Company profile
Mercator Group Content
• Business Strategy and General Information • Business Operations & Marketing Projects • Business Performance Analysis
TOGETHER AT EVERY STEP Business Strategy and General information
TOGETHER AT EVERY STEP History of the Company
1949: Establishment of the »Živila Ljubljana« wholesale company, the predecessor of Poslovni sistem Mercator, d.d.
1953: »Živila Ljubljana« is renamed to »Mercator«
1993: Start of privatization with an initial public offering of shares, the largest privatization project in Central Europe
1995: Privatization of company is completed, with the ownership taken over by national funds and some 63,000 minority shareholders end of 1995: Mercator, d.d., is listed on the Ljubljana Stock Exchange
TOGETHER AT EVERY STEP Vision and Mission
Mercator will be the largest, the most successful and the most efficient retailer in the region.
Mission: A satisfied customer recognizes us as the best retailer that offers everything a discount store can offer, and much more. Employees with smiles on their faces and sparkles in their eyes are our key competitive advantage. They will be able to develop their potential in a stable environment. We are striving towards a stable ownership structure that will support the company development based on merit and results. Mercator is striving to win the confidence of all stakeholders.
TOGETHER AT EVERY STEP Principles of corporate governance
TOGETHER AT EVERY STEP Four pillars based strategy
Optimization Focusing • Simplify the organization and • Region: focus on countries with processes growth potential and short-term profitability • Achieving the target productivity • Consumer: to return trust and • Optimization of total costs satisfaction, increase understanding • Investing part of savings in the of the needs, constantly adapting market and employees • Activities: the core activity • Financial stability Strategy Profitability Growth • We have to ensure profitable • The size is important in our industry, business so we need to continue to grow, • Adequate return for shareholders mainly organically and through targeted smaller acquisitions
TOGETHER AT EVERY STEP Strategic business fields
Other business Fast-moving Home products Real estate activities consumer goods
86.4 % of 6.7 % of 6.9 % of revenue revenue revenue TOGETHER AT EVERY STEP Overview by markets
CROATIA 13.3% of revenue 244 business units SERBIA 3,627 employees 19.5% of revenue 199 business units 4,764 employees SLOVENIA 56.3% of revenue 952 business units 11,794 employees BULGARIA 0.3% of revenue Exit from the 4 business units market planned 205 employees for 2013
BOSNIA AND HERZEGOVINA 6.8% of revenue 113 business units 2,004 employees
ALBANIA 0.1% of revenue Exit from the MONTENEGRO 3 business units market at the end 3.7% of revenue 109 employees of 2012 85 business units 1,417 employees TOGETHER AT EVERY STEP Group composition as at December 31,2012
MERCATOR GROUP
MERCATOR OPERATIONS SLOVENIA AND CROATIA MERCATOR OPERATIONS SOUTHEASTERN EUROPE
Poslovni sistem Mercator, d.d., Slovenia Mercator - S, d.o.o., Serbia (100.0%) Mercator - H, d.o.o., Croatia (99.9%) Mercator - BH, d.o.o., Bosnia and Herzegovina (100.0%) M - Tehnika, d.d., Slovenia (100.0%) M - BL, d.o.o., Bosnia and Herzegovina (100.0%) • Mercator centar tehnike d.o.o. za trgovinu i Mercator - CG, d.o.o., Montenegro (100.0%) usluge, Croatia (100.0%) Mercator - B, e.o.o.d., Bulgaria (100.0%) Mercator IP, d.o.o., Slovenia (100.0%) Mercator - A, sh.p.k., Albania (100.0%) M - Energija, d.o.o., Slovenia (100.0%) Mercator Makedonija, d.o.o.e.l., Macedonia M.COM, d.o.o., Slovenia (100.0%)* (100.0%)* Mercator - K, l.l.c., Kosovo (100.0%)* MERCATOR REAL ESTATE OTHER OPERATING ACTIVITIES Mercator - Optima, d.o.o., Slovenia (100.0%) M - nepremičnine, d.o.o., Slovenia (100.0%) Intersport ISI, d.o.o., Slovenia (100.0%) Argentum - A, d.o.o., Slovenia (100.0%)** • Intersport S-ISI, d.o.o., Serbia (100.0%) Argentum - B, d.o.o., Slovenia (100.0%)** • Intersport H, d.o.o., Croatia (100.0%) Argentum - C, d.o.o., Slovenia (100.0%)** • Intersport BH, d.o.o., Bosnia and Herzegovina Argentum - D, d.o.o., Slovenia (100.0%)** (100.0%) Argentum - E, d.o.o., Slovenia (100.0%)** Modiana, d.o.o., Slovenia (100.0%) Argentum - F, d.o.o., Slovenia (100.0%)** • Modiana, d.o.o., Serbia (100.0%) Argentum - G, d.o.o., Slovenia (100.0%)** • Modiana, d.o.o., Croatia (100.0%) Argentum - H, d.o.o., Slovenia (100.0%)** • Modiana, d.o.o., Bosnia and Herzegovina Argentum - I, d.o.o., Slovenia (100.0%)** (100.0%) Investment Internacional, d.o.o.e.l., Macedonia Mercator - Emba, d.d., Slovenia (100.0%) (100.0%)*
* TheTOGETHER company has not ATyet commenced EVERY its STEP business operations. ** Project-based real estate company which has not launched its activities yet. Mercator Group Management Board
MERCATOR GROUP
MERCATOR, d.d.
Toni Balažič
Management Board President
MERCATOR OPERATIONS MERCATOR OPERATIONS FINANCE AND IT SOUTHEASTERN EUROPE SLOVENIA AND CROATIA
Stanka Pejanović Igor Maroša Drago Kavšek
Senior Vice President Senior Vice President Senior Vice President
TOGETHER AT EVERY STEP Corporate Governance
Shareholders Assembly
currently consists of 14,741 shareholders
Supervisory Board
4-year term, 6 members appointed by shareholders, 3 members appointed by employees, Supervisory Board Members representing Shareholders appointed for the period March 30, 2012 - March 30, 2016. Since Supervisory Board Members representing Employees were not all appointed at the same time, their mandates expire at October 31, 2013 and May 19, 2015
Management Board
5-year term. Consists of 4 members
TOGETHER AT EVERY STEP Key Information for the Shareholders
Key information for the shareholders: Movement of closing price per MELR share in the year 2012, compared to the SBITOP index:
160 641
150 601
140 561
130 521 SBITOP
120 481 MELR (in EUR) (in MELR
110 441
100 401
MELR SBITOP
As at December 31, 2011, the share in the company Poslovni sistem Mercator, d.d., held by foreign investors amounted to 23.49 percent, which is 6.05 percentage point more than at the end of 2010.
TOGETHER AT EVERY STEP Business Operations & Marketing Projects
TOGETHER AT EVERY STEP Private label lines
Current private label lines and their presence on Mercator's markets:
BOSNIA AND SLOVENIA CROATIA SERBIA MONTENEGRO BULGARIA ALBANIA In 2012, we offered 2,783 private label HERZEGOVINA products in our stores.
The share of private label sales in total sales rose by 14 percent in all markets of Mercator's operations in 2012.
The development of private label lines and the year of the entry in foreign markets of Mercator's operations with the offer of private labels:
Slovenia Croatia Serbia Montenegro Bulgaria BiH Albania
TOTAL NUMBER OF PRIVATE 12 11 10 7 5 4 7 LABEL LINES TOGETHER AT EVERY STEP Mercator Group retail network consists of 1,600 units
BOSNIA AND COUNTRY SLOVENIA SERBIA CROATIA MONTENEGRO ALBANIA BULGARIA MERCATOR GROUP HERZEGOVINA Banner Mercator Roda Mercator Getro Mercator Drvopromet Mercator Roda Mercator Roda Number of Number Number Number Number Number Number of Number Number Number of Number of Number Gross sales Net sales ACTIVITY units of units of units of units of units of units units of units of units units units of units area area Hypermarkets 23 3 14 12 2 6 1 1 1 1 2 66 305,664 200,043 Supermarkets 129 - 47 27 2 18 15 3 6 - 1 248 269,010 174,362 Neighbourhood stores 333 - 52 43 18 3 46 3 66 - 1 565 200,552 116,053 Comfort stores 1 1 - 1 - 1 - - - - - 4 8,521 5,070 Convenience stores 1 ------1 159 83 Cash & Carry 13 - 5 - 16 - - - 1 - - 35 115,946 79,610 Hard discount stores 7 ------7 4,671 3,401 Restaurants 22 7 - - - 2 - - 1 - - 32 9,869 5,954 TOTAL FMCG program 529 11 118 83 38 30 62 7 75 1 4 958 914,392 584,576 Home program 52 14 1 13 ------80 109,037 70,940 Furniture program 15 ------1 - - 16 22,765 17,507 TOTAL home program 67 14 1 13 0 0 0 0 1 0 0 96 131,802 88,447 Clothing program and drugstores 88 15 0 34 0 12 0 0 0 0 0 149 68,080 56,615 Clothing program 71 8 - 34 - 8 - - - - - 121 64,890 53,887 Drugstores and perfumeries 17 7 - - - 4 - - - - - 28 3,190 2,728 Intersport 31 10 0 27 - 9 - 2 - 2 - 81 51,134 39,122 M holidays 13 ------13 242 242 TOTAL specialised programs 132 25 0 61 0 21 0 2 0 2 0 243 119,456 95,979 TOTAL retail units under 728 50 119 157 38 51 62 9 76 3 4 1,297 1,165,650 769,002 management Franchise stores 224 - 30 49 ------303 55,219 36,611 TOTAL 952 50 149 206 38 51 62 9 76 3 4 1,600 1,220,869 805,613
TOGETHER AT EVERY STEP Business Performance Analysis
TOGETHER AT EVERY STEP Despite negative conditions in the market, revenue in 2012 are comparable to those in 2011
EUR 2,873.2 mn revenue were generated by Mercator Group in the year 2012. In Slovenia revenue dropped by 2.6%, in foreign markets we saw revenue growth of 3.7%.
TOGETHER AT EVERY STEP Revenue in Bosnia and Herzegovina as a percentage of total revenue is rising constantly
TOGETHER AT EVERY STEP Non-urgent investments and accelerated divestments were stopped in the second half of 2012
EUR 67 mn was total CAPEX in year 2012, as compared to 2011 this represents 44% less capital expenditures.
TOGETHER AT EVERY STEP EBITDAR
EUR 167,2 mn Gross cash flow from operating activities before rental expenses (EBITDAR) the Mercator Group generated in year 2012.
TOGETHER AT EVERY STEP Write-offs and impairments had a great impact on business results
Despite large measure of cost rationalization, the net profit of the Mercator Group in 2012 amounted to EUR -104.6 mn.
Great part of the loss are write-offs and impairments in total amount of EUR 75,506 thousand.
TOGETHER AT EVERY STEP Thank you for your interest!
Additional information available at: http://www.mercator.si http://seonet.ljse.si/
TOGETHER AT EVERY STEP