St-Petersburg, Russia; 25 January, 2018 – 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 fourth quarter and twelve months ended 31 December 2017.

To view the full press release, please click here.

4Q 2017 Operating Highlights:

·             Total sales grew 23.4% in 4Q 2017 to Rub 112.1bn (4Q 2016: Rub 90.8bn);

·             Like-for-like (“LFL”)¹ sales growth of 5.2% vs. 4Q 2016;

·             LFL traffic growth of 0.6% combined with a 4.6% increase in LFL ticket;

·             30 new hypermarkets and 33 new supermarkets opened during the fourth quarter of 2017;

·             Total store count reached 328 stores as at 31 December 2017, comprising 231 hypermarkets and 97 supermarkets;

·             Total selling space increased to 1,382,111 sq.m as at 31 December 2017 (+20.6% vs. 31 December 2016); and

·             Number of active loyalty cardholders² increased to 12.3m (+17% y-o-y) with approximately 95% of transactions in the fourth quarter made using the loyalty card.

12M 2017 Operating Highlights:

·             Total sales grew 19.2% in 12M 2017 to Rub 365.2bn (12M 2016: Rub 306.4bn);

·             LFL sales growth of 0.9% vs. 12M 2016;

·             LFL traffic growth of (1.4%) combined with a 2.3% increase in LFL ticket;

·             Lenta started expansion of its supermarket format in Siberia and Ural regions; and

·             40 new hypermarkets and 49 new supermarkets were opened during 12M 2017 with 236.0 th. sq.m of net selling space addition – in line with the Company’s FY 2017 store opening guidance.

Material events in 4Q 2017 and after the reported period:

·             Lenta signed an agreement with the Holiday Group to acquire 22 supermarkets in the Siberia region, of which 6 were opened in December;

·             Lenta has joined EMD, Europe’s leading purchasing alliance to benefit from membership of the world’s largest FMCG purchasing network;

·             The Company started sales of Pirkka branded products (private label produced by Kesko of Finland) in Lenta stores across some regions;

·             130 new MAN trucks with refrigerated semitrailers were purchased to improve supply chain performance; and

·             Steven Hellman was appointed as a non-executive Director of Lenta Ltd. with effect from 1st December, 2017.

Lenta’s Chief Executive Officer, Jan Dunning commented:

“Lenta’s sales growth accelerated to 23% in the fourth quarter of 2017, driven by an improvement in like-for-like sales growth to 5.2% combined with a 21% increase in selling space. Customers reacted positively to continuing improvements in our offering, range, marketing and communication and this led to substantial improvements in both like-for-like ticket and traffic growth. We were particularly pleased to achieve an increase in like-for-like traffic for the first time in the year. Although we continued to see some pressure from cannibalization and deflation in the quarter, these effects show some signs of abating.

The Company continues to expand rapidly and again met its new store opening guidance with 40 hypermarkets and 49 supermarkets opened during the year. We doubled our supermarket network during 2017, opening more stores than in the previous four years since this format was launched in 2013. We also made notable progress in Moscow with 11 new hypermarkets and 10 new supermarkets, leading to year-on-year increases of over 70% in fourth quarter sales and selling space in this region.

We are very pleased with the first operating results of the 14 ex-NASH hypermarkets which were re-opened under the Lenta brand in November 2017. Sales at the 11 hypermarkets acquired from Kesko in 2016 also continued to ramp-up rapidly. Lenta’s ability to succeed in diverse markets with both acquired stores and organic openings provides a very clear demonstration of the attractiveness of Lenta’s customer proposition. In December, we completed the purchase of 22 supermarkets in Siberia from Holiday.

As a result of our expansion, Lenta’s overall market position continued to improve – in addition to being the country’s leading hypermarket operator, we are confident that Lenta also became Russia’s #3 food retailer during 2017.

For 2018, the Lenta team will continue its efforts to drive sales by further strengthening our customer proposition. We also expect some improvement in the macroeconomic and consumer environment.”

To view the full press release, please click here.

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

Lenta
Mariya Filippova
PR and GR manager
Tel: +7 812 380-61-31 ext.: 1892
E-mail: maria.filippova@lenta.com

Russian Media:
NW Advisors
Anton Karpov & Victoria Afonina 
Ňel:+7 495 795 06 23
E-mail: lenta@nwadvisors.com

International Media: 
FTI Consulting 
Leonid Fink & Jenny Payne
Ňel: +44 7497 783 705
E-mail: Leonid.Fink@fticonsulting.com

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 31 December 2017 are considered active