Lenta Reports Q2 Retail LFL Sales Growth of 10.1% and 1H EBITDA Margin of 10.2%

St. Petersburg, Russia (July 27th, 2020): Lenta PLC (MOEX & LSE: LNTA; the �Company�), one of the�largest retail chains in Russia, is pleased to publish its 1H 2020 auditor-reviewed consolidated IFRS�Financial Results and its Q2 and 1H 2020 Operational Results.

View the full press release here

Financial Highlights during 1H 2020¹:

������������� Retail Sales increased 9.6% YoY to 213.4 billion Rubles in 1H 2020

������������� Gross Margin increased to 23.29% in 1H 2020, an improvement of 77 bps YoY

������������� SG&A decreased as a percent of sales to 17.59% in 1H 2020, an improvement of 153 bps YoY

������������� EBITDA Margin increased to 10.17% in 1H 2020, an improvement of 207 bps or 26% YoY

������������� Net Income Margin increased to 4.31% in 1H 2020 vs. -2.24% in 1H 2019

������������� Free Cash Flow increased to a positive 1.5 billion Rubles in 1H 2020 vs. -4.7 billion in 1H 2019

������������� Net Debt/EBITDA decreased 30% to 1.9x as of 30 Jun 2020 vs. 2.7x as of 30 Jun 2019

������������� Net Interest Expense decreased 28% YoY to 3.4 billion Rubles in 1H 2020

Operational Highlights during 1H 2020:

������������� LFL Sales grew 10.1% in 2Q 2020 (Average Ticket Size 24.2% - Traffic -11.3%)

������������� LFL Sales grew 7.1% in 1H 2020 (Average Ticket Size 12.5% - Traffic -4.8%)

������������� Retail Sales increased 9.6% in 1H 2020 (Hypermarkets 9.3% and Supermarkets 12.6%)

������������� Average Ticket Size increased 12.6% to 1,102 Rubles in 1H 2020

������������� Lenta opened three new supermarkets in St. Petersburg in 1H 2020

������������� Employee Turnover fell 9.8% to 29% during 1H 2020, from 39% during 1H 2019

������������� Private Label Sales continue to grow and now comprise more than 14% of Total Sales

������������� Stock Losses (�Shrinkage�) during 1H 2020 decreased 56 bps YoY

������������� Online sales grew to 1.9 billion Rubles in 1H 2020 an increase of 324% YoY

Key Events during 1H 2020 and after the Reporting Period:
Update on Redomiciliation to Russia: On July 22nd, Lenta held an EGM meeting where the following�resolutions were passed: (1) to approve the redomiciliation in principle; (2) to change the name of the Company after redomiciliation to Russia from Cyprus; (3) to approve the interim financial statements of�the Company for the period ended 31 May 2020; (4) to ratify the appointment of the Cyprus auditors and�the preparation of the interim audited accounts; (5) to authorize members of the Board to approve of�the share issue prospectus. All other actions and main documents relating to Russian Law requirements�will be approved at a separate EGM to be held later in 2020.

COVID-19 Response: Since March, the COVID-19 pandemic has had a significant impact on communities�and businesses throughout Russia. Lenta has prioritized the safety and well-being of its customers and�employees throughout this challenging period. The Company was quick to establish a business-wide�COVID-19 response team whose focus since mid-March has been on coordinating Lenta�s effective�response to the pandemic. Lenta has worked closely with its suppliers throughout the crisis to ensure�shelves remained sufficiently stocked with both food and non-food items during this period of�increased demand. Comprehensive health and safety measures were introduced across Lenta�s�business to ensure the ongoing safety of colleagues and customers in its stores. Whilst the COVID-19 pandemic had a temporary impact on store traffic during the lockdown period, Lenta is pleased to�report significant increases in average ticket sizes across both hypermarket and supermarket formats.

Herman Tinga (Chief Executive Officer) commented on 1H 2020:
�We are pleased to report an encouraging performance during the first half of the year. Retail Sales�growth of 9.6% together with effective cost control and gross margin improvement has resulted in a better than expected EBITDA margin of more than 10%.��The first half of 2020 has been an unprecedented period for communities and businesses across Russia.

The COVID-19 pandemic has demonstrated how critical the food supply chain is and we are very proud�of the way in which Lenta responded to the crisis and continued to serve communities across the�Russian Federation. Our priorities throughout this period have been on ensuring the safety of our�customers and employees and that our stores remained well-stocked for customers. We are pleased to�report that during Q2 Lenta achieved Retail LFL growth in excess of 10% which reflects the strength of�our customer proposition and the effectiveness of the actions taken by the business to ensure our stores�remained accessible and safe for all customers.

�Whilst the longer-term impact of COVID-19 on customer behavior remains unknown, we believe Lenta�is very well positioned. Our market-leading hypermarket segment continues to offer consumers an�excellent product range and a strong value proposition. We are very pleased with the turnaround of our�supermarket format over the recent year. Furthermore, we are optimistic about our fast-growing online�business where we can efficiently leverage our existing infrastructure to serve customers with maximum�convenience. We intend to provide a fuller strategic update to our stakeholders in the second half of�2020.�

Rud Pedersen (Chief Financial Officer) commented 1H 2020:
�Lenta delivered a strong financial performance in the first half of the year reflecting the Company�s�operational excellence, effective response to the COVID-19 pandemic, and the resilience of our business�model. The Company�s very strong free cash flow and reduced cost of capital contributed to a significant�30% reduction to Lenta�s Net Debt to EBITDA ratio, which now stands at 1.9x.

�Despite lower footfall, as a result of the COVID-19 pandemic, we achieved more than 7% growth in LFL�Sales during the first half. This was driven by a 12.5% increase in Average Ticket Size reflecting Lenta�s�best-in-class product range and continued product availability.

This sales growth, alongside our continued focus on increasing efficiencies across the business,�supported a 26% improvement to our EBITDA Margin.

Despite ongoing macroeconomic uncertainty we are confident in the relevance of our customer�proposition and opportunities for long-term growth.�

View the full press release here

For further information please visit www.lentainvestor.com or contact:
Mariya Filippova
Head of Public Relations & Government Affairs
maria.filippova@lenta.com

Timothy Post
Head of Investor Relations
timothy.post@lenta.com

¹�Please note that all Financial Highlights are based upon IAS 17 numbers

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