Pursuant to the provisions of the Rules of the Ljubljana Stock Exchange and the valid legislation, Telekom Slovenije, d.d., Cigaletova 15, Ljubljana, hereby publishes the following notification:

The Supervisory Board of Telekom Slovenije, d.d., approved the Annual Report of the Telekom Slovenije Group and for Telekom Slovenije, d.d. for 2019, at its 9th regular meeting, held on Wednesday, 1 April 2020.

In 2019 Telekom Slovenije Group placed a lot of focus on digitalization, continued optimization of processes and systems, empowering employees and ensuring of user experience excellence. Through planned investments in reliable, secure and high-quality technologies, Telekom Slovenije, d.d., maintains its position of the leading provider of the most advanced technologies and next-generation networks, and communication, security, information and multimedia services. In 2019 Telekom Slovenije was the first Slovenian operator to upgrade its network with the Internet of Things technology (NB-IoT), which opens opportunities for developing innovative solutions with a high added value for process optimization, resource management, ensuring high levels of security, as well as a higher quality of living. The company introduced new advanced services and technologies, and utilized its infrastructure, know-how, experience and well established business processes to develop comprehensive ICT solutions and projects.

In 2019 Telekom Slovenije Group’s EBITDA amounted to €205.4 million, which is 11% more than in 2018. The EBITDA-to-sales ratio at the Telekom Slovenije Group level was 30.4%, while in the same period last year it stood at 25.9%. Telekom Slovenije Group generated €212.7 million in adjusted EBITDA in 2019, which is 2% more than in the year before. This is in line with the median change of the adjusted EBITDA of major European operators, which also stood at 2% between 2019 and 2018.

Telekom Slovenije Group created €675.4 million in net revenue from sales in 2019. While this is 6% less than in 2018, the 2019 revenue no longer includes the revenue from Blicnet, and also the revenue from international traffic in the wholesale market declined somewhat, as well as the revenue from mobile subscribers and the revenue from IT goods and services. Compared to 2018 Telekom Slovenije, d.d. increased revenue from the sale of services and goods through its online store by 39%, and the company is also increasing its share of revenue in e-health, energy and financial and insurance services. Telekom Slovenije Group generated a total of €681.7 million in operating revenues in 2019.

The ruling of the Court of Arbitration of the International Chamber of Commerce had a negative impact on net profit

Telekom Slovenije Group generated €27.4 million in net profit in 2019 without one-off events, which is, compared to adjusted net profit, 13% more than in 2018. By taking into account one-off events net profit of Telekom Slovenije Group for 2019 was €1.2 million, which was mostly the result of the negative ruling that Telekom Slovenije, d.d., received from the Court of Arbitration of the International Chamber of Commerce regarding the purchase of the 34% share of Antenna TV SL and events related to this ruling.

Telekom Slovenije, d.d., has retained its leading market share in mobile telephone services and fixed broadband service in Slovenia, with a 39.9% share in the mobile segment and a 31.0% share in the broadband internet access segment, as well as a 47.1% share in the IPTV segment. IPKO retained its leading 31.4% market share in fixed broadband access in Kosovo in 2019, as well as the 43.8% share in the mobile telephone services segment.

The majority of investments will go towards expanding the access fiber optics network, continued modernization of the radio network, and the development of services

Telekom Slovenije Group put €167.8 million towards investments in 2019.The planned funds were higher, however, Telekom Slovenije Group managed to realize the set goals at lower investments through optimization of purchasing processes. The majority of investments went towards expanding the access fiber optics network, continued modernization of the radio network, and the development of services. In 2019 Telekom Slovenije, d.d., provided connections through its fiber-optics infrastructure to more than 44,000 households, while the company provides the option of connecting to the biggest fiber-optics network in Slovenia to more than 325,000 households in total. Telekom Slovenije, d.d., is also ready for the next generation of mobile networks (5G), an evolutionary step in the development and a backbone of the digital future. As an upgrade to 4G, 5G requires advanced network technology, and it is very important to understand and test the equipment, but even more important to have the know-how and properly educated experts. Telekom Slovenije, d.d., plans smart 5G infrastructure in such a way that it will be able to provide general communication services as well as numerous virtual dedicated networks for individual business verticals, such as healthcare, energy, transportation, factories, smart cities, etc.

Response to the coronavirus COVID-19 epidemic

After the coronavirus COVID-19 began spreading across Europe, Telekom Slovenije, d.d., began preparing activities and adopting the first preventive measures based on its Business Continuity Management System (BCMS) that it had established to activate in case of disruptive events, and which is certified according to the ISO/IEC 22301 standard. The exceptional meeting of the company's Security Council took place on 25 February 2020, and the company adopted a special Plan of measures and operations for the event of the a pandemic, with a plan of activities including the activation of the National protection and rescue plan. In accordance with BCMS Telekom Slovenije, d.d., is, as part of the nation's critical infrastructure, ready and capable to provide key services and processes also in emergency situations.

We are witnessing a massive and fast transformation of remote work and education, and since the epidemic has been declared the company is facing a high increase in traffic in voice, data and video services, with 50% above regular circumstances. There is also a high increase in traffic for global internet network access and for IPTV, with a stark increase of time-shift service and video on demand. Network traffic communication capacities are limited, so the current situation is a major challenge for the ICT industry, however, the company has been handling it successfully so far. The network of Telekom Slovenije, d.d., is used by more than one million users. In the current situation the company tailored the work of our experts so that they can monitor network operations, provide technical support to users and the special needs of public institutions and businesses for increased capacities and additional services, as well as cyber security, which is exceptionally important in these circumstances. Experts are carefully monitoring every network element 24/7, and adjusting the available capacities, making sure that the company is able to successfully overcome any challenge and that users can enjoy uninterrupted services. During these emergency circumstances Telekom Slovenije, d.d., is putting all its efforts forward, within the requirements of the legislation, to ensure the provision of services to all the network users and to manage risks.

Considering the uncertainty and the fact that medical experts cannot yet provide an estimate as to how long the measures for limiting the spread of the coronavirus will last at the national level, Telekom Slovenije Group cannot provide a reliable estimate as to the effect of these conditions on its business results and operation. The measures that have been adopted at the state level in the first few weeks have already impacted the net sales revenue of Telekom Slovenije, d.d., in retail (especially mobile and fixed segment and IT services and goods) and the wholesale (international segment), and the revenue of some subsidiaries of the group because of business transactions on the market came to a standstill.

The Supervisory Board of Telekom Slovenije, d.d., gave its approval to the appointment of Klavdij Godnič for the director of Soline Pridelava soli, d.o.o., for a second four-year term, starting on 1 July 2020. Klavdij Godnič has been heading Soline, d.d., since 1 July 2012.

The Annual Report is attached as an appendix to this notification.

This notification will also be available on the company’s website (www.telekom.si) for at least 10 years after it is published.