Investor Q&A

We have provided answers to some of the most frequently asked questions on this page. We will update it as the situation progresses.

Last updated on 16 May 2022 at 11:23

QUESTION: What is NoHo Partners’s strategy and financial targets? (Updated 10 May 2021)

ANSWER: On 11 June 2021, NoHo Partners announced its updated strategy and financial targets: seeking strong growth and improved profitability in the strategy period 2022–2024. See the stock exchange release here.

The financial targets for the strategy period 2022–2024:

  • 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.

The Group’s updated strategy focuses on:

Growth:

  • Profitable growth in the Norwegian restaurant market through acquisitions
  • Scaling up the Friends & Brgrs chain to a national level
  • Large and profitable urban projects

Profitability:

  • Continuation of the cost-saving programme
  • Operational efficiency improvement
  • Portfolio development
  • Implementation of the development programmes in Denmark

Net debt:

  • Strong future operating cash flow
  • Gradual divestment of Eezy Plc
  • Use of treasury shares in acquisitions

The company’s vision is to be the leading restaurant company in Northern Europe. According to its values, the company focuses on entrepreneurship, quality, people, profitability and responsibility. The company will publish an ESG report on its operating principles on the basis of its values in 2022.

QUESTION: What are NoHo Partners’ near-term prospects? (Updated 10 May 2022)

ANSWER: NoHo Partners estimates that, during the financial period 2022, it will achieve a total turnover of approximately MEUR 300 and an EBIT margin of approximately 7% in the restaurant business.

In the first quarter of 2022, the company operated in a strictly restricted or closed business environment in all of its operating countries. Following the lifting of the restrictions, private consumption recovered rapidly and demand has been strong, exceeding the level of the year before the pandemic.

The business outlook for the tourism and catering sector has clearly improved as the pandemic eased. However, consumer confidence in financial development has been undermined by the tightening geopolitical situation and the general rise in costs. The company expects consumer demand to remain at a good level during the financial period 2022, business and event sales to gradually recover and the market to return to normal during the second quarter of 2022.

In March, the turnover was stronger than expected, especially in the company’s strategic growth areas in Norway, and the Nokia Arena and Friends & Brgrs launches. In March, the turnover grew by approximately 515 per cent from the previous year and accounted for 77 per cent of the total January–March turnover growth.

The Group’s turnover for April 2022 was MEUR 28.9, which represents an increase of 608 per cent from the reference month of 2021 and 36 per cent from the reference month of 2019 prior to the pandemic. The operational EBITDA in April was approximately MEUR 4.5.

Turnover in May 2022 is expected to be MEUR 29–32 and operational EBITDA is expected to be MEUR 4.5–5.5. Turnover in June 2022 is expected to be MEUR 27–30 and operational EBITDA is expected to be MEUR 3.5–4.5.

QUESTION: How has the coronavirus pandemic affected the business operations of NoHo Partners? (Updated 10 May 2022)

ANSWER: The COVID-19 pandemic has had a significant impact on the Group’s business since March 2020. The spread of the pandemic, the restrictions imposed by the Finnish Government 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. The Group has taken determined action to reduce the pandemic’s impacts, uncertainties and risks and to secure the Group’s financial position and sufficient financing.

The Group estimates that it lost approximately MEUR 100 in turnover due to the COVID-19 pandemic in 2021. In January–December 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’s 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’s turnover in January–March 2022 was MEUR 48.5, representing growth of 140.6 per cent compared to the corresponding period in 2021 and amounting to roughly 91 per cent of the turnover in the corresponding period in 2019, before the COVID-19 pandemic. In January–February, the operations took place in a partially restricted business environment during both the review period and the comparison period. In March 2022, restaurant restrictions were lifted completely, which was reflected in strong customer demand and growth in turnover.

The operational EBITDA turned positive in February after the partial lifting of the restrictions, and after the total lifting of the restrictions in March, it was EUR 3.5 million positive. The operational EBITDA for the whole review period was EUR 1.1 million, an increase of 116 per cent compared to the same period last year.

The financial support received by the Group from the Finnish, Danish and Norwegian governments for financial period 2021 totalled approximately MEUR 12.2. The support received from the Danish state in January–March 2022 amounted to approximately MEUR 0.7 and the support received from the Norwegian state amounted to MEUR 1.3. The financial support received by the Group totalled approximately MEUR 2.1. A more detailed account of government assistance and the distribution thereof is presented in Note 4 Government grants in the Interim Report Q1/2022.

QUESTION: What measures has NoHo Partners taken to ensure the safety of the personnel and customers during the COVID-19 pandemic? (Updated 18 February 2021)

ANSWER: The governments of Finland and the other Nordic countries have issued strict guidelines concerning the business hours and numbers of customers of restaurants and nightclubs. In addition to these, we have followed enhanced hygiene measures in our restaurants.

We have prepared special safety and hygiene instructions aimed at protecting the personnel and customers in accordance with the national guidelines. We also use self-monitoring guidelines based on the industry’s general guidelines to help restaurants operate safely during the exceptional circumstances caused by the COVID-19 pandemic.

QUESTION: Which measures have you taken to adjust costs? (Updated 17 February 2022)

ANSWER: Staff expenses and rents are our biggest fixed costs. We began determined adjustment measures regarding them immediately once the impact of the COVID-19 pandemic became apparent.

We announced negotiations in accordance with the Act on Cooperation within Undertakings on 13 March 2020, and the rapid progress of the negotiations on 18 March 2020. On 15 May 2020, we announced that we would begin new negotiations on continuing temporary layoffs. On 29 September 2020, the Finnish Government announced stricter restrictions on restaurants. That same day, we announced that we are commencing new negotiations in accordance with the Act on Co-operation in order to adapt our operations to the restrictions. On 5 January 2021, we announced that the cooperation negotiations resulted in changes in the organisational structure. On 25 February 2021, we announced new negotiations under the Co-operation Act in order to adapt our operations to the restaurant closure measures that will enter into force on 8 March 2021. On 9 March 2021, we announced that we would activate the lock-down contingency plan, when approximately 200 restaurants were closed and approximately 2,200 people were laid off.

We negotiated a lease exemption for 70 per cent of our leases in Finland for April to May 2020, when the total lease discounts were around MEUR 3.5. In January-December 2021, rental discounts were approximately MEUR 2.8.

On 21 December 2021, the company announced, that it will lay off its personnel and commence new negotiations pursuant to the Act on Co-operation within Undertakings to adapt its operations to the restrictions targeted at the restaurant industry, which were announced by the Finnish Government and entered into force on 24 December 2021.

QUESTION: How has NoHo Partners secured adequate funding during and through the pandemic? (Updated 16 May 2022)

ANSWER: On 15 February 2021, we announced that we have completed our negotiations with our principal financiers on a financing package in which the bridge financing, which was negotiated at the beginning of the Covid-19 pandemic, and the current financiers’ existing loans have been combined into one long-term financing package. The purpose of the negotiated financing package of MEUR 141 is to secure the company’s long-term financing position and make the reconstruction programme after the emergency conditions end possible.

The financing package consists of a five-year programme in which loan instalments are MEUR 6 during the 2021 financial period and MEUR 22 during the 2022 financial period. At the beginning of the financing programme, the interest level of loans granted by financial institutions will increase to a little over 3 per cent until the COVID-19 bridge financing has been paid back. After that, the interest level will gradually return to about 2.6 per cent.

When the coronavirus pandemic struck in March 2020, we immediately entered into financial negotiations for the duration of the state of emergency. On 3 April 2020, we informed that negotiations in all the company’s markets in Finland, Denmark and Norway have been completed and a financing package of EUR 34 million has been agreed upon. The interest on the bridge financing is under 4 per cent, including Finnvera’s guarantee commission for MEUR 15 of the financing.

On 29 May 2020, we announced the finalisation of a refinancing programme for our maturing debt as part of an overall financing package. As the final part of the financing package, we agreed on a debt of MEUR 10 with a right to conversion with the Finnish Industry Investment Ltd (Tesi). In May 2022, we announced a loan arrangement in which the company’s management and domestic investors acquired the majority of Tesi’s loan and converted their purchase into new shares in the company. As the result of the arrangement, the company’s equity is strengthened and its net debt decreases by over MEUR 10. The arrangement allows the company financial flexibility, which will drive the implementation of future growth projects as part of the company’s strategy for profitable growth. A stock exchange release published on 13 May 2022 here and investor news published on 16 May 2022 here.

NoHo Partners has classified its shareholding in Eezy Plc as an asset held for sale. The Group plans to gradually reduce its shareholdings in Eezy to finance future growth projects and, if necessary, strengthen its balance sheet position. In 2021 we sold shareholdings in Eezy for approximately MEUR 9 and recognised a capital gain of MEUR 0.7 for the quarter from these sales. In the first quarter of 2022, we continued to sell our holding in Eezy, starting with a capital gain of MEUR 0.4 in January.

The Group’s interest-bearing net liabilities, excluding the impact of IFRS 16 liabilities, continued to decline to MEUR 148.7 and, when adjusted by the market value of Eezy’s holding at the end of the review period, to less than MEUR 120. IFRS 16 liabilities totalled MEUR 170.3. The Group’s gearing ratio excluding the impact of IFRS 16 liabilities was 208.0%. Adjusted net finance costs in January–March were MEUR 3.4 (MEUR 3.0), of which the share of IFRS 16 interest expenses was MEUR 1.8 (MEUR 1.4).

QUESTION: How do you benefit from the Government compensations? (Updated 10 May 2022)

ANSWER: 
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.

The company did not receive government grants from the Finnish state during the review period. On 7 April 2022, the Finnish Government proposed to extend the uncovered fixed expense support under the Act on Support for Business Costs. The aid is intended primarily for medium-sized and large enterprises for the period from December 2021 to February 2022, during which business activities were restricted or completely blocked by government orders. The proposal is currently debated in committees. Possible support may have a positive one-off effect on the company’s second quarter results.

The support received from the Danish state in January–March 2022 amounted to approximately MEUR 0.7 and the support received from the Norwegian state amounted to MEUR 1.3. The financial support received by the Group totalled approximately MEUR 2.1. A more detailed account of government assistance and the distribution thereof is presented in Note 4 Government grants in the Interim Report Q1/2022.

QUESTION: What are the restrictions in the Group’s different markets? (Updated 13 April 2022)

ANSWER: There are no restaurant restrictions in the company’s operating countries. In Finland, the restaurant restrictions lifted completely on 1 March 2022. In Denmark, the restaurant restrictions were lifted completely on 1 February 2022. In Norway, the restaurant restrictions, with the exception of the prohibition to dance and one-metre safe distance, were lifted on 1 February 2022. The rest of the restrictions were lifted on 12 February 2022.

QUESTION: How do you communicate your business risks to investors? (Updated 10 May 2021)

ANSWER: We have communicated our risks regularly, for example, in connection with financial statements and management reports and quarterly financial reports, most recently in Q1/2022 Interim Report.

QUESTION: How big shareholder is NoHo in Eezy Plc? How has the crisis affected the business operations of Eezy?(Updated 10 May 2022)

ANSWER: NoHo Partners has classified its shareholding in Eezy Plc as an asset held for sale. The Group plans to gradually reduce its shareholdings in Eezy to finance future growth projects and, if necessary, strengthen its balance sheet position.

On 31 March 2022, the Group owned 5,139,745 shares in Eezy Plc, corresponding to a holding of approximately 20.5 per cent. The book value of the shares on NoHo Partners Plc’s balance sheet is MEUR 26.4, corresponding to EUR 5.14 per share. The closing price of the Eezy share at the end of March was EUR 5.86.

In January–March 2021, Eezy’s turnover was MEUR 50.9 (MEUR 36.6 in January-March 2021) and an operating profit was MEUR 0.5 (0.9), or 1.0% (2.5%) of net sales. In 2021, Eezy’s turnover was MEUR 203.3. and operating profit MEUR 11.8.

Our most recent financial report, Interim Report Q1/2022, is available here and Financial Statements release 2021 here.