Lenta Ltd reports 36.5% CAPEX growth and 21.2% Revenue growth
16 Feb 2017 • About Lenta Ltd (
$LNTA) • By InTwits
Lenta Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Lenta Ltd is a fast growth stock: 2016 revenue growth was 21.2%, 5 year revenue CAGR was 27.8% at 2016 ROIC 16.0%
- EBITDA Margin is relatively stable: 10.2% in 2016 vs. 11.1% in 2015 vs. 10.7% in 2012
- Lenta Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.7%. At the same time it's a lot of higher than industry average of 5.3%.
- CAPEX is quite volatile: 42,320 in 2016, 30,993 in 2015, 34,696 in 2014, 23,394 in 2013, 14,700 in 2012
- The company has highly profitable business model: ROIC is at 16.0%
- It operates with high leverage: Net Debt/EBITDA is 2.8x while industry average is 0.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Lenta Ltd ($LNTA) key annual financial indicators
| mln. RUB | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 109,910 | 144,266 | 193,988 | 252,763 | 306,352 | 21.2% |
| Gross Profit | 22,677 | 31,462 | 43,857 | 56,305 | 67,768 | 20.4% |
| SG&A | 11,930 | 16,676 | 24,448 | 30,374 | 38,748 | 27.6% |
| EBITDA | 11,741 | 16,118 | 21,318 | 28,018 | 31,390 | 12.0% |
| Net Income | 5,136 | 7,147 | 9,075 | 10,288 | 11,202 | 8.9% |
Balance Sheet
|
|---|
| Cash | 3,536 | 6,212 | 12,036 | 22,456 | 13,038 | -41.9% |
| Short Term Debt | 3,833 | 6,143 | 12,695 | 10,792 | 35,245 | 226.6% |
| Long Term Debt | 25,044 | 39,900 | 58,555 | 65,149 | 66,956 | 2.8% |
Cash flow
|
|---|
| Capex | 14,700 | 23,394 | 34,696 | 30,993 | 42,320 | 36.5% |
Ratios
|
|---|
| Revenue growth | 22.4% | 31.3% | 34.5% | 30.3% | 21.2% | |
| EBITDA growth | 40.1% | 37.3% | 32.3% | 31.4% | 12.0% | |
| Gross Margin | 20.6% | 21.8% | 22.6% | 22.3% | 22.1% | -0.2% |
| EBITDA Margin | 10.7% | 11.2% | 11.0% | 11.1% | 10.2% | -0.8% |
| Net Income Margin | 4.7% | 5.0% | 4.7% | 4.1% | 3.7% | -0.4% |
| SG&A, % of revenue | 10.9% | 11.6% | 12.6% | 12.0% | 12.6% | 0.6% |
| CAPEX, % of revenue | 13.4% | 16.2% | 17.9% | 12.3% | 13.8% | 1.6% |
| ROIC | 42.9% | 34.0% | 24.5% | 20.3% | 16.0% | -4.3% |
| ROE | | | 83.9% | 32.2% | 21.2% | -11.0% |
| Net Debt/EBITDA | 2.2x | 2.5x | 2.8x | 1.9x | 2.8x | 0.9x |
Revenue and profitability
Lenta Ltd's Revenue jumped on 21.2% in 2016. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 0.84 pp from 11.1% to 10.2% in 2016.
Gross Margin showed almost no change in 2016. SG&A as a % of Revenue increased slightly on 0.63 pp from 12.0% to 12.6% in 2016.
Net Income marign showed almost no change in 2016.
Capital expenditures (CAPEX) and working capital investments
Lenta Ltd's CAPEX/Revenue was 13.8% in 2016. CAPEX/Revenue decreased on 2.4 pp from 16.2% in 2013 to 13.8% in 2016. Average CAPEX/Revenue for the last three years was 14.7%.The company has spent a lot to CAPEX (135% of EBITDA) to secure its growth.
Return on investment
The company operates at high and attractive ROE (21.24%) while ROIC is a bit lower (16.00%). ROIC decreased on 4.3 pp from 20.3% to 16.0% in 2016. ROE dropped on 11.0 pp from 32.2% to 21.2% in 2016.
Leverage (Debt)
Debt level is 2.8x Net Debt / EBITDA and 3.3x Debt / EBITDA. Net Debt / EBITDA surged on 0.9x from 1.9x to 2.8x in 2016. Debt jumped on 34.6% in 2016 while cash dropped on 41.9% in 2016.
Appendix 1: Peers in Food & Drug Retailers
Below we provide Lenta Ltd benchmarking against other companies in Food & Drug Retailers industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| O'Key Group Sa ($OKEY) | 1.0x | 1.3x | 2.4x | 2.6x | |
| X5 Retail Group N.V ($89VS) | 3.3x | 2.7x | 2.2x | 2.3x | |
| Jardine Matheson Hldgs ($J36) | 1.4x | 1.3x | 1.3x | 1.3x | |
| Magnit PJSC ($MGNT) | 1.1x | 1.1x | 0.9x | 0.9x | |
| Dairy Farm International Hldgs ($DFIB) | -0.8x | -0.9x | -0.7x | 0.7x | |
| |
|---|
| Median (7 companies) | 1.0x | 1.2x | 1.1x | 0.9x | -8.8x |
|---|
| Lenta Ltd ($LNTA) | 2.2x | 2.5x | 2.8x | 1.9x | 2.8x |
