St-Petersburg, Russia; 19 October, 2017– 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 ended 30 September 2017.
To view the full press release, please click here.
3Q 2017 Operating Highlights:
- Total sales grew 18.7% in 3Q 2017 to Rub 89.6bn (3Q 2016: Rub 75.4bn);
- Like-for-like (“LFL”)1 sales growth of 0.7% vs. 3Q 2016;
- LFL traffic growth of (1.5%) combined with a 2.2% increase in LFL ticket;
- Six hypermarkets and five supermarkets opened during the third quarter of 2017;
- Total store count reached 265 stores as at 30 September 2017, comprising 201 hypermarkets and 64 supermarkets;
- Total selling space increased to 1,202,866 sq.m as at 30 September 2017 (+24.9% vs. 30 September 2016); and
- Number of active loyalty cardholders2 increased to 11.8m (+20% y-o-y) with approximately 94% of transactions in the third quarter made using the loyalty card.
9M 2017 Operating Highlights:
- Total sales grew 17.4% in 9M 2017 to Rub 253.1bn (9M 2016: Rub 215.5bn);
- LFL sales growth of (1.0%) vs. 9M 2016;
- LFL traffic growth of (2.1%) combined with a 1.2% increase in LFL ticket;
- Lenta started expansion of its supermarket format in Siberia and Ural regions; and
- 10 new hypermarkets and 16 supermarkets were opened during 9M 2017.
Material events in 3Q 2017 and after the reported period:
- Lenta signed an agreement to lease 14 hypermarkets in Moscow and Russian regions previously operated under the NASH brand;
- Lenta reached the milestone of 200 hypermarkets across Russia and opened its first supermarkets in Yekaterinburg; and
- Analytical credit rating agency (ACRA) assigned Lenta a rating of A+ (RUB). The outlook on the rating is “Stable”.
Lenta’s Chief Executive Officer, Jan Dunning commented:
“Lenta’s sales growth accelerated to 19% in the third quarter of 2017. We are pleased with the initial customer reaction to changes we made in our offering, range, marketing and communication which resulted in positive like-for-like sales growth. Although we are still seeing some pressure from deflation and cannibalization, our efforts led to substantial improvements in both like-for-like traffic and ticket growth, which accelerated every month of the third quarter. We are also very pleased with the performance of the stores we acquired from Kesko last year – their sales ramp-up is accelerating, reaching over 60% same-store sales growth3 in September, giving a very clear demonstration of the attractiveness of Lenta’s customer proposition.
We are also satisfied with the pace of expansion in both hypermarket and supermarket format. Supermarkets showed very strong performance in the reported quarter with 5% like-for-like sales growth and we are confident in our ambitious plans to continue rolling-out this format in existing and new cities of presence. Our hypermarket pipeline is progressing well and we recently increased our
2017 target to around 40 hypermarket openings following an agreement to lease 14 former NASH hypermarkets. The ex-NASH stores are now closed for refurbishment and will be reopened under the Lenta brand in November.
During the last few months Lenta’s team launched a series of initiatives to further enhance our attractiveness to customers, creating more distinctive features and increasing our competitive advantages. There is still a lot of work to be done, but we are pleased with the initial impact, which helped deliver positive like-for-like sales growth in the quarter - we hope to sustain this momentum over the coming months.”
Lenta Store Developments
In the third quarter of 2017, Lenta opened six new hypermarkets: four owned compact hypermarkets (Kamensk-Uralsky, Tyumen, Astrakhan and Moscow), one leased compact hypermarket (Orenburg) and one owned supercompact store (Orenburg). As a result, Lenta reached the milestone of 200 hypermarkets across Russia. The Company entered one new city and is now present in 79 cities across the country.
During the reported period the Company also opened five new supermarkets: three owned stores in Yekaterinburg, one leased store in Novosibirsk and one leased store in Saint-Petersburg. With the launch of its first supermarkets in the Ural region, Lenta’s supermarket network is now present in five regions (comprising Moscow, St Petersburg, Central, Siberia and Ural regions), with a total of 64 stores.
Lenta added 29,450 sq.m of net selling space in the reported quarter. Total selling space as at 30 September 2017 increased to 1,202,866 sq.m, up 24.9% year-on-year, with 24.0% growth in the hypermarket format and 44.0% growth in the supermarket format.
1 Lenta’s stores are included in the LFL store base starting 12 months after the end of the month in which they are opened
2 Cardholders who made at least 2 purchases at Lenta during the 12 months to 30 September 2017 are considered active
3 The stores acquired from Kesko are not included in Lenta’s LFL panel. Calculation of same-store sales is made based on the period when the stores were owned by Kesko.
To view the full press release, please click here.
For further information please visit https://www.lentainvestor.com or contact:
FTI Consulting
Russian Media:
Anton Karpov & Victoria Afonina
Ňel:+7 495 795 06 23
E-mail: lenta@FTIconsulting.com
FTI Consulting
International Media:
Leonid Fink & Jenny Payne
Ňel: +44 7497 783 705
E-mail: Leonid.Fink@fticonsulting.com
Jenny.Payne@fticonsulting.com
| 
