Over the last few years Lenta Ltd showed solid growth in fundamentals
04 Feb 2016 • About Lenta Ltd (
$LNTA) • By InTwits
Lenta Ltd is a fast-growing stock in Food & Drug Retailers industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Lenta Ltd showed growth in the last financial year. Lenta Ltd's revenue surged on 30.3% in FY2015. EBITDA also increased considerably: 31.4% for the same period.
If we look for the longer period Lenta Ltd showed fast revenue growth of 32.0% from 2012 to 2015 annually. EBITDA surged on 33.6% from 2012 to 2015 annually.
Lenta Ltd ($LNTA) financials for the last 5 years
| mln. RUB | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|
| Revenue | 89,766 | 109,910 | 144,266 | 193,988 | 252,763 |
|---|
| Revenue growth, % | | 22.4% | 31.3% | 34.5% | 30.3% |
|---|
| Gross margin, % | 18.6% | 20.6% | 21.8% | 22.6% | 22.3% |
|---|
| SG&A, % | 10.3% | 10.9% | 11.6% | 12.6% | 12.0% |
|---|
| EBITDA | 8,383 | 11,741 | 16,118 | 21,318 | 28,018 |
|---|
| EBITDA growth, % | | 40.1% | 37.3% | 32.3% | 31.4% |
|---|
| EBITDA margin, % | 9.34% | 10.7% | 11.2% | 11.0% | 11.1% |
|---|
| Net Income | 1,697 | 5,136 | 7,147 | 9,075 | 10,288 |
|---|
| Net Income margin, % | 1.89% | 4.67% | 4.95% | 4.68% | 4.07% |
|---|
| |
| CAPEX | 3,930 | 14,700 | 23,394 | 34,696 | 30,993 |
|---|
| CAPEX/Revenue, % | 4.38% | 13.4% | 16.2% | 17.9% | 12.3% |
|---|
| Debt | 24,961 | 28,877 | 46,043 | 71,251 | 75,941 |
|---|
| Cash | 5,136 | 3,536 | 6,212 | 12,036 | 22,456 |
|---|
| Net Debt/EBITDA | 2.4x | 2.2x | 2.5x | 2.8x | 1.9x |
|---|
| |
| ROIC, % | 44.1% | 42.9% | 34.0% | 24.5% | 20.3% |
|---|
| ROE, % | | | | 83.9% | 32.2% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. EBITDA margin increased slightly on 0.100 pp from 11% to 11.1% in 2015. In the last 3 years Lenta Ltd's EBITDA margin increased slightly on 0.400 pp from 10.7% in 2012 to 11.1% in 2015.
We call Lenta Ltd an attractive growth stock as together with the growth it delivers high ROIC at 20.3%. Three years ago it was considerably higher at 42.9%. It's average level of ROIC for the last three years was 26.2%.
The company showed big decline in Net Income margin of 0.600 pp from 4.70% to 4.10% in 2015. If we look for the longer period Lenta Ltd showed big decline in Net Income margin of 0.600 pp from 4.70% in 2012 to 4.10% in 2015.
Lenta Ltd operates at ROE of 32.2%.
Capital expenditures (CAPEX)
To this fast growth the company had to invest in CAPEX.The company's CAPEX/Revenue was 12.3% in FY2015. Lenta Ltd showed decline of 1.11 pp from 13.4% in 2012 to 12.3% in 2015. For the last three years the average CAPEX/Revenue was 15.5%.
Leverage (Debt)
The company has medium debt level at 1.9x Net Debt/EBITDA to maintain high growth. In the longer period Lenta Ltd's leverage dropped on 0.25x from 2.16x in 2012 to 1.91x in 2015.
Valuation vs. comparable companies
At the end of trading day today Lenta Ltd traded at 1.9x EV/EBITDA which is 86.3% lower than 13.9x Food & Drug Retailers peer group avearge calculated on the basis of 20 companies. The company trades at 0.0x P/E which is 100% lower than 11.2x Food & Drug Retailers industry avearge calculated based on 4 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Magnit PJSC ($MGNT) | | 33.5% | 29.4% | 32.3% | 24.4% |
| X5 Retail Group N.V ($89VS) | 32.6% | 8.0% | 9.0% | 18.5% | |
| Crawshaw Group ($CRAW) | | -0.9% | -0.6% | 11.9% | 17.1% |
| O'Key Group Sa ($OKEY) | 12.7% | 26.0% | 18.9% | 9.0% | |
| Dairy Farm International Hldgs ($DFIB) | 14.6% | 7.3% | 5.7% | 6.3% | |
| |
|---|
| Median (8 companies) | 20.5% | 7.6% | 7.1% | 7.6% | 20.8% |
|---|
| Lenta Ltd ($LNTA) | | 22.4% | 31.3% | 34.5% | 30.3% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Snacktime ($SNAK) | 55.0% | 56.6% | 51.8% | 55.1% | |
| Crawshaw Group ($CRAW) | 43.6% | 43.3% | 43.7% | 43.8% | 44.4% |
| Dairy Farm International Hldgs ($DFIB) | 29.4% | 28.9% | 29.8% | 29.9% | |
| Magnit PJSC ($MGNT) | 24.3% | 26.5% | 28.5% | 28.9% | 28.5% |
| O'Key Group Sa ($OKEY) | 22.8% | 23.5% | 23.9% | 24.5% | |
| |
|---|
| Median (8 companies) | 24.1% | 25.1% | 26.4% | 26.7% | 36.4% |
|---|
| Lenta Ltd ($LNTA) | 18.6% | 20.6% | 21.8% | 22.6% | 22.3% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Jardine Matheson Hldgs ($J36) | 24.4% | 13.1% | 11.6% | 11.8% | |
| Magnit PJSC ($MGNT) | 7.8% | 10.3% | 11.0% | 11.3% | 10.9% |
| X5 Retail Group N.V ($89VS) | 7.3% | 6.9% | 7.1% | 7.7% | |
| O'Key Group Sa ($OKEY) | 7.9% | 8.1% | 7.3% | 7.3% | |
| Dairy Farm International Hldgs ($DFIB) | 7.6% | 6.6% | 6.9% | 6.6% | |
| |
|---|
| Median (8 companies) | 7.7% | 6.7% | 7.0% | 6.9% | 8.6% |
|---|
| Lenta Ltd ($LNTA) | 9.3% | 10.7% | 11.2% | 11.0% | 11.1% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| O'Key Group Sa ($OKEY) | 9.3% | 7.1% | 8.7% | 10.6% | |
| Magnit PJSC ($MGNT) | 14.5% | 10.5% | 8.6% | 7.3% | 5.7% |
| X5 Retail Group N.V ($89VS) | 5.1% | 4.6% | 3.8% | 4.5% | |
| Jardine Matheson Hldgs ($J36) | 3.6% | 4.9% | 4.4% | 3.5% | |
| Snacktime ($SNAK) | 2.6% | 5.3% | 4.3% | 3.4% | |
| |
|---|
| Median (8 companies) | 3.6% | 4.7% | 4.1% | 3.4% | 6.0% |
|---|
| Lenta Ltd ($LNTA) | 4.4% | 13.4% | 16.2% | 17.9% | 12.3% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Magnit PJSC ($MGNT) | 17.9% | 23.1% | 26.0% | 33.2% | 32.6% |
| Dairy Farm International Hldgs ($DFIB) | 39.6% | 32.8% | 34.6% | 31.1% | |
| O'Key Group Sa ($OKEY) | 21.7% | 25.0% | 21.8% | 17.1% | |
| X5 Retail Group N.V ($89VS) | 11.9% | 3.1% | 13.0% | 14.9% | |
| Total Produce ($TOT) | 8.8% | 9.0% | 11.9% | 10.3% | |
| |
|---|
| Median (8 companies) | 14.9% | 8.5% | 12.4% | 12.6% | 19.9% |
|---|
| Lenta Ltd ($LNTA) | 44.1% | 42.9% | 34.0% | 24.5% | 20.3% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Snacktime ($SNAK) | 0.8x | 2.0x | 6.0x | 4.4x | |
| O'Key Group Sa ($OKEY) | 1.2x | 1.0x | 1.3x | 2.4x | |
| X5 Retail Group N.V ($89VS) | 3.1x | 3.3x | 2.7x | 2.2x | |
| Jardine Matheson Hldgs ($J36) | 0.6x | 1.4x | 1.3x | 1.3x | |
| Magnit PJSC ($MGNT) | 1.3x | 1.1x | 1.1x | 0.9x | 0.9x |
| |
|---|
| Median (8 companies) | 1.0x | 1.0x | 1.2x | 1.1x | -2.4x |
|---|
| Lenta Ltd ($LNTA) | 2.4x | 2.2x | 2.5x | 2.8x | 1.9x |
