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 11th regular meeting on Wednesday, 13 May 2020, the Telekom Slovenije Supervisory Board reviewed Unaudited business report of the Telekom Slovenije Group and Telekom Slovenije, d.d., for the period between January and March 2020. Telekom Slovenije Group generated €173.6 million in operating revenue in the first 3 months of this year, which is 1% more than in the first quarter of 2019. Net sales stood at €168.6 million.

In the first quarter of this year, Telekom Slovenije Group’s earnings before interest, tax, depreciation and amortization (EBITDA) amounted to €56.4 million, which is at the same level as last year. The EBITDA-to-sales ratio at the Telekom Slovenije Group level was 33.4%, while in the same period last year it stood at 32.9%. Telekom Slovenije, d.d., achieved EBITDA of €49 million. In the period from January to March 2020, earnings before interest, taxes (EBIT) amounted to €14.5 million, which is 23% or €2.7 million more than in the same period last year. Following the calculation of corporate income tax with deferred taxes, the Telekom Slovenije Group completed the first quarter of 2020 with a net profit of €11.3 million, which is 12% or €1.2 million more than in the same period of 2019.In the first 3 months of 2020, Telekom Slovenije Group set aside €44.5 million for investments.

After the epidemic was declared in Slovenia, we witnessed a massive and fast transformation of remote work and learning. Telekom Slovenije, d.d., responded to the changed conditions quickly and effectively. During this period Telekom Slovenije, d.d., faced high network loads and an increase in traffic in voice, data and video services, with traffic rates 50% above regular levels. In spite of this and the fact that network traffic communication capacities are limited, Telekom Slovenije, d.d., has been providing its users with uninterrupted services. The company adjusted the work of our experts so that they could monitor network operations, provide technical support to users and meet the special needs of public institutions and businesses for increased capacities and additional services, as well as cyber security, which is exceptionally important in these circumstances.

Telekom's sales centres were closed between 13 March and 23 April, when Telekom Slovenije, d.d., began reopening them. During this period users switched to digital channels, with the sales of products through the e-commerce growing by 38 % during the first three months of this year, compared to same period last year. Demand was the highest for mobile modems, notebook computers and tablets, and the sales of television sets, smart watches, robot vacuum cleaners, white goods and household appliances also increased.

As Telekom Slovenije Group announced at the publication of its 2019 Annual Report, the declared epidemic has affected the net sales of Telekom Slovenije, d.d., in the retail and wholesale (international area) markets, and because of the stall in business operations this also affected other group companies. In accordance with this the group immediately adopted additional measures and began implementing them with the goal of further optimizing operations and thereby mitigating the effects on its operations in this year. According to first estimates, the epidemic will negatively affect Telekom Slovenije Group’s EBITDA to the extent of approximately 3%, compared to the 2020 plan.

Telekom Slovenije Group is financially stable and continues to adapt its activities to the changing market conditions, while carefully monitoring and assessing supply chain and credit risks, system operations and the profitability of individual services, so it can take appropriate measures.

In accordance with the established corporate practice we will continue to notify stakeholders on our operations in the future.

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