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:

Mercator Group revenue in the first nine months of 2020 increased by 2.1% relative to the comparable period of the year before, and reached EUR 1.6 billion. Group revenue in the core activity of retail increased by 3.9% to reach EUR 1.3 billion, while normalized EBITDA in the period amounted to EUR 126.3 million, which is on a par with the equivalent period of 2019. The company Poslovni sistem Mercator d.d. recorded revenue growth of 2.9% and a 5.2% increase in its retail revenue. In the period 1–9, 2020, Mercator Group cut the net financial debt to normalized EBITDA ratio by a further 11.6%, or by 2.7% after adjustment for the effect of the accounting standard IFRS 16.

The president of Mercator's Management Board Tomislav Čizmić stresses in this respect: "With responsible and timely preparation for the corona crisis, and especially systematic adjustment to all current challenges, Mercator Group succeeded in ensuring revenue growth and this consolidate the foundations for Mercator Group's further development. Despite the closing down of certain activities and all negative effects of the healthcare crisis in all markets, Mercator Group continued to attain all key business and strategic goals in the last nine months, and, most importantly, we delivered unhindered supply and a broad offer throughout this period."

The ratio between net financial debt and normalized EBITDA, which was at 6.0 in the same period of the preceding year, has been improved considerably. As at September 30, 2020, it stood at 5.3, which is an improvement of 11.6%.

In the first nine months of this year, revaluation of Mercator Group's real estate consistently with the International Accounting Standards on the one hand resulted in an increase of equity (fair value reserve) due to a property value increase of EUR 23.3 million, while on the other hand it had a negative effect on Mercator Group's operating profit. Net effect of revaluation was a real estate value decrease of EUR 45.7 million, which accounts for 4.6% of total value of land, buildings, and investment property. After the revaluation, as at June 30, 2020, total fair value of land, buildings, and investment property amounts to EUR 1 billion, while the negative effect of revaluation on the business performance, consistently with the relevant accounting standards, amounts to EUR 69.0 million. Regardless of real estate revaluation, however, Mercator Group remains one of the largest property owners in Slovenia and the region.

Regardless of the crisis, Mercator Group continued all activities that are key for its further and long-term successful development. In this regard, continuation of the construction project for the new logistics and distribution centre in Ljubljana, and expansion and update of Mercator's business network are top priorities.

This announcement will be published on the company’s website at www.mercatorgroup.si as of November 26, 2020, and will remain published for a period of at least five years.