St-Petersburg, Russia; 21 July, 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 second quarter and first half ended 30 June 2015.

View the full press release here.

2Q 2015 Operating Highlights:

• Total sales grew 30.4% in 2Q 2015 to Rub 60.4bn (2Q 2014: Rub 46.3bn);
• Like-for-like (“LFL”)¹ sales growth of 8.6% vs. 2Q 2014;
• LFL traffic growth of 2.0% combined with a 6.4% increase in LFL ticket;
• Four hypermarkets and three supermarkets opened during the second quarter of 2015;
• Total of 143 stores at 30 June 2015, comprising 116 hypermarkets and 27 supermarkets;
• Total selling space increased to 751,447 sq.m. as at 30 June 2015 (+38.6% vs. 30 June 2014); and
• Number of active loyalty cardholders² increased to 7.6m (+33% y-o-y) with approximately 90% of transactions in the second quarter made using the loyalty card.

1H 2015 Operating Highlights:

• Total sales grew 33.8% in 1H 2015 to Rub 114.9bn (1H 2014: Rub 85.9bn);
• LFL sales growth of 11.5% vs. 1H 2014;
• LFL traffic growth of 4.7% combined with a 6.5% increase in LFL ticket;
• Eight hypermarkets and three supermarkets opened during the first half of 2015;

Material events in 2Q 2015 and after the reported period:

• Lenta has signed a Rub 37.3bn unsecured loan agreement with VTB Bank with a seven-year term replacing a secured loan with a maturity till 2018;
• Lenta has signed an amendment to Rub 4.6bn loan agreement with the European Bank for Reconstruction and Development (EBRD);
• The Company’s effective cost of debt decreased from 16.6% in Q1 2015 to 13.4% in Q2 2015, and is projected to decrease further to 12.25% in Q3 2015 (based on current MosPrime rates)
• Fitch Ratings has assigned Lenta with long-term foreign and local currency Issuer Default Ratings of ‘BB-‘ and a National Long-term rating of ‘A+(rus)’, both with a positive outlook.

Lenta’s Chief Executive Officer, Jan Dunning commented:

“In the second quarter of 2015, Lenta once again delivered industry leading sales growth of 30% and remains well positioned to win in a tough market environment. Continuing pressure on consumer incomes, decelerating inflation and a high base for comparison led to a slowdown of year-on-year sales growth rates in the second quarter, compared to our performance in the first quarter.

Despite the challenging environment we expect to achieve significantly better profitability in the first half of 2015 compared to the same period of the previous year, with Adjusted EBITDA growth of around 45% and EBITDA margin improving by over 70 basis points. We have achieved this profitability improvement thanks to effective cost management and supply chain improvements, while absorbing part of the effect of inflation on our customers.

Our financial position strengthened further with a significant fall in leverage in the first half of the year through a combination of rapidly growing EBITDA and the new equity issue completed in March. We continue to work actively with our lenders and in the second quarter we managed to reduce cost of debt by 320bps vs the first quarter, with further decreases expected throughout the remainder of the year.

The 'BB-' Fitch rating with a positive outlook, recently assigned to Lenta, reflects Lenta’s strong position in the modern food retail market in Russia, its resilient operational performance, robust profitability and the Company’s ability to grow its share of the Russian food retail market.”

View the full press release here.

For further information, please visit www.lentainvestor.com, or contact:

Lenta
Anna Meleshina,
Director of Public Relations and Government Affairs
+7 812 363 28 53
Anna.Meleshina@lenta.com

Albert Avetikov,
Director of Investor Relations
+7 812 363 28 44
Albert.Avetikov@lenta.com

Instinctif Partners
International Media
Mark Walter & Tony Friend
+44 (0)20 7457 2020
Mark.Walter@instinctif.com

Russian Media
Leonid Fink
+44 (0)20 7457 2015
Leonid.Fink@instinctif.com

Anton Karpov
+7 495 660 05 91
Anton.Karpov@instinctif.com

¹Lenta’s stores are included in the LFL store base starting 12 months after the end of the month they are opened
² Cardholders who made at least 2 purchases at Lenta during the 12 months to 30 June, 2015 are considered active