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:

Mercator Group sales revenue for 2017 is budgeted at EUR 2.4 billion; EUR 68.5 million will be allocated to investments. Mercator's key policy remains focusing on satisfying the needs of modern consumers and offering well-priced shopping. Positive effects of synergistic effects generated, withdrawal from underperforming markets, and adoption of the new strategy in March 2016 are already evident in performance. Positive trends are expected to continue in 2017.

EUR 68.5 million allocated to investment

Mercator Group has set forth relatively high goals for 2017. Revenue for the year is budgeted at EUR 2.4 billion, which is less than the 2016 estimate, mainly due to divestment of non-core activities in 2016, while the expected growth of revenue in core operations (FMCG program) is forecast at 1.2%. In 2017, Mercator Group will allocate EUR 68.5 million to investment, the majority of which will be dedicated to the project of constructing a logistics and distribution centre in Ljubljana, scheduled for opening in 2019. Slovenia will account for the predominant part (72%) of total investment funding. Aside from the funding for the new logistics and distribution centre in Ljubljana, Mercator will dedicate 39.7% of its investment budget to refurbishments and investment maintenance of the existing stores, and 34.4% to expansion of retail capacity. Refurbishments of smaller store formats, i.e. supermarkets and neighbourhood stores, will be given priority. In addition, the plans include refurbishment of several major stores, as well as construction of some new units.

Advantages for the consumers

Mercator's key policy remains focusing on satisfying the needs of modern consumers and offering well-priced shopping. Key target tasks are therefore geared towards further improvement of Mercator's pricing perception and making the offer more appealing in order to retain the existing customers and to attract new ones. Mercator will continue to build its Pika card customer loyalty system. Pika card was voted the best customer loyalty card and the program was voted the best customer loyalty program in Slovenia, as Pika card affords considerable savings and a number of benefits in the Mercator chain and with partner companies. Closely integrated into the local environment, Mercator remains the best neighbour as it carries the best fresh and local offer, with selection of well-priced products, and offers the consumers the best value for their money, the best service, and the best choice of fast-moving consumer goods. Mercator is looking to offer a modern shopping environment in its expansive network of stores.

Skilled and motivated employees

In the coming year, Mercator will again pay particular attention to employee training and motivation. Induction programs for new employees and internal training courses, with special emphasis on expert training, will be further developed and upgraded. This will ensure further development of selling skills necessary to provide ever better service for the customers.

Business plan of the Mercator Group and the company Poslovni sistem Mercator, d.d., for the year 2017 is attached.

This announcement will be published on the company’s website at www.mercatorgroup.si as of December 14, 2016, and will remain posted for a period of at least five years.