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Lenta Ltd's three year revenue growth was 28.5% and EBITDA growth was 24.9% per year

23 Feb 2017 • About Lenta Ltd ($LNTA) • By InTwits

Lenta Ltd is an attractive growth stock in Food & Drug Retailers industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.

Growth story


Lenta Ltd showed fast growth in the last financial year. Lenta Ltd's revenue surged on 21.2% in FY2016. Together with revenue growth Lenta Ltd also managed to keep EBITDA growth. EBITDA grew 12.0% for the same period.

In the last 3 years Lenta Ltd showed fast revenue growth of 28.5% from 2013 to 2016 annually. EBITDA surged on 24.9% from 2013 to 2016 annually.

Lenta Ltd ($LNTA) financials for the last 5 years

mln. RUB 2012 2013 2014 2015 2016
Revenue109,910144,266193,988252,763306,352
Revenue growth, %31.3%34.5%30.3%21.2%
Gross margin, %20.6%21.8%22.6%22.3%22.1%
SG&A, %10.9%11.6%12.6%12.0%12.6%
EBITDA11,74116,11821,31828,01831,390
EBITDA growth, %37.3%32.3%31.4%12.0%
EBITDA margin, %10.7%11.2%11.0%11.1%10.2%
Net Income5,1367,1479,07510,28811,202
Net Income margin, % 4.67%4.95%4.68%4.07%3.66%
 
CAPEX14,70023,39434,69630,99342,320
CAPEX/Revenue, %13.4%16.2%17.9%12.3%13.8%
Debt28,87746,04371,25175,941102,201
Cash3,5366,21212,03622,45613,038
Net Debt/EBITDA2.2x2.5x2.8x1.9x2.8x
 
ROIC, %42.9%34.0%24.5%20.3%16.0%
ROE, %83.9%32.2%21.2%

Profitability and return on investment


EBITDA margin declined slightly from 11.1% in FY2015 to 10.2% in FY2016. If we look for the longer period the company's EBITDA margin decreased on 1 pp from 11.2% in 2013 to 10.2% in 2016.

We call Lenta Ltd an attractive growth stock as together with the growth it delivers high ROIC at 16.0%. Three years ago it was considerably higher at 34.0%. Average ROIC for the last three years was 20.3%.

The company showed decline of 0.400 pp from 4.10% to 3.70% in 2016. In the longer period the company's Net Income margin dropped on 1.30 pp from 5% in 2013 to 3.70% in 2016.

Lenta Ltd operates at ROE of 21.2%. It's average level of ROE for the last three years was 45.8%.

Capital expenditures (CAPEX)


To this fast growth Lenta Ltd had to invest in CAPEX.In FY2016 Lenta Ltd had CAPEX/Revenue of 13.8%. CAPEX/Revenue dropped on 2.40 pp from 16.2% in 2013 to 13.8% in 2016. For the last three years the average CAPEX/Revenue was 14.7%.

Leverage (Debt)


Having such a fast growth profile Lenta Ltd keeps medium debt level at 2.8x Net Debt/EBITDA. If we look for the longer period Lenta Ltd showed fast leverage growth of 0.37x from 2.47x in 2013 to 2.84x in 2016.

Valuation vs. comparable companies


At the end of trading day today Lenta Ltd traded at 2.8x EV/EBITDA which is 88.4% lower than 24.5x Food & Drug Retailers peer group avearge calculated on the basis of 20 companies. At the end of trading day today Lenta Ltd traded at 0.0x P/E which is 95.3% lower than 0.1x Food & Drug Retailers peer group avearge calculated on the basis of 3 companies.

Peers in Food & Drug Retailers


Below you can find Lenta Ltd benchmarking vs. other companies in Food & Drug Retailers industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
X5 Retail Group N.V ($89VS)8.0%9.0%18.5%27.6%
Magnit PJSC ($MGNT)33.5%29.4%32.3%24.4%
Crawshaw Group ($CRAW)-0.6%11.9%17.1%50.5%
Total Produce ($TOT)6.4%8.5%1.1%7.8%
O'Key Group Sa ($OKEY)26.0%18.9%9.0%6.9%
 
Median (8 companies)7.6%7.1%7.6%7.4%22.6%
Lenta Ltd ($LNTA)31.3%34.5%30.3%21.2%


Top companies by Gross margin, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Snacktime ($SNAK)56.6%51.8%55.1%53.9%54.0%
Crawshaw Group ($CRAW)43.3%43.7%43.8%44.4%45.1%
Dairy Farm International Hldgs ($DFIB)28.9%29.8%29.9%29.5%
Magnit PJSC ($MGNT)26.5%28.5%28.9%28.5%
X5 Retail Group N.V ($89VS)23.6%24.4%24.5%24.5%
 
Median (8 companies)25.1%26.4%26.7%26.5%49.5%
Lenta Ltd ($LNTA)20.6%21.8%22.6%22.3%22.1%


Top companies by EBITDA margin, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Jardine Matheson Hldgs ($J36)13.1%11.6%11.8%12.8%
Magnit PJSC ($MGNT)10.3%11.0%11.3%10.9%
X5 Retail Group N.V ($89VS)6.9%7.1%7.7%7.2%
Crawshaw Group ($CRAW)3.7%3.4%6.5%6.4%1.5%
O'Key Group Sa ($OKEY)8.1%7.3%7.3%6.1%
 
Median (8 companies)6.7%7.0%6.9%6.2%-6.7%
Lenta Ltd ($LNTA)10.7%11.2%11.0%11.1%10.2%


Top companies by CAPEX/Revenue, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
X5 Retail Group N.V ($89VS)4.6%3.8%4.5%6.4%
Crawshaw Group ($CRAW)1.1%1.0%1.2%6.3%6.1%
Magnit PJSC ($MGNT)10.5%8.6%7.3%5.7%
O'Key Group Sa ($OKEY)7.1%8.7%10.6%5.1%
Jardine Matheson Hldgs ($J36)4.9%4.4%3.5%3.6%
 
Median (8 companies)4.7%4.1%3.4%4.4%5.0%
Lenta Ltd ($LNTA)13.4%16.2%17.9%12.3%13.8%


Top companies by ROIC, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Magnit PJSC ($MGNT)23.1%26.0%33.2%32.6%
Dairy Farm International Hldgs ($DFIB)32.8%34.6%31.1%21.6%
X5 Retail Group N.V ($89VS)3.1%13.0%14.9%15.7%
O'Key Group Sa ($OKEY)25.0%21.8%17.1%10.4%
Total Produce ($TOT)9.0%11.9%10.3%9.5%
 
Median (8 companies)8.5%12.4%12.6%10.0%-36.8%
Lenta Ltd ($LNTA)42.9%34.0%24.5%20.3%16.0%


Top companies by Net Debt / EBITDA

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
O'Key Group Sa ($OKEY)1.0x1.3x2.4x2.6x
X5 Retail Group N.V ($89VS)3.3x2.7x2.2x2.3x
Jardine Matheson Hldgs ($J36)1.4x1.3x1.3x1.3x
Magnit PJSC ($MGNT)1.1x1.1x0.9x0.9x
Dairy Farm International Hldgs ($DFIB)-0.8x-0.9x-0.7x0.7x
 
Median (7 companies)1.0x1.2x1.1x0.9x-8.8x
Lenta Ltd ($LNTA)2.2x2.5x2.8x1.9x2.8x