NoHo Partners Plc
FINANCIAL STATEMENTS RELEASE 17 February 2022 at 8:15
NOHO PARTNERS PLC�S FINANCIAL STATEMENTS RELEASE 1 JANUARY31 DECEMBER 2021
Operating loss for 2021 was MEUR 0.9 the fourth quarters EBIT rose to a record-breaking level
The second year of COVID-19 in 2021 was dominated by constantly changing restaurant restrictions. The last quarter started promisingly until the restrictions were tightened again towards the end of the year and the Group had to close most of its restaurants and lay off almost all of its employees. Although the pre-Christmas period did not meet expectations, the companys MEUR 6.7 EBIT for OctoberDecember was historically good and the EBIT percentage of 9.6% was one percentage point above the level of the 2019 reference period before the pandemic. The cost savings achieved during the pandemic and the improved operational efficiency are beginning to show as a clear improvement in relative profitability.
Operating cash flow is expected to turn positive after mid-February 2022, as the restrictions were eased, and become clearly positive after the lifting of the restrictions in March 2022. The market is expected to return to normal during the second quarter of 2022.
OCTOBERDECEMBER 2021 IN BRIEF
JANUARYDECEMBER 2021 IN BRIEF
SIGNIFICANT EVENTS IN THE FOURTH QUARTER
SIGNIFICANT EVENTS AFTER THE REVIEW PERIOD
SUMMARY
The COVID-19 pandemic with its restrictive measures on the restaurant industry had a significant impact on the Groups result for the financial period 2021. At the beginning of the last quarter of 2021, as the restrictions were eased, customer demand was strong in each of the Groups operating countries. The restrictions tightened again in NovemberDecember 2021 in all areas of the Groups operations, which had a significant impact on the Groups turnover and profit for the rest of the year.
The Groups turnover in OctoberDecember 2021 was MEUR 69.5, representing growth of about 119.9 per cent compared to the corresponding period in 2020 and amounting to roughly 92.5 per cent of the turnover in the corresponding period in 2019, before the COVID-19 pandemic. In JanuaryDecember 2021, turnover was MEUR 186.1, representing growth of about 18.7 per cent compared to the corresponding period in 2020 and amounting to roughly 68.2 per cent of the turnover in the corresponding period in 2019. The Group estimates that it lost approximately MEUR 100 in turnover due to the COVID-19 pandemic in the financial period 2021.
Operating cash flow was MEUR 9.8 in OctoberDecember 2021 and MEUR 11.3 in JanuaryDecember 2021. In OctoberDecember 2021, the Groups EBIT was MEUR 6.7, with the EBIT percentage being 9.6%. The EBIT percentage for the last quarter of 2019 prior to the pandemic was 8.6%, so the cost savings achieved during the pandemic and the improved operational efficiency are beginning to show as a clear improvement in relative profitability as the volumes increased.
The Groups operating loss for the financial period 2021 was MEUR -0.9, while the operating loss for the financial period 2020 was MEUR -23.9.
The Group recognised approximately MEUR 3.0 in financial support from the Finnish, Danish and Norwegian governments for the period 1 October31 December 2021 and approximately MEUR 12.2 for the period 1 January31 December 2021. Reductions in rent totalled approximately MEUR 2.8 in the financial period 2021.
The Groups turnover for January 2022 was MEUR 6.7, which decreased by 13 per cent from the reference month of 2021 and represents 43 per cent of the turnover of the reference month of 2019 prior to the pandemic. Operating cash flow was approximately MEUR -2.6 in January.
Based on the current estimate on the development of the operating environment, turnover in February 2022 is expected to be MEUR 1315 and operating cash flow is expected to be MEUR -10.
Turnover in March 2022 is expected to be more than MEUR 21 and operating cash flow is expected to be MEUR 23.
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.
REVIEW BY THE CEO: AKU VIKSTRÖM
For NoHo Partners, the year 2021 was a roller-coaster ride, as we navigated the ever-changing landscape of restaurant restrictions. The year began in a tightly restricted environment and, in the spring, the restaurant operations were completely shut down. The business recovery, which started well in the summer, quickly stalled due to the tightening of restrictions. The last quarter started again promisingly with the easing of restrictions in all the companys operating countries, until restrictions detrimental to business operations were again imposed towards the end of the year.
In terms of making a profit, the year was twofold. In 2021, turnover was MEUR 186.1 (156.8) and EBIT MEUR -0.9 (-23.9). The key indicator used during the exceptional circumstances operating cash flow was MEUR 11.3 (-5.1) in the positive for the whole year. As the restrictions eased, the company was able to demonstrate its profit performance by achieving record-level relative profitability figures. Correspondingly, in an unpredictable and unstable environment with restrictions, especially in Finland, it was impossible to deliver results. Nevertheless, I am proud and grateful for the flexibility that our organisation showed during the closures and ramp-ups of operations, which allowed us to minimise the losses. In the midst of the exceptional circumstances, we also completed the largest project in our history by opening 22 restaurants at the Nokia Arena in December.
During the year, the company announced its new strategy and financial targets for 2024. Strategic programmes have been pursued with determination, without compromising on objectives, even in the midst of the unstable business environment. The relative profitability of the last quarter (with an EBIT margin of 9.6%), delivered promising signs about this. Profitability was one percentage point better than in the last quarter of the record year 2019, although sales during the last couple of weeks of the year were ruined by the severe restrictions measures in all three countries.
The company has focused on ensuring its competitiveness by taking care of its personnel and preparing for the increase in the price of raw materials through the centralisation of purchasing activities and price increases. Together with financial institutions, the company is also committed to a loan repayment programme that makes it possible to implement the companys growth plan pursuant to the strategy and lighten its debt burden in a balanced manner. The aim is for the ratio of net debt to operating cash flow, adjusted for IFRS 16 lease liability, to be under 3 by the end of 2024.
The beginning of 2022 was characterised by the rapid spread of the Omicron variant and the resulting restaurant restrictions. However, according to the current outlook, the company will return to its positive cash flow business already in mid-February. The lifting of the remaining restaurant restrictions at the beginning of March will allow the business to recover and return to normal during the second quarter of 2022. Private consumption is expected to recover rapidly after the restrictions are lifted and the order book for business and event sales is also expected to show a strong transition from the previous year. The company will issue its guidance for 2022 when visibility improves after the lifting of the restrictions. The company will also publish its sustainability report for the first time in June 2022.
Aku Vikström, CEO
FUTURE OUTLOOK
The market
The COVID-19 pandemic has had a considerable impact on the companys market and the restaurant industry as a whole, and it has significantly affected the companys operations. As the pandemic escalated, the companys year 2022 started in a strictly limited operating environment in all of its operating countries. Private consumption is expected to recover rapidly after the restrictions are lifted and the business and event sales will gradually return to normal. Due to the significant increase in vaccination coverage and the coronavirus becoming milder, the Group expects the market to return to normal during the second quarter of 2022.
Profit guidance (as of 17 February 2022):
The company will issue its turnover and profitability forecast for 2022 at the latest in connection with the JanuaryMarch 2022 interim report.
The company will also provide monthly reports on the development of its business under these exceptional circumstances until further notice.
Previous profit guidance (as of 21 December 2021):
NoHo Partners estimates that, in the final quarter of 2021, the Group will achieve a total turnover of less than MEUR 70 and the turnover for the full financial period 2021 will amount to approximately MEUR 185.
The Groups operating cash flow is estimated to be more than MEUR 8 in the positive in the final quarter of 2021 and more than MEUR 10 in the positive for the full financial period 2021.
NoHo Partners will update its guidance for 2022 in connection with the financial statements release for 2021.
Financial targets
The Groups long-term financial targets for the strategy period 20222024 were published on 11 June 2021.
The Group aims to achieve a turnover of approximately MEUR 400 and an EBIT margin of approximately 10 per cent during 2024. At the same time, the aim of the company is for the ratio of net debt to operating cash flow, adjusted for IFRS 16 lease liability, to be under 3. The objective of the company is to pay dividends during the strategy period.
According to a management estimate published on 11 June 2021, the turnover of NoHo Partners Group in 2022 will be approximately MEUR 280 with the current units and approximately MEUR 400 as a whole in 2024. It is estimated that approximately MEUR 50 of the expected growth of approximately MEUR 120 will come from Norway, approximately MEUR 30 from the scaling of Friends & Brgrs business operations, approximately MEUR 30 from large and profitable urban projects and approximately MEUR 10 from the Groups other businesses.
KEY FIGURES | ||||
NoHo Partners Group, total | ||||
(EUR 1,000) | 1 Oct.31 Dec. 2021 | 1 Oct.31 Dec. 2020 | 1 Jan.31 Dec. 2021 | 1 Jan.31 Dec. 2020 |
KEY FIGURES, ENTIRE GROUP | ||||
Turnover | 69,530 | 31,615 | 186,069 | 156,771 |
EBIT | 6,702 | -11,772 | -898 | -23,880 |
EBIT, % | 9.6% | -37.2% | -0.5% | -15.2% |
Result of the financial period | 3,328 | -11,887 | -10,338 | -29,469 |
Earnings per share (EUR) for the review period attributable to the owners of the Company | 0.08 | -0.53 | -0.55 | -1.44 |
Operating cash flow, EUR | 9,775 | -7,161 | 11,295 | -5,124 |
Interest-bearing net liabilities excluding IFRS 16 impact, EUR | 151,916 | 163,431 | ||
Gearing ratio excluding IFRS 16 impact, % | 203.1% | 192.0% | ||
Interest-bearing net liabilities, EUR | 320,877 | 316,621 | ||
Gearing ratio, % | 462.4% | 391.0% | ||
Equity ratio, % | 15.1% | 18.1% | ||
Return on investment, % (p.a.) | 0.0% | -5.9% | ||
Adjusted net finance costs*, EUR | 2,969 | 3,270 | 12,517 | 10,197 |
Material margin, % | 75.9% | 68.9% | 74.4% | 72.0% |
Personnel expenses, % | 35.5% | 41.5% | 36.0% | 38.0% |
* The changed calculation formula is shown in the section Calculation formulas for key figures at the end of the financial statements release.
TURNOVER IN THE BUSINESS AREAS OF THE RESTAURANT BUSINESS | ||||
1 Oct.31 Dec. 2021 | 1 Oct.31 Dec. 2020 | 1 Jan.31 Dec. 2021 | 1 Jan.31 Dec. 2020 | |
Restaurants | ||||
Turnover (MEUR) | 25.2 | 13.7 | 68.7 | 58.0 |
Percentage of the total turnover | 36.2% | 43.3% | 36.9% | 37.0% |
Change in turnover | 84.0% | 18.4% | ||
Units, number | 75 | 77 | 75 | 77 |
Turnover/unit (MEUR) | 0.34 | 0.18 | 0.92 | 0.75 |
Entertainment venues | ||||
Turnover (MEUR) | 19.6 | 5.7 | 49.5 | 43.9 |
Percentage of the total turnover | 28.2% | 17.9% | 26.6% | 28.0% |
Change in turnover | 245.5% | 12.7% | ||
Units, number | 72 | 67 | 72 | 67 |
Turnover/unit (MEUR) | 0.27 | 0.08 | 0.69 | 0.66 |
Fast casual restaurants | ||||
Turnover (MEUR) | 11.4 | 8.9 | 39.9 | 31.2 |
Percentage of the total turnover | 16.5% | 28.2% | 21.4% | 19.9% |
Change in turnover | 28.5% | 27.7% | ||
Units, number | 66 | 53 | 66 | 53 |
Turnover/unit (MEUR) | 0.17 | 0.17 | 0.60 | 0.59 |
International restaurants | ||||
Turnover (MEUR) | 13.3 | 3.3 | 28.0 | 23.6 |
Percentage of the total turnover | 19.1% | 10.6% | 15.1% | 15.1% |
Change in turnover | 298.1% | 18.6% | ||
Units, number | 40 | 40 | 40 | 40 |
Turnover/unit (MEUR) | 0.33 | 0.08 | 0.70 | 0.59 |
DIVIDEND
NoHo Partners Plcs distributable assets on 31 December 2021 were EUR 98,271,289.64, of which the share of the financial periods result is EUR -4,912,630.50.
NoHo Partners Plcs Board of Directors proposes to the Annual General Meeting convening on 27 April 2022 that, based on the confirmed balance sheet for the financial period that ended on 31 December 2021, no dividend be distributed. On the financial statements date, 31 December 2021, there were 19,222,270 shares in the company.
CASH FLOW, INVESTMENTS AND FINANCING
The Groups operating net cash flow for JanuaryDecember 2021 was MEUR 45.0 (MEUR 8.4).
Growth investments made during the fourth quarter of 2021 included the opening of the Davai Davai restaurant in Helsinki, the opening of the Baarikärpänen nightclub in Helsinki and the opening of 22 restaurants at the Nokia Arena in Tampere.
The Groups gearing ratio excluding the impact of IFRS 16 liabilities was 203.1% on 31 December 2021. Interest-bearing net liabilities excluding the impact of IFRS 16 amounted to MEUR 151.9. IFRS 16 liabilities totalled MEUR 169.0. The Groups interest-bearing net liabilities (including the IFRS 16 liability) at the end of December 2021 were MEUR 320.9 (MEUR 316.6). The adjusted net finance costs for JanuaryDecember 2021 were MEUR 12.5 (MEUR 10.2). The equity ratio was 15.1% (18.1%) and the gearing ratio was 462.4% (391.0%).
THE IMPACT OF THE COVID-19 PANDEMIC ON THE GROUPS BUSINESS
The COVID-19 pandemic has had a significant impact on the Groups business since March 2020. The spread of the pandemic, the restrictions imposed by governments on the restaurant industry to mitigate it and the impacts of the pandemic on customer demand have had a highly negative effect on NoHo Partners business operations and financial results. As the ultimate duration and overall impacts of the pandemic are difficult to predict, its effects on NoHo Partners future turnover, result, cash flow and financial position may deviate from the current estimates and assumptions of the management. The company has taken purposeful action to reduce the pandemics impacts, uncertainties and risks and to secure the Groups financial position and sufficient financing.
In the first half of 2021, the Group operated in a strictly restricted or closed business environment in all of its operating countries. In the third quarter, the restrictions were relaxed in Finland and gradually lifted in Denmark and Norway. In the last quarter, the restrictions tightened again in all market areas of the company. A more detailed description of the changes in restaurant restrictions is presented in Note 1 Accounting Principles in the financial statements release.
In Finland, the restaurant restrictions were eased at the beginning of October, when regions in the baseline and acceleration phases only had general obligations concerning hygiene and safe distances. In regions in the community transmission phase, alcohol service hours and opening hours were extended to midnight and 1:00 a.m. respectively, and the prohibition of karaoke and dancing was lifted throughout the country.
NoHo Partners started using the COVID-19 passport in all restaurants starting from 25 November 2021. The restaurant restrictions were tightened in Finland on 28 November 2021, and after that alcohol service in restaurants in areas in the community transmission phase ended at 5 p.m. and opening hours at 6 p.m. The restrictions could be circumvented with a COVID-19 passport.
On 21 December 2021, the Finnish government announced new tightened restrictions as of 24 December 2021, with the use of COVID-19 passports and business and alcohol service hours significantly restricted nationally. All restaurants in the country had to be closed at 6 p.m. from 12 January 2022, with alcohol service ending at 5 p.m.
The Group announced immediately on 21 December 2021 that it was decreasing its profit guidance for 2021, published on 9 November 2021, as a result of strict restrictions on restaurant opening hours, local restrictions on assembly and the decision of the Finnish government to discontinue the use of the COVID-19 passport. As a consequence, the company had to close almost all of its Finnish restaurants. At the same time, the Group announced that it was laying off almost all of its personnel in Finland, totalling approximately 1,250 employees, and commencing negotiations pursuant to the Act on Co-operation within Undertakings in order to adapt its operations to the tightened restrictions.
After the 2021 financial period, alcohol service hours of restaurants were extended until 8 p.m. and opening hours until 9 p.m. at the beginning of February 2022. There was no change to stopping alcohol service at 5 p.m. and staying open until 6 p.m. of restaurants serving alcohol. The restrictions continued until 14 February 2022, after which alcohol service ends at 11 p.m. and opening hours end at midnight for all restaurants. The restrictions on assembly were also discontinued. The restriction on the use of the COVID-19 passport will continue for the time being and legislative work on it will continue. The restaurant restrictions are to be lifted completely on 1 March 2022.
During 2021, the company received approximately MEUR 4.5 in support from the Finnish state, of which the share of the last quarter was MEUR 0.7.
In Denmark, the restaurant restrictions were lifted throughout the country on 10 September 2021. The COVID-19 passport was taken back into use on 12 November 2021 in restaurants, bars, cafes and nightclubs and in indoor events of more than 200 people and outdoor events of more than 2,000 people. Restaurants had to close at 11 p.m., with alcohol service ending at 10 p.m. Customer capacity was restricted to half of normal and the nightclubs were closed. All restaurant restrictions were lifted in Denmark as of 1 February 2022.
In Denmark, the state has supported companies in the restaurant industry during the crisis by covering approximately 80 per cent of their fixed expenses, relative to the decline in turnover, similarly as the wage subsidy. With the restrictions re-introduced in November 2021, the Danish state covered up to 80 per cent of fixed expenses if turnover decreased by more than 30 per cent compared to the corresponding period in 2019. If a company was proactively closed, the state reimbursed 90 per cent of fixed costs, depreciation and interest between 17 December 2021 and 17 January 2022. When the restrictions were valid, the wage subsidy was 90 per cent of the wages of hourly paid workers and 75 per cent of the salaries of monthly wage earners.
In Norway, the restaurant restrictions were lifted throughout the country on 25 September 2021, and were tightened again in mid-December 2021, with a four-week ban on serving alcohol in restaurants. It ended on 14 January 2022, after which all restaurants were allowed to serve alcohol until 11 p.m. and stay open until midnight. The customer capacity was limited to about 50 per cent and only table service was allowed. The restaurant restrictions, with the exception of the prohibition to dance and one-metre safe distance, were lifted in Norway on 1 February 2022. The rest of the restrictions were lifted on 12 February 2022.
The Norwegian states 80% compensation for fixed costs remained in effect until the end of September 2021, when the restaurant restrictions were lifted. With the restrictions tightening again in December, the Norwegian state covered up to 85 per cent of fixed expenses if turnover decreased by more than 30 per cent compared to the corresponding period in 2019. Waste was reimbursed at a rate of 100% and the turnover of cancelled events at a rate of 70%. The wage subsidy (80 per cent up to NOK 30,000/month) and the reimbursement of fixed costs continued until the end of January 2022.
Government assistance during the state of emergency
In financial period 2021, the Group received support amounting to approximately MEUR 4.5 from the Finnish state, approximately MEUR 3.5 from the Danish state and approximately MEUR 4.2 from the Norwegian state. The financial support received by the Group from the Finnish, Danish and Norwegian governments for financial period 2021 totalled approximately MEUR 12.2 and for OctoberDecember 2021 approximately MEUR 3.0.
A more detailed account of government assistance and the distribution thereof is presented in Note 3 Government grants in the financial statements release.
DESCRIPTION OF ACCOUNTING PRINCIPLES
FINANCIAL REPORTING IN 2022
NoHo Partners financial reporting schedule in 2022 is as follows:
BRIEFING FOR THE MEDIA, ANALYSTS AND INVESTORS AT 10:00 A.M.
A briefing for the media, analysts and investors will be organised today, Thursday 17 February 2022 at 10:00 a.m. at restaurant Chéri, Helsinki. In the briefing, NoHo Partners CEO Aku Vikström will review NoHo Partners Plc’s 2021 financial performance, key events, the current state of business and the outlook.
The briefing is available as a live webcast at https://noho.videosync.fi/2021-q4-tulos. The briefing will be held in Finnish. The presentation materials and a recording of the briefing will be available on the companys website later today.
NoHo Partners full Financial Statements Release for JanuaryDecember 2021 is attached to this release as a PDF file. The Financial Statements Release is also available at www.noho.fi.
Tampere, 17 February 2022
NOHO PARTNERS PLC
Board of Directors
More information available from:
Aku Vikström, CEO, tel. +358 44 011 1989
Jarno Suominen, Deputy CEO, tel. +358 40 721 5655
NoHo Partners Plc
Hatanpään valtatie 1 B
FI-33100 Tampere
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 which 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, Stefans Steakhouse, Palace, Löyly, Hanko Sushi, Friends & Brgrs and Cocks & Cows. Depending on the season, the Group employs approximately 2,100 people converted into full-time employees. The Group aims to achieve turnover of MEUR 400 by the end of 2024. The companys vision is to be the leading restaurant company in Northern Europe.
Attachment
Reports Third Quarter Revenues of $29.3 Million Recurring Revenues Grew 20% Versus Prior Year Third…
NEW YORK, NY, Oct. 30, 2024 (GLOBE NEWSWIRE) -- Triller Group Inc. (Nasdaq: ILLR) (“Triller…
NEW YORK, Oct. 25, 2024 (GLOBE NEWSWIRE) -- Stronghold Digital Mining, Inc. (the “Company”) today…
WILMINGTON, N.C., Oct. 23, 2024 (GLOBE NEWSWIRE) -- Live Oak Bancshares, Inc. (NYSE: LOB) (“Live…
BEIJING, CHINA - Media OutReach Newswire - 31 October 2024 - During the recently launched…
ORDOS, CHINA – Media OutReach Newswire – 31 October 2024 - On October 28, nearly…