NoHo Partners Plc’s Interim Report 1 January–30 September 2024: Sustainable and profitable growth in challenging market

NoHo Partners Plc, Stock Exchange Release, 5 November 2024 at 8:00 EET

NoHo Partners Plc’s Interim Report 1 January–30 September 2024: Sustainable and profitable growth in challenging market

This release is a summary of NoHo Partner’s Interim Report for 1 January–30 September 2024. The complete report is attached to this release and is also available at www.noho.fi/en.

JULY-SEPTEMBER IN BRIEF

•         Turnover was MEUR 106.6 (96.0) and increased by 11.0%.

•         Operational EBITDA was MEUR 12.2 (10.6) and increased by 15.7%.

•         EBIT was MEUR 9.9 (8.7) and increased by 14.0%.

•         EBIT margin was 9.3% (9.1%).

•         The result for the period was MEUR 3.5 (-0.2) and increased by 1855.8%. The result adjusted by entries related to Eezy Plc was MEUR 3.5 (3.4).

•         Earnings per share were EUR 0.14 (-0.03) and increased by 566.9%. Earnings per share adjusted by entries related to Eezy Plc were EUR 0.14 (0.14).

JANUARY-SEPTEMBER IN BRIEF

•         Turnover was MEUR 307.1 (265.2) and increased by 15.8%.

•         Operational EBITDA was MEUR 33.6 (31.3) and increased by 7.2%.

•         EBIT was MEUR 26.5 (25.4) and increased by 4.3%.

•         EBIT margin was 8.6% (9.6%).

•         The result for the period was MEUR 6.9 (6.4) and increased by 8.8%. The result adjusted by entries related to Eezy Plc shares was MEUR 8.1 (11.1).

•         Earnings per share were EUR 0.22 (0.23) and decreased by 4.8%. Earnings per share adjusted by entries related to Eezy Plc shares were EUR 0.28 (0.45).

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

KEY FIGURES

MEUR	Q3 2024	Q3 2023	Change, %	Q1–Q3 2024	Q1–Q3 2023	Change, %	2023
Turnover	106.6	96.0	11.0	307.1	265.2	15.8	372.4
Operational EBITDA	12.2	10.6	15.7	33.6	31.3	7.2	44.7
EBIT	9.9	8.7	14.0	26.5	25.4	4.3	35.9
EBIT, %	9.3	9.1		8.6	9.6		9.7
Result of the financial period	3.5	-0.2	1,855.8	6.9	6.4	8.8	10.4
Earnings per share for the review period attributable to the owners of the company, EUR	0.14	-0.03	566.9	0.22	0.23	-4.8	0.38
Earnings per share adjusted by entries related to Eezy Plc shares, EUR	0.14	0.14	0.1	0.28	0.45	-38.3	0.73
Interest-bearing net liabilities excluding IFRS 16 impact				121.6	140.1		134.6
Gearing ratio excluding IFRS 16 impact, %				114.9	124.3		116.2
Ratio of net debt to operational EBITDA excluding IFRS 16 impact				2.6	3.3		3.0
Adjusted equity ratio, %				27.1	29.1		29.7
Material margin, %	74.9	75.0		74.5	75.2		75.2
Personnel expenses, %	31.8	31.4		32.5	32.4		32.5

 

In the comparison period the comparable EBIT, adjusted for transaction costs related to the BBS arrangement, was MEUR 10.2 (10.6%) in Q3 2023 and MEUR 26.9 (10.1%) in Q1-Q3 2023. In 2023, the comparable EBIT was MEUR 37.5 (10.1%).

The calculation formulas for key figures are presented on page 30 of the Interim Report.

FUTURE OUTLOOK

Profit guidance as of 15 February 2024

NoHo Partners estimates that, during the financial year 2024, it will achieve total turnover of approx. MEUR 430 and EBIT margin of approx. 9.5%.

Financial targets for the strategy period 2025–2027

The company’s long-term guidance is as follows:

In Finnish operations the group aims to achieve a turnover of approx. MEUR 400 and to maintain the current good level of EBIT margin. In international business, the target is profitable growth and creating shareholder value. In the long-term, the company aims to decrease the ratio of net debt to operational EBITDA, adjusted for IFRS 16 lease liability, to the level of approx. 2 and to distribute annually increasing dividend.

CEO REVIEW
We achieved a good result in the third quarter of 2024 despite the continued challenging market situation. Our EBIT margin was 9.3%, which supports our full-year target level. In a difficult market environment, profitability in Finland was above 10%. The profitability of the international business was more than 7%, even if in Switzerland the third quarter is seasonally the weakest in our restaurant business. As the figures for again this quarter show, our diverse restaurant portfolio and operational excellence will help us build sustainable and profitable growth even in a weaker economic cycle.

The challenges in the Finnish restaurant market continued in the third quarter, but according to external economic forecasts, we believe that the economy has now bottomed out. Consumer purchasing power will recover as interest rates decrease, and it is estimated to be slowly reflected in the consumption of restaurant services during 2025. This is also supported by the good reservation situation in the pre-Christmas period with regard to events and corporate customers. During the review period, the pressures on consumer purchasing power were particularly evident in the entertainment market, where the decrease in turnover due to weak consumer demand affected profitability in Finland. During the strategy period, we expect the restaurant market to grow, and the Finnish market in particular has a lot of potential. The weaker market situation will bring opportunities for profitable growth through acquisitions and resulting synergy benefits.

The expansion of Better Burger Society, which operates in the growing European premium burger market, progressed in line with the strategy when two new Friends&Brgrs restaurants were opened in Finland during the review period. In the last quarter of the year, we will open one new unit in Finland and two in Switzerland. The business of the Danish packaging material supplier Triple Trading, acquired as part of international investment activities, continued to grow and the first group-level synergies will actualize in the first half of 2025.

Since the end of the review period, we have signed a new financing agreement for the entire Group. Its lighter amortisation program will free up capital for growth investments and paying increasing dividend. With the new financing agreement and falling reference interest rates, the company’s cost of financing will decrease significantly in the coming years. The financing agreement also makes it possible to achieve the long-term target set for debt, according to which the company’s objective is to lower the ratio of net debt to operational EBITDA, adjusted for IFRS16 lease liabilities, to approximately two. In our Capital Markets Day held in May, we announced the goals for the strategy period until 2027, and we are now starting to build the company towards its next phase.

In October, we strengthened our market share in Finland by acquiring a majority of the H5 Ravintolat Oy, which includes eight restaurants in Tampere. The acquired restaurants have proven the profitability of their business operations and are an excellent addition to our restaurant portfolio in Finland.

I have been part of the company’s unique growth story for almost two decades, and we will move to the next strategy period together with a broader Executive Team. The structure of the Executive Team confirmed in early September supports the company’s ambitious growth targets and operational development. We are starting from a good position as we head towards the busiest season of the year.

TURNOVER AND INCOME

In July–September 2024, the Group’s turnover increased by 11.0% to MEUR 106.6 (96.0). Operational EBITDA was MEUR 12.2 (10.6) and increased by 15.7%. EBIT was MEUR 9.9 (8.7) with an EBIT margin of 9.3% (9.1%). The result for July–September was MEUR 3.5 (-0.2). During the comparison period, BBS transaction cost adjusted operational EBITDA was MEUR 12.1, EBIT was MEUR 10.2 and EBIT margin was 10.6%. During the comparison period, the result adjusted by entries related to Eezy Plc shares and BBS transaction costs was MEUR 4.9.

In January–September 2024, the Group’s turnover increased by 15.8% to MEUR 307.1 (265.2). Operational EBITDA was MEUR 33.6 (31.3) and increased by 7.2% compared to the corresponding period in the previous year. EBIT was MEUR 26.5 (25.4) with an EBIT margin of 8.6% (9.6%). The result for the period was MEUR 6.9 (6.4). During the comparison period, BBS transaction cost adjusted operational EBITDA was MEUR 32.8, EBIT MEUR 26.9 and EBIT margin 10.1%. The result adjusted by entries related to Eezy Plc shares and BBS transaction costs was MEUR 8.1 (12.6).

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. With the effective operational control and revenue growth, personnel costs have remained at a competitive level.

Finnish operations

MEUR	Q3 2024	Q2 2023	Q1–Q3 2024	Q1–Q3 2023	2023
Turnover	74.2	75.5	213.4	214.4	292.6
Operational EBITDA	8.7	8.9	22.3	26.2	35.6
EBIT	7.6	7.8	18.7	22.4	30.7
EBIT, %	10.2	10.3	8.8	10.5	10.5
Material margin, %	76.0	75.1	75.6	75.1	75.5
Personnel expenses, %	31.4	31.5	32.6	32.3	32.7

 

In July–September 2024, the turnover decreased by 1.8% to MEUR 74.2 (75.5) compared to the previous year. Operational EBITDA was MEUR 8.7 (8.9). EBIT in July–September was MEUR 7.6 (7.8) with an 10.2% (10.3%) EBIT margin.

In January–September 2024, the turnover decreased by 0.5% to MEUR 213.4 (214.4) compared to the previous year. Operational EBITDA was MEUR 22.3 (26.2). EBIT was MEUR 18.7 (22.4) with an 8.8% (10.5%) EBIT margin.

International business

MEUR	Q3 2024	Q2 2023	Q1–Q3 2024	Q1–Q3 2023	2023
Turnover	32.4	20.5	93.7	50.8	79.7
Operational EBITDA	3.6	1.7	11.3	5.1	9.1
EBIT	2.4	0.9	7.7	3.0	5.3
EBIT, %	7.3	4.5	8.3	5.8	6.6
Material margin, %	71.9	74.6	71.7	75.6	73.9
Personnel expenses, %	33.0	31.3	32.3	32.7	31.7

 

In July–September 2024, turnover increased by 58.1% from the previous year to MEUR 32.4 (20.5). Of the turnover increase, MEUR 6.4 is explained by the expansion into Switzerland from 1 September 2023. Operational EBITDA was MEUR 3.6 (1.7). EBIT was MEUR 2.4 (0.9) with an 7.3% (4.5%) EBIT margin.

In January–September 2024, turnover increased by 84.3% from the previous year to MEUR 93.7 (50.8). Of the turnover increase, MEUR 30.4 is explained by the expansion into Switzerland from 1 September 2023. Operational EBITDA was MEUR 11.3 (5.1). EBIT was MEUR 7.7 (3.0) with an 8.3% (5.8%) EBIT margin.

BRIEFING FOR THE ANALYSTS, INVESTORS AND MEDIA

The company will present the results for the reporting period to analysts, investors and media over a webcast today at 10:00 EET. In the webcast held in Finnish, Noho Partners’ CEO Jarno Suominen and CFO Jarno Vilponen will present the company’s financial performance and key events during the reporting period as well as the current state of business and the outlook.

The briefing can be followed as a live webcast at https://noho.videosync.fi/q3-2024. During and after the presentation, the questions can be placed through the webcast chat function or by phone. To ask questions by phone, the participant is required to register at https://palvelu.flik.fi/teleconference/?id=50049660. After the registration you will receive the phone number and conference ID to access the conference. If you wish to ask a question, please press *5 on your telephone keypad to enter the queue.

The recording of the webcast will be available on the company’s website later on the same day.

Interview opportunities for media by phone or on site at Sanomatalo, Flik’s Studio, are available after the event. Media representatives are asked to book interviews via Head of IR & Communications Sanna Sandvall, [email protected] or tel. +358 40 760 0794.

Additional information
Jarno Suominen, CEO, [email protected] (Executive assistant Niina Kilpeläinen, tel. +358 50 413 8158)
Jarno Vilponen, CFO, tel. +358 40 721 9376
Sanna Sandvall, Head of IR & Communications. tel. +358 40 760 0794

NoHo Partners Plc

NoHo Partners Plc is a Finnish group established in 1996, and it specialises in restaurant services being the creative innovator of the Northern European restaurant market. The company was listed in Nasdaq Helsinki in 2013 becoming the first Finnish listed restaurant company, and it has continued to grow strongly throughout its history.

The Group companies include some 300 restaurants in Finland, Denmark, Norway and Switzerland. The well-known restaurant concepts include Elite, Savoy, Teatteri, Sea Horse, Stefan’s Steakhouse, Palace, Löyly, Friends & Brgrs, Campingen, Cock’s & Cows and Holy Cow!. Depending on the season, NoHo Partners employs approx. 2,800 people converted into full-time employees, and in 2023, company’s turnover amounted to approx. MEUR 370. NoHo Partners’ vision is to be the leading restaurant operator in Northern Europe. More information is available at noho.fi/en.