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

In the first nine months of 2018, Mercator Group retail revenue increased by 5.4% relative to the comparable period of the preceding year, and its EBITDA reached EUR 86.8 million, which is 24.7% more than in the comparable period of the year before. Result from operating activities more than doubled, amounting to EUR 35.8 million in the period 1–9, 2018, which is EUR 21.8 million better than the comparable result in the equivalent period of the year before. EBITDA was also higher for the company Poslovni sistem Mercator d.d., amounting to EUR 56.6 million, or 3.5% more than in the comparable period of the year before. Mercator Group's parent company wrapped up the period 1–9, 2018, with a net profit of EUR 14.5 million.

Mercator Group successfully wrapped up the period 1–9, 2018, with a net profit of EUR 8.9 million, which is EUR 19.4 million more in comparable terms relative to the corresponding period of the previous year. "Result from operating activities improved considerably and it reached EUR 35.8 million in the first nine months of 2018, which is an improvement of EUR 21.8 million over the comparable result for the same period of the year before. In the period 1–9, 2018, Mercator Group generated EUR 1,617.3 million of sales revenue, which is 1.6% more than in the comparable period of the previous year," said Tomislav Čizmić, president of Mercator Group's Management Board.

The new strategy, new store concept, store refurbishments, and improved competitiveness of services have been yielding positive results in Mercator Group's core activity. Retail accounts for 78.7% of total revenue. In Slovenia, which remains the most important market for Mercator Group, retail revenue rose by 0.5 percent relative to the comparable period of the preceding year, despite the considerable decrease in the share of Mercator's retail area. Mercator Group thus remains focused on its core activity, and further improvement of profitability remains its key goal.

Mercator Group's net financial debt as at September 30, 2018, amounted to EUR 738.3 million, which is 11.2%, or EUR 93.3 million, less than a year earlier. In 2018, Mercator continues to regularly settle all of its liabilities to financial and business partners.

In the first nine months of this year, Mercator invested just over EUR 19 million into its fixed assets, while divestments amounted to EUR 17.8 million, which included sale of property, plant, and equipment. Mercator acquired 13 new units, or 6,923 m2 of new gross retail area, in all markets of its operations. The company also carried out all required activities for divestment of ten shopping centres in Slovenia (monetization project), and signed a sale agreement for them in October.

Mercator remains focused on the consumers, a modern shopping environment in as many locations as possible, on an extended and enriched offer of fast-moving consumer goods, and on strengthening of relations with local and regional suppliers in order to facilitate local and regional development.

This announcement will be published on the company’s website at www.mercatorgroup.si as of November 23, 2018, and will remain posted for a period of at least five years.