Lenta's financial performance

Main article: Tape

2023: Revenue growth by 14.5% to RUB 615.53 billion

In 2023, Lenta's revenue reached RUB 615.53 billion, up 14.5% from a year earlier. The retailer announced such data on February 5, 2024.

It follows from the materials of Lenta that in 2023 the company's retail revenue increased by 14% compared to 2022 and amounted to 604.66 billion rubles. Hypermarkets brought the retailer 457.84 billion rubles of annual revenue (+ 6). Supermarket revenues decreased by 5.1% (to 67.88 billion rubles), and sales in convenience stores (the results of this format include the results of Monetka and Lenta Mini stores), on the contrary, increased sharply - by 316.4%, to 78.94 billion rubles.

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Tape

Sales of Lenta's comparable stores (like-for-like, LfL) increased by 4.6% in 2023. The average check increased by 2.6%, consumer traffic - by 2%. Online sales of Lenta in 2023 reached 53.24 billion rubles, an increase of almost a third (+ 31.8%) on an annualized basis. In particular, in the direction of Lenta Online (includes the services Lenta Online, Utkonos and Click & Collect), 10.8% revenue growth was recorded, to 31.39 billion rubles. The average check of buyers of goods in Lenta via the Internet for the year decreased by 8.3%, to 2131 rubles.

Lenta also reports that by the end of 2023, the total number of loyalty cards issued by the company reached 38.3 million, including 3.1 million units activated in the fourth quarter of 2023. The share of transactions using loyalty cards is 96.6%.

As of December 31, 2023, the number of stores managed by the retailer reached 2,819, including 261 hypermarkets, 246 supermarkets and 2,312 convenience stores. Lenta's trading space at the end of December amounted to 2.3 million square meters. m, which is 30% more than at the end of 2022.^[1]

2022: Revenue growth by 11.1%, to 537.4 billion rubles

In 2022, Lenta gained 537.4 billion rubles, which is 11.1% more than a year earlier. Almost all of this amount fell on retail sales - 530.2 billion rubles, which is 11.4% higher than a year ago. The retailer published its financial and operating results on January 30, 2023.

Gross profit increased over the year by 8.7% to 120.7 billion rubles. At the same time, gross margin decreased by 51 bp to 22.5%. EBITDA amounted to 32.6 billion rubles, EBITDA margin - 6.1%. The ratio of net debt to EBITDA at December 31, 2022 was 1.6x compared to 1.4x at December 31, 2021.

Revenues of Lenta hypermarkets in 2022 increased by 3.3% compared to 2021 and amounted to 431.87 billion rubles. The total revenue of the company's smaller stores rose by 56.7%, to 90.48 billion rubles.

Comparable sales (LFL) at the end of 2022 increased by 2.3%, while the LFL-average check increased by 5%. The total number of stores reached 820, including 259 hypermarkets and 561 small format stores. The total trading area increased by 1.9% and amounted to 1,788,2 thousand square meters. m. Online sales increased by 108.9% yoy to RUB 40.4 billion; At the end of the year, revenue from online sales reached 7.5% of Lenta's total sales. The average check decreased by 3.8%, to 1,051 rubles, but the number of checks increased by 15.8%, to 505 million rubles.

In 2022, total business, general and administrative expenses (prior to IFRS application) increased by 21.4% to RUB 113.0 billion. Commercial, general and administrative expenses as a percentage of revenue increased by 178 bp, mainly due to a 94 bp increase in personnel expenses, a 57 bp increase in rental expenses and 19 bp increase in professional services expenses. Capital expenses amounted to 11.0 billion rubles, an increase of 17.8% year-on-year. Capital expenditures were mainly related to the opening of small format stores, the integration of the Bill, Family and Platypus networks and the development of IT systems.

The revenue of Utkonos at the end of 2022 turned out to be equal to 7.85 billion rubles (the figure for 2021 is not indicated). Wholesale sales of Lenta decreased by 8.3%, to 7.2 billion rubles.

Free cash flow for the full year 2022 amounted to RUB 2.9 billion, an increase of 5.3% year-on-year, mainly due to a significant decrease in net cash used in investment activities, which was partially offset by a decrease in net cash received from operating activities.

In 2022, the entire Russian business faced exceptional challenges that required our team to take decisive measures - reconfiguring supply channels, establishing relationships with new suppliers, establishing settlement processes with foreign counterparties, says Lenta CEO Vladimir Sorokin. - In 2022, customers continued to save money and gradually switched to cheaper goods. During the year, we carried out work to revise our assortment, adjusting it accordingly to the needs of our customers.[2]

2021

Revenue growth by 8.6%, to 483.64 billion rubles

On February 21, 2022, Lenta reported an 8.6% increase in revenue for the previous year - up to 483.64 billion rubles. Net profit of the retail chain decreased by 21.8%, to 13.65 billion rubles.

The retailer attributed the rise in revenue to a 15.6% increase in retail space and a 2.4% rise in comparable (LFL) sales. At the same time, wholesale sales decreased by 2.5% and amounted to 1.6% of Lenta's revenue in 2021.

Lenta reported 8.6% revenue growth in 2021

Lenta's capital expenditures for 2021 amounted to 9.3 billion rubles, an increase of 23.3% compared to 2020. The growth was due to the acceleration of the pace of organic store opening (141 stores on a gross basis for full 2021 compared to 20 stores for full 2020), the completion of the construction of new distribution centers, ongoing expenses for the development of information systems and expenses related to the integration of Bill stores.

By the end of 2021, Lenta's total debt increased by 12% compared to 2020, to 88.4 billion rubles. Net debt decreased by 3.6%, to 55.1 billion rubles. Net debt to EBITDA was 1.4x compared to 1.5x at the end of 2020.

Commercial, general and administrative expenses increased by 21.8%, to 28.302 billion rubles, as a percentage of revenue expenses increased to 19.2% from 18.7% against the background of an increase in personnel costs (to 7.4% from 7%), depreciation (to 3.1% from 3%) and rent (to 1.9% from 1.4%).

Commenting on Lenta's financial and operating results, CEO Vladimir Sorokin noted that in 2021 the retailer expanded its presence in the market thanks to a combination of organic growth and strategic acquisitions. The net growth of our chain amounted to 364 stores. He also noted that by the end of 2021, the company opened 133 stores in the Mini Lenta format^[3]

Internet sales growth by 208%, to 19.34 billion rubles

In 2021, sales of products and goods via the Internet at Lenta reached 19.34 billion rubles, an increase of 208% compared to 2020, when the indicator was measured at 6.27 billion rubles. The retailer announced such data on January 27, 2022.

Online sales through partners doubled to 10.63 billion rubles from 5.26 billion rubles. Lenta's own services demonstrated higher growth rates. Thus, sales of the Lenta Online delivery service increased more than nine times (by 813%), to 8.085 billion rubles from 886 million rubles a year earlier. Sales through the click & collect service increased fivefold (by 406%), to 631 million rubles.

In 2021, Lenta processed 10.4 million orders, which is 221% more than in 2020. Online partners accounted for 5.88 million orders (+ 126% by 2020), the Lenta Online platform - 4.29 million (+ 609%). The average check within the framework of Internet orders amounted to 1852 rubles against 1930 rubles in 2020.

The total revenue of Lenta in 2021 amounted to 483.64 billion rubles, which is 8.6% more than a year ago. The company's retail revenue increased by 8.8% to 475.79 billion rubles. Hypermarkets brought the retailer 416.8 billion rubles, which is 4.4% more than a year earlier.

In 2021, Lenta added 236.385 thousand new retail space (forecast was at least 200 thousand square meters). The company opened three hypermarkets and closed the same number. In the supermarket segment, the retailer chain grew by 373 new stores (9 stores were closed). As a result, the net increase was 364 stores. The total number of stores as of December 31, 2021 was 757 (including 254 hypermarkets and 503 small stores).

The company noted that in 2021, Lenta began work on multi-format organic expansion, digital business development and strategic acquisitions of retailers Bill, Family, and Utkonos^[4]

2020

Net profit - 17.4 billion rubles

As a result of its work in 2020, Lenta registered a net profit of 17.4 billion rubles (net profit margin - 3.9%), while in 2019 the retailer had net losses of 2.1 billion rubles and negative profitability of 0.5%.

Lenta itself associates the losses of 2019 with non-cash expenses, which amounted to 14.1 billion rubles, including impairment of assets in the amount of 11.8 billion rubles. Lenta's poor business margins are blamed on weak macroeconomic performance, aggressive competition and growing promotional activity coupled with their own lapses in the non-food range.

According to Lenta, despite the difficult situation in 2020, the company continued to pay special attention to cost control. Nevertheless, the cost of 1.5 billion rubles associated with ensuring the safety of visitors and employees against the background of COVID-19 created additional pressure on the company's profitability indicators. Commercial, general and administrative expenses decreased to 18.3% of revenue, down 3 basis points year-on-year.

Lenta explained its net profit at the end of 2020 by its large retail revenue (437.49 billion rubles, + 7.3% by 2019).

The total debt of Lenta at the end of 2020 amounted to 113.39 billion rubles, a decrease of 37.9% compared to the end of the previous year. Net debt decreased by 16.2%, to 91.59 billion rubles.

It also follows from Lenta's reporting that the network's capital investments in 2020 amounted to 7.6 billion rubles, which is 46% less on an annualized basis. Net cash from operating activities amounted to 27.3 billion rubles, a decrease of 12.3% year-on-year.

On the day of the publication of financial and operating results for 2020, Lenta shares fell in price by 2%.^[5]

Revenue growth by 6.7%, to 445.544 billion rubles

Lenta completed 2020 with a 6.7 percent revenue growth of RUB 445.54 billion. Retail revenue rose by 7.3%, to 437.49 billion rubles, and wholesale revenues decreased by 17.3%, to 8.05 billion rubles.

According to the financial statements, the retail revenue of Lenta hypermarkets in 2020 reached 399.26 billion rubles, which is 7.1% more than a year ago. The total turnover of supermarkets increased by 9.3%, od 38.23 billion rubles.

Lenta's revenue in 2020 rose 6.7%

Comparable retail sales ("LFL") in 2020 increased by 5.4%, the average LFL check increased by 11.6%, LFL traffic decreased by 5.5%.

The retail area of ​ ​ Lenta stores in 2020 increased by 2%, to 1.519 million square meters. m (including the retail area of ​ ​ the hypermarket chain - by 1.6%, supermarkets - by 6.5%). Within a year, the retailer opened six hypermarkets (and closed one) and 14 supermarkets (six closed).

According to Lenta CEO Vladimir Sorokin, the COVID-19 coronavirus pandemic affected the behavior of customers: most of them preferred to visit stores less often, and the main driver of growth was an increase in the average check (by 11.6%, to 1115 rubles). In 2020, the average check in Lenta hypermarkets amounted to 1238 rubles (+ 11.6% by 2019), in supermarkets - 549 rubles (+ 12.8%). At the same time, the number of checks in Lenta outlets combined decreased by 3.9%, to 392 million.

Under these conditions, hypermarket indicators showed steady dynamics due to a competitive assortment of goods, attractive prices and concern for safe shopping conditions, says Vladimir Sorokin. Sales in December were at traditionally high levels, he said, thanks to customers buying from our stores ahead of the lengthy January holidays many spent at home.^[6]

2019

Revenue growth by 1.0% to RUB 417.5 billion

On February 25, 2020, Lenta PelSi reported consolidated financial results for the IFRS year ended December 31, 2019.

Revenue increased 1.0% to RUB 417.5 billion (2018: RUB 413.6 billion), while retail revenue increased 4.0% to RUB 408.0 billion (2018: RUB 392.2 billion) and wholesale revenue decreased 55.5%;

Gross margin rose to 22.0% (+ 0.5 pp vs 2018) on the back of a positive impact from the declining share of the low-margin wholesale business in revenue and a slight increase in retail margin;

Commercial, general and administrative expenses increased to 18.3% of revenue (+ 1.6 pp compared to 2018) on the back of the combined effect of the increase in personnel costs, higher depreciation expenses due to changes in useful life for improvement facilities and an increase in rental costs due to the indexation of rental rates;

Adjusted EBITDA amounted to 34.0 billion rubles, down 6.2% (2018: 36.2 billion), profitability - 8.1% (2018: 8.8%);

Non-cash expenses in the amount of about 14.1 billion rubles, including impairment of assets in the amount of 11.8 billion rubles and depreciation expenses due to changes in useful life for improvement facilities in the amount of about 2.3 billion rubles;

Net interest expense increased by 1.9% to RUB 9.3 billion compared to 2018 (RUB 9.1 billion), as an increase in total debt offset a decrease in the average cost of debt;

Net loss against the background of non-cash expenses amounted to 2.1 billion rubles with negative profitability of 0.5% compared to net profit of 11.7 billion rubles and profitability of 2.9% in 2018;

Net cash from operating activities before interest and income tax amounted to 42.8 billion rubles, compared to 32.4 billion rubles in 2018 (+ 32.1%), which is mainly due to changes in working capital; Capital investments amounted to RUB 14.1 billion, a decrease of 36.1% compared to 2018 (RUB 22.1 billion), mainly due to a decrease in the rate of network development compared to the previous year, strict cost control and changes in the order of payments for some projects not related to network development;

The Company generated a positive free cash flow of RUB 17.0 billion in 2019;

Net debt as of December 31, 2019 amounted to 77.1 billion rubles against 93.3 billion rubles at the end of 2018 and 99.3 billion rubles as of June 30, 2019;

Net Debt/Adjusted EBITDA was 2.3x versus 2.6x at December 31, 2018 and 2.7x at June 30, 2019.

In 2019, a total of 8 hypermarkets and 3 supermarkets, 3 hypermarkets and 7 supermarkets were closed during the same period;

The total number of Lenta stores as at 31 December 2019 was 380, including 249 hypermarkets and 131 supermarkets with a total sales area of 1,489,497 sq.m. (+ 1.5% vs 31 December 2018);

Lenta changed its approach to recognizing wholesale and retail revenue and revised these figures for Q4 and 2018 and Q4 and 2019. The revision did not affect the growth of the Company's total revenue;

Comparable ("LFL") 2 retail sales increased by 0.1% excluding VAT. This is equivalent to a 0.9% increase in retail sales with VAT on the back of a tax rate increase from 1 January 2019;

LFL average check increased by 0.1%, LFL traffic remained unchanged in 2019;

The number of active Lenta 3 loyalty cardholders as of 31 December 2019 increased by 10.1% yoy to 15.8 million;

Lenta opened a distribution center in Moscow with a total area of ​ ​ 70,990 sq.m. and increased the warehouse area in Novosibirsk to 71,837 sq.m. Both sites contain functions that should help optimize procurement and logistics at the company, as well as support the centralization and further development of Lenta's iconic product categories. Lenta expects an increase in sales space of about 3% in 2020. This figure reflects the company's decision to focus on improving store performance and operational efficiency. However, Lenta will continue to find attractive opportunities for growth and development in existing and new formats, as well as further development in online format.

In 2020, Lenta will continue to work on optimizing its business, general and administrative expenses. The Company expects 2020 EBITDA margin to be higher than 2019 as a result of its 2020 priorities.

Lenta plans to invest about 4% of revenue in capital expenditures in 2020. This includes a lower level of investment in organic growth and logistics infrastructure compared to 2019. At the same time, Lenta will increase the costs of IT, digital marketing and other projects aimed at improving the purchasing experience in stores and subsequent growth in operating efficiency.

The plan for development and capital expenditures, as well as subsequent work on optimizing operating funds, will generate a positive balance of free funds in 2020.

249 hypermarkets in 88 cities of Russia

For 2019:

• Lenta managed 249 hypermarkets in 88 Russian cities and 131 supermarkets in Moscow, St. Petersburg, Siberia, Ural and Central regions with a total sales area of ​ ​ 1,493,663 sq.m.
• The average retail space of one Lenta hypermarket was about 5,500 square meters, the average supermarket area was 800 square meters.
• The company operated twelve distribution centers.

The company developed several formats of hypermarkets with low prices, which differ in marketing and pricing policies, as well as an assortment of goods from local manufacturers. As of June 30, 2019, the Company had a workforce of approximately 50,509.

2017:271 stores in 79 cities

For 2017, in the assets of the company:

• 271 stores in 79 cities
• 7 own distribution centers
• 1.2 million square meters of retail space

2010:37 hypermarkets in 18 cities with revenues of 55 billion rubles

In 2010, the company had 37 hypermarkets in 18 cities, which in 2009 provided 55 billion rubles in revenue.

2007: $2 billion valuation of the company

Before the 2008 crisis, Lenta's estimates exceeded $2 billion, and investors lined up to gain a stake in the company.

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