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:

At today's session, the Supervisory Board of Poslovni sistem Mercator, d.d., approved the Mercator Group Business Plan for 2015. The Group’s revenue in the next year is planned at EUR 2.85 billion, up 6.94% relative to the 2014 estimate. In addition, a considerable improvement of profitability is planned. Planned cash flows from operating activities (EBITDA) in 2015 amount to EUR 182 million, which is 65% more than the planned figure for 2014. The Group expects a positive bottom line in 2015 with a profit of EUR 60 million. Mercator Group will meet its plans by further implementation of the existing activities to optimize operations and extensive marketing activities that have had a positive effect on performance. Also bearing a positive impact on profitability are the agreement on long-term Mercator Group financial liability restructuring, new organization of the Mercator Group that involves discontinuation of operations in underperforming markets, and a presence boost in the Serbian market. Moreover, synergistic effects are expected at the Agrokor Group level, especially in terms of exchange of best practice and know-how, logistics processes, and negotiations on competitive purchasing terms. As a result of consolidation following the acquisition by the company Agrokor, d.d., notable changes will be seen in the structure of Mercator Group operations in 2015. Revenue in Slovenia will be slightly higher in 2015 relative to the 2014 estimate; revenue in the Serbian market will increase significantly; and revenue in Croatia and Bosnia and Herzegovina will be much lower. There will be a threefold increase in investments in 2015 compared to this year. 

In comparison to this year, Mercator Group is planning revenue growth of 6.94% for a total of EUR 2.85 billion. In Slovenia, revenue is planned to rise by 3% relative to the 2014 estimate; in Montenegro, the planned revenue is on a par with this year's estimated figure. As a result of the transfer of Agrokor retail units in Serbia to Mercator, Group revenue in this market will soar by 71.3% in 2015. Following Agrokor's takeover of Mercator's retail operations in the markets of Croatia and Bosnia and Herzegovina, Mercator's revenue will decrease by 69.9% in Croatia and by 86.9% in Bosnia and Herzegovina. Planned revenue in these two markets will be derived from real estate management activities of the company, and operations of Modiana and Intersport. On the one hand, overall revenue growth will result from further extensive marketing activities that improve Mercator's competitiveness in the markets; on the other hand, it will be a result of consolidation in each market, carried out as a part of the takeover.

In 2015, Mercator Group is planning a considerable improvement of operating profitability. This will be accomplished through planned revenue growth, continuation of activities to optimize operations, and the refinancing of the Group's borrowings negotiated in this year. The latter also allows adjustment or decrease of interest rate, improvement of relations with the suppliers, improvement of liquidity, and a notable increase in investment activity. Another positive effect on the profitability of operations will be seen with transfer of retail operations in the Croatian market where the Group has had negative results, to the Konzum retail chain. Mercator Group profitability will also depend on the synergistic effects in the field of trade within the Agrokor Group.

In 2015, Mercator Group will boost its investment activities, allocating EUR 99.5 million for them, which is a threefold increase over investment in 2014. Consistently with the strategy laid down, the largest share of investment is represented by refurbishment and maintenance of the existing retail units in Slovenia.

Business plan of the Mercator Group and the company Poslovni sistem Mercator, d.d., for the year 2015 is attached.

This announcement will be published on the company’s website at www.mercatorgroup.si as of December 9, 2014, and will remain posted for a period of at least five years.