The first nine months of 2009 have seen remarkably challenging economic conditions resulting from the global financial crisis and its effects on the real economy. Despite the harsh circumstances, Mercator Group generated over EUR 2 billion of net sales revenues in the first three quarters of 2009, assuming constant exchange rates, which is 2.3 percent more than in the same period last year. When the changes in exchange rates are accounted for, Mercator Group revenues have dropped by 0.6 percent in the first three quarters of 2009, compared to the same period last year. In Slovenia, revenue growth reached 0.5 percent; in foreign markets, the growth amounted to 6.1 percent at constant exchange rates; when the changes in exchange rates are accounted for, the revenues abroad dropped by 2.3 percent.

In the first three quarters of the year, Mercator carried out its development and investment activities as planned. The group's investments, totaling at EUR 93.6 million, were mostly allocated for the development of retail network. The opening of a hypermarket in Stara Zagora in October 2009 denoted Mercator's entry into the Bulgarian market.

In the first three quarters of 2009, Mercator Group generated EUR 141 million of gross cash flow from operating activities before rental expenses (EBITDAR), representing a 3.5 percent growth assuming fixed exchange rates, or 0.7 percent growth when currency translation differences are accounted for. Stable generation of cash flow from operating activities, even in the time of severe economic conditions, points to high financial power, competitiveness, and business efficiency of the entire Group.

In the first three quarters of 2009, the Group generated EUR 17.6 million of net income, which is 51.8 percent less than in the same period last year. Eliminating the extraordinary proceeds from disposal of property, plant, and equipment, extraordinary proceeds from disposal of financial assets, and currency translation differences, the adjusted income before taxes (EUR 21.5 million) is 14.6 percent lower than in the same period last year (EUR 25.2 million). The Management Board sees this as a solid result, given the exceptionally harsh economic conditions in all markets.


Please find the Interim report January-September 2009 attached.

This announcement will be published at the company website at www.mercator.si as of October 29th 2009, for a period of at least five years.