttuurikasarmi cultural centre with its four restaurants, which is planned in central Helsinki at the end of 2023.

TURNOVER AND INCOME

In October–December 2022, the Group’s turnover increased by 26.7% to MEUR 88.1 (69.5). Compared to the corresponding period in 2019 prior to the Covid-19 pandemic, the increase was of 17.2%. Operational EBITDA increased 17.3% to MEUR 11.5 (9.8). EBIT was MEUR 8.5 (6.7) with an EBIT margin of 9.6% (9.6). The result for October–December was MEUR 0.7 (3.3), which was negatively affected by a fair value impairment of MEUR 2.9 recognised in financial items due to the market value of Eezy Plc shares, classified as held for sale, falling below the book value.

In January–December 2022, the Group’s turnover increased by 68.1% to MEUR 312.8 (186.1). Despite the restricted business environment due to the Covid-19 pandemic in the first months of 2022, turnover increased by 14.6%, compared to the corresponding period in 2019. Operational EBITDA increased by 268.1% compared to the corresponding period in the previous year and was MEUR 41.6 (11.3). EBIT was MEUR 31.6 (-0.9) with an EBIT margin of 10.1 (-0.5). The result for the review period was MEUR 4.9 (-10.3), which was negatively affected by a fair value impairment of MEUR 10.4 recognised in financial items due to the market value of Eezy Plc shares, classified as held for sale, falling below the book value.

The company was able to balance the effects of inflation on its business through centralised purchasing agreements and price increases, and the general rise in prices did not significantly affect the material margin. In spite of the labour shortages in the industry, the company also performed well in recruitment and resource allocation, and the growth in turnover as well as operational efficiency has kept personnel expenses at a competitive level.

BUSINESS SEGMENTS

As of 1 January 2022, NoHo Partners' business consists of two business segments, which are reported separately:

• Finnish operations

• International business

The business segments are further divided into business areas for which turnover is reported. The Finnish operations include three business areas: restaurants, entertainment venues and fast food restaurants. The international business includes two business areas: Norway and Denmark.

FINNISH OPERATIONS 

MEUR	Q4 2022	Q4 2021	Q1–Q4 2022	Q1–Q4 2021
Turnover	71.4	56.2	251.2	158.1
Operational EBITDA	10.6	7.1	34.8	9.3
EBIT	8.4	5.2	28.3	1.0
EBIT, %	11.8	9.2	11.3	0.6
Material margin, %	76.9	76.9	75.3	74.6
Personnel expenses, %	32.5	35.0	32.8	34.7

In October–December 2022, the turnover of Finnish operations increased by 26.9% to MEUR 71.4 (56.2) compared to the previous year and by 18.9% compared to the corresponding period in 2019. Operational EBITDA was MEUR 10.6 (7.1). EBIT in October–December was MEUR 8.4 (5.2) with an 11.8% (9.2) EBIT margin.

In January–December 2022, the turnover of Finnish operations increased by 59.0% to MEUR 251.2 (158.1) compared to the previous year. Compared to the corresponding period in 2019 turnover increased by 9.5%. In Finland, Covid-19 pandemic-related restrictions were lifted in March 2022. Operational EBITDA was MEUR 34.8 (9.3). EBIT was MEUR 28.3 (1.0) with a 11.3% (0.6) EBIT margin.

INTERNATIONAL BUSINESS 

MEUR	Q4 2022	Q4 2021	Q1–Q4 2022	Q1–Q4 2021
Turnover	16.7	13.3	61.6	28.0
Operational EBITDA	0.9	2.7	6.8	2.0
EBIT	0.1	1.5	3.4	-1.9
EBIT, %	0.7	11.5	5.5	-6.6
Material margin, %	74.7	72.0	75.3	73.4
Personnel expenses, %	34.4	37.7	35.1	43.7

In October–December 2022, turnover in the international business increased by 25.8% from the previous year to MEUR 16.7 (13.3) and by 10.6% compared to the corresponding period in 2019. Operational EBITDA was MEUR 0.9 (2.7). EBIT was MEUR 0.1 (1.5) with a 0.7% (11.5) EBIT margin, which includes MEUR 0.8 costs related to the closure and write-off of three unprofitable units in Norway. EBIT for the comparable period was improved by Covid-19 pandemic-related government grants that were confirmed in the last quarter of 2021.

In January–December 2022, turnover in the international business increased by 119.8% from the previous year to MEUR 61.6 (28.0) and by 42.0% compared to the corresponding period in 2019. In Norway and Denmark, the restrictions related to the Covid-19 pandemic were lifted in February 2022. Operational EBITDA was MEUR 6.8 (2.0). EBIT was MEUR 3.4 EBIT (-1.9) with a 5.5% (-6.6) EBIT margin.

TURNOVER BY BUSINESS AREA 

In accordance with the reorganisation measures announced on 9 June 2022, the company now uses the term “fast food business” for the business that was previously referred to as the “fast casual” business. The allocation of units to the business area has been adjusted in accordance with the new structure, and this has also been taken into account in the comparison figures.

FINNISH OPERATIONS	Q4 2022	Q4 2021	Q1–Q4 2022	Q1–Q4 2021
Restaurants
Turnover, MEUR	33.4	27.2	112.2	72.7
Share of total turnover, %	38.0	39.1	35.9	39.1
Change in turnover, %	22.8	-	54.4	-
Units at the end of period, number	93	96	93	96
Entertainment venues
Turnover, MEUR	26.4	19.6	97.2	50.6
Share of total turnover, %	29.9	28.2	31.1	27.2
Change in turnover, %	34.5	-	91.9	-
Units at the end of period, number	71	72	71	72
Fast food -restaurants
Turnover, MEUR	11.6	9.4	41.9	34.8
Share of total turnover, %	13.1	13.6	13.4	18.7
Change in turnover, %	22.8	-	20.6	-
Units at the end of period, number	52	45	52	45
Total, MEUR	71.4	56.2	251.2	158.1

INTERNATIONAL BUSINESS	Q4 2022	Q4 2021	Q1–Q4 2022	Q1–Q4 2021
Norway
Turnover, MEUR	10.7	8.8	39.7	16.8
Share of total turnover, %	12.2	12.6	12.7	9.0
Change in turnover, %	22.1	-	136.1	-
Units at the end of period, number	21	21	21	21
Denmark
Turnover, MEUR	6.0	4.5	21.9	11.2
Share of total turnover, %	6.8	6.5	7.0	6.0
Change in turnover, %	33.0	-	95.3	-
Units at the end of period, number	19	19	19	19
Total, MEUR	16.7	13.3	61.6	28.0

CASH FLOW, INVESTMENTS AND FINANCING

The Group’s operating net cash flow in January–December was MEUR 70.5 (45.0). Cash flow before change in working capital was MEUR 80.3 and changes in working capital MEUR 4.3. Both receivables and payables included in the working capital have increased along with turnover, but the total change in working capital during the review period is not material.

The investment net cash flow in January–December was MEUR -16.4 (-4.7) The investments in January-December in Finland included, for example, the opening of six new Friends & Brgrs restaurants and Café Savoy, the acquisition of the restaurant Sea Horse and the business acquisition of restaurant Origo and Fat Lizard. In Norway the Group acquired businesses of Postkontoret and Laboratoriet Skøyen. The investment net cash flow includes also MEUR 4.2 of positive cash flow from the sale of Eezy Plc’s shares, which were classified as held for sale.

Financial net cash flow amounted to MEUR -55.4 (-37.1), including MEUR 21.5 in amortisation of financial institution loans. Financial cash flow also includes the repayment of a loan of MEUR 1.8 related to the Tesi arrangement.

The Group’s interest-bearing net liabilities excluding the impact of IFRS 16 liabilities decreased during January–December by MEUR 30.9 and amounted to MEUR 121.0 at the end of the review period. The decrease was attributable to the strong profit performance and the Tesi convertible loan arrangement carried out in May, which reduced net debt by over MEUR 10. The Group’s gearing ratio excluding the impact of IFRS 16 liabilities decreased from 203.1% at the beginning of the financial period to 135.1%.

Adjusted net finance costs in January–December were MEUR 23.2 (12.5), which included expense of MEUR 10.4 due to decrease of the market value of Eezy Plc shares classified as assets held for sale. IFRS 16 interest expenses in January-December were MEUR 7.4 (5.9).

EVENTS AFTER THE REPORTING PERIOD 

NoHo Partners selected as the main supplier for restaurant services by Helsinki Expo and Convention Centre

On 18 January 2023, NoHo Partners announced that company NoHo Partners has been selected as the main supplier for restaurant services by Helsinki Expo and Convention Centre (brand name Messukeskus) as of 1 July 2023. Helsinki Expo and Convention Centre is the largest venue for exhibitions, meetings and congresses in Finland, hosting national and international events for about a million visitors annually. The annual revenue from the restaurant services at the convention centre is approximately EUR 15 million.

In January 2023, Group turnover increased to approximately MEUR 22.7

NoHo Partners’ turnover in January 2023 was approximately MEUR 22.7 (6.8) and increased by 236% compared to the same period in the previous year. In January 2022, the Group operated in a strictly restricted or closed business environment in all of its operating countries due to the Covid-19 pandemic. Turnover increased by 23% compared to the corresponding pre-pandemic period in 2020.

As of 16 February 2023, NoHo Partners will publish in the interim reports the Group turnover for the first month of the commencing quarter. The target is to provide better service to investors through timely and transparent investor communications.

FINANCIAL REPORTING AND ANNUAL GENERAL MEETING 2023

NoHo Partners Plc publishes financial reports for 2023 as follows:

• Interim report for January-March on Tuesday 9 May 2023

• Half-year report for January-June on Tuesday 8 August 2023

• Interim report for January-September on Tuesday 7 November 2023

NoHo Partners Plc's Annual General Meeting is planned to be held on 19 April 2023.

BRIEFING FOR THE MEDIA, ANALYSTS AND INVESTORS AT 10:00 A.M.

A briefing for the media, analysts and investors will be organised today, 16 February 2023. In the briefing, NoHo Partners CEO Aku Vikström will review NoHo Partners Plc's financial performance, key events, the current state of business and the outlook.

The briefing is available as a live webcast. 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 Financial Statements Release for January–December 2022 is attached to this release and available at www.noho.fi/en.

Tampere, 16 February 2023

NOHO PARTNERS PLC 
Board of Directors

For more information, please contact:

Aku Vikström, CEO, tel. +358 44 235 7817
Jarno Suominen, Deputy CEO, tel. +358 40 721 5655
Jarno Vilponen, CFO, tel. +358 40 721 9376

NoHo Partners Plc 
Hatanpään valtatie 1 B 
FI-33100 Tampere, Finland

NoHo Partners Plc is a Finnish group established in 1996, specialising in restaurant services. 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 some 250 restaurants in Finland, Denmark and Norway. The well-known restaurant concepts of the company include Elite, Savoy, Teatteri, Sea Horse, Stefan’s Steakhouse, Palace, Löyly, Hanko Sushi, Friends & Brgrs, Campingen and Cock’s & Cows. Depending on the season, the Group employs approximately 2,300 people converted into full-time employees. The Group aims to achieve turnover of EUR 400 million by the end of 2024. The company’s vision is to be the leading restaurant company in Northern Europe.

Attachment

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