Review by the CEO

Profitability endures even in slight headwinds

Q1 2024, 7 May 2024

We achieved the 7.3 % EBIT margin in the traditionally weakest quarter, which I consider to be a strong performance in the current market environment. It demonstrates our sustainable business model and the ability of the organisation to adapt to changes in the operating environment. Our international business had a strong EBIT margin of more than 8 %, and profitability in Finland has also remained at a good level of around 7 %, even in a fluctuating demand environment.

The profitable growth of Swiss Holy Cow! burger chain continued during the reporting period and was at an excellent level, while Norway and Denmark continued at the good profitability level seen in the previous year. In Finland, our food restaurant portfolio performed as expected, and organic growth in fast food continued. The beginning of the year has been twofold for entertainment venues, and the decline in purchasing power is particularly evident in nightclubs popular among students. Correspondingly, pubs traditionally perform well even in a weaker economic cycle.

Net debt continued to decline towards our target ratio in the current interest rate environment meaning 2.5 to operational EBITDA. In accordance with the resolution of the Annual General Meeting held in April 2024, the company pays an increasing dividend of EUR 0.43 (0.40) for the financial period ended 31 December 2023. The strengthening balance sheet and declining net debt will enable profitable growth in line with the company’s strategy, together with an increasing dividend payment, in the future as well.

We expect demand to continue to fluctuate also in the second quarter. However, our operating model is very flexible and we expect profitable growth to continue even in a weaker economic cycle. Interest rates have a direct impact on households’ purchasing power. Possible interest rate cuts will boost demand in the second half of the year.

We will achieve our targets for the previous strategy period ahead of schedule during this year. We will publish the targets for the strategy period lasting until 2027 at the Capital Markets Day to be held on 22 May in Helsinki.

Aku Vikström
CEO, NoHo Partners