Pursuant to the provisions of the Rules of the Ljubljana Stock Exchange and the valid legislation, Telekom Slovenije, d.d., Cigaletova 15, Ljubljana, hereby publishes the following notification:

At its 7th regular meeting, which took place on Wednesday, 4 November 2020, Telekom Slovenije’s Supervisory Board reviewed the Unaudited Financial Report of the Telekom Slovenije Group and Telekom Slovenije, d.d., for the Period between January and September 2020.

In its financial statements as of 30 September 2020 Telekom Slovenije Group recorded separately the assets and results of its two subsidiaries that are in the process of being sold. Since reclassification, the effects for reclassified assets have been treated as discontinued operations. On 3 November 2020, the process of selling the 100% share in the Kosovo-based IPKO Telecommunications LLC was stopped, and the company will remain part of the Telekom Slovenije Group. Telekom Slovenije, d.d., shall treat the suspension of sale as a non-adjusting event after the balance sheet date.

Based on the direction of the process of selling the 100% share in IPKO Telecommunications LLC (Telekom Slovenije, d.d., received binding offers in the third quarter of 2020), Telekom Slovenije Group’s consolidated financial results as of 30 September 2020 separately record the revenue, expenditure and net profit or loss from the discontinued operations for Planet TV, d.o.o., and IPKO Telecommunications LLC as the total amount of net profit or loss from discontinued operations. In accordance with the International Financial Reporting Standard IFRS 5 the conditions for reclassifying the assets and obligations of the subsidiary IPKO Telecommunications LLC were met. The sale of the 100% share in Planet TV, d.o.o., was concluded on 30 September 2020. Because of the material effect on the Group’s financial statements, Telekom Slovenije Group recognised separately the revenue, expenditure and net profit or loss from discontinued operations for IPKO, and the loss from the measurement of fair value and the sale of Planet TV, d.o.o. in the net profit or loss of discontinued operations. Adjustments were also made for the comparative period January – September 2019.

Comparison of key financial indicators of Telekom Slovenije Group’s operations in the nine months of 2020, with included operations of Planet TV, d.o.o., and IPKO Telecommunications LLC, and plans

Below key financial indicators of Telekom Slovenije Group’s operations in the nine months of 2020, which include the operations of Planet TV, d.o.o., and IPKO Telecommunications LLC, are compared to previously published key targets of Telekom Slovenije Group for 2020:

• In the first nine months of this year, Telekom Slovenije Group generated a total of €495.5 million in operating revenue. During this period the revenue was affected both by the global pandemic, as well as the COVID-19 epidemic declared in the country, and the measures related to it, namely closed points of sale, lower revenue from users roaming in the networks of foreign operators, as well as a significant decline in international voice traffic, and foreign users roaming in our mobile networks, and the stalled or reduced operations of Group companies. Revenue was therefore 3% below plans, while compared to the same period last year, Telekom Slovenije, d.d., increased revenue from e-commerce by 59%.
• In the first nine months of this year, Telekom Slovenije Group’s earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at €162.2 million, which is 2 percent more than planned.
• After corporate income tax with deferred taxes, the Telekom Slovenije Group completed the first three quarters of 2020 with a net profit of €27.4 million, which is 31% or €6.5 million above plans.

9-month business results of Telekom Slovenije, d.d., for 2020

In the first nine months of this year, Telekom Slovenije, d.d., made €448.6 million in revenue, which is 2% less than in the same period last year, and recorded an EBITDA of €139.8 million, which is 1% more than in the same period last year, while earnings before interest and taxes (EBIT) stood at €37.1 million, which is 13% more than in the same period last year, and net profit amounted to €28.2 million.

Key financial indicators of Telekom Slovenije Group for the nine months of 2020, without Planet TV, d.o.o., and IPKO Telecommunications LLC

After excluding Planet TV, d.o.o., and IPKO Telecommunications LLC, Telekom Slovenije Group achieved the following results in the first nine months of 2020:

• In the first nine months of this year, Telekom Slovenije Group generated €440.0 million in net sales, while its total operating revenue amounted to €450.5 million. Business revenue was down 2%, compared to the same period last year.
• In the first nine months of this year, Telekom Slovenije Group’s earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at €144.6 million, which is 1% less than in the same period last year. The EBITDA margin at the Telekom Slovenije Group level was 32.9%, which is 3% higher than in the same period last year.
• In the period from January to September 2020, earnings before interest, taxes (EBIT) amounted to €40.1 million, which is 7% or €2.8 million more than in the same period last year.
• After corporate income tax with deferred taxes, Telekom Slovenije Group completed the first three quarters of 2020 with a net profit of €36.8 million, which is 18% more than in the same period last year.

Impact of the declared pandemic and two epidemics and the impact of subsequent measures on business operations in 2020

The global pandemic, as well as the epidemics declared in the country in March and October, and the measures related to them, affected the operations of Telekom Slovenije Group companies in 2020, especially due to the closed points of sale, lower revenue from users roaming in the networks of foreign operators, the significant decline in international voice traffic, and foreign users roaming in our mobile networks, and the stalled or reduced operations. Immediately after the pandemic was declared and the first measures were introduced during the first wave of the national epidemic, Telekom Slovenije Group adopted appropriate measures and began implementing them with the goal of further optimizing operations and reducing the impact on operations.

When this report on business results for the first nine months of this year was being prepared, the pandemic was still declared, the national epidemic had been declared for a second time, and our points of sale were once again closed. In accordance with this, we reviewed the key assumptions underlying Telekom Slovenije Group’s plan for 2020. After nine months of operations in 2020, we estimate that the pandemic and the measures at the national level during the first and the second waves of the declared epidemic, while taking into account all adopted measures, will have a negative impact on the net revenue of Telekom Slovenije Group (without Planet TV and IPKO) in the amount of approximately 3%, compared to 2020 targets, while the impact on Telekom Slovenije Group’s EBITDA (without Planet TV and IPKO) is expected to be about 4% compared to the target EBITDA for 2020. At the level of the Telekom Slovenije Group (excluding Planet TV and IPKO), the 2020 investments will also be below target by approximately 5%.

Regardless of the challenges we are facing this year, Telekom Slovenije Group remains financially stable and continues to adapt its activities to the changing market conditions, while carefully monitoring and assessing the risks in supply chain, credit risk, system operations and the profitability of individual services, so it can take appropriate measures.

Telekom Slovenije’s mobile customers can already use the first 5G network in Slovenia

After Telekom Slovenije, the leading and most advanced Slovenian provider of ICT services, established the national fifth generation mobile (5G) network in the existing 2600 MHz frequency spectrum in late July, its customers can use the 5G technology from 5 October 2020. For this purpose, users can select the Naj 5G (Top 5G) plan, which includes unlimited calls and messaging as well as a 300 GB data allowance with speeds of up to 450 Mbps downlink and 100 Mbps uplink, making the fastest network even faster. Users with mobile phones that support the technology can also activate 5G services on any other mobile plan by sending a text message with the keyword 5G to 1918. Telekom Slovenije, d.d., plans to provide a 33% population coverage with the 5G network in the existing frequency band by the end of the year, which is the result of a deliberate, gradual and especially prompt investment into the development of new technologies. Compared to existing mobile networks, 5G brings much higher data transfer speeds in both directions (downlink and uplink), and a much shorter response time with exceptionally low latency of a few milliseconds. At the same time, it also supports efficient simultaneous connections of a large number of devices (more than a million), which will facilitate the development of smart industry, smart cities and, using network slicing, provide continued digitalisation of the economy through the introduction of numerous virtual dedicated (campus) networks. Telekom Slovenije, d.d., plans to launch its fifth generation public mobile network in the form of campus networks, where a single physical infrastructure can host several virtual dedicated networks for various business verticals, such as energy supply, transportation, logistics, manufacturing, smart cities, healthcare, protection and rescue (public safety), and similar.

The announcement will also be available on the company’s website (www.telekom.si) for a period of at least 10 years.