29 October 2018

3Q 2018 sales and operating results

Lenta sales and operating highlights for the third quarter 30 September 2018

St-Petersburg, Russia; 29 October, 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 third quarter ended 30 September 2018.

To download the full press release, click here.

3Q 2018 Operating Highlights:

  • Total sales grew 12.5% in 3Q 2018 to Rub 100.8bn (3Q 2017: Rub 89.6bn);
  • Like-for-like (“LFL”)1 sales growth of -0.6% vs. 3Q 2017;
  • LFL traffic growth of -0.3% combined with a 0.3% decrease in LFL ticket;
  • 10 new supermarkets were opened during the third quarter of 2018, while two supermarkets were closed;
  • Total store count reached 354 stores as at 30 September 2018, comprising 233 hypermarkets and 121 supermarkets;
  • Total selling space increased to 1,410,073 sq.m as at 30 September 2018 (+17.2% vs. 30 September 2017); and
  • Number of active loyalty cardholders2 increased to 13.8m (+17% y-o-y) with approximately 96% of transactions in the third quarter made using the loyalty card.

9M 2018 Operating Highlights:

  • * Total sales grew 16.1% in 9M 2018 to Rub 294.0bn (9M 2017: Rub 253.1bn);
  • * LFL sales growth of 2.9% vs. 9M 2017;
  • * LFL traffic growth of 0.6% combined with a 2.2% increase in LFL ticket; and
  • * Two new hypermarkets and 27 supermarkets were opened during 9M 2018 while three supermarkets were closed.

Lenta’s Chief Executive Officer, Jan Dunning commented:

“Sales growth of 12.5% in the third quarter came below our original expectations and reflects the economic pressure on consumers. Lenta continues to win new customers in both formats, demonstrating the attractiveness of our customer offer. However, consumers are in a saving mode, shopping less frequently and buying less per visit. These trends have continued and even accelerated in October. We will keep improving our offer, assortment, and marketing activities in an effort to offset the weak economy and to support our customers.

The long-term fundamentals of the fragmented Russian food retail industry remain attractive for the most effective players. We believe our robust business model will enable us to continue to grow market share and deliver attractive returns. However, in the near term Lenta remains focused on operational efficiency, cash generation and returns on investment. We therefore plan to grow selling space at a significantly slower pace in 2019 which will result in positive free cash flow. We also believe that Lenta’s current market valuation understates the fundamental value of the business, and that this provides an attractive opportunity to create value for shareholders through a buyback programme while maintaining our strong balance sheet with conservative leverage.”

We have announced today that the Board of Directors has authorised a GDR buyback program under which total purchases of up to Rub 11.6bn may be made within the next 12 months, corresponding to 10% of all GDRs3. This is a sign of our confidence in the business as well as our focus on creating value for shareholders.

To download the full press release, click here.

A brief video summary on Lenta’s business and its Big Data initiative can be seen here.

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

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
Тel:+7 495 795 06 23
E-mail: lenta@nwadvisors.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 30 September 2018 are considered active
3 Based on the GDR quoted sale price as of the close of trading on October 26, 2018.