RNS Number : 1022Q
Lenta International PJSC
23 February 2021
 

 

 Press Release | St. Petersburg | 24 February 2021

 

 

Lenta Reports Record EBITDA and Net Income in FY 2020

 

St. Petersburg, Russia, 24 February 2021: Lenta IPJSC (MOEX & LSE: LNTA), one of the largest retail chains in Russia, today published its audited consolidated IFRS accounts for the full year ended 31 December 2020.

 

A conference call with the Chief Financial Officer to discuss these results is scheduled for later today. Please see the dial-in details at the end of this press release.



FY 2020 Key Financial Highlights1

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FY 2020 Key Financial Results

IFRS 16


IAS 17

RUB million

FY 2020

FY 2019

Change


FY 2020

FY 2019

Change









Total Sales

445,544

417,500

6.7%


445,544

417,500

6.7%

Retail Sales

437,493

407,761

7.3%


437,493

407,761

7.3%

Hypermarkets

399,262

372,787

7.1%


399,262

372,787

7.1%

Supermarkets

38,231

34,974

9.3%


38,231

34,974

9.3%

Wholesale

8,051

9,739

-17.3%


8,051

9,739

-17.3%









Gross Profit

101,816

92,017

10.6%


101,494

91,659

10.7%

Gross Margin (%)

22.9%

22.0%

81 bps


22. 8%

22.0%

83 bps









SG&A

(80,114)

(75,084)

6.7%


(81,538)

(76,535)

6.5%

SG&A as % of Total Sales

18.0%

18.0%

0 bps


18.3%

18.3%

-3 bps









EBITDAR

45,950

40,665

13.0%


45,586

40,302

13.1%

EBITDAR Margin

10.3%

9.7%

57 bps


10.2%

9.7%

58 bps

Rent as % of Total Sales

-0.2%

-0.3%

4 bps


-1.4%

-1.5%

11 bps









EBITDA

44,919

39,506

13.7%


39,315

33,959

15.8%

EBITDA Margin

10.1%

9.5%

62 bps


8.8%

8.1%

69 bps









Operating Profit before impairment

26,379

21,066

25.2%


24,591

19,251

27.7%

Operating Profit Margin before impairment

5.9%

5.1%

87 bps


5.5%

4.6%

91 bps

Reversal of impairment (impairment)

2,907

(11,850)



3,005

(11,850)










Operating Profit

29,286

9,216

217.8%


27,595

7,401

272.9%

Operating Profit Margin

6.6%

2.2%

437 bps


6.2%

1.8%

442 bps

Net Interest Expense

(8,902)

(12,040)

-26.1%


(6,217)

(9,260)

-32.9%

Net FX gain / (Loss)

(386)

221



(247)

118


Profit / (Loss) Before Income Tax

19,998

(2,603)



21,131

(1,740)










Net Income / (Loss)

16,541

(2,794)



17,447

(2,104)


Net Income Margin

3.7%

-0.7%

438 bps


3.9%

-0.5%

442 bps

 

 

 

 



 

 

 

 

 

Total Sales demonstrated robust growth of 6.7% and amounted to RUB 445.5 billion, compared to RUB 417.5 billion in 2019, predominantly driven by a higher Average Ticket, despite lower Traffic throughout the year.

 

Retail Sales grew by 7.3% to RUB 437.5 billion (2019: RUB 407.8 billion), supported by changing customer behaviors due to the COVID-19 pandemic, successful promotional activities, enhancements to Lenta's loyalty program, and a noticeable trend of trading up throughout much of the year. 

 

Both Lenta's Hypermarket and Supermarket formats continued to show good performance in 2020, amid the COVID-19 pandemic, further proving the resilience of Lenta's Hypermarket format.

 

Retail sales at hypermarkets were up 7.1% year-over-year thanks to growth in like-for-like Average Ticket despite a decline in the like-for-like Traffic. During 2020, our Supermarket format showed Retail Sales growth of 9.3% year-over-year.

 

Gross Profit (IAS 17) grew to RUB 101.5 billion, up 10.7% year-on-year, and Gross Profit Margin improved by 83 bps to 22.78% from 21.95% in 2019 as a result of an improvement in shrinkage, higher retail margins, and improved trade terms with suppliers. Additional positive impact came from a 17.3% sales decline in our low-margin wholesale business throughout the year, which partially offset higher stock provisions.

 

Lenta remained focused on maintaining strict cost management amidst the volatile environment of 2020, nonetheless COVID-19 pandemic-related costs, in the amount of RUB 1.5 billion, put extra pressure on profitability.

 

In 2020, EBITDA (IAS 17) in absolute terms reached an all-time high, while the EBITDA margin also showed significant improvement. Absolute EBITDA rose by 15.8% year-over-year and amounted to RUB 39.3 billion, while the EBITDA margin rose to 8.8%, up from 8.1% in the previous year. This strong performance in EBITDA was primarily driven by retail sales growth coupled with a higher gross margin.

Net Interest Expense (IAS 17) decreased by 32.9% year-over-year to RUB 6.2 billion in FY 2020.

 

Lenta delivered Net Income (IAS 17) of RUB 17.4 billion for the year, compared to a net loss of RUB 2.1 billion in 2019, due mainly to strong retail sales. As a result, the Net Income Margin was 3.9% in FY 2020.



 

 

 

Selling, general and administrative (SG&A)

IFRS 16


IAS 17

RUB million

FY 2020

FY 2019

Change


FY 2020

FY 2019

Change









Payroll and related taxes

31,265

28,119

11.2%


31,265

28,119

11.2%

as a % of Total Sales

7.0%

6.7%

28 bps


7.0%

6.7%

28 bps

Depreciation and Amortization

18,540

18,440

0.5%


14,724

14,708

0.1%

as a % of Total Sales

4.2%

4.4%

-26 bps


3.3%

3.5%

-22 bps

Store Operations2

14,084

13,580

3.7%


14,084

13,580

3.7%

as a % of Total Sales

3.2%

3.3%

-9 bps


3.2%

3.3%

-9 bps

Professional Fees

4,318

4,388

-1.6%


4,318

4,388

-1.6%

as a % of Total Sales

1.0%

1.1%

-8 bps


1.0%

1.1%

-8 bps

Leases

1,031

1,159

-11.0%


6,271

6,342

-1.1%

as a % of Total Sales

0.2%

0.3%

-5 bps


1.4%

1.5%

-11 bps

Advertising

5,749

5,177

11.0%


5,749

5,177

11.0%

as a % of Total Sales

1.3%

1.2%

5 bps


1.3%

1.2%

5 bps

Other

5,127

4,221

21.5%


5,127

4,221

21.5%

as a % of Total Sales

1.2%

1.0%

14 bps


1.2%

1.0%

14 bps

Total SG&A

80,114

75,084

6.7%


81,538

76,535

6.5%

as a % of Total Sales

18.0%

18.0%



18.3%

18.3%

-3 bps

SG&A excluding D&A

61,574

56,644

8.7%


66,814

61,827

8.1%

as a % of Total Sales

13.8%

13.6%

25 bps


15.0%

14.8%

19 bps

 

 

 

Selling, General, and Administrative expenses (IAS 17) increased by 6.5% year-over-year to RUB 81.5 billion, and amounted to 18.3% of Total Sales, an improvement of 3 bps.

 

Payroll and related taxes rose by 11.2% year-over-year due to COVID-19 pandemic-related intensity allowance costs, changes to our senior management team, bonus compensation in connection with certain milestones being reached, new store expansion, and the further roll-out of Lentochka, which is one of our online channels.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2. Store Operations includes utilities, cleaning, repair and maintenance, and security services. 

 

 

FY 2020 Cash Flow Statement


IFRS 16


IAS 17

RUB million

FY 2020

FY 2019

Change


FY 2020

FY 2019

Change









Profit before income tax

19,998

(2,603)



21,131

(1,740)


Net adjustments for loss on disposal of assets, impairment, depreciation and amortization, and other

25,943

43,558

-40.4%


19,247

37,153

-48.2%

Movements in Working Capital

(2,138)

7,479



(2,071)

7,422


Cash generated from operating activities

43,803

48,434

-9.6%


38,307

42,835

-10.6%

Net Interest & Income Taxes Paid

(13,763)

(14,562)

-5.5%


(11,046)

(11,767)

-6.1%

Net cash from Operating Activities

30,040

33,872

-11.3%


27,260

31,068

-12.3%

Net cash used in Investing Activities

(7,374)

(13,964)

-47.2%


(7,409)

(14,008)

-47.1%

Net cash (used) in / generated from Financing Activities

(74,262)

19,692



(71,447)

22,540


Net Increase / (Decrease) in Cash & Cash Equivalents

(51,596)

39,600



(51,596)

39,600


 

 

Net Cash from Operating Activities (IAS 17) in FY 2020 amounted to RUB 27.3 billion.

Capital expenditures in 2020 were 45.7% lower than in 2019 and amounted to RUB 7.6 billion. The reduction mainly reflected hypermarket openings and slow implementation of maintenance and improvement projects, taking into account the COVID-19 situation.

 

 

FY 2020 Debt Position and Leverage

IFRS 16


IAS 17

RUB million

31-Dec-20

31-Dec-19


31-Dec-20

31-Dec-19







Gross Debt

113,394

182,701


78,952

150,541

Long-term Debt

45,941

82,110


45,941

82,110

Short-term Debt

33,011

68,431


33,011

68,431

Lease Liabilities (IFRS 16)

34,442

32,160




Cash & Cash Equivalents

21,809

73,405


21,809

73,405

Net Debt

91,585

109,296


57,143

77,136

Net Debt / EBITDA ratio




1.5x

2.3x

 

Lenta materially improved its leverage position over the course of 2020, closing the year with Gross Debt of RUB 79.0 billion (IAS 17), compared to RUB 150.5 billion as of the end of 2019. Cash & Cash Equivalents at the end of FY 2020 stood at RUB 21.8 billion due to proactive efforts to pay down debt obligations.

 

As of 31 December 2020, Lenta's Net Debt to EBITDA ratio stood at 1.5x compared to 2.3x one year earlier (IAS 17).

 

 

 

 



 

 

 

FY 2021 Outlook

 

Lenta will provide detailed guidance for FY 2021 at the company's Capital Markets Day on the 18th of March 2021.

 

 

 

FY 2020 IFRS Results Conference Call

 

Lenta will host an investor and analyst conference call at 17:00 Moscow time (14:00 London, 09:00 New York), on Wednesday, 24 February 2021. On the call will be Rud Pedersen (CFO) and Tim Post (IRO).

To participate in the conference call, please use the following dial-in details:

 

Conference ID: 1920893 ("Lenta FY 2020 IFRS Results Conference Call")

 

Russian Federation:             +7 495 646 9190 (local access)
8 10 800 2867 5011 (toll-free)

United Kingdom:                  +44 (0)330 336 9411 (local access)
0800 279 7204 (toll-free)

United States:                      +1 929-477-0402 (local access)
888-204-4368 (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
Mariya Filippova
Head of Public Relations and Government Affairs
maria.filippova@lenta.com

Lenta

Timothy Post
Investor Relations Officer
timothy.post@lenta.com

 

EM (International Media Inquiries)
Lenta@em-comms.com

 

 

 

 





 

 

 

 

About Lenta

Lenta is the largest hypermarket chain in the Russian Federation and the fourth largest food retailer. The Company was founded in 1993 in St. Petersburg and as of December 31, 2020 operated 254 hypermarkets and 139 supermarkets in 88 cities across 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, while the Lenta supermarket averages 800 square meters. The company operates 13 distribution centers throughout Russia. Lenta is listed on both the London Stock Exchange and Moscow Exchange, trading under the ticker: 'LNTA'.


 

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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