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Mercator Group notably improves its performance indicators in 2018

In the 2018 business year, Mercator Group's normalized gross cash flow from operating activities reached EUR 107.5 million, which is a considerable increase of 18.6% over the year 2017. In no more than two years, Mercator Group increased its normalized EBITDA by 72.3% (for the year 2016, normalized EBITDA was at EUR 62.4 million). In the 2018 business year, Mercator generated net sales revenue of EUR 2.18 billion and wrapped up the year with a profit of EUR 1.6 million. In 2018, Mercator Group notched up its sales revenue by 1.2% relative to the year 2017; in particular, revenue from retail, which is Mercator's core business, rose by 3.2%. Moreover, the Group also significantly cut its financial debt relative to the preceding year, by EUR 97 million.

In 2018, Mercator Group sourced EUR 1.2 billion worth of merchandise from local and regional suppliers, which accounts for 70% of total procurement. Thus, it contributed notably to the development of the entire chain, from growing to processing, in all markets of its operations. At the same time, Mercator Group paid EUR 173 million of taxes, contributions, and other charges in 2018, of which EUR 120 million were paid in Slovenia.

One precondition for Mercator Group's long-term stability and long-term development possibilities is its deleveraging. With all deleveraging activities conducted in 2018, Mercator Group succeeded in significantly reducing its debt. The ratio between net financial debt and normalized EBITDA at the end of 2018 was at 7.2, which means it was cut by 24.2% compared to the year 2017. More importantly, it was cut from to this level from 14.1 over the last two years. It should also be noted, that the effects on debt reduction from the divestment of ten shopping centres in Slovenia are not yet included in this decrease, since the Supernova transaction was only completed in early 2019. In 2018, Mercator continued its intensive preparations for its largest investment – the new logistics and distribution centre in Ljubljana. At the end of 2018, it also announced a public call for applications for building designers, which is currently in its final stage.

In 2018, Mercator Group investments into property, plant, and equipment (CAPEX) amounted to EUR 29.9 million. The Group newly opened or refurbished 122 stores. Of the total investment amount, 56.7% was used for investments in Slovenia and 43.3% was used for investments in international markets. New openings and refurbishments of existing stores provide excellent service for the customers, a broad choice, and a pleasant shopping experience. Mercator as the largest Slovenian and regional retailer invests a lot into competitiveness, and ensures its differentiation especially with a broad offer, emphasis on local products, digitalization of the shopping experience, and the best customer loyalty programs.

In 2019, Mercator Group will continue to pursue its strategy that has already yielded positive results. The year 2019 will be under effect of persistently harsh business conditions due to competition's activities in all markets of Mercator's operations, especially at the level of its core business, and to growth of all expenses, particularly energy, service, and labour costs in all markets where the Group conducts its business.