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 announces the following:

In 2014, Mercator Group is planning revenue in the amount of EUR 2.7 billion, operating profit in the amount of EUR 35 million, and net profit in the amount of EUR 339 thousand. Successfully completed financial restructuring will have a positive effect on the stabilization of the Group's operations and it will allow faster business restructuring in the future. Mercator Group will carry on its business restructuring strategy with main emphasis on the improvement of competitive position and focus on improvement of profitability of operations. Consistent pursuit of long-term cost optimization projects and improvement in market perception have already yielded the first positive developments for the Group, which will fuel Mercator in the coming years. In 2014, we will invest EUR 58.9 million, which is EUR 20 million more than the 2013 estimate.

Revenue planned by the Mercator Group for 2014 is 3.5% lower than the 2013 estimate. The planned decrease of revenue results from closing down of the non-profitable units, and exit from non-strategic activities, which is consistent with the Group's adopted restructuring strategy. Persistence of harsh economic conditions in all key markets of Mercator Group operations will also have a notable negative effect on revenue. According to the forecasts, these conditions will lead to further decrease of sales of both fast-moving consumer goods, and durables and apparel; improvement of macroeconomic conditions is only expected in 2015.

For 2014, Mercator Group is planning operating profit in the amount of EUR 34.9 million and net profit of EUR 339 thousand. Improvement of Group profitability will result from the focus on long-term projects geared towards further decrease of costs on one hand, and improvement of Mercator's perception by the customers on the other. Activities related to the provision of well-priced shopping for our customers, to the provision of a wide offer of local, fresh and high-quality products, and to the Pika card customer loyalty system will be carried on. Cost-control measures will be aimed at cutting the energy and logistics costs; we will also divest our non-core assets and close down non-profitable retail units. In 2014, capital expenditures will be increased somewhat; the majority of investment will be allocated to refurbishment of the existing retail units.

The process of integration of the companies M - Tehnika, Modiana, and Intersport will also continue. Thus, integration of the Modiana chain will be completed in 2014 by merger with the parent company. In international markets, transfers of activities and mergers have already been completed in 2013; in Slovenia, the transfer is planned for the first half of 2014. Intersport will remain an independent chain in Slovenia; integration of companies in foreign markets was completed this year. Integration of the company M - Tehnika, d.d., with the company Mercator, d.d., was implemented in 2013.

According to the negative economic forecasts for the next year, the negative effects of the environment on the purchasing power and consumption will persist. Mercator Group will continue its business restructuring process in the next year, which will have a key effect on the Group's current operations. Successful completion of financial restructuring, which is in its closing stage, is a key prerequisite for providing the stability of Mercator Group operations in the future. Owing to the agreement reached with the banks, Mercator will be able to complete the strategy laid down, which has already yielded the initial positive results, to become a successful and competitive retailer.

Business Plan of the Mercator Group and the company Poslovni sistem Mercator, d.d., for the year 2014, is attached herewith.

As of December 11, 2013 this announcement shall also be published on the company website at www.mercator.si where it shall remain available for a period of no less than five years.