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 quarter of 2021, Mercator Group's normalized EBITDA grew by 7.4% to reach EUR 47.3 million for the period. The Group ended the first quarter with a business result of EUR 3.1 million, which is an increase of 183.9% compared to the equivalent period of the year before. Mercator Group proved once again in the first quarter of 2021 that it has a clear development strategy and that its performance is successful regardless of the restrictions brought about by the epidemic. Revenue from retail operations, Mercator's core activity, increased by as much as 8.9% in the first quarter of 2021, compared to the same period of 2019 (the year preceding the coronavirus pandemic).

"Positive performance trends are a result of successful execution of our business strategy and all initiatives that have led to the attainment of our business goals. In recent years, we succeeded in updating nearly 60% of our retail network, and we have invested a lot in our service, prices, and personalized offer. Growth of our market share is a result of these efforts. In addition to successful performance in terms of EBITDA and net income, Mercator Group also further decreased its leverage, as our net financial debt was down 5.5% relative to the year before. We also continued our planned investments in the first quarter, which will continue to ensure the Group's successful development," stressed Tomislav Čizmić, Mercator's President of the Management Board.

The impact of the COVID-19 epidemic persisted throughout the first quarter of 2021. Mercator Group and all its companies successfully adapted to all measures taken by governments in respective markets of the Group's operations. In the course of adjustment to the measures, the Group continued to pursue its key responsibilities – provision of safety for the employees and customers, responsibility to supply chain – and the business results indicate that the Group successfully fulfilled its responsibility for uninterrupted and effective operations. Successful performance also relies on motivated employees who invest a lot of knowledge, experience, and effort in their work. In the period of crisis, Mercator Group also responsibly provided job security, not only at the company, but also along the supply chain.

Mercator Group revenue from sales and rent amounted to EUR 507.8 million, which is a drop of 4.3%. In the same period of last year, revenue growth was exceptionally high due to the first wave of the COVID-19 epidemic (10.8% overall revenue growth and 14.1% retail revenue growth), while a part of the revenue decrease is due to the measures adopted by the governments in the region, aimed at containing the epidemic in 2021 (closing of M Tehnika technical consumer goods operations, closing of schools, restaurants, accommodation industry) and the resulting decrease in Mercator's wholesale revenue. For comparison – retail revenue, i.e. revenue in the Group's core activity, increased by as much as 8.9% in the period at hand compared to 2019 (the year preceding the epidemic).

Mercator Group continued its planned activities for construction of the new logistics and distribution centre in Ljubljana, for expanding its business network, and for real estate monetization. Thus, the Supervisory Board approved the key terms and conditions for sale and lease-back of five Mercator commercial properties (land with existing non-functional facilities) and 22 existing commercial facilities, and thus approved the project of construction of new commercial facilities that will have a positive effect on the level of debt, and especially contribute to an increase in the share of retail area in Slovenia.

At the end of the first three months of 2021, key activities took place with regard to Mercator's transfer to the Fortenova Group. Thus, at the end of March, the company Sberbank transferred 1,123,803 shares or 18.53% of total Mercator share capital from the company Sberbank to the company Fortenova Group TopCo.

In early March 2021, Mercator Supervisory Board approved the financial arrangement with the Fortenova Group, for restructuring of Mercator's financial liabilities maturing in June 2021. Thus, the last key precondition was met for transferring the Mercator shareholding from Agrokor to the Fortenova Group.

At the end of March 2021, Mercator signed an amended agreement on the maturing super senior facility with the VTB Europe bank in the amount of EUR 80 million. This amendment involved a three-month initial extension of the repayment deadline in order to allow a stable framework for completing the agreement on wider group debt refinancing. The amendment also allowed a framework for extending the tenor until the end of September 2021, and for an additional EUR 20 million of existing super senior facility in addition to the wider group debt refinancing. Thus, all conditions were met for the transfer of Mercator Group to the Fortenova Group, which would give Mercator a stable and financially successful owner that will ensure Mercator Group's further successful development.

This announcement will be published on the company’s website at www.mercatorgroup.si as of May 27, 2021, and will remain published for a period of at least five years.