TIDMLNTR TIDMLNTA
RNS Number : 5105W
Lenta International PJSC
26 April 2021
Press Release | St. Petersburg | 26 April 2021
Lenta's Q1 2021 adjusted Retail Sales increased by 6.9% and
Online Sales by 674%
Q1 2021 Operational and Financial Highlights(1)
-- The Q1 2021 year-over-year comparison was materially impacted
by the extraordinarily high base effect for the March 14-31, 2020
period, when last year's COVID-19 bulk buying began in earnest.
Adjusting for this effect, Retail Sales growth amounted to 6.9% and
LFL Sales growth was 7.3%
-- In Q1 2021, unadjusted Retail Sales increased by 1.5% y-o-y
to RUB 105.9 billion
-- Unadjusted LFL Sales growth for the full Q1 2021 quarter was
1.3% with an Average Ticket growth of 11.6% and a customer Traffic
decline of 9.3%
-- Lenta continued with the rapid roll-out of its online
channel, which is now available in all 89 Russian cities where the
company operates. As a result, Online Sales and Online Orders grew
by 674% and 871% y-o-y respectively in Q1 2021, to RUB 3.8 billion
and 2.2 million orders
-- In Q1 2021, Lenta added 1 store on a net basis, bringing the
total number of retail stores to 394 and the Total Selling Space to
1.52 million square meters as of 31 March 2021
-- Gross Profit was RUB 23.4 billion, an increase of 2.4% y-o-y,
which resulted in a Gross Margin of 21.8%, an improvement of 26 bps
y-o-y
-- SG&A expenses amounted to RUB 21.6 billion, or 20.1% of
Total Sales, an increase of 217 bps y-o-y, driven by investments
into preparing Lenta for growth, salary indexation in LFL stores
and new store openings, investments into online, COVID-19 and other
one-off related expenses
-- EBITDA was RUB 6.7 billion in Q1 2021, and Lenta's EBITDA
Margin was 6.2%
-- LTM Net Debt to EBITDA ratio stood at 1.7x as of March 31, 2021
St. Petersburg, Russia, 26 April 2021: Lenta IPJSC (MOEX &
LSE: LNTA), one of the largest retail chains in Russia, today
announces its operational results and unaudited financial
highlights for Q1 2021. A conference call with management to
discuss these results is scheduled for today (see below for dial-in
details).
Vladimir Sorokin, Chief Executive Officer:
"Lenta started 2021 with a firm financial foundation for growth
and a clear strategy focused on value creation. In the first
quarter of 2021, Lenta improved its Gross Margin to 21.8% and grew
its Online Sales more than sevenfold. Adjusted to exclude the high
base effect of 14-31 March 2020, our Q1 2021 Total Sales growth was
a healthy 6.9%.
We have already made some exciting progress on new strategic
initiatives aimed at expanding our online business and
strengthening our multi-format offering. We just recently launched
our new Mini Lenta proximity store format, which enables us to get
closer to our customers and to offer a tailored range of quality
products at segment-leading prices alongside a unique customer
experience. The new format will operate to the same high standards
that customers have come to appreciate from Lenta's hypermarkets
and supermarkets.
While the external environment still presents challenges as a
result of the COVID-19 pandemic, Lenta has continued to adjust
swiftly to meet and exceed the expectations of our customers when
it comes to product quality and selection, as well as ensuring a
safe shopping experience."
1. Please note that all Financial Highlights are based upon IAS
17 figures.
1st Quarter - LFL RESULTS(2) Q1 Q1 Q1
Sales Average Ticket Traffic
Total Retail 1.3% 11.6% -9.3%
Hypermarkets 1.9% 10.9% -8.1%
Supermarkets(3) -5.0% 11.3% -14.7%
1st Quarter - OPERATING RESULTS (Year-over-Year)
Q1 2021 Q1 2020 Change % Change
Total Sales (RUB millions) 107,312 106,004 1,308 1.2%
Retail Sales 105,881 104,352 1,528 1.5%
Hypermarkets 96,190 94,553 1,637 1.7%
Supermarkets (3) 9,691 9,800 (109) -1.1%
Wholesale 1,431 1,652 (221) -13.4%
Average Ticket (RUB) 1,126 1,021 105 10.3%
Hypermarkets 1,249 1,134 115 10.1%
Supermarkets(3) 571 522 49 9.4%
Number of Tickets (millions) 94 102 (8) -8.0%
Hypermarkets 77 83 (6) -7.6%
Supermarkets(3) 17 19 (2) -9.6%
Total Retail Stores (eop) 394 380 14
Hypermarkets 254 249 5
Openings 1 0 1
Closing 1 0 1
Supermarkets(3) 140 131 9
Openings 2 0 2
Closing 1 0 1
New Selling Space (sqm, eop) 3,499 0 3,499
Hypermarkets 2,899 0 2,899
Supermarkets(3) 600 0 600
Total Selling Space (sqm, eop) 1,522,097 1,489,229 32,868 2.2%
Hypermarkets 1,403,687 1,378,581 25,106 1.8%
Supermarkets(3) 118,410 110,648 7,762 7.0%
Total Online Sales (RUB, millions) 3,813 493 3,320 673.9%
Total Online Orders (thousands) 2,152 222 1,931 871.4%
Cities of Online Operation
Online Partners 89 21 68
Lentochka 84 1 83
Click & Collect 89 0 89
2. LFL Results do not include 29-Feb-2020
3. Supermarkets include one new proximity store opened in Q1 2021
4. "eop" refers to "end of period"
Q1 2021 Monthly - OPERATING RESULTS
January YoY February YoY March YoY
Total Sales (RUB millions) 33,893 9.4% 34,767 2.4% 38,652 -5.9%
Retail Sales 33,607 9.4% 34,264 2.8% 38,009 -5.7%
Hypermarkets 30,505 10.2% 31,190 3.2% 34,495 -5.8%
Supermarkets (3) 3,102 2.0% 3,075 -0.3% 3,514 -4.4%
Wholesale 286 13.8% 502 -21.6% 643 -15.5%
Average Ticket (RUB) 1,105 17.4% 1,169 16.5% 1,109 -0.1%
Hypermarkets 1,221 17.0% 1,297 16.3% 1,232 0.0%
Supermarkets(3) 570 15.0% 583 15.5% 561 0.0%
Number of Tickets (millions) 30 -6.8% 29 -11.7% 34 -5.6%
Hypermarkets 25 -5.8% 24 -11.3% 28 -5.9%
Supermarkets(3) 5 -11.3% 5 -13.7% 6 -4.3%
Total Retail Stores (eop) 392 393 394
Hypermarkets 253 254 254
Openings 0 1 0
Closing 1 0 0
Supermarkets(3) 139 139 140
Openings 0 0 2
Closing 0 0 1
New Selling Space (sqm,
eop) (2,883) 5,782 600
Hypermarkets (2,883) 5,782 0
Supermarkets(3) 0 0 600
Total Selling Space (sqm,
eop) 1,515,715 1.8% 1,521,497 2.2% 1,522,097 2.2%
Hypermarkets 1,397,905 1.4% 1,403,687 1.8% 1,403,687 1.8%
Supermarkets(3) 117,810 6.5% 117,810 6.5% 118,410 7.0%
Total Online Sales (RUB,
millions) 1,164 994.8% 1,285 831.8% 1,364 448.9%
Total Online Orders (thousands) 687 1263% 714 974% 752 618%
Cities of Online Operation
Online Partners 89 89 89
Lentochka 83 83 84
Click & Collect 89 89 89
3. Supermarkets include one new proximity store opened in Q1
2021
Operating Results Commentary
Adjusted for the extraordinarily high base effect of 14-31 March
2020 due to last year's COVID-19 bulk buying, Lenta's Retail Sales
growth in Q1 2021 amounted to 6.9%. Adjusted LFL Retail Sales
Growth was 7.3%. Adjusted Q1 2021 Hypermarket LFL Sales increased
by 8.3%, while Adjusted Supermarket LFL sales decreased by
1.9%.
Lenta's Retail Sales in Q1 2021 increased by 1.5% compared to Q1
2020. This increase was driven by a 10.3% growth in Average Ticket
size during Q1, which was offset by an 8.0% decrease in customer
Traffic. Lenta stores, especially Hypermarkets, continued to show
good performance in Q1 2021, further proving the resilience of the
Hypermarket format in the current environment. The Hypermarket
format delivered 1.7% growth in Retail Sales, as a result of a
10.1% increase in the Average Ticket size, which was offset by a
7.6% decrease in customer Traffic. Our Supermarket format posted a
1.1% decrease in Retail Sales, as a result of an increase in the
Average Ticket size of 9.4% and a decrease in customer Traffic of
9.6%.
During Q1, LFL Retail Sales grew by 1.3% as the Average Ticket
size increased by 11.6%. LFL customer Traffic decreased 9.3% during
Q1, reflecting consumers' continuing preference to shop less
frequently amid the continued COVID-19 environment. Hypermarket LFL
Retail Sales were up 1.9%, driven by a 10.9% increase in the
Average Ticket size offset by an 8.1% decrease in Traffic. Lenta's
Supermarkets Q1 LFL Retail Sales fell by 5.0%, while Average Ticket
was up 11.3% and Traffic decreased by 14.7%.
Lenta's share of online sales continued to grow in line with
broader market trends, as the COVID-19 pandemic accelerated the
ongoing trend of preference for grocery delivery. At the same time,
sales of healthy lifestyle products have demonstrated steady growth
as a result of the pandemic's effect on customer behavior.
In Q1 2021, Lenta's fast-growing online sales platform, which
offers services across all core customer missions, continued to be
an engine of growth for the company. Total Online Sales during the
period amounted to RUB 3.8 billion, an increase of 674%
year-over-year, while Total Online Orders were up 871% and amounted
to 2.2 million. During the quarter, Total Online Sales represented
3.6% of Lenta's Total Sales. The company's own Lentochka express
delivery service now represents 38% of Online Sales. Both Online
Sales and Online Orders demonstrated strong month-on-month
improvements in January through March 2021.
The company already operates its own Click & Collect
platform in all 89 cities where it operates physical stores. In Q1
2021, the company added four new cities to its Lentochka offering,
bringing the total number of cities to 84. In addition, Lenta works
with its online partners in all 89 cities where it operates.
Lenta's internal analysis continues to confirm that Lentochka
delivered incremental sales and did not materially cannibalize
existing revenue streams.
Lenta opened one new hypermarket and two new supermarkets during
Q1 2021. Lenta also closed one hypermarket and one supermarket
during the reporting period, bringing the total number of Lenta
stores at the quarter end to 254 hypermarkets and 140
supermarkets.
Q1 2021 Key Financial Results IFRS 16 IAS 17
RUB million Q1 2021 Q1 2020 Change Q1 2021 Q1 2020 Change
Total Sales 107,312 106,004 1.2% 107,312 106,004 1.2%
Gross Profit 23,493 22,958 2.3% 23,431 22,875 2.4%
Gross Margin (%) 21.9% 21.7% 23 bps 21.8% 21.6% 26 bps
SG&A (21,210) (18,647) 13.7% (21,563) (19,001) 13.5%
SG&A as % of Total Sales 19.8% 17.6% 217 bps 20.1% 17.9% 217 bps
EBITDAR 8,599 10,738 -19.9% 8,325 10,656 -21.9%
-212 -229
EBITDAR Margin 8.01% 10.13% bps 7.76% 10.05% bps
Rent as % of Total Sales 0.23% 0.24% -1 bps 1.55% 1.45% 10 bps
EBITDA 8,347 10,479 -20.3% 6,666 9,124 -26.9%
-211 -240
EBITDA Margin 7.8% 9.9% bps 6.2% 8.6% bps
Operating Profit before
impairment 3,479 5,862 -40.7% 2,853 5,426 -47.4%
Operating Profit Margin -229 -246
before impairment 3.2% 5.5% bps 2.7% 5.1% bps
Reversal of impairment
(i mpairment) (9) 42 (9) 42
Operating Profit 3,470 5,904 -41.2% 2,844 5,468 -48.0%
-234 -251
Operating Profit Margin 3.2% 5.6% bps 2.7% 5.2% bps
Net Interest Expense (1,788) (2,396) -25.4% (1,119) (1,710) -34.6%
(Net FX loss) (27) (387) -93.0% (5) (217) -97.7%
Profit Before Income
Tax 1,656 3,121 -46.9% 1,720 3,541 -51.4%
Net Income 1,265 2,854 -55.7% 1,317 3,190 -58.7%
-151 -178
Net Income Margin 1.2% 2.7% bps 1.2% 3.0% bps
Total Sales rose by 1.2% year-over-year in Q1 2021, supported by
retail sales growth, online development, growing participation in
Lenta's revamped loyalty program and a noticeable trend of trading
up.
In Q1 2021, Gross Profit (IAS 17) increased by 2.4%
year-over-year and Gross Margin increased by 26 bps to 21.8%. This
was driven by better supply chain management, as well as improved
shrinkage and stock provision.
EBITDA (IAS 17) for the period decreased by 26.9% to RUB 6.7
billion, mainly due to the absence in Q1 2021 of the spike in sales
seen in the previous year, but also as a result of investments into
preparing Lenta for growth, salary indexation in LFL stores and new
store openings, online business growth, COVID-19 expenses and other
one-off related expenses.
Operating Profit before impairment (IAS 17) amounted to RUB 2.9
billion in Q1 2021.
Selling, General, and Administrative IFRS 16 IAS 17
(SG&A)
RUB million Q1 2021 Q1 2020 Change Q1 2021 Q1 2020 Change
Payroll and related taxes 8,492 7,374 15.2% 8,492 7,374 15.2%
as a % of Total Sales 7.9% 7.0% 96 bps 7.9% 7.0% 96 bps
Depreciation and Amortization 4,868 4,616 5.5% 3,813 3,697 3.1%
as a % of Total Sales 4.5% 4.4% 18 bps 3.6% 3.5% 7 bps
Lease Expenses 252 259 -2.7% 1,660 1,532 8.4%
as a % of Total Sales 0.2% 0.2% -1 bps 1.5% 1.4% 10 bps
Utilities 1,396 1,305 7.0% 1,396 1,305 7.0%
as a % of Total Sales 1.3% 1.2% 7 bps 1.3% 1.2% 7 bps
Store Operations 2,286 2,130 7.3% 2,286 2,130 7.3%
as a % of Total Sales 2.1% 2.0% 12 bps 2.1% 2.0% 12 bps
Professional Fees 1,112 983 13.1% 1,112 983 13.1%
as a % of Total Sales 1.0% 0.9% 11 bps 1.0% 0.9% 11 bps
Advertising 1,259 1,051 19.8% 1,259 1,051 19.8%
as a % of Total Sales 1.2% 1.0% 18 bps 1.2% 1.0% 18 bps
Other 1,545 929 66.3% 1,545 929 66.3%
as a % of Total Sales 1.4% 0.9% 56 bps 1.4% 0.9% 56 bps
Total SG&A 21,210 18,647 13.7% 21,563 19,001 13.5%
217
as a % of Total Sales 19.8% 17.6% 217 bps 20.1% 17.9% bps
SG&A excluding D&A 16,342 14,031 16.5% 17,750 15,304 16.0%
as a % of Total Sales 15.2% 13.2% 199 bps 16.5% 14.4% 210 bps
Total Selling, General, and Administrative expenses (IAS 17)
increased by 13.5% year-over year to RUB 21.6 billion and amounted
to 20.1% of Total Sales. This was driven by a combination of
factors, including investments into preparing Lenta for growth,
salary indexation in LFL stores and new store openings, online
business growth, COVID-19 expenses, and other one-off related
expenses.
Lenta remained focused on creating a safe store experience for
both employees and customers in Q1 2021, and this resulted in
COVID-19 related expenses increasing to RUB 295 billion, compared
to zero in Q1 2020. Expenses included purchases of masks, gloves,
thermometers, and disinfectants.
Advertising costs during Q1 2021 were up 19.8% year-over-year,
due to a shift from offline to online channel marketing spend.
Professional fees, which include consulting, legal and auditor
fees, as well as bank commissions for acquiring services, rose by
13.1% in Q1 2021.
Q1 2021 Cash Flow Statement IFRS 16 IAS 17
RUB million Q1 2021 Q1 2020 Change Q1 2021 Q1 2020 Change
Profit before income
tax 1,656 3,121 -46.9% 1,720 3,541 -51.4%
Net adjustments for
loss on disposal of
assets, impairment,
depreciation & amortization,
and other 6,689 7,311 -8.5% 4,979 5,536 -10.1%
Movements in Working
Capital (7,081) (5,777) 22.6% (6,959) (5,624) 23.7%
Cash generated from
operating activities 1,264 4,655 -72.8% (260) 3,453 -107.5%
Net Interest & Income
Taxes Paid (2,679) (3,764) -28.8% (2,000) (3,078) -35.0%
Net cash (used in) /
from Operating Activities (1,415) 891 -258.8% (2,260) 375 -702.7%
Net cash (used) in Investing
Activities (3,069) (2,094) 46.6% (3,077) (2,103) 46.3%
Net cash (used) in Financing
Activities (1,426) (60,780) -97.7% (573) (60,255) -99.0%
Net (Decrease) in Cash
& Cash Equivalents (5,910) (61,983) -90.5% (5,910) (61,983) -90.5%
CAPEX in Q1 2021 amounted to RUB 3.2 billion, an increase of
51.1% year-over-year, and was focused on new hypermarket and
supermarket construction, as well as distribution center
construction and IT investments.
Net cash used in Financing Activities in Q1 2021 was lower than
in the previous year, as Lenta had taken the opportunity in Q1 2020
to repay several credit lines.
Free Cash Flow for the Q1 2021 amounted to RUB -5.4 billion,
which was RUB 3.7 billion lower than in the previous year, mainly
due to lower EBITDA in Q1 2021.
Q1 2021 Debt Position and IFRS 16 IAS 17
Leverage
RUB million 31-Mar-21 31-Dec-20 31-Mar-21 31-Dec-20
Gross Debt 112,720 113,394 78,475 78,952
Long-term Debt 47,920 45,941 47,920 45,941
Short-term Debt 30,555 33,011 30,555 33,011
Lease Liabilities (IFRS
16) 34,245 34,442 - -
Cash & Cash Equivalents 15,899 21,809 15,899 21,809
Net Debt 96,821 91,585 62,576 57,143
LTM Net Debt / EBITDA ratio 1.7x 1.5x
As of March 31, 2021, Lenta's Gross Debt (IAS 17) had decreased
to RUB 78.5 billion. The company's LTM Net Debt to EBITDA ratio
stood at 1.7x at the end of Q1 2021, compared to 2.2x at the end of
Q1 of 2020 and 1.5x at year-end 2020.
Lenta's interest coverage ratio at the end of Q1 2021 stood at
6.0x.
FY 2021 Guidance
In line with the company's performance in Q1 2021, Lenta
Management reiterates the following FY 2021 Guidance provided at
the company's Capital Markets Day on March 18, 2021:
-- Selling Space Growth: at least 100k sqm
-- EBITDA Margin: above 8%
-- CAPEX: up to 5% of Sales
Q1 2021 Conference Call
The Lenta Management Team will host an investor and analyst
conference call at 17:00 Moscow time (15:00 London, 10:00 New
York), on Monday, 26 April 2021. On the call will be Vladimir
Sorokin (CEO), Rud Pedersen (CFO), and Tim Post (IRO).
To participate in the conference call, please use the following
dial-in details:
Conference ID: 5638180 ("Lenta Q1 Results Call")
Russian Federation: +7 499 609 1260 (local access)
8 800 100 9471 (toll free)
UK: +44 (0)330 027 1846 (local access)
0800 031 4838 (toll free)
USA: +1 334-777-6978 (local access)
800-367-2403 (toll free)
Participants are encouraged to register approximately 5-10
minutes prior to the start of the call.
For further information, please visit www.lentainvestor.com or
contact:
Lenta Lenta
Mariya Filippova Timothy Post
Head of Public Relations and Government Investor Relations Officer
Affairs timothy.post@lenta.com
maria.filippova@lenta.com
EM (International Media Inquiries)
Lenta@em-comms.com
About Lenta
Lenta IPJSC (LSE and MOEX: LNTA) is a leading Russian
multi-format food and FMCG retailer. The company operates
hypermarkets, supermarkets, and recently launched a new proximity
store format under the brand "Mini Lenta." It also provides
customers the option to shop online via its click-and-collect and
express delivery services. Lenta is Russia's largest hypermarket
operator and the fourth largest food retailer overall by Sales. The
company was founded in 1993 in St. Petersburg and as of March 31,
2021 operated 254 hypermarkets and 140 supermarkets in 89 cities
across European Russia with more than 1.5 million square meters of
Selling Space. The average Lenta hypermarket has approximately
5,500 square meters of selling space, the average Lenta supermarket
has 800 square meters, and the Mini Lenta format is 500 meters on
average. The company operates 13 distribution centers to supply all
of its stores. 2020 Revenues were RUB 445 billion (approximately
USD 6 billion).
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 of the date of this
announcement. Except 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.
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