Pursuant to the Rules and Regulations of the Ljubljana Stock Exchange, d.d, and the relevant legislation, the company Poslovni sistem Mercator, d.d., hereby informs the shareholders and the public of the following:

In the period 1-9 2013, Mercator Group generated good EUR 2 billion of net revenue, which is 3.6 percent less than in the corresponding period of the year before. Lower revenue is mostly a result of poorer sales of apparel and technical consumer goods, and lower revenue in Slovenia and Croatia. Moreover, revenue was affected by the implementation of the planned business decisions related to the business restructuring process. The cost optimization process has been in progress with sustained success. Savings in the period 1-9 2013 exceed the figure planned for the entire year 2013. In the first nine months of the year, Mercator Group decreased its financial liabilities by EUR 29.7 million, and the draft agreement on long-term restructuring of financial liabilities ensures stability for the Group.

Mercator Group in the period 1-9 2013 generated loss in amount of EUR 17.6 million, which is lower than a loss generated in the equivalent period last year. The loss generated in the third quarter of this year amounted to EUR 2.4 million and is lower than in the first two quarters of the year.

Lower revenue in the period 1-9 2013 is mostly a result of lower sales of apparel and technical consumer goods, as consequence of changes in the shopping behaviour of consumers and lower revenue in Slovenia and Croatia, resulting from harsh economic conditions. Lower revenue also resulted from the implementation of the previously planned business decisions as a part of the business restructuring process, including the withdrawal from the markets of Albania and Bulgaria, closing of underperforming sales units, and reduction of sales areas.

In the first nine months of this year, Mercator Group decreased its financial debt by 2.7 percent or EUR 29.7 million; thus, as at September 30, 2013 net debt of the Group amounted to EUR 994.3 million. Mercator has also reached an agreement in principle with its lenders steering committee, consisting of six creditor banks, on the key terms of a long-term restructuring of financial liabilities of the Group companies. The proposal on restructuring, which was presented to other creditor banks on November 5, 2013, is an important step for the Group's long-term stability. It is expected to achieve a successful completion of the process by the end of year.

Mercator Group savings in the period 1-9 2013 amounted to EUR 27.4 million, which exceeds the planned figure. The highest savings were attained with regard to costs of material and services.

After several years of decline in its market share, Mercator succeeded in stopping this trend in the first nine months of the year, and in stabilizing the market share by numerous marketing activities, despite the harsh conditions in the market. The revision of the Pika customer loyalty and benefit system was launched this year, which was successfully completed. Upon the increase in the VAT rate, prices were locked for over 2,000 best-selling products of the FMCG program. Regular special offers have been improved and a lot of attention has been paid to the loyal customers who were offered additional benefits).

Business report of the Mercator Group and the company Poslovni sistem Mercator, d.d., for the period 1-9 2013 is attached.

This announcement will be published on the company’s website at www.mercator.si as of November 12, 2013, and will remain posted for a period of at least five years.