Lenta Ltd 3rd Quarter Results -2-

The performance of Lenta's supermarkets in the third quarter of 2014 was in line with expectations, despite the stores' relative immaturity (only five stores out of 16 had been operating more than a year as at 30 September, 2014). The supermarket format's share of Lenta's total sales increased to 2.9% in the quarter, up from 0.7% in the third quarter of 2013.

 
                         3Q       3Q       Net   Change        9M       9M       Net     Change 
                       2014     2013    change      (%)      2014     2013    change        (%) 
 
 Sales (Rub, 
  million)           48,547   36,540    12,008    32.9%   134,447   98,671    35,776      36.3% 
     hypermarkets    47,153   36,294    10,859    29.9%   130,945   98,381    32,563      33.1% 
     supermarkets     1,395      246     1,149   467.0%     3,502      289     3,213   1,110.6% 
 
 Average ticket 
  (Rub)               1,054    1,059        -6    -0.5%     1,061    1,055         6       0.6% 
     hypermarkets     1,088    1,069        19     1.8%     1,091    1,059        31       3.0% 
     supermarkets       507      448        59    13.2%       526      442        83      18.8% 
 
 Customer traffic 
  (million)            46.1     34.5      11.6    33.6%     126.7     93.5      33.2      35.5% 
     hypermarkets      43.3     33.9       9.4    27.6%     120.1     92.9      27.2      29.3% 
     supermarkets       2.7      0.5       2.2   400.7%       6.7      0.7       6.0     919.0%

Guidance

Given nine months openings and progress in the construction of new stores, Lenta confirms its initial guidance of 24 hypermarket and 15 supermarket openings in 2014. The Company expects these store openings to translate into an increase of at least 30% in total net selling space for 2014. We have also made good progress in building our new site pipeline and maintain our long-term target to double net selling space over the three years to December 2016. Our sales growth guidance for the full year 2014 remains unchanged at 34-38%. However we will inevitably not be immune from possible impacts on consumer behaviour caused by deterioration in the macro environment.

About Lenta

Lenta is one of the largest retail chains in Russia and the country's second largest hypermarket chain (in terms of 2013 sales). The Company was founded in 1993 in St. Petersburg. Lenta operates 87 hypermarkets in 50 cities across Russia and 17 supermarkets in Moscow and the Moscow region, with a total of approximately 570,673 sq.m. of selling space. The average Lenta hypermarket store has selling space of approximately 6,400 sq.m. The Company operates four hypermarket 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 27,800 people as of 31 December 2013.

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, the European Bank for Reconstruction and Development and VTB Capital Private Equity, all of whom 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'.

Forward looking statements:

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the fact that they do not only relate to historical or current events. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "expected", "plan", "goal", "believe", or other words of similar meaning.

By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, a number of which are beyond Lenta's control. As a result, actual future results may differ materially from the plans, goals and expectations set out in these forward-looking statements.

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.

[1] Numbers in the Announcement are preliminary and not reviewed or audited. Insignificant deviations in % change or totals are explained by rounding. This note applies to all tables in this Announcement

[2] Lenta's stores are included in the LFL store base starting 12 months after the end of the month they are opened

[3] Cardholders who made at least 2 purchases at Lenta during the 12 months to 30 September, 2014 are considered active

[4] Within the reported period

This information is provided by RNS

The company news service from the London Stock Exchange

END

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