Lenta Publishes Unaudited IFRS Financial Results for Half Year
OREANDA-NEWS. Increase of over 30% in selling space, robust LFL sales growth and strong margin development
further highlight track record of delivering profitable growth
St. Petersburg, Russia; 7 October 2013 - Lenta Ltd (“Lenta” or the “Company”), one of the largest retail chains in Russia, today announces its unaudited consolidated IFRS results for the half year ending 30 June 2013.
H1 2013 Financial Highlights:
Total Sales grew 26.7% to RUB 62.1bn (H1 2012: RUB 49.1bn);
Gross margin of 21.2% (+1.9 p.p. vs. H1 2012);
SG&A increased to 13.2% as a percentage of sales (+1.8 p.p. vs. H1 2012) as we accelerate our store roll-out plans and the infrastructure is put in place to support future growth;
Adjusted EBITDA1 of RUB 6.6bn, up 30.5% (H1 2012: RUB 5.1bn) ahead of sales growth due to margin expansion;
Investments of RUB 8.3bn, more than double the H1 2012 level, linked to a larger pipeline of new stores and the construction of two new distribution centers;
Net cash generated from operating activities before net interest paid of RUB 0.6bn, compared to RUB 2.4bn in H1 2012 due to an increase in working capital requirements for new stores; and
Net Profit2 of RUB 2.5bn, up 3.9% (H1 2012: RUB 2.4bn), despite adverse non-cash fair value adjustments and higher interest expenses; excluding the effect of non-cash fair value adjustments, net income increased to RUB 2.7bn, up 24.4% on H1 2012.
H1 2013 Operational Highlights:
Four new hypermarkets and one new supermarket (as part of a pilot scheme in Moscow) opened during the first half;
Total number of hypermarkets reached 60, and including the first supermarket, selling space reached 397,000 sq.m. as at 30 June 2013 (+31.7% vs. 30 June 2012);
Like-for-like (“LFL”)3 sales growth of 7.55% vs. H1 2012, in advance of a significant increase in the LFL store base in H2 and beyond; and
H1 2013 average ticket of RUB 1,053 (H1 2012: RUB 1,019).
1 Adjusted EBITDA is reported EBITDA as set out in Note 3 of the IFRS financial statements adjusted for non-recurring one-off items such as changes in accounting estimates and one-off non-operating costs
2 Net Profit equates to “Profit for the year” in the attached IFRS Financial Statements
3 Lenta’s stores are included in the LFL store base starting 12 months after the end of the month they are opened
Lenta’s Chief Executive Officer, Jan Dunning said:
“The significant growth in our top line is due to the strength of our customer proposition as well as an accelerating store opening programme, which is now in full flow. We opened 4 new hypermarkets during the first half and a further 3 in the third quarter to give a total of 7 new hypermarkets year-to-date. Lenta has also opened 5 new supermarkets this year in the Moscow region as part of a pilot scheme. For 2013 as a whole, we plan to open 18 new hypermarkets and 7-10 supermarkets adding over 30% to our total selling space.
Our efficient business model, combined with the benefits of increasing scale, is enabling us to deliver excellent profitability, despite absorbing the necessary costs incurred in stepping up to a faster rate of expansion. As our new stores mature we also expect to benefit from a positive impact on our like-for-like sales growth in the future. In conjunction with our expansion plan, which will be further accelerated in 2014, we believe our competitive pricing and promotions, our improved assortment and our high operational standards position the business well to participate fully in the rapid growth of modern retail formats in Russia.”
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