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 13 April 2021 at 15:08.

QUESTION: How has the coronavirus pandemic affected the business operations of NoHo Partners? (Last updated on 13 April 2021)

ANSWER: The COVID-19 pandemic has had a serious impact on the market and the restaurant industry. The sudden change in the market has also considerably affected the operations of NoHo Partners. We took measures as soon as the pandemic began to secure our ability to operate throughout the exceptional circumstances. These measures concerned, among other things, the safety of our employees and customers, adjusting costs and securing financing.

On 25 February 2021, the Finnish government announced that it would submit a proposal to Parliament to close the restaurants for three weeks in the areas of acceleration and spread phase from 8 to 28 March 2021. At the same time, it was announced that the costs of the lockdown will be reimbursed to entrepreneurs. On March 8, 2021, The Finnish Parliament accepted the law that closes restaurants in the areas of acceleration and spread phase for three weeks.

On February 25, 2021, we announced new negotiations under the Co-operation Act to adjust our operations to the restaurant closure measures that will take effect on March 8, 2021. The aim of the negotiations is to minimize the economic impact of the COVID-19 pandemic. The co-operation negotiations cover the entire Group’s personnel, i.e. approximately 1,250 people in Finland. In addition, the effects of the restaurant restriction measures are indirectly reflected in the company’s approximately 2,000 temporary employees. Negotiations can lead to reduction of jobs and layoffs, either full-time or part-time.

On 9 March 2021, we announced that we immediately activated our lockdown backup plan, and now there are approximately 200 restaurants closed and approximately 2,200 people temporary laid off. Our staff have been the hardest hit by the COVID-19 crisis and we are fully committed to getting through this situation without any permanent redundancies. We trust that the Government and landlords will act responsibly, similar to the lockdown imposed last spring, and play an active role in bridging the gap caused by the crisis and work towards market recovery.

Based on the lockdown period in spring 2020, we can conclude that rapid measures to reduce costs, temporary reductions in rents and government support, will significantly limit the negative impact on operating cash flow.

The full-year turnover for 2020 was MEUR 156.8, which is approximately 57.5 per cent of the turnover for the year 2019. The loss of turnover caused by the COVID-19 pandemic for the financial period 2020 was estimated to be nearly MEUR 145. The EBIT for the financial period was MEUR 23.9 negative. With the rapid reaction, increased efficiency of operational activities and cost-savings, the company succeeded in limiting the negative impact of the exceptional circumstances on its operating cash flow, which was only MEUR 5.1 negative for the full financial period.

On 9 March 2021, we announced that the Group’s turnover for February 2021 was approximately MEUR 8.0, which is roughly 37 per cent of the turnover for the corresponding period the previous year. The turnover was generated by restaurant operations in Finland, with the restaurants in Denmark and Norway being closed. The Group’s operating cash flow was approximately MEUR -1.7.

We have prepared for recovery from the COVID-19 shock thoroughly by trimming costs and polishing our operational activities. This, and the company’s restaurant portfolio which was enhanced even further during the crisis and the balance lightened by the complete depreciation programme, will guarantee a solid foundation for improving the company’s structural profitability.

On 13 April 2021, we announced that our turnover in March 2021 was approximately MEUR 4.2, which is roughly 20 per cent of the turnover for the corresponding period in 2019. Nearly half of the turnover consisted of sales in the first week of March, when restaurants were still open in Finland. The remainder of the turnover was generated by the takeaway sales of 47 restaurants. Due to the shutdown of business operations, operating cash flow in March was negative by a clear margin, but we estimate that some of this will be restored by the compensation still under consideration by the Finnish state. Consequently, we will only be able to assess the final results for March and the first quarter at a later time. We have secured our liquidity by driving our burn rate as low as possible while preparing for the gradual reopening of our business starting from the beginning of May. As our business environment remains unstable and the government’s decision-making is difficult to predict, we have also taken measures to prepare for the potential prolongation of the situation, such as by selling part of our holdings in Eezy and strengthening our cash position.

QUESTION: What measures has NoHo Partners taken to ensure the safety of the personnel and customers during the COVID-19 pandemic? (Last updated on 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? (Last updated on 9 March 2021)

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. We reported on the rapid progress of the negotiations on 18 March 2020, and announced that, due to the sudden change in the circumstances of the COVID-19 pandemic and the recommendations and orders issued by the authorities and the Finnish Government, the Group had made a decision concerning layoffs without prior cooperation negotiations. The layoffs were temporary, with a duration of no longer than 90 days, and they concern all of the Group’s personnel in Finland, totalling approximately 1,300 employees.

Starting on 1 April 2020, the Group has temporarily laid off seven of the eleven members of NoHo Partners’ Executive Team and 1,030 of its regular employees. Persons on family and study leave or other long leave are not included in the scope of the layoffs.

We announced on 15 May 2020 that we would begin cooperation negotiations on continuing temporary layoffs due to the uncertain market situation.

On 15 June 2020, we announced that the temporary part-time or full-time layoffs would concern approximately 550 employees.

On 29 September 2020, the Finnish Government announced stricter restrictions on restaurants. That same day, we announced we are commencing negotiations in accordance with the Act on Cooperation within Undertakings to adapt our operations to the restrictions on the restaurant industry. The cooperation negotiations concern all the Group’s employees, totalling approximately 1,300 employees in Finland.

We announced on 5 January 2021 that the cooperation negotiations resulted in changes in the organisational structure, reduction of 55 jobs and 15 jobs being made part-time in the Group Executive Team, management and administrative specialist positions as well as part-time and full-time temporary layoffs concerning approximately 600 at the time.

On February 25, 2021, we announced new negotiations under the Co-operation Act to adjust our operations to the restaurant closure measures that will take effect on March 8, 2021. The aim of the negotiations is to minimize the economic impact of the COVID-19 pandemic. The co-operation negotiations cover the entire Group’s personnel, i.e. approximately 1,250 people in Finland. In addition, the effects of the restaurant restriction measures are indirectly reflected in the company’s approximately 2,000 temporary employees. Negotiations can lead to reduction of jobs and layoffs, either full-time or part-time.

On 9 March 2021, we announced that we immediately activated our lockdown backup plan, and now there are approximately 200 restaurants closed and approximately 2,200 people temporary laid off.

The Group negotiated a two-month rent exemption for April–May 2020 for 70 per cent of its leases in Finland. Reductions in rent totalled approximately MEUR 3.5 in May–June 2020.

QUESTION: How has NoHo Partners secured adequate funding during and through the pandemic? (Last updated on 18 February 2021)

ANSWER: We announced on 15 February 2021 that we had completed the negotiations concerning 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.

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).

We announced on 3 April 2020 that the negotiations with the Group’s current financers in all of its market areas in Finland, Denmark and Norway had been concluded and an agreement was reached regarding a financing package of MEUR 34. The interest on the bridge financing is under 4 per cent, including Finnvera’s guarantee commission for MEUR 15 of the financing.

At the end of 2020, the Group’s gearing ratio excluding the impact of IFRS 16 liabilities was 192%. Interest-bearing net liabilities excluding the impact of IFRS 16 amounted to MEUR 163.4. IFRS 16 liabilities totalled MEUR 153.2. The Group’s interest-bearing net liabilities (including the IFRS 16 liability) at the end of December 2020 were MEUR 316.6 (MEUR 266.7), equity ratio was 18.1% (29.1%) and gearing ratio was 391% (194.6%) including the IFRS 16 liability.

QUESTION: What does 2021 look like and how do you expect business to recover? (Last updated on 8 April 2021)

ANSWER: At this time, the company will not provide its turnover and profitability forecast for 2021 due to the uncertain market situation. The financial impact of the pandemic on the Group’s business and outlook cannot be fully determined at present.

The profit guidance for 2021 will be updated when visibility is improved and the overall impact of the COVID-19 pandemic on the operating environment and the Group’s business can be assessed more accurately. The restrictions on business activities, potential changes to the restrictions and the global economic uncertainty will have a significant impact on the Group’s turnover and financial result for early 2021.

The company will also provide monthly reports on the development of its business during these exceptional circumstances.

According to our current estimate, market restrictions will be relaxed and demand will begin to recover during the summer. Following the recovery, we will begin to implement our rebuilding programme with determination. As the summer of 2020 showed, customer demand returns quickly when the market normalises and terraces open. We have prepared for recovery from the COVID-19 shock thoroughly by trimming costs and polishing our operational activities under difficult conditions. This, and the company’s restaurant portfolio which was enhanced even further during the crisis and the balance lightened by the complete depreciation programme, will guarantee a solid foundation for improving the company’s structural profitability.

We have prepared a three-stage action plan for managing the impacts of the COVID-19 pandemic. Please find further information regarding the below stages in the stock exchange release published on 5 May 2020. The company returned from operating in the restricted business environment to lockdown phase in early March 2021.

Stage 1: The operating environment during the state of emergency (lockdown)
In the lockdown stage, the Group focused on quickly reducing expenses, laying off personnel and balancing its finances while restrictions on its business were in place.

Stage 2: Restricted operating environment
The Group will resume its business operations in a managed and gradual manner. Decisions on the resumption of business will be made on a weekly basis and separately for each business location. The aim of the Group is to ensure a positive operating cash flow, even in the restricted operating environment, as the restaurant industry gradually recovers.

Stage 3: Strengthening competitiveness
In the third stage of the plan, the focus is shifted to strengthening the Group’s competitiveness in the post-pandemic restaurant market as well as strengthening the capital structure.

We are prepared for three different scenarios, which we published in connection with our Q1/2020 interim report on 9 June 2020: 

Basic scenario: sales will be approximately 70–85% of the normal level and the operating cash flow will be positive.

Low scenario: sales will be approximately 50% of the normal level, the operating cash flow will be neutral and investments are mainly frozen.

High scenario: sales will recover to the normal level and the operating cash flow will be strongly positive.

On 7 April 2021, CEO Aku Vikström opened in Kauppalehti possible steps for the gradual opening of the company’s Finnish restaurant operations. The company aims to get to open restaurants in three stages. In the first phase, the week after the first May, the company aims to open restaurants with the aim that they can be open until 10 p.m. In the second phase, after Midsummer, the goal is to get to open bars and nightclubs. We expect corporate events to normalize from the beginning of September.

QUESTION: What can we expect in the next few years? (Last updated on 18 February 2021)

ANSWER: We have prepared for recovery from the COVID-19 shock thoroughly by trimming costs and polishing our operational activities under difficult conditions. This, and the company’s restaurant portfolio which was enhanced even further during the crisis and the balance lightened by the complete depreciation programme, will guarantee a solid foundation for improving the company’s structural profitability.

We are looking into the future with confidence and will publish our new strategy and its goals during the first half of 2021. Our company’s aim is to be the leading restaurant company in the Nordic countries, and its strategy will be profitable growth in increasingly select markets and customer segments. For example, we aim at significant growth in the Norwegian market, the Friends & Brgrs chain and larger projects.

Together with financial institutions, the company is committed to a loan repayment programme that makes it possible to implement the company’s growth plan 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 2023.

QUESTION: How do you benefit from the Government compensations? (Last updated on 26 March 2021)

ANSWER:  The compensation received by the Group from the Finnish state totalled approximately MEUR 5.1 in January–December 2020. Also in January–December, the Group received support amounting to approximately MEUR 4.5 from the Danish state and MEUR 2.8 from the Norwegian state. The financial support received by the Group from the Finnish, Danish and Norwegian governments for the period 1 January–31 December 2020 totalled approximately MEUR 12.5.

The compensation schemes by the Danish state will remain in effect until further notice following the tightening of restrictions. In connection with the introduction of the stricter restrictions, the rate of turnover-based government support for fixed expenses was increased from 80 per cent to 90 per cent. In addition to fixed expenses, the state also compensates for 80 per cent of wage expenses. The Danish State’s compensation will continue until 18 June 2021, as the restrictions continue.

When the restrictions were loosened, the support provided by the Norwegian state to cover fixed expenses was reduced from 80 per cent to 50 per cent in early August 2020 and subsequently increased to 60 per cent in October when the restrictions were again tightened. Once the restrictions were tightened further in November, the subsidy was again increased, amounting to 85 per cent in November–December 2020 and 70 per cent in January–March 2021. Norwegian state compensation will continue for the time being as the restrictions continue. In addition, the Norwegian state will pay additional support to companies by the cities in March 2021. NoHo Partners’ additional support will amount to approximately EUR 0.4 million.

QUESTION: What are the restrictions in the Group’s international markets? (Last updated on 26 March 2021)

ANSWER: In Denmark and Norway, the restrictions have been stricter than in Finland throughout the COVID-19 pandemic but, at the same time, the governments have supported the restaurant sector financially with direct subsidies. In Denmark and Norway, approximately 80 per cent of the lease expenses and other fixed expenses were covered by the state during the COVID-19 pandemic. In both countries, the Group has had to adjust its cost structure through temporary layoffs and redundancies and determined measures to increase administrational efficiency.

In Denmark, restaurants were closed in mid-March and restaurants serving food were allowed to reopen in early May. During the summer months in Denmark, the number of customers in the indoor areas of restaurants was restricted and restaurants had to close at midnight. Gatherings of more than 500 people were cancelled until the end of August 2020. Nightclubs and cocktail bars were closed until the end of August and cocktail bars were reopened on 1 September 2020. Stricter restrictions on the opening hours of bars and restaurants were introduced effective from 18 September 2020, requiring restaurants to close at 10 p.m., customer volumes were reduced to approximately 50 per cent of the maximum capacity, and gatherings of more than 50 people were not allowed. Due to the acceleration of the COVID-19 pandemic, restaurants were closed across the country on 9 December 2020, and only take-away sales are allowed. According to the current plan of the Danish state, the terrace restaurants will open on 21 April 2021 and other restaurants on 6 May 2021.

In Denmark, the state has supported companies in the restaurant industry during the crisis by covering 80 per cent of their fixed expenses, relative to the decline in turnover. In addition to fixed expenses, the Danish state also covered 80 per cent of wage expenses until 8 July 2020. Following stricter restrictions, the subsidy for fixed expenses was increased to 90 per cent at the beginning of November 2020, in addition to which the state compensates for 80 per cent of wage expenses. The compensation by the Danish state will remain in effect until 18 June 2021, as the restriction measures continue.

In Norway, alcohol licences were reactivated for food-serving restaurants in Oslo on 6 May 2020 after the restaurant closure in starting from mid-March, and the alcohol licences of other restaurants were reactivated at the beginning of June. The number of customers in the indoor areas of restaurants was restricted during the summer months and food and beverages had to be served at tables.

In Norway, the normal opening hours of restaurants were in force from 15 June to 8 August 2020. The restrictions on opening hours were tightened thereafter, and the order to close at midnight was introduced on 8 August 2020. In Norway, restrictions on opening hours were lifted on 12 October 2020 except in Oslo. Restaurants could operate at 50% customer capacity, table service was mandatory and a safe distance of one metre was to be maintained. Gatherings of more than 200 people are cancelled until further notice. The restrictions in Oslo were tightened on 27 October 2020: restaurants were prohibited from allowing new customers in after 10 p.m. and had to stop serving food and beverages at midnight. The restrictions were tightened further on 9 November 2020, after which restaurants were no longer allowed to serve alcohol. The company’s restaurants in Norway are primarily entertainment venues, and they were closed. The restriction on serving alcohol was cancelled regionally in the third week of January 2021, but in Oslo, for example, the ban on serving alcohol continued. On 2 March 2021 restaurants in Oslo were ordered to close and only take-away is allowed for now. The ban on serving alcohol took effect nationwide from 26 March 2021.

When the restrictions were loosened, the compensation provided by the Norwegian state to cover fixed expenses was reduced from 80 per cent to 50 per cent in early August 2020 and again subsequently increased to 60 per cent in October. Once the restrictions were tightened further in November, the subsidy was again increased, amounting to 85 per cent in November–December 2020 and 70 per cent in January–March 2021. Norwegian state compensation will remain in effect for the time being as the restrictions continue. In addition, the Norwegian state will pay additional support to companies by the cities in March 2021. NoHo Partners’ additional support will amount to approximately EUR 0.4 million.

QUESTION: Has NoHo Partners reassessed its strategy? (Last updated on 9 March 2021)

ANSWER: We have initiated our 2023 strategy process. The financial targets and strategic plan will be published in the first half of 2021 when market visibility improves.

QUESTION: Modified How do you communicate your business risks to investors? (Last updated on 18 February 2021)

ANSWER: We have regularly communicated about our risks in conjunction with financial statements, annual reports and quarterly financial reviews, for example.

QUESTION: How big shareholder is NoHo in Eezy Plc? How has the crisis affected the business operations of Eezy? (Last updated on 8 April 2021)

ANSWER: On 23 March 2021, Eezy Plc announced that NoHo Partners offered over 210,000 shares, and approximately MEUR 1.1 worth of shares to Eezy’s key personnel. The buyers were members of the Eezy’s management team and board of directors, franchise entrepreneurs and other key personnel.

“We wanted to offer this opportunity to Eezy’s key persons to commit even further to the company. Eezy is a leader in the HR Services Market and the interest shown by management and franchise entrepreneurs is a clear sign of commitment to the company and its future”, NoHo Partners’ Chairman of the Board Timo Laine says in Eezy’s investor news release.

As a result of the share sale, NoHo Partners owned 7,304,881 shares and 29.4 percent of Eezy Plc’s shares on 23 March 2021.

Releases published by Eezy Plc on 23 March 2021:
– The flagging notice available here
– Management Transactions available here
– Investor news available here

On 26 March 2021, NoHo Partners sold 30,000 shares, and on 7 April 2021, 1,000,000 shares of Eezy Plc. As a result of the share sales, NoHo Partners owns 6,274,881 shares, and 25.3 percent of Eezy Plc’s shares on 7 April 2021.

Eezy stated the following in its financial statements bulletin 2020:
”COVID-19 has affected our customers and us since March. The impact has been largest in the Horeca sector that normally makes about one quarter of our revenue. Horeca sector’s business stopped in spring, started recovery in summer, but then slowed again toward the end of the year, as worsening corona situation and new restrictions have decreased demand. Horeca market is estimated to remain weak for the next few months.”

“Corona’s negative effects can be clearly seen also in the industrial and construction sectors, which normally generate almost half of our revenue, but the impact varies a lot by area and customer. Importing foreign labor is still difficult.”

“There is no certainty on the duration of the crisis and the related restrictions, or on the recovery pace after the crisis, which makes reliable forecasting of the revenue difficult. The company will adjust the size of the organization to match the needs at each moment. Lengthening crisis may increase customers’ financial difficulties, which can lead to credit losses. We closely monitor our customers’ payment practices. Our own liquidity is currently good.”

“Corona has decreased the demand for professional services, but customer demand is gradually recovering. The crisis may increase unemployment, which may increase demand for employment services, change management and career coaching services.”

Eezy’s revenue for 2020 was MEUR 190.6 (January–December 2019: MEUR 169.8). EBITDA was MEUR 13.5 (12.6) and EBIT was MEUR 5.6 (8.0). Adjusted EBITDA was MEUR 14.3 (16.4) and adjusted EBIT MEUR 6.9 (11.8). Earnings per share were EUR 0.11 (0.25).

Eezy does not give guidance for 2021. The goal is to give guidance during the first year-half.

Our most recent financial report, Financial Statements Release 2020, is available here and Financial Statements 2020 here.