St. Petersburg, Russia; 12 March 2015– Lenta Ltd (“Lenta” or the “Company”), one of the largest retail chains in Russia, today announces its audited consolidated IFRS results for the year ending 31 December 20141.
2014 Financial Highlights:
Total sales grew 34.5% to RUB 194.0bn (2013: RUB 144.3bn);
Adjusted EBITDA2 of RUB 21.4bn, up 29.8% (2013: RUB 16.5bn) with a margin of 11.0% (2013: 11.4%);
Gross margin of 22.6% (+0.8 p.p. vs. 2013) rose due to improved supplier conditions;
SG&A increased to 14.5% of sales (+1.4 p.p. vs. 2013) primarily due to the increasing share of leased stores and associated expenses, increased depreciation expense as well as continuously growing proportion of stores in the ramp-up phase in the total store base;
Capital expenditures of RUB 35.1bn, an increase of 48.6% compared to 2013 (RUB 23.6bn) linked to a larger number of new store openings in 2014, building pipeline for new store openings in 2015-2016 and the construction of two new distribution centres (“DCs”);
Net cash generated from operating activities, before net interest and income taxes paid, of RUB 23.5bn compared to RUB 15.9bn in 2013 (an increase of 48%) driven by EBITDA growth and net working capital improvement;
Net interest expenses of RUB 6.8bn, an increase of 59.9% compared to 2013 (RUB 4.3bn) due to additional borrowing in the reporting period and a rise in interest rates;
Net Profit3 of RUB 9.1bn, up 27.0% (2013: RUB 7.1bn) with a margin of 4.7%; and
Net Debt of RUB 59.2bn as of 31 December 2014 (Net debt/Adjusted EBITDA of 2.8x).
2014 Operational Highlights:
31 hypermarkets and 14 supermarkets opened during 2014;
Total number of hypermarkets at 31 December 2014 was 108, with 24 supermarkets in operation, selling space was c. 701,150 sq.m. as of 31 December 2014 (+38.7% vs. 31 December 2013);
Like-for-like (“LFL”)4 sales growth was 10.6% for 2014;
LFL average ticket increased by 6.0% in 2014;
LFL traffic increased by 4.4% in 2014; and
35% increase in the number of active loyalty cardholders y-o-y to a total of 6.5mm as of 31 December 2014.
1Certain amounts do not correspond to the IFRS financial statements for the year ended 31 December 2013 and reflect adjustments made as detailed in Note 2 of the IFRS financial statements
2 Adjusted EBITDA is reported EBITDA as set out in Note 6 of the IFRS financial statements adjusted for non-recurring one-off items such as changes in accounting estimates and one-off non-operating costs and income
3 Net Profit equates to “Profit for the year” in the attached IFRS Financial Statements
4 Lenta’s stores are included in the LFL store base starting 12 months after the end of the month they are opened
Lenta’s Chief Executive Officer, Jan Dunning said:
“We are delighted that Lenta continues to win in its market; delivering industry-leading growth in sales and selling space for the second consecutive year.
Our pace of growth has accelerated further as we push on with our store opening plans and extend Lenta’s geographic and format reach in the under-served Russian market. We added 39% to our total selling space in the year and we are on track to meeting our long-term expansion commitment to double our selling space by the end of 2016 despite a more difficult macro environment. Offsetting the impact of an increase in the proportion of immature stores due to our rapid expansion, improvements in operational efficiency enabled Lenta to achieve almost 50% growth in cash generated from operations and near-stable profit margins with positive year-on-year margin trends in the second half of the year.
We have adapted our offer to satisfy changing customer needs and saw accelerating sales and traffic growth in early 2015. Our low price/low cost business model is well suited to these challenging times as it enables us to help our customers by mitigating the effects of inflation. This makes us even more confident in driving successful further expansion”.
For further information please visit www.lentainvestor.com, or contact:
Lenta
Anna Meleshina, Director of Public Relations and Government Affairs
+7 812 363 28 53
Anna.Meleshina@lenta.com
Albert Avetikov, Director of Investor Relations
+7 812 363 28 44
Albert.Avetikov@lenta.com
Instinctif Partners
International Media
Mark Walter & Tony Friend
+44 20 7457 2020
Mark.Walter@instinctif.com
Russian Media
Anton Karpov
+7 495 660 05 91
Anton.Karpov@instinctif.com
Leonid Fink
+44 20 7457 2020
Leonid.Fink@instinctif.com
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