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SAR-34/19

MERCATOR, d.d., Ljubljana

Mercator successfully continues its business and financial restructuring

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 half of 2019, Mercator Group increased its revenue by 0.4% relative to the equivalent period of the preceding year, to EUR 1.06 billion. Relative to the same period last year, the company Poslovni sistem Mercator d.d., which is the most important company in the Mercator Group, increased its sales revenue by 4.1% in the first half of 2019, amounting to EUR 598 million. Sales revenue from retail in Slovenia was higher by 3% and it amounted to EUR 442.5 million for the period 1–6, 2019. Mercator Group wrapped up the first half of 2019 with 58.4% net profit growth, which amounted to EUR 2.358 million. Mercator Group EBITDA in the first half of 2019 reached EUR 83 million.

In the first six months of 2019, Mercator Group was thus highly successful in terms of its further pursuit of the goals laid down in its business strategy, as well as in terms of its financial and business restructuring. At the same time, it accomplished its key goals regarding deleveraging, and considerably improved the maturity profile of its financial liabilities. Compared to the same period last year, net financial debt was cut by more than EUR 152 million. In comparable terms, the ratio between net financial debt and normalized EBITDA as at June 30, 2019, was 5.9 times, which means that it is 28.3% lower than in the same period of the year before.

»In two years, Mercator Group succeeded in improving its EBITDA by 72% and considerably decreasing its debt. With a clear strategy, focus on local and regional products and suppliers, with a new innovative store concept, and everyday effort by all employees to meet the needs of the customers, we succeeded in accomplishing a business and financial turnover. In the future, we will continue to consistently execute our strategy, since both the long-term development of Mercator as the largest Slovenian and regional retailer and the development of the entire chain of the food processing industry in Slovenia and the region depend on it,« stressed Tomislav Čizmić, President of Mercator Group's Management Board.

Simultaneously with successful deleveraging, Mercator Group continues to carry out the largest investment in Mercator's history – the construction of a new logistics and distribution centre in Ljubljana. As a part of the new investment cycle, Mercator is also planning to expand the logistics capacities of its sales network in Serbia. Indeed, Serbia in particular is a market where Mercator sees a major growth opportunity, including through takeovers, as the retail industry in Serbia is expected to consolidate very soon.

This announcement will be published on the company’s website at www.mercatorgroup.si as of September 26, 2019, and will remain published for a period of at least ten years.

Poslovni sistem Mercator d.d.
Management Board
Date: 26.09.2019