TIDMLNTR TIDMLNTA
RNS Number : 1093Q
Lenta Ltd
24 November 2016
Lenta Doubles its Total Selling Space Ahead of Schedule
The company has achieved its objective, set three years ago at
IPO
St. Petersburg, Russia; 24 November, 2016 - Lenta Ltd (LSE,
MOEX: LNTA), one of the largest retail chains in Russia, is pleased
to announce the early achievement of its strategic objective to
double selling space before the end of 2016.
Lenta has doubled its total selling space to 1,019,968 sq.m,
achieving one of the most important strategic targets established
at its IPO in March 2014.
Lenta is Russia's fastest growing hypermarket operator and
became the country's largest hypermarket chain measured by selling
space in 2015. During the first 9 months of 2016, Lenta opened over
60% of the net selling space added in the hypermarket segment by
the Top-150 retailers, up from 35% in 2015(1) . Today Lenta
accounts for approximately 20% of all hypermarket selling space in
Russia2.
Lenta has opened 87 hypermarkets since the beginning of 2014.
During this period the company has entered 30 new cities while also
strengthening its position in the 45 cities where it was already
present. Lenta now has hypermarkets in 32 of the 36 Russian cities
with a population above 500,000 and expects to be present in all
cities with a population above one million before the end of
2016.
The company expects to open at least 26 more hypermarkets before
the end of 2016, including 10 stores through the acquisition of
Kesko's food retail business in Russia, which is projected to be
completed on 30(th) November, 2016.
In addition to hypermarkets, Lenta is also rapidly developing
its supermarket format. The first pilot supermarket store was
opened in Moscow in 2013 - since then the company has opened 43
stores, including 33 stores since its IPO in 2014. Lenta expanded
its supermarket business to St Petersburg in 2015 and will open its
first supermarkets in Siberia within the next few months. The
company plans to open at least twice as many supermarkets this year
as in 2015 and to significantly accelerate this rate of openings in
2017.
Lenta has also invested in its distribution network, opening new
distribution centres in Moscow, Yekaterinburg, Rostov-on-Don and
Tolyatti during the last 3 years. Lenta's supply chain network now
has the capacity to serve over 250 hypermarkets and 250
supermarkets, providing a strong foundation for future growth.
Total capital investment by Lenta in the 3 year period 2014-16
is expected to exceed RUB 120 billion(3) . Lenta's robust low
price-low cost business model has enabled the company to increase
its rate of investment in 2016 despite the challenging economic
environment. In addition to providing 12,000(4) new jobs directly
since its IPO, Lenta's continued expansion supports many more jobs
among its local suppliers and in the construction industry at a
time when employment and incomes in the wider economy are under
pressure.
Lenta's Chief Executive Officer, Jan Dunning commented: "At the
beginning of 2014, we set ourselves the goal of doubling retail
space within three years. Many felt that this target was too
ambitious, but we were completely confident because we had a clear
understanding of how to achieve it. For us, it is important to
deliver not just rapid growth, but successful growth - successful
for our customers, business partners and shareholders. In the
context of such rapid expansion, we continue to be one of the most
efficient food retailers in Russia and aim to retain this
position.
[1] Lenta share of net selling space added in hypermarket
segment in 2015 and 2016 derived from Infoline data.
2 Based on Infoline data.
3 Based on the guidance of RUB 45-50bn for 2016, adjusted upward
for the acquisition of Kesko's food retail business in Russia.
4 Calculated as the increase in the number of FTE (full time
equivalent) employees between February 28, 2014 and October 30,
2016.
In 2012, just over a year before our IPO, Lenta was Russia's
seventh largest retailer in terms of total sales - since then, our
expansion enabled us to become the fourth largest retailer in terms
of total sales in the third quarter of 2016(5) . We have also
become Russia's largest hypermarket operator in terms of selling
space, up from third place at the time of our IPO.
The Russian retail market presents the most efficient operators
with huge potential for future growth combined with attractive
returns. In early 2017 we will present a new long-term strategy, in
which we will explain our plans to enable Lenta to realize its full
market potential".
In February 2017, after the announcement of the 2016 full year
financial results, Lenta intends to hold a strategy presentation
open to all investors, at which the company will set out its new
long-term goals.
About Lenta
Lenta is the largest hypermarket chain in Russia (in terms of
selling space) and the country's fifth largest retail chain (in
terms of 2015 sales). The Company was founded in 1993 in St.
Petersburg. Lenta operates 165 hypermarkets in 75 cities across
Russia and 43 supermarkets in Moscow and St. Petersburg, with a
total of approximately 1,019,968 sq.m of selling space. The average
Lenta hypermarket store has selling space of approximately 5,900
sq.m. The average Lenta supermarket store has selling space of
approximately 1,000 sq.m. The Company operates seven owned
distribution centres.
The Company's price-led hypermarket formats are differentiated
in terms of their promotion and pricing strategies as well as their
local product assortment. The Company employed approximately 34,134
people as of 30 June 2016(6) .
The Company's management team combines a mix of local knowledge
and international expertise coupled with extensive operational
experience in Russia. Lenta's largest shareholders include TPG
Capital and the European Bank for Reconstruction and Development,
both of which are committed to maintaining high standards of
corporate governance. Lenta is listed on the London Stock Exchange
and on the Moscow Exchange and trades under the ticker: 'LNTA'.
A brief video summary on Lenta's business and its Big Data
initiative can be seen here.
Lenta Citigate
Anna Meleshina, International Media:
Public Relations & David Westover
Government Affairs el: +44 207 282 2886
Director E-mail: lentateam@citigatedr.co.uk
Tel: +7 812 363 28
53 FTI Consulting
E-mail: anna.meleshina@lenta.com Russian Media:
Anton Karpov & Victoria
Anastasia Kuznetsova, Afonina
Corporate Communications el:+7 495 795 06 23
Manager E-mail: lenta@FTIconsulting.com
el:+7 (812) 336 39
97
E-mail: a.kuznetsova@lenta.com
5 Based on public data on total quarterly sales in the third
quarter of 2016.
6 FTE (full-time equivalent). Average FTE for 1H 2016 was 33,758
employees.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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