TIDMLNTR TIDMLNTA
RNS Number : 4897C
Lenta Ltd
16 October 2015
LENTA SALES AND OPERATING HIGHLIGHTS FOR THE THIRD QUARTER
ENDED 30 SEPTEMBER 2015
St-Petersburg, Russia; 16 October, 2015 - Lenta Ltd, (LSE, MOEX:
LNTA / "Lenta" or the "Company") one of the largest retail chains
in Russia, is pleased to announce the Company's consolidated sales
and operating results for the third quarter and nine months ended
30 September 2015.
3Q 2015 Operating Highlights:
-- Total sales grew 29.3% in 3Q 2015 to Rub 62.8bn (3Q 2014: Rub 48.5bn);
-- Like-for-like ("LFL")1 sales growth of 8.5% vs.3Q 2014;
-- LFL traffic growth of 2.1% combined with a 6.2% increase in LFL ticket;
-- Six hypermarkets opened during the third quarter of 2015;
-- Total of 149 stores at 30 September 2015, comprising 122 hypermarkets and 27 supermarkets;
-- Total selling space increased to 787,804 sq.m. as at 30
September 2015 (+38.3% vs. 30 September 2014); and
-- Number of active loyalty cardholders2 increased to 8.0m (+33%
y-o-y) with approximately 90% of transactions in the third quarter
made using the loyalty card.
9M 2015 Operating Highlights:
-- Total sales grew 32.1% in 9M 2015 to Rub 177.7bn (9M 2014: Rub 134.4bn);
-- LFL sales growth of 10.4% vs. 9M 2014;
-- LFL traffic growth of 3.7% combined with a 6.4% increase in LFL ticket;
-- 14 hypermarkets and three supermarkets opened during the first nine months of 2015.
Material events in 3Q 2015 and after the reported period:
-- Lenta issued two tranches of bonds on MoEx for a total amount
of Rub 10bn with 10 years maturity and a coupon rate of 12.4%3
(both tranches rated "BB-" by Fitch Ratings);
-- S&P Ratings Services upgraded the long-term credit rating
of Lenta Ltd. and its main operating company Lenta LLC to "BB-"
with a "stable" outlook;
-- Moody's Investors Service upgraded Lenta's credit rating to "Ba3", outlook "stable";
-- Lenta acquired three new stores and four land plots from
O'KEY Group; one of the acquired stores opened in September and the
other two will open before the end of 2015. New stores will be
developed on the four land plots to open during 2016-2017.
Lenta's Chief Executive Officer, Jan Dunning commented:
"In the third quarter of 2015, Lenta again delivered strong
growth, with total sales up 29% despite a high base for comparison.
Lenta remains well positioned to win in a tough market environment
generating strong 8.5% LFL sales and 2% LFL traffic growth despite
continuing pressure on consumer incomes and decelerating food
inflation. Further adjustments to our offer to meet evolving
consumer needs, including intensified tailored promotions, resulted
in an acceleration of sales growth in September with double-digit
LFL sales growth.
We continued to benefit from effective cost management and
further improvements in our supply chain, which together with
improved supplier terms enabled us to absorb part of the effect
inflation has on our customers without sacrificing
profitability.
Returns on investment in new stores have remained consistently
strong. Our new store pipeline has also continued to strengthen,
enabling us to increase our hypermarket opening target for 2015 to
at least 30 stores.
The upgrade of S&P's credit rating to 'BB-' with a stable
outlook, assigned to Lenta in August and upgrade of Moody's credit
rating to "Ba3" with a "stable" outlook in October, reflect our
strong operational performance, robust profitability and improved
financial position which enable the Company to grow its share of
the Russian food retail market."
For further information, please visit www.lentainvestor.com, or
contact:
Lenta Instinctif Partners
Anna Meleshina, International Media:
Public Relations & Government Mark Walter and Saule Jandossova
Affairs Director el:+44 (0)20 7457 2020
Tel: +7 812 363 28 53 E-mail: Mark.Walter@instinctif.com
E-mail: anna.meleshina@lenta.com
Primum
Yana Mogileva, PR Manager Russian Media:
el:+7 (812) 336 39 97 Alexandra Semenova and Nikolay
E-mail: yana.mogileva@lenta.com Konchurkov
el:+7 926 903 9975
E-mail: NKochurkov@primum.ru
Lenta Store Developments
In the third quarter of 2015, Lenta opened six hypermarkets
(three owned standard stores in Murmansk, Moscow and Novokuznetsk,
two owned compact stores in Kemerovo and Volgograd and one leased
compact store in Moscow), taking the total number of stores to 149
(122 hypermarkets and 27 supermarkets). The Company entered one new
city in the third quarter of 2015 and is now present in 634 cities.
Lenta added 36,359 sq.m. of new selling space in the reported
quarter. Total selling space as at 30 September 2015 increased to
787,804 sq.m., up 38.3% year-on-year.
As at As at As at As at
30 Sept 30 Sept Net Change 30 Sept 30 Sept Net Change
3Q 2015 3Q 2014 change (%) 9M 2015 9M 2014 change (%)
Number of
stores 149 103 46 44.,7% 149 103 46 44.7%
hypermarkets 122 87 35 40.2% 122 87 35 40.2%
supermarkets 27 16 11 68.8% 27 16 11 68.8%
Number of
new stores5 6 7 -1 -14.3% 17 16 1 6.3%
hypermarkets 6 5 1 20.0% 14 10 4 40.0%
supermarkets - 2 - - 3 6 -3 -50.0%
Total selling
space (sq.m.) 787,804 569,800 218,004 38.3% 787,804 569,800 218,004 38.3%
hypermarkets 758,474 550,905 207,572 37.7% 758,477 550,905 207,572 37.7%
supermarkets 29,327 18,895 10,432 55.2% 29,327 18,895 10,433 55.2%
Total selling
space added
(sq.m.)5 36,359 27,526 8,833 32,1% 86,656 64,136 22,520 35.1%
hypermarkets 36,359 25,140 11,219 44,6% 83,890 57,065 26,825 47,0%
supermarkets - 2,386 - - 2,766 7,071 -4,305 -60.9%
Lenta's Operating Performance
Continuing selling space additions and LFL growth supported
overall sales growth of 29.3% for the third quarter of 2015. Total
sales amounted to Rub 62.8bn in the third quarter, compared to Rub
48.5bn for the same period last year.
In the third quarter of the year Lenta continued to implement
digital marketing activities to reach customers, with special
offers tailored on an individual basis to enhance traffic. The
number of active loyalty cardholders increased to 8.0 million as at
30 September, 2015 (+33% y-o-y).
LFL sales growth of 8.5% in the third quarter was supported by
LFL traffic growth of 2.1% and average LFL ticket increase of 6.2%
due to inflationary effects partly offset by a reduction in the
number of items per basket, changes in the product mix and
increased promotions. LFL food sales increased by 10.0%, while LFL
non-food sales growth remained negative. In addition to the effects
of trading down, sales in the third quarter were also affected by
the high base of last year, especially in July and August. Sales
growth strengthened in September with double-digit LFL sales growth
and robust LFL traffic growth; LFL ticket growth was impacted by
decelerating inflation, however trading down stabilized - while
growth in number of articles per basket and product mix still
remained negative y-o-y, the dynamics have improved since July.
Lenta's expansion resulted in an increase in the number of new
maturing stores included in the LFL store base for comparison.
During the third quarter of 2015, six hypermarkets entered the LFL
panel.
LFL sales LFL average LFL traffic LFL sales LFL average LFL traffic
growth ticket growth growth ticket growth
growth growth
3Q 2015 3Q 2015 3Q 2015 9M 2015 9M 2015 9M 2015
Lenta total
(%) 8.5% 6.2% 2.1% 10.4% 6.4% 3.7%
hypermarkets 8.3% 6.3% 1.9% 10.2% 6.5% 3.5%
supermarkets 14.7% 9.0% 5.2% 19.1% 9.7% 8.5%
The average hypermarket ticket in the third quarter increased to
Rub 1,122 (+3.1% compared to the third quarter of 2014), lower than
the 6.3% increase in the LFL average hypermarket ticket due to the
increase in the proportion of young stores. As of 30 September 2015
the share of selling space younger than three years increased to
60% compared to 52% as at 30 September 2014 and the share of stores
operating for less than one year increased to 28% compared to 27% a
year ago. The same trend was visible in the supermarket format,
where the average ticket in the third quarter increased by 4.7% to
Rub 531 compared to 9.0% increase in the LFL average ticket.
Total customer traffic increased by 26.6% in the third quarter
of 2015 compared with the same period of the previous year,
comprising 24.1% growth in hypermarket traffic and 64.8% increase
in traffic at Lenta's supermarket format.
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