TIDMLNTR TIDMLNTA
RNS Number : 4248P
Lenta Ltd
18 February 2016
LENTA PUBLISHES AUDITED IFRS FINANCIAL RESULTS FOR THE YEAR
ENDED 31 DECEMBER 2015
St. Petersburg, Russia; 18 February 2016 - 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 2015(1) .
2015 Financial Highlights:
-- Total sales grew 30.3% to Rub 252.8bn (2014: Rub 194.0bn) in
line with the Company's sales growth guidance;
-- Adjusted EBITDA(2) of RUB 28.1bn, up 31.4% (2014: RUB 21.4bn)
with a margin of 11.1% (2014: 11.0%);
-- Gross margin of 22.3% (-0.2 p.p. vs. 2014) slightly decreased
due to additional price investments in the second half of the
year;
-- SG&A decreased to 14.3% of sales (0.2 p.p. lower vs.
2014) thanks to continuous operational improvements and increased
productivity which more than offset rising share of leased stores
and associated rental expenses and increased depreciation
expenses;
-- Capital expenditures of RUB 31.4bn, a decrease of 10.7%
compared to 2014 (RUB 35.1bn) linked to lower investments in land
acquisition;
-- Net cash generated from operating activities, before net
interest and income taxes paid, of RUB 25.9bn compared to RUB
23.5bn in 2014 (an increase of 10.2%) primarily driven by EBITDA
growth;
-- Net interest expenses of RUB 9.3bn, an increase of 36.2%
compared to 2014 (RUB 6.8bn) primarily due to higher interest rates
and;
-- Net Profit(3) of RUB 10.3bn, up 13.4% (2014: RUB 9.1bn) with a margin of 4.1%; and
-- Net Debt of RUB 53.5bn as of 31 December 2015 (Net debt/Adjusted EBITDA of 1.9x).
2015 Operational Highlights:
-- 32 hypermarkets and eight supermarkets opened during 2015,
exceeding the Company's guidance of at least 30 hypermarket
openings;
-- Total number of hypermarkets at 31 December 2015 was 140,
with 32 supermarkets in operation, selling space was c. 882,383
sq.m. (+25.8% vs. 31 December 2014);
-- Lenta opened a new distribution center ("DC") in
Yekaterinburg in October - its first DC in the Ural federal
district;
-- Like-for-like ("LFL")(4) sales growth was 9.1% for 2015;
-- LFL average ticket increased by 5.0% in 2015;
-- LFL traffic increased by 3.9% in 2015; and
-- The number of active loyalty cardholders(5) increased by 29%
y-o-y to a total of 8.4mm as of 31 December 2015.
Material events after the reported period:
-- Lenta signed a Rub 7bn three-year fixed rate unsecured loan facility with Rosbank; and
-- Opened two hypermarkets (in Grozny and Ufa) since the beginning of the year.
[1] Certain amounts do not correspond to the IFRS financial
statements for the year ended 31 December 2014 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
5 Cardholders who made at least 2 purchases at Lenta during the
12 months to 31 December, 2015 are considered active
Lenta's Chief Executive Officer, Jan Dunning said:
"Lenta continues to deliver industry-leading sales growth and
profitability against the back-drop of a challenging consumer and
macro environment.
Lenta was Russia's fastest growing large retailer in 2015 for
the third consecutive year. We improved profitability despite
additional price investments made in the second half to support
traffic growth by reducing the effects of inflation on our
customers. Adjusted EBITDA grew by over 31% and EBITDA margin
improved by around 0.1 p.p to 11.1%. Our suppliers rewarded us for
delivering strong growth and this enabled us to become even more
competitive. I am especially delighted that the increase in
profitability was enabled by sustainable operational improvements -
productivity driven by optimization of processes and further
development of our supply chain infrastructure. We see room for
further efficiency improvements and will continue to drive
synergies from the increasing scale of the business.
We substantially strengthened our balance sheet through a
combination of the growth in profitability and the additional
equity issues in 2015. We also significantly improved the maturity
profile of our debt while benefiting from the fall in Mosprime
rates and reduced margins under our major long-term loan
facilities. Given Lenta's healthy financial position and strong
business performance we are well positioned to further accelerate
our expansion. Our new store pipeline is stronger than ever and we
continue to be confident in achieving our guidance to open at least
40 hypermarkets in 2016".
Store Developments and Supply Chain
Lenta opened 32 hypermarkets and eight supermarkets during 2015,
taking the total number of hypermarkets to 140 and supermarkets to
32. The Company entered 11 new cities in 2015 and was present in 69
cities(6) . Total selling space as at 31 December 2015 increased to
882,383 sq.m., up 25.8% compared to the end of 2014.
Since the beginning of 2016 the Company has opened two
hypermarkets in Grozny and Ufa, increasing the total store count to
174, including 142 hypermarkets in 70 cities and 32 supermarkets in
Moscow and Saint-Petersburg. Total selling space as at 18 February
2016 reached 891,995 sq.m.
Lenta continues to invest significantly in its supply chain: a
new DC was opened in Yekaterinburg in the fourth quarter of 2015.
Lenta has also started construction of a new owned dedicated DC for
supermarkets in the Moscow region which will open later this year.
The average centralisation ratio increased to 46.1% in 2015 from
39.7% in 2014.
Operating performance
Lenta's total sales in 2015 increased 30.3% compared to 2014 due
to an increase in sales from new stores opened in 2015, new stores
opened in 2014 that are not yet part of the like-for-like panel and
a 9.1% increase in like-for-like sales. The increase in sales from
new stores was due to the acceleration in new store openings in
2014 and 2015, with a 25.8% increase in net selling space as of 31
December 2015 compared to 31 December 2014.
The macro and consumer environment remained difficult with
increased pressure on customer incomes and continued high
inflation. Consumers continued to be price-sensitive and
promo-oriented, both trading down and reducing their volume of
purchases. While total sales growth and LFL sales growth were
slower in the second half of the year, Lenta total sales growth for
the full year was in line with guidance.
6 According to Lenta's methodology for calculating number of
cities of presence, since 1 May 2015 all cities located in Moscow
City and the Moscow region are shown as Moscow, and all cities
located in the Leningrad region and St. Petersburg are shown as St.
Petersburg.
YoY growth 1H 2015 2H 2015 2015 2014
Total sales 33.8% 27.5% 30.3% 34.5%
LFL sales 11.5% 7.2% 9.1% 10.6%
LFL traffic 4.7% 3.2% 3.9% 4.4%
LFL ticket 6.5% 3.9% 5.0% 6.0%
Financial Performance
Lenta demonstrated strong overall performance during the year,
with industry-leading sales growth and an increase of the Adjusted
EBITDA margin of 0.1 p.p to 11.1%. The increase in profitability
was achieved thanks to improved supplier terms, effective cost
management and supply chain improvements partly offset by price
investments which absorbed part of the impact of inflation on
Lenta's customers.
Net profit grew by 13.4% to Rub 10.3bn in 2015 driven by EBITDA
growth partly offset by increased interest expenses and higher
depreciation. While the net profit margin of 4.1% was primarily
affected by the elevated growth in interest expenses, it was
supported by an effective tax rate of 20.1% - slightly below the
normalised level of 22%.
Income Statement Highlights
% Change
1H 1H 2H 2H 2015
RUB (millions) 2014 2015 2014 2015 2014 2015 - 2014
Total sales 85,899 114,897 108,089 137,866 193,988 252,763 30.3%
Gross profit 18,384 24,877 25,352 31,428 43,736 56,305 28.7%
-0.2
Gross margin 21.4% 21.7% 23.5% 22.8% 22.5% 22.3% p.p
SG&A, % -0.2
of sales 15.1% 14.6% 13.9% 14.0% 14.4% 14.3% p.p
Adjusted
SG&A(7)
, % of sales 12.1% 11.1% 11.1% 10.8% 11.6% 10.9% -0.6p.p
Adjusted
EBITDAR(8) 8,707 13,030 14,074 17,721 22,781 30,752 35.0%
Adjusted
EBITDAR 0.4
margin 10.1% 11.3% 13.0% 12.9% 11.7% 12.2% p.p
Rental expenses, 0.3
% of sales 0.7% 1.1% 0.8% 1.0% 0.7% 1.1% p.p
Adjusted
EBITDA 8,122 11,747 13,249 16,333 21,372 28,080 31.4%
Adjusted 0.1
EBITDA margin 9.5% 10.2% 12.3% 11.8% 11.0% 11.1% p.p.
Operating
profit 6,590 9,015 11,069 13,317 17,659 22,332 26.5%
Profit before
income tax 3,643 3,789 7,285 9,083 10,928 12,872 17.8%
February 18, 2016 02:09 ET (07:09 GMT)
Any forward-looking statements made by or on behalf of Lenta
speak only as at the date of this announcement. Save as required by
any applicable laws or regulations, Lenta undertakes no obligation
publicly to release the results of any revisions to any
forward-looking statements in this document that may occur due to
any change in its expectations or to reflect events or
circumstances after the date of this document.
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACSDVLBFQLFBBBB
(END) Dow Jones Newswires
February 18, 2016 02:09 ET (07:09 GMT)
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