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Category: Inside information
Published on: SEOnet
Published at:  20.03.2020 15:44
Published document ID: INI-170/20

MERCATOR, d.d., Ljubljana

Notification regarding the coronavirus outbreak

Pursuant to the Rules and Regulations of the Ljubljana Stock Exchange, d.d, and the relevant legislation, the company Poslovni sistem Mercator, d.d., hereby informs the shareholders and the public of the following:

As the largest Slovenian and regional retailer, Mercator Group is aware of its responsibility and its multiple aspects. Mercator Group is an enterprise of systemic importance to the Republic of Slovenia, largest employer in Slovenia and one of the largest employers in the region; it is also one of the largest contributors of fiscal revenue, and it is the pillar of the Fast-moving consumer goods industry in both Slovenia and the broader region.

We are aware of the multiple levels of our responsibility in the time of crisis – and the epidemic in Slovenia and the entire region certainly qualifies as a crisis. In early February 2020, the Management Board appointed a special crisis task force that analyses and coordinates all Mercator Group activities on a daily basis. The crisis task force specified the highest priority processes; it adopts and coordinates all measures on a daily basis; it continuously monitors all information released by the national authorities, healthcare institutions, and all other relevant stakeholders. In this situation, we are responsible for the health and safety of our employees and our customers, for uninterrupted supply of goods to the population in all markets of our operations, and uninterrupted operations of the entire Mercator Group. We have been able to ensure all this, because we prepared for the crisis in a timely, organized, and responsible manner.

Responsibility for health and safety of our employees and customers

Health and safety of our employees and customers is the top priority for all Mercator Group Management Board's measures. In these extraordinary circumstances, the employees, especially those at stores and in logistics, are putting maximum efforts, knowledge, and experience in order to considerably contribute to the pursuit of all company's priorities. Therefore, we are conducting all preventive measures to ensure protective equipment, establish a system for managing available human resources, relevant technical equipment, to install additional barriers at checkout counters, to provide protective equipment (gloves, disinfectants etc.) for the protection of our customers, and to equip all our stores with instructions for customers. In addition, we regularly and continuously provide information to both our employees and our customers. Due to the closing down of public transport, we introduced additional measures and allocated all available vehicles for transport to work. All employees, including those in operations, who do not have access to child care for their children, were allowed to stay home to care for their children. All other employees whose work allow this, are working from home. To this end, we also provided in a timely manner the necessary technical equipment. Despite the lack of human resources, we are conducting all activities in compliance with the relevant labour and employment legislation. Since work of our employees in these extraordinary circumstances is highly challenging, the Mercator Group Management Board has already adopted a resolution on a bonus for work in extraordinary conditions, which will increase the base salaries of all operations workers by 30%. We shall continue to adapt all measures for the health and safety of our employees and customers to the current circumstances. Regardless of the extraordinary conditions, the Management Board has maintained a high standard of social dialogue at all Group companies.

Responsibility for uninterrupted supply

As the largest retailer in Slovenia and the region, we have a special responsibility for uninterrupted supply of goods to the population. Uninterrupted supply of goods has many aspects, including maintaining and ensuring comprehensive supply chains, organized logistics even in considerably higher daily and even hourly turnover, uninterrupted operation of all IT systems, ensuring adequate human resource structure in circumstances of considerably changed needs and requirements, and provision of security and service functions. The key goal, of course, is meeting considerably higher requirements for goods within considerably shorter time frames across the entire sales network. Mercator Group prepared in a timely, organized, and responsible manner for considerable increase in turnover and stocked up on basic foodstuff before the outbreak. As a result, we are able to successfully supply goods to people in all markets of our operation, and to successfully and efficiently meet our responsibility.

Responsibility for uninterrupted operations

Since the appointment of the crisis task force, we have analysed several scenarios and implemented a number of measures for planning and management of liquidity, supply flows, costs, and investments.

All companies in the system have received clear instructions to establish cost control, control of payables and settlement thereof, and a system of additional controls for ensuring uninterrupted operations compliant with the relevant regulations, as a priority.

The Management Board analyses all activities on a daily basis and it has already established a system for documenting all measures it has introduced and carried out. The goal of these activities is to specify the best practices that will be the foundation for all activities in any extraordinary circumstances in the future.

As the management team, we believe we have adopted all reasonable measures to prepare for all scenarios, to continuously evaluate the situation, and to monitor the effects of the adopted measures. We have also adjusted and carried out the required plans for measures in case of unforeseen events, including references to the best practices, in order to ensure further daily operations.

This announcement will be published on the company’s website at www.mercatorgroup.si as of March 20, 2020, and will remain posted for a period of at least five years.

Poslovni sistem Mercator d. d.
Management Board
Date: 23.03.2020