TIDMLNTR TIDMLNTA
RNS Number : 2056C
Lenta International PJSC
21 February 2022
Press Release | St. Petersburg | 21 February 2022
Lenta Reports 8.6% Sales Growth and an 8.1% EBITDA Margin in FY
2021
St. Petersburg, Russia, 21 February 2022: Lenta IPJSC (LSE:
LNTA, MOEX: LNTA, LENT) , one of the largest multi-format retail
chains in Russia, today announces its audited financial results for
the fourth quarter and full year of 2021.
FY 2021 Highlights(1)
-- Total Sales increased by 8.6% y-o-y to RUB 484 billion
-- Retail Sales reached RUB 476 billion, representing 8.8% y-o-y growth
-- Gross Profit was RUB 111 billion, an increase of 9.5%. Gross
Margin increased by 19 bps and stood at 23.0%
-- SG&A expenses increased as a percent of Sales by 94 bps
due to intensified expansion of small-format stores, Lenta Online
and expenses related to the acquisitions of Billa and Semya
-- EBITDA was RUB 39.2 billion with an 8.1% EBITDA Margin
-- CapEx stood at RUB 9.3 billion, up 23.3% y-o-y
-- As of 31 December 2021, the Net Debt to EBITDA ratio was 1.4x vs. 1.5x as of 31 December 2020
Q4 2021 Highlights(1)
-- Total Sales increased by 18.6% y-o-y to RUB 147 billion
-- Retail Sales reached RUB 145 billion, representing 18.9% y-o-y growth
-- Gross Profit was RUB 33.5 billion, an increase of 21.2%.
Gross Margin increased by 48 bps and stood at 22.7%
-- SG&A expenses increased as a percent of Sales by 50 bps
mainly due to higher lease expenses, payroll and related taxes on
the back of expansion
-- EBITDA was RUB 11.4 billion, an increase of 22.2%. EBITDA
Margin increased by 22 bps and stood at 7.7%
1. Please note that all Financial Highlights are based upon IAS 17 figures.
Vladimir Sorokin, Chief Executive Officer:
"Lenta's strong performance in the past year provides momentum
to execute the ambitious growth strategy we presented to our
shareholders in 2021. Measuring this performance against our
long-term strategic objectives, we are well on the way to transform
Lenta into a champion multi-format food retailer.
In 2021, we grew our retail footprint through a combination of
smart organic growth and strategic acquisitions, adding 364 stores
on a net basis and increasing Total Selling Space by over 15%. The
acquisitions of Billa and Semya has strengthened Lenta's market
positions in Moscow and Perm via locations with established
customer traffic, while their competencies in small stores will
support our organic expansion.
Our core Hypermarket business is gaining market share and
delivering solid results, posting sales growth and improved
efficiency in 2021. In addition, we are working to increase the
productivity of this format through several initiatives, including
dedicated zones for online order picking in our stores.
The roll-out of our Lenta Mini format is moving along swiftly.
As of the end of the year, we had 133 Lenta Mini locations and 85
of those stores were added in the fourth quarter alone. We see that
there is ample opportunity to further optimize the operations of
Lenta Mini and our supermarkets in 2022.
Lenta's online business is becoming an increasingly important
contributor to our growth, with Online Sales up 208% in 2021. A key
focus of 2022 will be on an integration of the Utkonos business,
while leveraging it's business's assortment strength, loyal
customer base, and expertise in dark stores. We believe Lenta-U
will become a sizable player in the Russian e-grocery market.
I am pleased to say that despite the intense expansion in small
formats, two acquisitions, and the strong growth of our Online
business we were able to deliver an EBITDA Margin on an
industry-leading level of over 8.0% in 2021.
The current macroeconomic situation and inflationary environment
create headwinds for the entire sector, but we are confident that
Lenta is well-positioned to navigate the challenges and deliver
strong results in 2022. We will continue to execute our strategy
investing in expansion and online development as well as continuous
improvements of our operations to ensure Lenta's long-term growth
and leadership."
Q4 & FY 2021 FINANCIAL HIGHLIGHTS
Key Financial Results, IAS 17
RUB million Q4'21 Q4'20 Change FY'21 FY'20 Change
========================= ========== ========== ========= ========== ========== =========
Total Sales 147,316 124,172 18.6% 483,641 445,544 8.6%
Gross Profit 33,497 27,644 21.2% 111,107 101,494 9.5%
Gross Margin (%) 22.7% 22.3% 48 bps 23.0% 22.8% 19 bps
SG&A (28,302) (23,237) 21.8% (93,066) (81,538) 14.1%
SG&A as % of Total
Sales -19.2% -18.7% -50 bps -19.2% -18.3% -94 bps
EBITDAR 14,195 11,032 28.7% 47,643 45,586 4.5%
EBITDAR Margin 9.6% 8.9% 75 bps 9.9% 10.2% -38 bps
Rent as % of Total
Sales -1.9% -1.4% -53 bps -1.7% -1.4% -33 bps
EBITDA 11,414 9,343 22.2% 39,242 39,315 -0.2%
EBITDA Margin 7.7% 7.5% 22 bps 8.1% 8.8% -71 bps
Operating Profit before
impairment 6,854 5,657 21.2% 23,185 24,591 -5.7%
Operating Profit Margin
before impairment 4.7% 4.6% 10 bps 4.8% 5.5% -73 bps
-94.5%
Reversal of impairment 173 2,996 -94.2% 164 3,005 bps
Operating Profit 7,026 8,652 -18.8% 23,348 27,595 -15.4%
Operating Profit Margin 4.8% 7.0% -220 bps 4.8% 6.2% -137 bps
Net Interest Expense (1,294) (1,335) -3.1% (4,923) (6,217) -20.8%
Net FX gain / (Net
FX loss) (28) 10 -380.0% (497) (247) 101.2%
Profit Before Income
Tax 5,704 7,327 -22.2% 17,928 21,131 -15.2%
Net Income 4,102 5,906 -30.5% 13,646 17,447 -21.8%
Net Income Margin 2.8% 4.8% -197 bps 2.8% 3.9% -109 bps
For Q4 & FY 2021 Financial Highlights in accordance with
IFRS 16 - see Appendix 1
Total Sales demonstrated strong growth of 8.6% and amounted to
RUB 483.6 billion compared to RUB 445.5 billion in 2020. This
growth was primarily driven by the Selling Space growth of 15.6%
which was further amplified by 2.4% LFL Sales growth. Retail Sales
grew by 8.8% to reach RUB 475.8 billion, while Wholesale decreased
by 2.5% and constituted 1.6% of Lenta's Total Sales in 2021.
In 2021, Gross Profit (IAS 17) rose by 9.5% year-over-year to
RUB 111.1 billion, and Gross Margin increased by 19 bps to 23.0%
due to the better promotional margins resulting from the revision
of promo campaigns, a higher centralization ratio as well as
positive dynamics of stock provisions. The growth was slightly
offset by intensified cashback investments related to the revamped
loyalty program. Despite the consolidation of Billa and Semya and a
higher share of new stores in the ramp-up stage shrinkage as a
proportion of Sales decreased by 4 bps year-over-year.
Despite the significant investments into Lenta's growth strategy
and resulting higher SG&A, EBITDA (IAS 17) came in at RUB 39.2
billion and decreased only by 0.2% compared to the previous year,
when Lenta benefitted from abnormal surge buying and stocking up
customers' behavior during lockdown period. Lenta's EBITDA margin
remained at an industry-leading level of 8.1% in 2021, in line with
the company's Guidance for the full year.
Selling, General, and Administrative (SG&A) expenses, IAS
17
RUB million Q4'21 Q4'20 Change FY'21 FY'20 Change
=============================== ======= ======= ======== ======= ======= =======
Payroll and related
taxes 10,963 8,699 26.0% 35,436 31,265 13.3%
as a % of Total Sales 7.4% 7.0% 44 bps 7.3% 7.0% 31 bps
Depreciation and Amortization
(D&A) 4,560 3,685 23.7% 16,057 14,724 9.1%
as a % of Total Sales 3.1% 3.0% 13 bps 3.3% 3.3% 2 bps
Lease Expenses 2,781 1,689 64.7% 8,401 6,271 34.0%
as a % of Total Sales 1.9% 1.4% 53 bps 1.7% 1.4% 33 bps
Utilities 1,535 1,310 17.2% 5,626 4,970 13.2%
as a % of Total Sales 1.0% 1.1% -1 bps 1.2% 1.1% 5 bps
Store Operations 3,090 2,715 13.8% 10,262 9,114 12.6%
as a % of Total Sales 2.1% 2.2% -9 bps 2.1% 2.0% 8 bps
Professional Fees 1,060 1,197 -11.4% 4,489 4,318 4.0%
as a % of Total Sales 0.7% 1.0% -24 bps 0.9% 1.0% -4 bps
Advertising 2,545 2,315 9.9% 6,489 5,749 12.9%
as a % of Total Sales 1.7% 1.9% -14 bps 1.3% 1.3% 5 bps
Other 1,768 1,627 8.7% 6,306 5,127 23.0%
as a % of Total Sales 1.2% 1.3% -11 bps 1.3% 1.2% 15 bps
Total SG&A 28,302 23,237 21.8% 93,066 81,538 14.1%
as a % of Total Sales 19.2% 18.7% 50 bps 19.2% 18.3% 94 bps
SG&A excluding D&A 23,742 19,552 21.4% 77,009 66,814 15.3%
as a % of Total Sales 16.1% 15.7% 37 bps 15.9% 15.0% 93 bps
For Q4 & FY 2021 Financial Highlights in accordance with
IFRS 16 - see Appendix 1
In 2021, Total Selling, General, and Administrative expenses
(IAS 17) increased by 14.1% year-over-year to RUB 93.1 billion.
SG&A as a percentage of Total Sales increased by 94 bps to
19.2%. This growth was mainly driven by higher payroll and related
taxes and lease expenses as a percent of sales, as well as an
increase in-store operations costs and Online delivery costs.
In 2021, Lenta faced increasing competition for employees, and
in order to be able to compete for professionals and be in line
with market benchmarks the Company proceed with salary indexation
of in-store and supply-chain employees. Payroll and related taxes
rose by 13.3% year-over-year in connection with salary indexation
(in Q4 2021), new store openings, as well as the two acquisitions,
while personnel expenses as a percent of Total Sales increased by
31 bps.
D&A as a percent of Total Sales increased by 2 bps due to
owned selling space growth by 2.8% to 1,158 k sqm.
Lease expenses rose by 33 bps as a percent of Total Sales,
primarily due to the acquisitions of Billa and Semya, both of which
have a higher percentage of leased versus owned stores in their
portfolios. The share of leased selling space for Lenta overall
increased to 34.0% as of 31 December 2021 compared to 25.8% a year
ago.
Store Operations increased by 12.6% year-over-year, mainly
driven by costs associated with security services, cleaning, as
well as store repairs and maintenance.
Advertising costs during 2021 were up 12.9% year-over-year, due
to investments into our growing online channel.
Cash Flow Statement, IAS 17
RUB million Q4'21 Q4'20 Change FY'21 FY'20 Change
================================ ========= ========= ======== ========== ========== ========
Profit before income
tax 5,704 7,327 -22.2% 17,928 21,131 -15.2%
Net adjustments for
loss on disposal of
assets, impairment,
depreciation & amortization,
and other 5,998 2,689 123.1% 21,572 19,493 10.7%
Movements in Working
Capital 11,015 11,712 -6.0% 2,076 (2,370) -
Cash generated from
operating activities 22,717 21,728 4.6% 41,576 38,254 8.7%
Net Interest & Income
Taxes Paid (3,440) (1,602) -114.7% (7,991) (11,046) 27.7%
Net Cash from Operating
Activities 19,277 20,126 -4.2% 33,585 27,208 23.4%
Net cash used in Investing
Activities (2,880) (2,416) -19.2% (30,815) (7,409) -315.9%
Net cash generated
from/(used in) financing
activities (41) (599) -93.2% 9,218 (71,447) -
Effect of exchange
rates on cash and
cash equivalents 18 (30) - (471) 52 -
Net Increase / (Decrease)
in Cash & Cash Equivalents 16,374 17,081 -4.1% 11,517 (51,596) -
For Q4 & FY 2021 Financial Highlights in accordance with
IFRS 16 - see Appendix 1
Capital Expenditures in 2021 amounted to RUB 9.3 billion, an
increase of 23.3% year-over-year. The increase resulted from an
accelerated pace of new organic store openings (141 store
openings(2) on a gross basis during FY 2021 vs 20 store openings
during FY 2020), completing construction of new distribution
centers, continuing IT development costs, and expenses related to
the integration of Billa stores.
In 2021, Net Cash generated from Operating Activities (IAS 17)
amounted to RUB 33.6 billion, up 23.4%, reflecting business growth
and healthy profitability.
The positive change in Working Capital (IAS 17) of RUB 2.1
billion during FY 2021, compared to a negative RUB 2.4 billion in
FY 2020, was mainly driven by higher trade and other payables and
net other tax payables.
Net Cash used in Investing Activities increased to RUB 30.8
billion in FY 2021 from RUB 7.4 billion in 2020, as a result of the
two acquisitions.
In 2021, Net Cash generated from Financing Activities amounted
to RUB 9.2 billion, compared to RUB 71.4 billion used in Financing
Activities in 2020. This dynamic resulted from an increase in Gross
Debt in FY 2021, as opposed to the debt repayment, which took place
in 2020.
Free Cash Flow for FY 2021 was RUB 2.8 billion, which was RUB
17.0 billion lower than Free Cash Flow in 2020, mainly due to
higher Net Cash used in Investing Activities.
2. Excluding new stores added following the acquisition of
Billa's and Semya's businesses.
Debt Position and Leverage
IFRS 16 IAS 17
RUB million 31-Dec-21 31-Dec-20 31-Dec-21 31-Dec-20
========================= ========== ========== ========== ==========
Gross Debt 148,962 113,394 88,414 78,952
Long-term Debt 66,912 45,941 66,912 45,941
Short-term Debt 21,502 33,011 21,502 33,011
Lease Liabilities
(IFRS 16) 60,548 34,442 - -
Cash & Cash Equivalents 33,326 21,809 33,326 21,809
Net Debt 115,636 91,585 55,088 57,143
Net Debt / EBITDA
(LTM) ratio 1.4 1.5
Lenta's cash position at the end of FY 2021 was RUB 33.3
billion. Gross Debt increased by RUB 9.5 billion or 12.0% compared
to 31 December 2020 and stood at RUB 88.4 billion as of 31 December
2021. Net Debt decreased by RUB 2.1 billion compared to 31 December
2020 and stood at RUB 55.1 billion. All of the Company's debt has
fixed interest rates and is fully Ruble denominated matching its
revenue structure. The weighted average effective interest rate for
Lenta's debt portfolio in 2021 was 6.83%, down 53 bps from the 2020
level. Lenta's Net Debt to EBITDA ratio was 1.4x as of 31 December
2021 vs 1.5x as of 31 December 2020.
FY'22 GUIDANCE
Lenta expects it will add at least 200 stores in 2022. This
figure reflects the Company's decision to focus on expansion in
small formats. In 2022, Lenta will continue to look for attractive
growth opportunities and expansion in existing and new formats, as
well as further development of our online business.
Lenta plans to invest up to 5% of its Sales in Capital
Expenditures in 2022. Lenta plans to invest into organic expansion
and required infrastructure to support the development of small
formats. Capital spending in 2022 will also include investments
into IT & digitalization projects, as well as repair and
maintenance expenses.
CONFERENCE CALL
The Lenta Management Team will host an investor and analyst
conference call
Date:
Monday, 2 1 February 202 2
Time:
-- 17:00 Moscow time
-- 1 4 :00 London time
-- 9 :00 New York time
On the call will be Vladimir Sorokin (CEO), Rud Pedersen (CFO),
and Tatyana Vlasova (Head of Investor Relations).
Dial-in details:
-- Russia +7 495 283 98 58
-- United Kingdom +44 203 984 9844
-- United States +1 718 866 4614
Telephone numbers for additional countries can be found at the
webcast URL.
Participant code: 878744
Audio webcast URL: https://mm.closir.com/slides?id=878744
Participants are encouraged to register approx. 5-10 minutes
prior to the start of the call.
A presentation of the operational and financial results can be
found at: https://corp.lenta.com/en/
For further information, please contact:
Lenta EM (International Media Inquiries)
Tatyana Vlasova Lenta@em-comms.com
Head of Investor Relations
tatyana.vlasova@lenta.com
Lenta
Mariya Filippova
Head of Public Relations and Government
Affairs
maria.filippova@lenta.com
About Lenta
Lenta IPJSC (LSE: LNTA, MOEX: LNTA, LENT) 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 December
31, 2021, operated 254 hypermarkets and 503 supermarkets and
convenience stores in 89 cities across Russia with more than 1.75
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 14
distribution centers to supply all of its stores. 2021 Revenues
were RUB 484 billion (approximately USD 6.5 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.
Appendix 1
Q4 & FY 2021 FINANCIAL HIGHLIGHTS, IFRS 16
Key Financial Results
RUB million Q4'21 Q4'20 Change FY'21 FY'20 Change
============== =================== =================== ========= ================== ================== =========
Total Sales 147,316 124,172 18.6% 483,641 445,544 8.6%
Gross Profit 33,588 27,724 21.2% 111,361 101,816 9.4%
Gross Margin
(%) 22.8% 22.3% 47 bps 23.0% 22.9% 17 bps
SG&A (27,856) (22,863) 21.8% (91,447) (80,114) 14.1%
SG&A as % of
Total
Sales -18.9% -18.4% -50 bps -18.9% -18.0% -93 bps
EBITDAR 14,290 11,136 28.3% 48,097 45,950 4.7%
EBITDAR
Margin 9.7% 9.0% 73 bps 9.9% 10.3% -37 bps
Rent as % of
Total
Sales -0.3% -0.3% -1 bps -0.3% -0.2% -2 bps
EBITDA 13,871 10,797 28.5% 46,885 44,919 4.4%
EBITDA Margin 9.4% 8.7% 72 bps 9.7% 10.1% -39 bps
Operating
Profit
before
impairment 7,394 6,137 20.5% 25,258 26,379 -4.2%
Operating
Profit
Margin
before
impairment 5.0% 4.9% 8 bps 5.2% 5.9% -70 bps
Reversal of
impairment 173 2,898 -94.0% 164 2,907 -94.4%
Operating
Profit 7,567 9,035 -16.2% 25,422 29,286 -13.2%
Operating
Profit
Margin 5.1% 7.3% -214 bps 5.3% 6.6% -132 bps
Net Interest
Expense (2,498) (2,010) 24.3% (8,428) (8,902) -5.3%
Net FX gain /
(Net
FX loss) (72) 91 -179.1% (524) (386) 35.8%
Profit Before
Income
Tax 4,997 7,116 -29.8% 16,470 19,998 -17.6%
Net Income 3,537 5,737 -38.3% 12,480 16,541 -24.6%
Net Income
Margin 2.4% 4.6% -222 bps 2.6% 3.7% -113 bps
Selling, General, and Administrative (SG&A) expenses
RUB million Q4'21 Q4'20 Change FY'21 FY'20 Change
================= =================== =================== ======== ================== ================== =======
Payroll and
related
taxes 10,963 8,699 26.0% 35,436 31,265 13.3%
as a % of Total
Sales 7.4% 7.0% 44 bps 7.3% 7.0% 31 bps
Depreciation and
Amortization 6,476 4,661 38.9% 21,627 18,540 16.7%
as a % of Total
Sales 4.4% 3.8% 64 bps 4.5% 4.2% 31 bps
Lease Expenses 419 339 23.6% 1,212 1,031 17.6%
as a % of Total
Sales 0.3% 0.3% 1 bps 0.3% 0.2% 2 bps
Utilities 1,535 1,310 17.2% 5,626 4,970 13.2%
as a % of Total
Sales 1.0% 1.1% -1 bps 1.2% 1.1% 5 bps
Store Operations 3,090 2,715 13.8% 10,262 9,114 12.6%
as a % of Total
Sales 2.1% 2.2% -9 bps 2.1% 2.0% 8 bps
Professional
Fees 1,060 1,197 -11.4% 4,489 4,318 4.0%
as a % of Total
Sales 0.7% 1.0% -24 bps 0.9% 1.0% -4 bps
Advertising 2,545 2,315 9.9% 6,489 5,749 12.9%
as a % of Total
Sales 1.7% 1.9% -14 bps 1.3% 1.3% 5 bps
Other 1,768 1,627 8.7% 6,306 5,127 23.0%
as a % of Total
Sales 1.2% 1.3% -11 bps 1.3% 1.2% 15 bps
Total SG&A 27,856 22,863 21.8% 91,447 80,114 14.1%
as a % of Total
Sales 18.9% 18.4% 50 bps 18.9% 18.0% 93 bps
SG&A excluding
D&A 21,380 18,202 17.5% 69,820 61,574 13.4%
as a % of Total
Sales 14.5% 14.7% -15 bps 14.4% 13.8% 62 bps
Cash Flow Statement
RUB million Q4'21 Q4'20 Change FY'21 FY'20 Change
======================== =================== =================== ======== ================= =========== ========
Profit before income
tax 4,997 7,116 -29.8% 16,470 19,998 -17.6%
Net adjustments for
loss on disposal of
assets, impairment,
depreciation &
amortization,
and other 9,151 4,332 111.2% 30,650 26,190 17.0%
Movements in Working
Capital 11,257 11,765 -4.3% 2,319 (2,437) -
Cash generated from
operating activities 25,405 23,213 9.4% 49,439 43,751 13.0%
Net Interest & Income
Taxes Paid (4,647) (2,283) 103.5% (11,560) (13,763) -16.0%
Net cash from Operating
Activities 20,758 20,930 -0.8% 37,879 29,988 26.3%
Net cash used in
Investing
Activities (2,870) (2,407) 19.2% (30,779) (7,374) 317.4%
Net cash generated
from/(used in)
financing
activities (1,532) (1,412) 8.5% 4,888 (74,262) -
Effect of exchange
rates on cash and
cash equivalents 18 (30) - (471) 52 -
Net Increase /
(Decrease)
in Cash & Cash
Equivalents 16,374 17,081 -4.1% 11,517 (51,596) -
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