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Telekom Slovenije

Quarterly Report • May 15, 2024

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Quarterly Report

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Unaudited Business Report of the Telekom Slovenije Group and Telekom Slovenije, d.d.

for the period January to March 2024

Table of contents

1 INTRODUCTORY NOTE3
1.1 Statement of responsibility of the Management Board3
2 STRATEGY OF THE TELEKOM SLOVENIJE GROUP FOR THE PERIOD 2024 TO 2028 4
2.1 Vision, mission, values 4
2.2 Summary of the Strategic Business Plan 4
3 TELEKOM SLOVENIJE GROUP 6
3.1 Markets and companies of the Telekom Slovenije Group6
3.2 Operating highlights7
3.3 Key operating indicators of the Telekom Slovenije Group 8
3.4 Ownership structure and share trading 11
3.5 Market and market shares in key service segments 16
3.6 Management of risks 17
4 CORPORATE GOVERNANCE 20
5 SIGNIFICANT EVENTS IN THE PERIOD JANUARY TO MARCH 2024 22
6 SIGNIFICANT EVENTS AFTER THE REPORTING DATE 23
7 CONDENSED INTERIM ACCOUNTING REPORT OF THE TELEKOM SLOVENIJE GROUP AND
TELEKOM SLOVENIJE, D.D. FOR THE PERIOD JANUARY TO MARCH 2024 24
7.1 Condensed interim financial statements of the Telekom Slovenije Group and Telekom
Slovenije, d.d. 25
7.2 Notes to the interim financial statements of the Telekom Slovenije Group and Telekom
Slovenije 33
7.3 Financial instruments and risk management 48

Ljubljana, May 2024

1 INTRODUCTORY NOTE

Pursuant to the law and the Rules of the Ljubljana Stock Exchange, Telekom Slovenije, d.d. (hereinafter: Telekom Slovenije), with its registered office at Cigaletova 15, Ljubljana, hereby publishes the Unaudited Business Report of the Telekom Slovenije Group and Telekom Slovenije for the period January to March 2024.

The condensed interim financial statements for the period ending 31 March 2024 were compiled in accordance with IAS 34 Interim Financial Reporting, and must be read in conjunction with the annual financial statements compiled for the financial year ending 31 December 2023. The financial statements for the period January to March 2024 have not been audited.

Telekom Slovenije's Supervisory Board discussed the Unaudited Business Report of the Telekom Slovenije Group and Telekom Slovenije for the period under consideration at its session on 13 May 2024.

Any significant changes to the data contained in the prospectus for listing on the stock exchange are regularly published by the Company on the Ljubljana Stock Exchange's SEOnet website and on the Company's website at www.telekom.si.

The Unaudited Business Report for the period January to March 2024 is also accessible on the Company's website at www.telekom.si.

1.1 Statement of responsibility of the Management Board

The members of Telekom Slovenije, d.d.'s Management Board responsible for compiling the unaudited report of the Telekom Slovenije Group and Telekom Slovenije for the period January to March 2024, hereby find that:

  • to the best of our knowledge, the unaudited report of the Telekom Slovenije Group and Telekom Slovenije was compiled and published in accordance with valid legislation and the International Financial Reporting Standards as adopted by the EU;
  • the condensed interim financial statements for the period ending 31 March 2024 were compiled in accordance with IAS 34 Interim Financial Reporting, and must be read in conjunction with the annual financial statements compiled for the financial year ending 31 December 2023;
  • the selected accounting policies were applied consistently in the compilation of the condensed financial statements and any changes to those policies were disclosed, and that accounting estimates were made fairly and with careful consideration, according to the principle of prudence and the diligence of a good manager, and under the assumption that the Telekom Slovenije Group and Telekom Slovenije are going concerns; and
  • the interim business report presents a fair picture of information regarding major transactions with related parties, in accordance with regulations.

Boštjan Košak President of the Management Board

Boštjan Škufca Zaveršek, MSc Vice-President of the Management Board

Irma Gubanec, MSc Member of the Management Board

Vesna Prodnik, MSc Member of the Management Board

Špela Fortin Member of the Management Board – Workers' Director

2 STRATEGY OF THE TELEKOM SLOVENIJE GROUP FOR THE PERIOD 2024 TO 2028

2.1 Vision, mission, values

2.2 Summary of the Strategic Business Plan

The Strategic Business Plan of the Telekom Slovenije Group for the period 2024–2028 represents the core corporate document. Defined in that document through its mission, vision, values, business model and objectives is the Telekom Slovenije Group's future development.

That document is based on available data, taking into account regulatory restrictions and trends in the macroeconomic environment of the region in which the Telekom Slovenije Group operates. In drafting the document, we took into account analyses of operations and the market shares of comparable European operators, analyses of the competition, development expectations and trends in the telecommunication sector.

Connecting opportunities

The future development of the Telekom Slovenije Group is based on the vision 'Connecting opportunities'. We represent the infrastructure foundation of connected users and devices.

The development of the Telekom Slovenije Group in the coming period will rely on highly qualified employees, the most advanced technologies, and sustainable development and social responsibilities.

The Group's future operations will focus on three strategic pillars:

  • We will record additional growth in revenues and market shares on telecommunications markets in Slovenia and abroad. Special emphasis will be given to making better use of the existing infrastructure.
  • As a reliable provider of critical infrastructure and the digitalisation of services, we plan the highest growth in the ICT segment and digital services. We will increase the value of services through the inclusion of cyber security solutions.
  • We will improve operational efficiency through the continued digitalisation of operations, the reduction of costs and the improved efficiency of investing activities.

Sustainable development

We include the principles of sustainability in our operations, products, services and content. We ensure the highest coverage through broadband access and advanced digital services. We responsibly accept our role in the adaptation to and mitigation of climate change, in part by reducing our carbon footprint, through energy efficiency and the use of cleaner energy sources. Together with our partners, we are promoting the transformation to a carbon-neutral and digitally connected Slovenia with a comprehensive range of solutions for the further development of smart cities, businesses and communities. Through our activities, we are bridging the digital divide and striving for an inclusive, healthy and safe society.

Objectives of the Telekom Slovenije Group for 2024

in EUR million Objectives for 2024
Operating revenues 717.4
Earnings before interest, taxes, depreciation and
amortisation (EBITDA)		 233.6
Net profit 43.2
Value of investments 235.7

3 TELEKOM SLOVENIJE GROUP

3.1 Markets and companies of the Telekom Slovenije Group

The Telekom Slovenije Group comprises the controlling company Telekom Slovenije and its subsidiaries. The composition of the Telekom Slovenije Group and participating interests as at 31 March 2024 are presented in the picture below, and in more detail on the website https://www.telekom.si/en/about-us/telekom-slovenijegroup/subsidiraries.

Composition of Telekom Slovenije as at 31 March 2024

There were no changes in the composition of the Telekom Slovenije Group in the period January to March 2024.

Telekom Slovenije is the founder of the Heart Foundation, the aim of which is to help the children of employees of Slovenian Telekom Slovenije Group companies who have lost one or both parents, or who are seriously ill. The foundation's funds are contributed voluntarily by the employees of Slovenian Telekom Slovenije Group companies.

3.2 Operating highlights

The Telekom Slovenije Group achieved the following results in the period January to March 2024:

  • The Telekom Slovenije Group had 5% or 83,991 more retail mobile users as at 31 March 2024 than at the same date last year, and 2% more fixed retail broadband connections. Telekom Slovenije increased the number of fixed retail broadband connections by 7,527 and the number of retail mobile telephony users by 23,922. IPKO increased the number of retail mobile telephony users by 60,069.
  • The Telekom Slovenije Group generated EUR 170.4 million in operating revenues in the period January to March 2024, an increase of 4% relative to the same period in 2023.
  • Sales revenue totalled EUR 169.1 million, an increase of 4% relative to the same period in 2023. The Group recorded an increase in revenues on account of growth in the number of users and higher sales of IT merchandise and services, while revenues from financial, eHealth and insurance services and revenues on the wholesale market were also higher.
  • The Telekom Slovenije Group's operating expenses totalled EUR 152.0 million, an increase of 1% relative to the same period in 2023. Labour costs were higher primarily as the result of a change in the method for the interim calculation of business and work performance costs, with the estimated proportionate annual amount included in the results for the first quarter of 2024. The aforementioned effects were recorded in previous years at the time of payment or in final annual results. We are thus normalising the effects of quarterly reporting.
  • Earnings before interest and taxes (EBIT) amounted to EUR 18.3 million at the Telekom Slovenije Group level, an increase of 31% relative to the same period last year.
  • Earnings before interest, taxes, depreciation and amortisation (EBITDA) totalled EUR 59.7 million at the Telekom Slovenije Group level, an increase of 10% or EUR 5.5 million relative to the same period in 2023. The EBITDA margin (i.e. EBITDA as a proportion of sales revenue) was 35.3% at the Group level.
  • Following the calculation of income tax (including deferred taxes), the Telekom Slovenije Group generated a net profit of EUR 12.1 million, an increase of 48% or EUR 3.9 million relative to the same period in 2023.

3.3 Key operating indicators of the Telekom Slovenije Group

Key performance indicators of the Telekom Slovenije Group, in accordance with the financial report:

Telekom Slovenije Group Telekom Slovenije
in EUR thousand and % I – III 2024 /
31 March
2024		 I – III 2023 /
31 December
2023		 Index
24/23		 I – III 2024 /
31 March
2024		 I – III 2023 /
31
December
2023		 Index
24/23
Operating revenues 170,370 164,140 104 148,160 143,825 103
EBITDA 59,657 54,182 110 46,137 42,832 108
EBITDA margin = EBITDA / sales revenue 35.3% 33.2% 106 31.3% 29.9% 105
EBIT 18,347 13,973 131 11,667 9,190 127
Return on sales = EBIT / sales revenue (EBIT
margin)		 10.9% 8.6% 127 7.9% 6.4% 124
Net profit from continuing operations 12,102 8,188 148 7,944 5,144 154
Assets* 1,310,342 1,317,866 99 1,244,089 1,250,315 100
Equity* 629,742 658,638 96 597,188 630,189 95
Equity ratio* 48.1% 50.0% 96 48.0% 50.4% 95
Net financial debt* 408,754 355,737 115 410,028 356,577 115

* Comparative data as at 31 December 2023.

The Telekom Slovenije Group also uses the Alternative Performance Measures (APMs) defined by the ESMA to present its operating results.

Indicators of the sustainable (ESG) operations of the Telekom Slovenije Group

I – III 2024 I – III 2023 Index
24/23
Environmental indicators
Electricity consumption (in million kWh) 21.4 20.8 103
Energy intensity (in MWh/EUR million) 126.8 127.3 100
Social indicators
Number of employees as at 31 March 3,239 3,251 100
Number of employees with a disability as at 31 March 95 96 99
Coverage of the Slovenian population with 5G technology as at 31 March 61.6% 40.4% 152
Coverage of the Slovenian population with 4G technology as at 31 March 97.0% 97.0% 100
Governance indicators
Proportion of the under-represented gender on Telekom Slovenije's
Management Board as at 31 March		 40% 40% 100
Personal data protection (number of inspections by supervisory authorities) 0 1 -
Protection of privacy (number of reports of potential breaches of
customer's privacy)		 24 24 100

Overview of operations by company and key market

Operating revenues

in EUR thousand I – III 2024 I – III 2023 Index
24/23
Telekom Slovenije 148,160 143,825 103
Other companies in Slovenia 18,239 21,560 85
IPKO – Kosovo 21,292 19,100 111
Other companies abroad 992 992 100
Exclusions and adjustments between Group companies -18,313 -21,337 -
Telekom Slovenije Group 170,370 164,140 104

Earnings before interest, taxes, depreciation and amortisation (EBITDA)

in EUR thousand I – III 2024 I – III 2023 Index
24/23
Telekom Slovenije 46,137 42,832 108
Other companies in Slovenia 2,195 1,940 113
IPKO – Kosovo 11,497 10,037 115
Other companies abroad 718 714 101
Exclusions and adjustments between Group companies -890 -1,341 -
Telekom Slovenije Group 59,657 54,182 110

Earnings before interest and taxes (EBIT)

in EUR thousand I – III 2024 I – III 2023 Index
24/23
Telekom Slovenije 11,667 9,190 127
Other companies in Slovenia 467 425 110
IPKO – Kosovo 5,588 4,137 135
Other companies abroad 267 253 106
Exclusions and adjustments between Group companies 358 -32 -
Telekom Slovenije Group 18,347 13,973 131

Net profit for the period

in EUR thousand I – III 2024 I – III 2023 Index
24/23
Telekom Slovenije 7,944 5,144 154
Other companies in Slovenia 1,059 201 527
IPKO – Kosovo 4,350 2,657 164
Other companies abroad 165 146 113
Exclusions and adjustments between Group companies -1,416 40 -
Telekom Slovenije Group 12,102 8,188 148

Investments

in EUR thousand I – III 2024 I – III 2023 Index
24/23
Telekom Slovenije 44,922 35,372 127
Other companies in Slovenia 1,430 9,292 15
IPKO – Kosovo* 1,697 7,304 23
Other companies abroad 130 168 77
Exclusions and adjustments between Group companies -2,418 -5,543 -
Telekom Slovenije Group 45,761 46,593 98

* IPKO – Kosovo: includes the acquisition in 2023 of the radio frequency spectrum for 2x10 MHz capacities in the 800 MHz frequency band and 1x100 MHz in the 3.6 GHz frequency band. The investment in this regard amounts to EUR 4,921 thousand.

Employees

Number of employees as at 31 March 2024 31 December 2023 Index
24/23
Telekom Slovenije 2,065 2,083 99
Other companies in Slovenia 685 684 100
IPKO – Kosovo 489 486 101
Telekom Slovenije Group 3,239 3,253 100

TELEKOM SLOVENIJE GROUP CONNECTIONS AND SERVICES BY TYPE AND MARKET

Retail mobile users

Number of connections as at 31 March 2024 31 March 2023 Index
24/23
Slovenia 968,216 944,294 103
Kosovo 929,600 869,531 107
Telekom Slovenije Group 1,897,816 1,813,825 105

Retail broadband connections

Number of connections as at 31 March 2024 31 March 2023 Index
24/23
Slovenia 203,669 196,142 104
Kosovo 96,821 98,232 99
Telekom Slovenije Group 300,490 294,374 102

3.4 Ownership structure and share trading

General information regarding Telekom Slovenije shares as at 31 March 2024

General information regarding shares
Ticker symbol TLSG
ISIN code SI0031104290
Listing Ljubljana Stock Exchange, prime market
Share capital (EUR) 272,720,664.33
Number of ordinary registered no-par value shares 6,535,478
Number of shares held in treasury 36,836
Number of shareholders as at 31 December 2024 8,236

Trading in TLSG shares

The shares of Telekom Slovenije are listed on the prime securities market of the Ljubljana Stock Exchange under the ticker symbol TLSG. The shares are included in the SBITOP and SBITOP TR share indices, and accounted for 4.69% of those two indices according to the semi-annual review of computational parameters conducted on 14 March 2024. The SBITOP and SBITOP TR are the Slovenian 'blue chip' indices that provide information regarding the movement of the most liquid and largest shares on the Ljubljana Stock Exchange. In contrast to the SBITOP, the SBITOP TR takes into account both market prices and dividends in its calculation. Telekom Slovenije's shares are also included in the ADRIAprime share index, which is a composite index of selected companies listed on the prime markets of the Ljubljana Stock Exchange and Zagreb Stock Exchange. The aforementioned index takes into account both changes in share prices and dividend yield.

The TLSG share price closed at EUR 71.00 on the last trading day of March 2024. The share price rose by 17.36% in the period January–March 2024, while the SBITOP index was up by 16.64% during the same period. Turnover in the Company's shares (excluding block trades) totalled EUR 4.49 million, representing 4.43% of total turnover on the Ljubljana Stock Exchange. The market capitalisation of Telekom Slovenije stood at EUR 464.02 million on the last trading day of March 2024.

Trading statistics for TLSG shares

Standard price in EUR I – III 2024 I – III 2023
Highest daily price 72.00 55.50
Lowest daily price 60.50 47.00
Average daily price 66.61 51.20
Turnover (excluding block trades) in EUR
thousand		 I – III 2024 I – III 2023
Total volume for the period 4,486.37 2,724.59
Highest daily volume 367.63 485.54
Lowest daily volume 0.74 0.00
Average daily volume 73.55 43.25

Change in the share price and turnover in TLSG shares

Source: Ljubljana Stock Exchange, archive of data.

Source: Ljubljana Stock Exchange, archive of data.

Key financial data relating to TLSG shares

31 March 2024 /
I – III 2024		 31 March 2023 /
I – III 2023
Closing price of one share on the last trading day of the period in
EUR		 71.00 52.50
Capital return per share during the period in %1 17.36 11.23
Telekom Slovenije
Book value of one share in EUR2 91.38 93.58
P/BV 0.78 0.56
Net earnings per share in EUR3 1.22 0.79
Telekom Slovenije Group
Book value of one share in EUR4 96.36 94.87
P/BV 0.74 0.55
Net earnings per share in EUR5 1.86 1.26

Notes:

1The capital return per share is calculated as follows: (share price on the final trading day of the period – share price on the final trading day of the previous period) / share price on the final trading day of the previous period.

2 The book value of one share is calculated as the ratio of the book value of Telekom Slovenije's equity on the last day of the period to the number of issued ordinary shares.

3Net earnings per share is calculated as the ratio of Telekom Slovenije's net operating profit for the accounting period to the average number of issued ordinary shares, excluding treasury shares.

4 The book value of one share is calculated as the ratio of the book value of the Telekom Slovenije Group's equity on the last day of the period to the number of issued ordinary shares.

5Net earnings per share is calculated as the ratio of the Telekom Slovenije Group's net operating profit for the accounting period to the average number of issued ordinary shares, excluding treasury shares.

Ownership structure and largest shareholders as at 31 March 2024

Telekom Slovenije had 8,236 shareholders as at 31 March 2024, a decrease of 26 relative to the end of 2023. At 0.38 percentage points, domestic financial corporations and funds recorded the most significant decrease in ownership stake during the first three months of 2024. The ownership stake of foreign legal entities was up by 0.20 percentage points. The ownership stakes of domestic and foreign individuals and domestic companies were up by 0.13 and 0.05 percentage points, respectively.

Ownership structure

* Individual shareholders include individuals who pursue gainful activities on the market.

Ten largest shareholders

The concentration of ownership, as measured by the ownership stake held by the ten largest shareholders, stood at 79.60% as at 31 March 2024, an increase of 0.03 percentage points relative to the end of 2023. The composition of the ten largest shareholders changed as a result of the above-described changes.

Shares held by the Management Board and Supervisory Board of Telekom Slovenije

Members of the Management Board and Supervisory Board held 1,178 TLSG shares as at 31 March 2024.

Name Office Number
of
shares		 % of equity
Management Board
Boštjan Škufca Zaveršek Vice-President of the Management Board 380 0.00581
Vesna Prodnik Member of the Management Board 400 0.00612
Supervisory Board
Aleksander Igličar Member of the Supervisory Board 150 0.00230
Drago Kijevčanin Vice-President of the Supervisory Board 212 0.00324
Dušan Pišek Member of the Supervisory Board 36 0.00055
Total Management Board
and Supervisory Board		 1,178 0.01802

When the Company's shares are traded by its representatives and when reporting on such transactions at Telekom Slovenije, we comply with the applicable legislation and the Rules Restricting Trading in the Shares of Telekom Slovenije.

3.5 Market and market shares in key service segments

Changes in the number of connections on the electronic communications market in Slovenia

Source: Statistical Office of the Republic of Slovenia, Electronic Communications, fourth quarter of 2023.

Telekom Slovenije's market shares in the fourth quarter of 2023 in key market segments

Source: Report on the development of the electronic communications market for the fourth quarter of 2023, AKOS; internal Telekom Slovenije figures.

3.6 Management of risks

The material risks at the Telekom Slovenije Group and the measures to manage them are presented below.

Strategic risks

  • We operate on markets subject to stiff competition in terms of pricing, services and the infrastructure, regulatory requirements, and changing customer needs, expectations and price sensitivity. Users demand high-quality and more extensive services at lower prices.
  • Managing these risks requires a targeted market approach, constant innovation, the active monitoring of user expectations and market trends, and flexibility in supply. The emphasis is on ensuring the highest quality and the broadest set of competitive services for the most diverse user segments.
  • The optimisation and development of the product portfolio are ongoing processes. We follow user needs by updating our mobile and fixed packages, by offering innovations and by enriching programme content. We promote the migration of users to more contemporary packages, and implement activities to maintain subscribers.
  • We updated the mobile NEO application based on trends and user habits. Artificial intelligence is already partly integrated into the NEO platform's voice control and recommendation system.
  • Artificial intelligence is also used in certain systems in the Cyber Security and Resilience Centre.
  • We promote the use of advanced mobile payment options (e.g. VALÚ and VALÚ Moneta).
  • Activities are in progress to promote the sale of cyber security, IT support, eCare and telemedicine services, and comprehensive ICT solutions tailored to the needs of business customers. Strategic partnerships for innovative solutions are being formed.
  • We are digitalising user processes (digital communications, simple IT architecture and technology).
  • To satisfy the needs of business users and the wholesale market, we are introducing a new cloud-based CRM system that will facilitate the most advanced customer relationship management approaches and methods through a high level of integration with back-office systems.
  • The wholesale portfolio is being adapted to regulatory obligations and market needs. Additional international redundant connections have been established to increase cyber security.
  • We manage risks in connection with securing investment projects and taking on major transactions by searching for new opportunities on the domestic and foreign markets.
  • In terms of media, we are searching for new business opportunities, developing new advertising products, and launching new sales campaigns and content-based projects. We are adding new targeted advertising channels and segments.

Financial risks

  • We regularly monitor changes in the financial environment and the financial risks to which we are exposed in our operations.
  • Liquidity risk is controlled through the management and planning of cash flows, through the optimisation of working capital, by ensuring that financial debt has appropriate maturities, through the use of liquid assets within the Group, and through short-term credit lines that are regularly rolled over with respect to needs.
  • Credit risk management is achieved through credit assessment and the active monitoring of subscribers' transactions, and by setting maximum allowable exposures. We manage the risk of the deteriorating financial position of subscribers through credit insurance and by regularly monitoring the appropriateness thereof. Monitoring of the settlement of contractual obligations and the active recovery of past-due debt are elements of comprehensive credit risk management.
  • Interest rate risk is managed by ensuring that financial debt with fixed interest rates and/or hedged interest rates or with variable interest rates is properly structured.

Regulatory and compliance-related risks

  • In our operations, we comply with valid legislation, as well as decisions and aspects of sectoral regulations and other competent bodies. We manage regulatory risks through organisational and procedural measures, through constructive dialogue, by putting forth opinions, comments and suggestions in public consultations regarding drafts of general and specific laws issued by the regulator, and by taking legal action against issued regulatory decisions, whenever that is justified.
  • We process extensive collections of personal data relating to users, business partners, employees and other stakeholders. Much of

our attention is therefore dedicated to the security and compliance of data processing, for existing services and for new services alike. Crucial in that regard is the application of general EU regulations and national legislation (GDPR, Personal Data Protection Act, etc.), and sectoral legislation, in particular the Electronic Communications Act (ZEKom-2). Underlying laws have brought stricter regulation and increased the awareness of both users and the general public regarding the protection of data, while sectoral legislation sets out the obligations of the Company in individual areas of operations. We are monitoring activities aimed at the initial application of Regulation (EU) 2023/2854 governing data, which will enter into force in September 2025, and Regulation (EU) 2023/1543 on European Production Orders and European Preservation Orders for electronic evidence, which will enter into force in August 2026. We are also monitoring the drafting of other regulations in the area of personal data processing in Slovenia and the EU, which have not yet entered into force but will affect the provision of services in the future (e.g. the eprivacy regulation, which is being coordinated by EU bodies).

Operational risks

  • A great deal of attention is given to the management of ICT-related operational risks. We manage these risks through the control and development of subsystems, by improving operational efficiency and through employee training, all while supporting new business opportunities.
  • We continuously optimise the network and the target architecture, data centres and other technical infrastructure. The fixed and mobile network and systems are the continuous subject of general and technological upgrades. The capacity of equipment is being upgraded and the number of licences increased in line with growth in traffic. Multiple activities are in progress to replace communication equipment in the MPLS backbone network and to upgrade the mobile packet network.
  • Modern network technology (Software Defined Access or SDA), which already includes the zero trust principle of cyber security and advanced user identification and authorisation techniques, is being introduced at an accelerated rate in the internal business network.
  • In the area of ICT security, the Company continuously develops systems for monitoring technologies and anomalies in the infrastructure and ICT services.
  • We ensure business continuity through the

regular assessment of the system and the testing of plans, and through upgrades of topology and the capacity of the infrastructure and ICT services, as required. Capacities are upgraded and increased through redundancy in those network segments where increased functional and security-related risks have been identified. Security checks are performed and knowledge and data regarding threats are shared with European telecommunications operators and international cyber incident response teams. In place is a modern Cyber Security and Resilience Centre that functions 24/7. Risks are also managed through the implementation of the security policy, by identifying security threats and vulnerabilities, and by spreading the security culture. Investments are made continuously in the development of the capacities (people, processes and technologies) in order to improve resilience. The network (fixed and mobile) and systems are continuously upgraded and adapted to new threats with the aim of preventing abuse both in the national network and in roaming. We continuously improve ICT processes and mechanisms to ensure the smooth functioning of systems and applications, and modernise and make technological upgrades in line with trends and needs. A search is in progress in Kosovo for a new secondary location to ensure business continuity in the event of a catastrophe (disaster recovery).

  • The more rapid implementation of 5G technology by the competition in Kosovo could lead to the loss of the company's leading position on the market. Intensive preparations are in progress for the introduction of 5G technology.
  • In Kosovo, IT risks due to the outdated business support system (BSS) architecture, non-standard development and the departure of staff due to the situation on the IT market are managed through the continuation of the BSS transformation programme, the consolidation of processes and additional training.
  • We manage risks in Kosovo due to interruptions in data traffic or system failure on the fibre optic cable by migrating from an aerial to an underground infrastructure.
  • We also face risks associated with attracting and retaining competent employees and rising labour costs, as it is difficult to recruit and retain staff with specific expertise due to labour market conditions and increased demand for professionally qualified personnel. We manage those risks through employee development, targeted development and training programmes and the internal transfer of knowledge. To that end, we upgrade employee motivation and

remuneration systems, and systematically enhance the employer brand. We manage relationships with external service providers. Due to the possibility of early disability retirements and other employee departures, we regularly implement measures to rejuvenate and maintain the flexibility of the employee structure. We implement numerous activities for young people, cooperate with schools and faculties, and offer company scholarships. We place a great deal of emphasis on the wellbeing of employees, and on measures in connection with occupational safety and health.

  • We manage risks in connection with procurement processes through centralised procurement, a standardised procurement process and a supplier risk assessment methodology. To that end, compliance with contractual provisions is monitored. The Supplier Code of Conduct falls into this category of activities. We ensure regular communication with suppliers, continuously monitor the availability of goods and the timeliness of deliveries, draw up forecasts and order goods in advance, search for alternative suppliers and employ a strategy of two or more suppliers, where this is practical and economically justified. We also explore the possibility of additional suppliers, in particular for critical goods and services.
  • We manage the risk of additional investments in Kosovo due to regulatory requirements and the demands of the business environment relating to the shift from an aerial to an underground infrastructure by coordinating with the Kosovo Energy Distribution Services

(KEDS), local communities and other operators.

  • In connection with the risk associated with the payment of copyright fees and fees for the transmission of programmes via the cable network, we are working with the competent ministry in Kosovo to appoint an international expert to draft an expert opinion regarding the amount of those fees.
  • Unfavourable weather conditions could result in a drop in salt production, which we would compensate for by drawing down inventories.

Risks relating to sustainability aspects of operations

  • We regularly monitor the impacts of the external and internal environments, and assess risks on that basis. Risk management measures primarily relate to further efforts aimed at more efficient energy consumption and the reduction of emissions.
  • The digital and green transitions are integrated into the Group's strategy, which is based on the superior quality of the network and the most advanced ICT services and solutions, all of which contributes to the mitigation of climate and environmental changes and the adaptation to the impacts thereof, and also facilitates energy savings.
  • We regularly brief stakeholders and provide information regarding activities relating to socially responsible and sustainable conduct.

4 CORPORATE GOVERNANCE

Management Board

Telekom Slovenije's Management Board functioned in the following composition as at 31 March 2024:

  • Boštjan Košak, President,
  • Boštjan Škufca Zaveršek, MSc, Vice-President,
  • Irma Gubanec, MSc, member,
  • Vesna Prodnik, MSc, member, and
  • Špela Fortin, member and Workers' Director.

President of the Management Board Boštjan Košak began his four-year term of office on 4 October 2022. Irma Gubanec, MSc began her four-year term of office on 12 October 2022. Boštjan Škufca Zaveršek, MSc, who was appointed Vice-President of the Management Board, and Vesna Prodnik, MSc began their four-year terms of office on 14 November 2022. Member of the Management Board and Workers' Director Špela Fortin began her second four-year term of office on 14 September 2023.

Supervisory Board

Telekom Slovenije's Supervisory Board comprises nine members, six of whom are shareholder representatives and three of whom are employee representatives. The members of the Supervisory Board submitted a statement of compliance with the criteria of independence in accordance with the Corporate Governance Code.

The Supervisory Board comprised the following members as at 31 March 2024:

Shareholder representatives:

  • Žiga Debeljak, MSc, President,
  • Karla Pinter, MSc, Vice-President,
  • Marko Boštjančič, member,
  • Alenka Čok Pangeršič, MSc, member,
  • Mateja Čuk Orel, MSc, member, and
  • Aleksander Igličar, MSc, member.

Employee representatives:

  • Drago Kijevčanin, Vice-President,
  • Dušan Pišek, member, and
  • Rok Pleteršek, member.

Members of the Supervisory Board are elected for a term of four years.

The composition of the Supervisory Board is diverse, as its members complement each other in terms of their expertise, competences, experience, age, gender, work method and other aspects. This facilitates the effective exchange of opinions and views at sessions.

For more information, visit https://www.telekom.si/en/about-us/company.

Composition of management and governance bodies at subsidiaries of the Telekom Slovenije Group as at 31 March 2024

SLOVENIA
GVO, d.o.o.
Managing Director: Dr Zef Vučaj
Supervisory Board: Vesna Prodnik, MSc (President), Peter Anžin and Helena Jakič
Infratel, d.o.o.
Managing Director: Dr Zef Vučaj
Optic-Tel, d.o.o.
Managing Director: Dr Zef Vučaj
Avtenta, d.o.o.
Managing Director: Matija Nendl
TSmedia, d.o.o.
Managing Director: Igor Gajster
Soline, d.o.o.
Managing Director: Klavdij Godnič
TSinpo, d.o.o.
Managing Director: Vesna Lednik
OTHER COUNTRIES
IPKO Telecommunications LLC, Kosovo

CEO: András Páli SIOL, d.o.o. Zagreb, Croatia Managing Director: Simon Furlan, MSc SIOL, d.o.o. Podgorica, Montenegro Managing Director: Simon Furlan, MSc SIOL, d.o.o. Sarajevo, Bosnia and Herzegovina Managing Director: Simon Furlan, MSc SIOL, DOOEL Skopje, North Macedonia Managing Director: Simon Furlan, MSc SIOL DOO BELGRADE, Serbia Managing Director: Simon Furlan, MSc SIOL Prishtina LLC, Kosovo Managing Director: Simon Furlan, MSc

5 SIGNIFICANT EVENTS IN THE PERIOD JANUARY TO MARCH 2024

FIRST QUARTER OF 2024

JANUARY

  • GVO is celebrating 20 years of operations this year.
  • On 23 January, the Court of Audit of the Republic of Slovenia published the audit report 'Efficiency of the operations of Telekom Slovenije, d.d.' in the period 1 January 2019 to 31 October 2022. Telekom Slovenije cooperated constructively with the Court of Audit throughout the entire audit procedure, and took an active approach to the rectification of deficiencies. As a result, the audit report did not impose measures on the Company or require the submission of a response report.
  • ESG: For the third year in a row, Telekom Slovenije received the international Top Employer certificate, which is received by companies that implement excellent HR practices.

FEBRUARY

  • On 2 February, the Ljubljana District Court sent Telekom Slovenije the preliminary filing of the plaintiff in connection with the lawsuit filed by T-2, according to which the latter proposes an increase in its claim in the amount of EUR 59 million. On 2 March 2021, Telekom Slovenije received a lawsuit for the payment of ordinary damages in the amount of EUR 12,195,656.00, payment for lost profit in the amount of EUR 35,760,909.00 and the non-existence of claims in the amount of EUR 1,778,033.00, together with appertaining amounts. The aforementioned claim represents damages that the plaintiff allegedly incurred in the period 1 September 2018 to 31 July 2020.
  • On 28 February, the Ljubljana District Court sent Telekom Slovenije a lawsuit filed by T-2, demanding, inter alia, that the court find that Telekom Slovenije does not have the right to request the submission of collateral in accordance with contracts concluded on the basis of sample offers for local access at a fixed location (WLA) and central access at a fixed location (WCA). The Company responded to that lawsuit by the prescribed deadline.
  • The 37th General Meeting of Shareholders of Telekom Slovenije was held on 7 February 2024. Shareholders supported the proposal that distributable profit from 2022 in the amount of

EUR 40,291,580.40 be earmarked for the payment of dividends, i.e. EUR 6.20 gross per share.

  • With the aim of mitigating interest rate risk, Telekom Slovenije entered into an interest rate swap (IRS) for 75% of the principal amount of a long-term loan drawn down at the end of 2023. As a result, the proportion of the total financial liabilities of the Group and Company accounted for by loans bearing a fixed or hedged interest rate rose to 51.9%.
  • TSmedia redesigned the Siol.net portal.

MARCH

  • On 12 March 2024, Telekom Slovenije received a ruling from the Administrative Court of the Republic of Slovenia in the administrative matter involving the Competition Protection Agency (CPA) with respect to the reversal of the decision of 2 February 2015. In the decision under review, the Administrative Court upheld Telekom Slovenije's claim in full, and also reversed the CPA's decision in the remaining part regarding the alleged abuse of a dominant position on the inter-operator broadband access market with bit-streaming and on the interoperator market for access to the fixed network infrastructure in the Republic of Slovenia. The matter was returned for a new hearing before the CPA.
  • On 1 March, Telekom Slovenije doubled speeds in mobile subscriber packages and thus facilitated a fast internet with gigabit speeds (download speeds of up to 1 Gbit/s and upload speeds of up to 200 Mbit/s).
  • ESG: Avtenta received the Top Cloud Performer award for best SAP cloud solution partner for 2023, as well as the Platinum Credit Excellence award, which is given to companies that retain the highest credit rating (Gold AAA) for three years in a row. Avtenta met those criteria in 2021, 2022 and 2023.
  • ESG: Soline added a salt shower body bar to its range of natural products.

6 SIGNIFICANT EVENTS AFTER THE REPORTING DATE

SECOND QUARTER OF 2024

APRIL

  • Telekom Slovenije published a change to its financial calendar for 2024. That change relates to the date of the 38th General Meeting of Shareholders, which will be held on 17 June 2024, and to the date of publication of the resolutions of the 38th General Meeting of Shareholders, which will be 18 June 2024.
  • Telekom Slovenije published the audited annual report of the Telekom Slovenije Group and Telekom Slovenije, d.d. for 2023.
  • Together with the Supervisory Board, the Company's Management Board prepared a proposal on the use of distributable profit for 2023. The distributable profit of Telekom Slovenije was EUR 66,507,561.11 as at 31 December 2023. On 7 February 2024, the General Meeting of Shareholders adopted a resolution that distributable profit for 2022 in the amount of EUR 40,291,580.40, comprising retained earnings up to and including 2022, be used for the payment of dividends. The General Meeting of Shareholders, to be held on 17 June 2024, will receive a proposal to allocate remaining distributable profit in the amount of EUR 26,215,980.71 as follows: EUR 23,863,902.71, representing net profit for 2023, shall be allocated to other profit reserves, while the remainder shall remain unallocated. The reason for such a proposal lies in the fact that the Company benefited from the state aid granted with the aim of alleviating high electricity prices in accordance with the Act on Aid to the Economy to Mitigate the Impact of the Energy Crisis (ZPGOPEK). According to that act, companies that pay profits for 2023 are not entitled to the aforementioned aid. Such a payment would make Telekom Slovenije liable for the repayment of aid in the amount of EUR 3.57 million.

7 CONDENSED INTERIM ACCOUNTING REPORT OF THE TELEKOM SLOVENIJE GROUP AND TELEKOM SLOVENIJE, D.D. FOR THE PERIOD JANUARY TO MARCH 2024

The condensed financial statements of the Telekom Slovenije Group and the condensed financial statements of the controlling company Telekom Slovenije, d.d. for the reported period and the comparable period last year were compiled in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU and in accordance with the requirements of the Companies Act (ZGD).

The condensed financial statements for the period ending 31 March 2024 were compiled in accordance with IAS 34 Interim Financial Reporting, and must be read together with the financial statements and disclosures compiled for the 2023 financial year. The financial statements for the period January–March 2024 and the comparable period January–March 2023 are unaudited, while the financial statements for the comparable period ending 31 December 2023 are audited. The financial statements of the Group and Company were compiled under the assumption that both are going concerns. Operations are not seasonal.

Changes in accounting policies

The accounting policies used in the compilation of the interim condensed financial statements are the same as those applied in the compilation of the financial statements for the financial year ending 31 December 2023.

Use of significant estimates and judgements

The compilation of the financial statements requires of management certain estimates, assessments and assumptions that affect the carrying amount of assets and liabilities, the disclosure of contingent liabilities as at the statement of financial position date and the amount of revenues and expenses in the period ending on the statement of financial position date. Future events and their impact cannot be determined with certainty. Accounting assessments therefore apply a judgement subject to change taking into account new events, experiences and additional information, and as the result of changes in the business environment. Actual values may vary from estimates. Estimates and assumptions are reviewed on a regular basis. Revisions to accounting estimates are recognised in the period in which estimates are revised, and in all future years affected by such revisions.

Functional and presentation currency

The reporting currency of the Telekom Slovenije Group is the euro, which is also the functional and presentation currency of the controlling company Telekom Slovenije. All financial information is presented in thousands of euros, unless otherwise stated.

7.1 Condensed interim financial statements of the Telekom Slovenije Group and Telekom Slovenije, d.d.

Unaudited consolidated and separate statement of profit or loss for the period ending 31 March 2024

in EUR thousand I – III 2024 I – III 2023 I – III 2024 I – III 2023
Sales revenue 169,068 163,216 147,390 143,482
Other operating income 1,302 924 770 343
Cost of goods sold -21,833 -22,271 -22,488 -23,258
Costs of materials and energy -5,626 -9,649 -4,401 -7,854
Cost of services -49,531 -48,672 -46,781 -45,466
Labour costs -31,530 -27,397 -26,090 -22,513
Depreciation and amortisation -41,310 -40,209 -34,470 -33,642
Other operating expenses -2,193 -1,969 -2,263 -1,902
Total operating expenses -152,023 -150,167 -136,493 -134,635
Earnings before interest and taxes 18,347 13,973 11,667 9,190
Finance income 636 152 2,343 1,168
Finance expenses -4,218 -4,135 -3,976 -3,931
Profit before tax 14,765 9,990 10,034 6,427
Corporate income tax -1,573 -1,058 -992 -547
Deferred taxes -1,090 -744 -1,098 -736
Net profit for the period 12,102 8,188 7,944 5,144
Earnings per share
Basic earnings per share in EUR 1.86 1.26 1.22 0.79
Diluted earnings per share in EUR 1.86 1.26 1.22 0.79

* The finance income of Telekom Slovenije include interest on loans to subsidiaries.

Unaudited consolidated and separate statement of other comprehensive income for the period ending 31 March 2024

Telekom Slovenije Group Telekom Slovenije
in EUR thousand I – III 2024 I – III 2023 I – III 2024 I – III 2023
Net profit for the period 12,102 8,188 7,944 5,144
Other comprehensive income that may be
subsequently reclassified to the statement of
profit or loss		 -711 -11 -713 -15
Translation reserves 1 3 0 0
Effective part of change in the fair value of hedging
instrument		 -913 -19 -913 -20
Deferred tax 201 5 200 5
Other comprehensive income that may not be
subsequently reclassified to the statement of
profit or loss		 59 274 59 275
Change in the fair value of financial assets through
other comprehensive income		 76 338 76 339
Deferred tax -17 -64 -17 -64
Other comprehensive income for the period
after tax		 -652 263 -654 260
Total comprehensive income for the period 11,450 8,451 7,290 5,404

Unaudited consolidated and separate statement of financial position as at 31 March 2024

Telekom Slovenije Group Telekom Slovenije
in EUR thousand 31 March 31 December 31 March 2024 31 December
ASSETS 2024 2023 2023
Intangible assets 205,068 203,754 166,883 162,379
Property, plant and equipment 680,326 686,497 602,471 607,716
Right-of-use assets 88,088 79,205 96,092 85,356
Investments in subsidiaries 0 0 36,920 36,920
Other investments 2,548 2,472 19,008 22,014
Contract assets 4,713 4,179 4,281 3,749
Other receivables 18,950 19,685 18,948 19,684
Deferred costs 2,749 2,714 2,794 2,787
Investment property 3,269 3,296 3,269 3,296
Deferred tax assets 41,343 42,203 40,934 41,848
Total non-current assets 1,047,054 1,044,005 991,600 985,749
Assets held for sale 588 588 588 588
Inventories 26,627 24,802 23,117 21,176
Trade and other receivables 167,063 170,123 157,283 161,091
Receivables for corporate income tax 813 932 180 442
Contract assets 17,939 14,148 17,723 14,036
Deferred costs 13,941 6,743 9,922 4,855
Investments 1,006 1,046 18,192 18,002
Cash and cash equivalents 35,311 55,479 25,484 44,376
Total current assets
Total assets		 263,288
1,310,342		 273,861
1,317,866		 252,489
1,244,089		 264,566
1,250,315
EQUITY AND LIABILITIES
Share capital 272,721 272,721 272,721 272,721
Share premium 181,489 181,489 180,956 180,956
Profit reserves 106,479 106,479 104,978 104,978
Legal reserves 51,612 51,612 50,434 50,434
Reserves for treasury shares and interests 4,065 4,065 4,065 4,065
Treasury shares and interests -4,065 -4,065 -4,065 -4,065
Statutory reserves 54,854 54,854 54,544 54,544
Other profit reserves
Retained earnings		 13
68,397		 13
96,640		 0
38,144		 0
70,492
Retained earnings from previous periods 56,295 49,575 30,200 46,628
Profit or loss for the period 12,102 47,065 7,944 23,864
Fair value reserves -825 -172 -825 -172
Reserves for actuarial gains/losses 1,429 1,429 1,214 1,214
Translation reserves 52 52 0 0
Total equity 629,742 658,638 597,188 630,189
Contract liabilities 19,094 19,730 18,587 19,237
Provisions 25,039 24,711 21,465 21,139
Other operating liabilities 21,651 23,336 21,384 17,316
Accrued liabilities 8,899 8,916 418 426
Loans and borrowings 306,610 306,578 306,610 306,578
Lease liabilities 73,181 65,216 80,427 70,267
Other financial liabilities 913 0 913 0
Deferred tax liabilities 304 304 0 0
Total non-current liabilities 455,691 448,791 449,804 434,963
Trade payables 100,205 123,746 82,305 108,222
Income tax payable 183 7 108 0
Loans and borrowings 33,804 30,598 33,804 30,598
Lease liabilities 10,393 9,868 11,804 11,512
Other financial liabilities 20,170 2 20,146 0
Contract liabilities 11,431 11,907 5,476 5,779
Accrued liabilities 48,723 34,309 43,454 29,052
Total current liabilities 224,909 210,437 197,097 185,163
Total liabilities 680,600 659,228 646,901 620,126
Total equity and liabilities 1,310,342 1,317,866 1,244,089 1,250,315

Unaudited consolidated statement of changes in equity of the Telekom Slovenije Group for the period ending 31 March 2024

Profit reserves Retained earnings
in EUR thousand Share
capital		 Share
premium		 Legal
reserves		 Treasury
share
reserves		 Treasury
shares		 Statutory
reserves		 Other
profit
reserves		 Retained
earnings
from
previous
years		 Profit or
loss for
the period		 Fair value
reserve for
financial
instruments		 Fair value
reserve for
hedging
instruments
in net
amount		 Reserves
for actuarial
deficits and
surpluses		 Translation
reserves		 Total
Balance as at 1 January 2024 272,721 181,489 51,612 4,065 -4,065 54,854 13 49,575 47,065 -172 0 1,429 52 658,638
Net profit or loss for the period 0 0 0 0 0 0 0 0 12,102 0 0 0 0 12,102
Other comprehensive income for
the period		 0 0 0 0 0 0 0 0 0 59 -712 0 0 -653
Total comprehensive income for
the period		 0 0 0 0 0 0 0 0 12,102 59 -712 0 0 11,449
Dividends paid 0 0 0 0 0 0 0 -40,292 0 0 0 0 0 -40,292
Transactions with owners 0 0 0 0 0 0 0 -40,292 0 0 0 0 0 -40,292
Transfer of profit or loss from the
previous year to retained earnings		 0 0 0 0 0 0 0 47,065 -47,065 0 0 0 0 0
Changes in equity 0 0 0 0 0 0 0 47,065 -47,065 0 0 0 0 0
Other 0 0 0 0 0 0 0 -53 0 0 0 0 0 -53
Balance as at 31 March 2024 272,721 181,489 51,612 4,065 -4,065 54,854 13 56,295 12,102 -113 -712 1,429 52 629,742

Unaudited consolidated statement of changes in equity of the Telekom Slovenije Group for the period ending 31 March 2023

Profit reserves Retained earnings
in EUR thousand Share
capital		 Share
premium		 Legal
reserves		 Treasury
share
reserves		 Treasury
shares		 Statutory
reserves		 Other
profit
reserves		 Retained
earnings
from
previous
years		 Profit or
loss for
the period		 Fair value
reserve for
financial
instruments		 Fair value
reserve for
hedging
instruments
in net
amount		 Reserves
for actuarial
deficits and
surpluses		 Translation
reserves		 Total
Balance as at 1 January 2023 272,721 181,489 51,612 4,065 -4,065 54,854 13 12,497 37,506 -202 14 1,155 18 611,677
Net profit or loss for the period 0 0 0 0 0 0 0 0 8,188 0 0 0 0 8,188
Other comprehensive income for the
period		 0 0 0 0 0 0 0 0 0 274 -14 0 3 263
Total comprehensive income for the
period		 0 0 0 0 0 0 0 0 8,188 274 -14 0 3 8,451
Transfer of profit or loss from the
previous year to retained earnings		 0 0 0 0 0 0 0 37,506 -37,506 0 0 0 0 0
Changes in the composition of the Group 0 0 0 0 0 0 0 -34 0 0 0 0 34 0
Changes in equity 0 0 0 0 0 0 0 37,472 -37,506 0 0 0 34 0
Other 0 0 0 0 0 0 0 -97 0 0 0 0 0 -97
Balance as at 31 March 2023 272,721 181,489 51,612 4,065 -4,065 54,854 13 49,872 8,188 72 0 1,155 55 620,031

Unaudited statement of changes in equity of Telekom Slovenije for the period ending 31 March 2024

Profit reserves Retained earnings
in EUR thousand Share
capital		 Share
premium		 Legal
reserves		 Treasury
share
reserves		 Treasury
shares		 Statutory
reserves		 Other
profit
reserves		 Retained
earnings from
previous years		 Profit or
loss for the
period		 Fair value
reserve for
financial
instruments		 Fair value
reserve for
hedging
instruments
in net
amount		 Reserves for
actuarial
deficits and
surpluses		 Total
Balance as at 1 January 2024 272,721 180,956 50,434 4,065 -4,065 54,544 0 46,628 23,864 -171 -1 1,214 630,189
Net profit or loss for the period 0 0 0 0 0 0 0 0 7,944 0 0 0 7,944
Other comprehensive income for
the period		 0 0 0 0 0 0 0 0 0 60 -713 0 -653
Total comprehensive income for
the period		 0 0 0 0 0 0 0 0 7,944 60 -713 0 7,291
Dividends paid 0 0 0 0 0 0 0 -40,292 0 0 0 0 -40,292
Transactions with owners 0 0 0 0 0 0 0 -40,292 0 0 0 0 -40,292
Transfer of profit or loss from the
previous year to retained earnings		 0 0 0 0 0 0 0 23,864 -23,864 0 0 0 0
Changes in equity 0 0 0 0 0 0 0 23,864 -23,864 0 0 0 0
Balance as at 31 March 2024 272,721 180,956 50,434 4,065 -4,065 54,544 0 30,200 7,944 -111 -714 1,214 597,188

Unaudited statement of changes in equity of Telekom Slovenije for the period ending 31 March 2023

Fair value
Profit reserves
Retained earnings
Fair value
reserve for
Reserves for
Share
Share
reserve for
hedging
Treasury
Other
Retained
Profit or
Legal
Treasury
Statutory
capital
premium
financial
instruments
share
profit
earnings from
loss for the
reserves
shares
reserves
instruments
in net
reserves
reserves
previous years
period
amount
in EUR thousand actuarial
deficits and
surpluses		 Total
Balance as at 1 January 2023 272,721 180,956 50,434 4,065 -4,065 54,544 0 26,076 20,793 -203 15 897 606,233
Net profit or loss for the period 0 0 0 0 0 0 0 0 5,144 0 0 0 5,144
Other comprehensive income for
the period		 0 0 0 0 0 0 0 0 0 275 -15 0 260
Total comprehensive income for
the period		 0 0 0 0 0 0 0 0 5,144 275 -15 0 5,404
Transfer of profit or loss from the
previous year to retained earnings		 0 0 0 0 0 0 0 20,793 -20,793 0 0 0 0
Changes in equity 0 0 0 0 0 0 0 20,793 -20,793 0 0 0 0
Other 0 0 0 0 0 0 0 1 0 0 0 0 1
Balance as at 31 March 2023 272,721 180,956 50,434 4,065 -4,065 54,544 0 46,870 5,144 72 0 897 611,638

Unaudited consolidated and separate cash flow statement for the period ending 31 March 2024

Telekom Slovenije Group Telekom Slovenije
in EUR thousand I – III 2024 I – III 2023 I – III 2024 I – III 2023
Cash flows from operating activities
Net profit for the period 12,102 8,188 7,944 5,144
Adjustments for:
Depreciation and amortisation 41,310 40,209 34,470 33,642
Impairment and write-offs of property, plant and equipment
and intangible assets		 33 82 0 0
Gain/loss on disposal of property, plant and equipment -208 -82 -206 106
Impairment and write-offs of inventories 232 167 233 167
Net impairment of receivables and contract assets 1,193 1,141 1,100 905
Adjustment for provisions -7 -6 0 0
Finance income -636 -152 -2,344 -1,168
Finance expenses 4,218 4,135 3,976 3,931
Income tax expense with deferred taxes 2,663 1,802 2,090 1,284
Cash flows from operating activities prior to changes in
working capital and provisions		 60,900 55,484 47,263 44,011
Change in inventories -1,773 -5,712 -1,889 -5,121
Change in trade and other receivables 2,946 1,775 3,202 3,587
Change in accrued and deferred asset items and contract assets -11,783 -9,939 -8,558 -8,281
Change in provisions 335 328 326 296
Change in trade and other payables -26,174 -11,072 -22,050 -11,622
Change in accrued and deferred liability items and contract
liabilities		 13,285 12,324 13,442 10,509
Income tax paid -833 -1,095 -597 -888
Net cash from operating activities 36,903 42,093 31,139 32,491
Cash flows from investing activities
Proceeds from investing activities 683 305 5,320 5,535
Proceeds from sale of property, plant and equipment 419 269 419 58
Dividends received 0 0 939 0
Proceeds from interest 226 0 777 930
Proceeds from repayment of loans and deposits 38 36 3,185 4,547
Disbursements from investing activities -33,690 -41,586 -31,414 -32,950
Disbursements for property, plant and equipment -14,458 -17,207 -12,060 -12,759
Disbursements for intangible assets -19,232 -24,379 -19,024 -19,381
Disbursements for loans and deposits issued 0 0 -330 -810
Net cash from investing activities -33,007 -41,281 -26,094 -27,415
Cash flows from financing activities
Proceeds from financing activities 0 0 0 0
Disbursements from financing activities -24,065 -11,886 -23,938 -11,645
Repayment of lease liabilities – principal -3,088 -3,222 -3,040 -2,973
Repayment of non-current borrowings 0 -7,692 0 -7,692
Disbursements for interest -831 -972 -752 -980
Dividends paid -20,146 0 -20,146 0
Net cash from financing activities -24,065 -11,886 -23,938 -11,645
Net increase/decrease in cash and cash equivalents -20,169 -11,074 -18,893 -6,569
Opening balance of cash and cash equivalents 55,479 37,382 44,376 19,573
Effect of exchange rate changes on cash and cash equivalents 1 45 1 45
Closing balance of cash and cash equivalents 35,311 26,353 25,484 13,049

7.2 Notes to the interim financial statements of the Telekom Slovenije Group and Telekom Slovenije

Telekom Slovenije Group

The Telekom Slovenije Group comprised the controlling company Telekom Slovenije and the following subsidiaries as at the reporting date (31 March 2024):

Company Country 31 March 2024
Telekom Slovenije, d.d. Slovenia 100%
GVO, d.o.o. Slovenia 100%
TSmedia, d.o.o. Slovenia 100%
Avtenta, d.o.o. Slovenia 100%
Soline, d.o.o. Slovenia 100%
TSinpo, d.o.o. Slovenia 100%
Optic-Tel, d.o.o. Slovenia 100%
Infratel, d.o.o. Slovenia 100%
IPKO Telecommunications LLC Kosovo 100%
SIOL, d.o.o., Zagreb Croatia 100%
SIOL, d.o.o., Sarajevo Bosnia and Herzegovina 100%
SIOL, d.o.o., Podgorica Montenegro 100%
SIOL, DOOEL Skopje North Macedonia 100%
SIOL DOO Beograd Serbia 100%
Heart Foundation Slovenia 100%
SIOL Prishtina LLC Kosovo 100%

Segment reporting

Segment reporting is based on the internal reporting system used by management in the management of operations. The criterion for segment reporting is the registered office where an activity is performed. The Telekom Slovenije Group thus presents its operations in the following two segments:

Slovenia: this segment includes all Group companies registered in Slovenia, and primarily activities in the areas of fixed and mobile telephony services, the construction and maintenance of the telecommunications network, multimedia and internet services, and content and digital TV. The segment comprises the following companies: Telekom Slovenije, GVO, Avtenta, TSmedia, TSinpo, Optic-Tel, Infratel and Soline, as well as the Heart Foundation, which organises and collects donations, grants and other monetary and non-monetary contributions to achieve the foundation's charitable mission.

Other countries: this segment comprises other Group companies, including IPKO, SIOL Zagreb, SIOL Sarajevo, SIOL Podgorica, SIOL Skopje, SIOL Belgrade and SIOL Prishtina. This segment's main activity is the provision of telecommunication services.

Inter-segment sales were executed according to market terms. Intra-group transactions are eliminated in the consolidation process, and included in eliminations and adjustments.

The Group does not disclose finance income and expenses by segment, as the Group's financing is centralised at the level of the controlling company. Disclosures regarding revenues generated with external customers are described by type in the note 'Revenue'.

Segment reporting

in EUR thousand Slovenia Other countries Eliminations and
adjustments*		 Total
I – III 2024 I – III 2023 I – III
2024		 I – III
2023		 I – III
2024		 I – III
2023		 I – III 2024 I – III 2023
Sales revenue 149,064 145,301 20,004 17,915 0 0 169,068 163,216
Inter-segment sales 16,142 19,252 2,164 2,082 -18,306 -21,334 0 0
Total segment revenue 165,206 164,553 22,168 19,997 -18,306 -21,334 169,068 163,216
Other operating income 1,190 833 112 91 0 0 1,302 924
Total operating expenses -137,036 -135,904 -14,987 -14,263 0 0 -152,023 -150,167
Operating profit per
segment		 29,360 29,482 7,293 5,825 -18,306 -21,334 18,347 13,973
Finance income 0 0 0 0 0 0 636 152
Finance expenses 0 0 0 0 0 0 -4,218 -4,135
Profit before tax 0 0 0 0 0 0 14,765 9,990
Corporate income tax 0 0 0 0 0 0 -1,573 -1,058
Deferred taxes 0 0 0 0 0 0 -1,090 -744
Net profit for the period 12,102 8,188
Other data by segment Slovenia Other countries Eliminations and
adjustments*		 Total
31 March
2024		 31
December
2023		 31 March
2024		 31
December
2023		 31 March
2024		 31
December
2023		 31 March
2024		 31
December
2023
Segment assets 1,340,910 1,350,732 133,466 135,536 -164,034 -168,402 1,310,342 1,317,866
Segment liabilities 699,628 675,667 69,092 75,429 -88,120 -91,868 680,600 659,228

* Inter-company amounts are excluded from the consolidated financial statements.

Sales revenue by segment

Slovenia Other countries Total
in EUR thousand I – III
2024		 I – III
2023		 I – III
2024		 I – III
2023		 I – III
2024		 I – III
2023
Mobile services on end-user market 51,601 52,392 13,082 11,270 64,683 63,662
Fixed-line telephone services on end-user market 48,792 46,622 5,268 5,104 54,060 51,726
Additional services 1,404 1,244 0 0 1,404 1,244
Wholesale market 40,341 37,499 1,654 1,541 41,995 39,040
Other revenues and merchandise 6,926 7,544 0 0 6,926 7,544
Total revenues 149,064 145,301 20,004 17,915 169,068 163,216

Sales revenues

Breakdown of revenue by service category

Telekom Slovenije Group Telekom Slovenije
in EUR thousand I – III 2024 I – III 2023 I – III 2024 I – III 2023
Mobile services on end-user market 64,683 63,662 51,644 52,442
Fixed-line telephone services on end-user market 54,060 51,726 48,224 46,216
Additional services 1,404 1,244 1,430 1,257
Wholesale market 41,995 39,040 40,740 38,063
Other revenues and merchandise 6,926 7,544 5,352 5,504
Total revenues 169,068 163,216 147,390 143,482
Telekom Slovenije Group Telekom Slovenije
in EUR thousand I – III 2024 I – III 2023 I – III 2024 I – III 2023
Revenue from services rendered 146,313 138,906 124,653 119,040
Sales revenue – goods 22,755 24,310 22,737 24,442
Total revenues 169,068 163,216 147,390 143,482

The sales revenue of the Telekom Slovenije Group amounted to EUR 169.1 million in the period January–March 2024, an increase of EUR 5.9 million relative to the same period in 2023.

Revenues were up in the mobile segment of the end-user market due to higher revenues at IPKO, primarily due to an increase in the number of users. Revenues were lower at Telekom Slovenije mainly due to lower revenues from the sale of mobile merchandise, meaning the associated costs were also lower.

Revenues were higher in the fixed segment of the end-user market primarily due to higher revenues from broadband services as the result of growth in the number of users and sales of IT merchandise and services at Telekom Slovenije.

Revenues from additional services include revenues from financial services, eHealth services and insurance. All revenue categories have recorded growth in 2024.

We have also recorded growth in wholesale revenues, primarily from international wholesale traffic.

Revenues from leases

The Telekom Slovenije Group generated revenues from leases in the amount of EUR 3,193 thousand in the period January–March 2024, compared with EUR 3,183 thousand during the same period last year.

Telekom Slovenije generated revenue from leases in the amount of EUR 3,446 thousand in that period, compared with EUR 3,470 thousand during the same period last year.

Costs of services

Telekom Slovenije Group Telekom Slovenije
in EUR thousand I – III 2024 I – III 2023 I – III 2024 I – III 2023
Telecommunication services 25,919 24,512 25,295 24,174
Costs of leased lines, networks and platforms 1,403 1,278 2,482 2,071
Multimedia content 2,525 2,289 2,317 2,105
Costs of subcontractors 5,640 6,809 4,158 4,680
Maintenance of property, plant and equipment 4,660 4,964 4,806 5,027
Costs of other services 9,384 8,820 7,723 7,409
Total costs of services 49,531 48,672 46,781 45,466

The costs of services incurred by the Group in the period January–March 2024 were up by EUR 859 thousand relative to the same period in 2023. The costs of telecommunication services were up due to higher revenues on the wholesale market.

The costs of subcontractor services were lower, primarily due to the reduced scope of subcontractor costs.

The costs of other services primarily comprise the costs of advertising and sponsorships in the amount of EUR 1,728 thousand (January–March 2023: EUR 1,856 thousand), the costs of intellectual and personal services in the amount of EUR 1,545 thousand (January–March 2023: EUR 1,049 thousand), the costs of attracting customers in the amount of EUR 912 thousand (January–March 2023: EUR 1,098 thousand), the costs of insurance premiums in the amount of EUR 979 thousand (January–March 2023: EUR 873 thousand), and the costs of other services in the amount of EUR 2,828 thousand (January–March 2023: EUR 2,444 thousand).

Operating profit (EBIT) and net profit

Telekom Slovenije Group

Earnings before interest and taxes (EBIT) in the amount of EUR 18,347 thousand were up by EUR 4,374 thousand relative to the same period last year. A net profit of EUR 12,102 thousand was achieved for the accounting period in the context of a net financial loss of EUR 3,582 thousand.

Telekom Slovenije

Earnings before interest and taxes (EBIT) in the amount of EUR 11,667 thousand were up by EUR 2,477 thousand relative to the same period last year. A net profit of EUR 7,944 thousand was achieved for the accounting period in the context of a net financial loss of EUR 1,633 thousand.

Intangible assets

Changes in intangible assets of the Telekom Slovenije Group in the period January–March 2024

in EUR thousand Goodwill Concessions
and licences		 Costs of
obtaining
contracts
with
customers		 Computer
software		 Other
intangible
assets		 Intangible
assets under
construction		 Total
Cost
Balance as at 1 January 2024 49,737 436,637 24,670 255,783 67,606 5,244 839,677
Increases 0 0 0 0 126 18,630 18,756
Assets generated in the Group 0 0 0 0 25 451 476
Transfer into use 0 12,914 3,481 1,485 -212 -17,668 0
Impairments and write-offs 0 0 0 1 0 -3 -2
Other transfers* 0 0 0 10 356 0 366
Balance as at 31 March 2024 49,737 449,551 28,151 257,279 67,901 6,654 859,273
Impairment
Balance as at 1 January 2024 46,019 299,193 10,788 227,451 52,205 267 635,923
Other transfers* 0 0 0 4 356 0 360
Amortisation 0 10,555 2,144 4,745 478 0 17,922
Balance as at 31 March 2024 46,019 309,748 12,932 232,200 53,039 267 654,205
Carrying amount
Balance as at 1 January 2024 3,718 137,444 13,882 28,332 15,401 4,977 203,754
Balance as at 31 March 2024 3,718 139,803 15,219 25,079 14,862 6,387 205,068

* Other transfers include transfers between intangible assets and property, plant and equipment, and transfers between groups of assets.

Changes in intangible assets of the Telekom Slovenije Group in 2023

in EUR thousand Goodwill Concessions
and licences		 Costs of
obtaining
contracts
with
customers		 Computer
software		 Other
intangible
assets		 Intangible
assets under
construction		 Total
Cost
Balance as at 1 January 2023 49,737 421,678 21,142 253,952 67,620 13,262 827,391
Increases 0 0 0 0 2 73,936 73,938
Assets generated in the Group 0 0 0 0 0 1,414 1,414
Transfer into use 0 52,040 10,633 20,402 30 -83,105 0
Impairments and write-offs 0 -37,627 -7,105 -17,567 -46 -263 -62,608
Other transfers* 0 546 0 -1,004 0 0 -458
Balance as at 31 December
2023		 49,737 436,637 24,670 255,783 67,606 5,244 839,677
Impairment
Balance as at 1 January 2023 46,019 293,491 10,267 222,667 50,328 267 623,039
Increases 0 0 0 1,126 0 0 1,126
Impairments and write-offs 0 -35,015 -7,105 -17,550 -46 0 -59,716
Other transfers* 0 283 0 -560 0 0 -277
Amortisation 0 40,434 7,626 21,768 1,923 0 71,751
Balance as at 31 December
2023		 46,019 299,193 10,788 227,451 52,205 267 635,923
Carrying amount
Balance as at 1 January 2023 3,718 128,187 10,875 31,285 17,292 12,995 204,352
Balance as at 31 December
2023		 3,718 137,444 13,882 28,332 15,401 4,977 203,754

* Other transfers include transfers between intangible assets and property, plant and equipment, and transfers between groups of assets. Changes in intangible assets of Telekom Slovenije in the period January–March 2024

in EUR thousand Goodwill Concessions
and licences		 Costs of
obtaining
contracts
with
customers		 Computer
software		 Other
intangible
assets		 Intangible
assets under
construction		 Total
Cost
Balance as at 1 January 2024 3,602 293,808 24,670 242,612 19,336 4,954 588,983
Increases 0 0 0 0 0 18,604 18,604
Assets generated at the Company 0 0 0 0 0 420 420
Transfer into use 0 12,903 3,481 1,124 0 -17,508 0
Impairments and write-offs 0 0 0 0 0 -2 -2
Other transfers* 0 0 0 10 0 0 10
Balance as at 31 March 2024 3,602 306,711 28,151 243,746 19,336 6,468 608,015
Impairment
Balance as at 1 January 2024 0 186,751 10,788 212,194 16,871 0 426,604
Other transfers* 0 0 0 4 0 0 4
Amortisation 0 7,857 2,144 4,434 89 0 14,524
Balance as at 31 March 2024 0 194,608 12,932 216,632 16,960 0 441,132
Carrying amount
Balance as at 1 January 2024 3,602 107,057 13,882 30,418 2,465 4,954 162,379
Balance as at 31 March 2024 3,602 112,103 15,219 27,114 2,376 6,468 166,883

* Other transfers include transfers between intangible assets and property, plant and equipment, and transfers between groups of assets.

Changes in intangible assets of Telekom Slovenije in 2023

in EUR thousand Goodwill Concessions
and licences		 Costs of
obtaining
contracts
with
customers		 Computer
software		 Other
intangible
assets		 Intangible
assets under
construction		 Total
Cost
Balance as at 1 January 2023 3,602 282,259 21,142 240,289 19,352 12,723 579,367
Increases 0 0 0 0 0 67,910 67,910
Assets generated at the Company 0 0 0 0 0 1,220 1,220
Transfer into use 0 46,856 10,633 19,242 30 -76,761 0
Impairments and write-offs 0 -35,852 -7,105 -15,915 -46 -138 -59,056
Other transfers* 0 546 0 -1,004 0 0 -458
Balance as at 31 December 2023
Impairment		 3,602 293,809 24,670 242,612 19,336 4,954 588,983
Balance as at 1 January 2023 0 190,312 10,267 206,980 16,549 0 424,108
Increases 0 0 0 1,126 0 0 1,126
Impairments and write-offs 0 -33,240 -7,105 -15,913 -46 0 -56,304
Other transfers* 0 283 0 -562 0 0 -279
Amortisation 0 29,396 7,626 20,563 368 0 57,953
Balance as at 31 December 2023 0 186,751 10,788 212,194 16,871 0 426,604
Carrying amount
Balance as at 1 January 2023 3,602 91,947 10,875 33,309 2,803 12,723 155,259
Balance as at 31 December 2023 3,602 107,058 13,882 30,418 2,465 4,954 162,379
* Other transfers include transfers between intangible assets and property, plant and equipment, and transfers between groups of assets.

Commitments for intangible assets amounted to EUR 7,296 thousand at the Telekom Slovenije Group level and

to EUR 8,427 thousand at Telekom Slovenije as at 31 March 2024.

Property, plant and equipment

Changes in property, plant and equipment of the Telekom Slovenije Group in the period January–March 2024

in EUR thousand Land,
buildings
and cable
ducts		 Cable
network		 Telephone
exchanges		 Equipment
for the
mobile
network		 Other
equipment		 Assets
under
construction		 Other Total
Cost
Balance as at 1 January
2024		 528,488 1,261,294 82,980 311,798 350,596 6,921 247 2,542,324
Difference from the translation
to the presentation currency		 0 0 0 0 -151 0 0 -151
Increases 0 0 0 0 108 10,576 1 10,685
Assets generated in the Group 0 0 0 0 0 4,426 0 4,426
Transfer into use 898 7,683 144 1,429 5,375 -15,529 0 0
Impairments and write-offs -33 -155 -5 -101 -3,570 -7 0 -3,871
Write-offs 0 0 -20 -677 -2,033 0 0 -2,730
Other transfers* 0 -1,328 -1 0 -9 1,334 0 -4
Balance as at 31 March 2024 529,353 1,267,494 83,098 312,449 350,316 7,721 248 2,550,679
Impairment
Balance as at 1 January
2024		 241,884 991,555 77,949 257,340 275,709 11,390 0 1,855,827
Difference from the translation
to the presentation currency		 0 0 0 0 -152 0 0 -152
Increases 0 0 1 0 0 0 0 1
Impairments and write-offs -33 -138 -4 -100 -2,490 0 0 -2,765
Write-offs 0 0 -20 -677 -2,033 0 0 -2,730
Depreciation 3,351 6,003 445 3,176 7,198 0 0 20,173
Other transfers** 0 0 0 0 -1 0 0 -1
Balance as at 31 March 2024 245,202 997,420 78,371 259,739 278,231 11,390 0 1,870,353
Carrying amount
Balance as at 1 January
2024		 286,604 269,739 5,031 54,458 74,887 -4,469 247 686,497
Balance as at 31 March 2024 284,151 270,074 4,727 52,710 72,085 -3,669 248 680,326

* Other transfers include transfers between intangible assets and property, plant and equipment, transfers to investment property and transfers between groups of assets.

Changes in property, plant and equipment of the Telekom Slovenije Group in 2023

in EUR thousand Land,
buildings
and cable
ducts		 Cable
network		 Telephone
exchanges		 Equipment
for the
mobile
network		 Other
equipment		 Assets
under
construction		 Other Total
Cost
Balance as at 1 January 2023 518,088 1,219,276 84,890 300,538 355,401 27,491 61 2,505,745
Difference from the translation to
the presentation currency		 0 -4 0 0 -3 0 0 -7
Increases 0 640 0 0 1,069 79,506 186 81,401
Assets generated in the Group 0 0 0 0 0 16,205 0 16,205
Transfer into use 11,185 46,137 1,290 19,212 33,904 -111,728 0 0
Impairments and write-offs -1,624 -4,594 -3,648 -7,952 -39,784 -4,562 0 -62,164
Other transfers* 839 -161 448 0 9 9 0 1,144
Balance as at 31 December
2023		 528,488 1,261,294 82,980 311,798 350,596 6,921 247 2,542,324
Impairment
Balance as at 1 January 2023 229,415 971,670 79,481 253,252 281,036 11,390 0 1,826,244
Difference from the translation to
the presentation currency		 0 -1 0 0 -1 0 0 -2
Increases 85 0 5 8 71 0 0 169
Impairments and write-offs -798 -2,907 -3,634 -7,831 -35,085 0 0 -50,255
Depreciation 13,509 22,807 1,830 11,911 29,678 0 0 79,735
Other transfers** -327 -14 267 0 10 0 0 -64
Balance as at 31 December
2023		 241,884 991,555 77,949 257,340 275,709 11,390 0 1,855,827
Carrying amount
Balance as at 1 January 2023 288,673 247,606 5,409 47,286 74,365 16,101 61 679,501
Balance as at 31 December
2023		 286,604 269,739 5,031 54,458 74,887 -4,469 247 686,497

* Other transfers include transfers between intangible assets and property, plant and equipment, and transfers between groups of assets.

Changes in property, plant and equipment of Telekom Slovenije in the period January–March 2024

in EUR thousand Land,
buildings
and cable
ducts		 Cable
network		 Telephone
exchanges		 Equipment
for the
mobile
network		 Other
equipment		 Assets
under
construction		 Total
Cost
Balance as at 1 January 2024 503,398 1,158,489 81,552 195,407 331,395 14,311 2,284,552
Increases 0 0 0 0 0 11,302 11,302
Assets generated at the Company 0 0 0 0 0 1,412 1,412
Transfer into use 898 5,159 144 646 4,795 -11,641 1
Impairments and write-offs -33 -25 -25 -726 -5,232 0 -6,041
Other transfers* 0 0 -1 0 -9 0 -10
Balance as at 31 March 2024 504,263 1,163,623 81,670 195,326 330,950 15,383 2,291,215
Impairment
Balance as at 1 January 2024 232,873 938,008 76,714 163,852 265,389 0 1,676,836
Increases 0 0 1 0 0 0 1
Impairments and write-offs -33 -18 -24 -724 -4,169 0 -4,967
Depreciation 3,236 4,695 436 2,033 6,477 0 16,877
Other transfers* 0 0 0 0 -4 0 -4
Balance as at 31 March 2024 236,077 942,684 77,126 165,160 267,695 0 1,688,743
Carrying amount
Balance as at 1 January 2024 270,525 220,481 4,838 31,555 66,006 14,311 607,716
Balance as at 31 March 2024 268,186 220,939 4,544 30,166 63,255 15,383 602,471

* Other transfers include transfers between intangible assets and property, plant and equipment, transfers to investment property and transfers between groups of assets.

Changes in property, plant and equipment of Telekom Slovenije in 2023

in EUR thousand Land,
buildings
and cable
ducts		 Cable
network		 Telephone
exchanges		 Equipment
for the
mobile
network		 Other
equipment		 Assets
under
construction		 Total
Cost
Balance as at 1 January 2023 488,699 1,139,346 83,665 185,472 337,505 20,541 2,255,228
Increases 0 0 0 0 0 67,523 67,523
Assets generated at the Company 0 0 0 0 0 4,713 4,713
Transfer into use 11,179 23,180 1,087 12,831 29,904 -78,181 0
Impairments and write-offs -1,604 -3,876 -3,648 -2,896 -36,023 -286 -48,333
Other transfers* 5,124 -161 448 0 9 1 5,421
Balance as at 31 December 2023 503,398 1,158,489 81,552 195,407 331,395 14,311 2,284,552
Impairment
Balance as at 1 January 2023 220,231 921,561 78,259 159,497 270,748 0 1,650,296
Increases 85 0 5 8 67 0 165
Impairments and write-offs -1,237 -2,318 -3,634 -2,870 -32,262 0 -42,321
Depreciation 12,984 18,779 1,817 7,217 26,827 0 67,624
Other transfers* 810 -14 267 0 9 0 1,072
Balance as at 31 December 2023 232,873 938,008 76,714 163,852 265,389 0 1,676,836
Carrying amount
Balance as at 1 January 2023 268,468 217,785 5,406 25,975 66,757 20,541 604,932
Balance as at 31 December 2023 270,525 220,481 4,838 31,555 66,006 14,311 607,716

* Other transfers include transfers between intangible assets and property, plant and equipment, and transfers between groups of assets.

Commitments for property, plant and equipment amounted to EUR 5,942 thousand at the Telekom Slovenije Group level and to EUR 15,929 thousand at Telekom Slovenije as at 31 March 2024.

Right-of-use assets

Changes in right-of-use assets of the Telekom Slovenije Group in the period January–March 2024

in EUR thousand Base
stations –
easement
and lease		 Technological
premises –
easement and
lease		 Lease of
business
premises
and land		 Vehicles Lease of
lines		 Other Total
Cost
Balance as at 1 January 2024 85,401 9,514 11,970 3,104 23,363 4,345 137,697
Increases – contract amendments 10,989 65 242 108 35 42 11,481
Transfer to use – new contracts 726 20 0 154 0 0 900
Decreases – contract amendments -308 -3 0 0 0 0 -311
Disposals -64 -14 0 0 0 -195 -273
Other transfers 0 0 72 0 0 0 72
Balance as at 31 March 2024 96,744 9,582 12,284 3,366 23,398 4,192 149,566
Impairment
Balance as at 1 January 2024 35,032 4,093 7,587 1,369 8,110 2,301 58,492
Disposals -13 -6 0 0 0 -183 -202
Depreciation 1,903 188 379 168 427 123 3,188
Balance as at 31 March 2024 36,922 4,275 7,966 1,537 8,537 2,241 61,478
Carrying amount
Balance as at 1 January 2024 50,369 5,421 4,383 1,735 15,253 2,044 79,205
Balance as at 31 March 2024 59,822 5,307 4,318 1,829 14,861 1,951 88,088

Changes in right-of-use assets of the Telekom Slovenije Group in 2023

in EUR thousand Base
stations –
easement
and lease		 Technological
premises –
easement and
lease		 Lease of
business
premises
and land		 Vehicles Lease of
lines		 Other Total
Cost
Balance as at 1 January 2023 74,036 8,929 9,719 2,687 22,246 4,224 121,841
Difference from the translation to the
presentation currency		 0 0 0 0 -88 0 -88
Increases – contract amendments 8,781 714 1,721 327 176 98 11,817
Transfer to use – new contracts 3,564 322 872 664 1,119 60 6,601
Decreases – contract amendments -477 -305 -353 -96 -90 0 -1,321
Disposals -503 -146 0 -478 0 -37 -1,164
Other transfers 0 0 11 0 0 0 11
Balance as at 31 December 2023 85,401 9,514 11,970 3,104 23,363 4,345 137,697
Impairment
Balance as at 1 January 2023 27,748 3,337 5,923 1,220 6,365 1,829 46,422
Disposals -197 -82 0 -457 0 -37 -773
Depreciation 7,481 802 1,664 606 1,745 509 12,807
Other transfers 0 36 0 0 0 0 36
Balance as at 31 December 2023 35,032 4,093 7,587 1,369 8,110 2,301 58,492
Carrying amount
Balance as at 1 January 2023 46,288 5,592 3,796 1,467 15,881 2,395 75,419
Balance as at 31 December 2023 50,369 5,421 4,383 1,735 15,253 2,044 79,205

Changes in right-of-use assets of Telekom Slovenije in the period January–March 2024

in EUR thousand Base
stations –
easement
and lease		 Technological
premises –
easement and
lease		 Lease of
business
premises
and land		 Vehicles Lease of
lines		 Other Total
Cost
Balance as at 1 January 2024 66,326 8,376 4,939 2,753 55,949 711 139,054
Increases – contract amendments 10,244 57 90 11 2,536 0 12,938
Transfer to use – new contracts 726 20 0 154 0 0 900
Disposals -64 -14 0 0 0 0 -78
Balance as at 31 March 2024 77,231 8,439 5,029 2,918 58,485 711 152,814
Impairment
Balance as at 1 January 2024 28,029 3,509 2,833 1,200 17,493 633 53,698
Disposals -12 -6 0 -1 0 0 -18
Depreciation 1,619 162 185 148 889 39 3,042
Balance as at 31 March 2024 29,635 3,665 3,019 1,347 18,383 672 56,722
Carrying amount
Balance as at 1 January 2024 38,297 4,867 2,106 1,553 38,456 78 85,356
Balance as at 31 March 2024 47,596 4,774 2,010 1,571 40,102 39 96,092

Changes in right-of-use assets of the Telekom Slovenije Group in 2023

in EUR thousand Base
stations –
easement
and lease		 Technological
premises –
easement and
lease		 Lease of
business
premises
and land		 Vehicles Lease of
lines		 Other Total
Cost
Balance as at 1 January 2023 60,695 7,994 4,054 2,456 44,461 633 120,293
Increases – contract amendments 2,389 185 13 133 10,368 78 13,166
Transfer to use – new contracts 3,564 322 872 599 1,120 0 6,477
Disposals -322 -125 0 -435 0 0 -882
Balance as at 31 December 2023 66,326 8,376 4,939 2,753 55,949 711 139,054
Impairment
Balance as at 1 January 2023 21,882 2,884 2,100 1,063 13,759 478 42,167
Disposals -141 -62 0 -415 0 0 -618
Depreciation 6,288 687 733 552 3,734 155 12,149
Balance as at 31 December 2023 28,029 3,509 2,833 1,200 17,493 633 53,698
Carrying amount
Balance as at 1 January 2023 38,813 5,110 1,954 1,393 30,702 155 78,126
Balance as at 31 December 2023 38,297 4,867 2,106 1,553 38,456 78 85,356

Depreciation in the amount of EUR 3,188 thousand and interest expense on lease liabilities in the amount of EUR 487 thousand were disclosed in the Telekom Slovenije Group's statement of profit and loss in the period January– March 2024. The Group disclosed depreciation in the amount of EUR 3,119 thousand and interest expense in the amount of EUR 557 thousand during the same period last year.

Depreciation in the amount of EUR 3,042 thousand and interest expense on lease liabilities in the amount of EUR 407 thousand were disclosed in Telekom Slovenije's statement of profit and loss in the period January–March 2024. The Company disclosed depreciation in the amount of EUR 3,007 thousand and interest expense in the amount of EUR 511 thousand during the same period last year.

Trade and other receivables

The Group and Company disclose receivables from the sale of merchandise with a maturity exceeding one year in non-current receivables. Corrections to the value of receivables relate to expected credit losses. The maturity structure of receivables is presented in Section 7.3.

Current trade and other receivables were down by EUR 3,060 thousand at the Telekom Slovenije Group level and by EUR 3,808 thousand at Telekom Slovenije relative to the balance at the end of 2023.

Financial liabilities for borrowings received and other financial liabilities

Financial liabilities amounted to EUR 361,497 thousand at the Telekom Slovenije Group level and comprised the following as at 31 March 2024:

  • loans and borrowings in the amount of EUR 340,414 thousand;
  • liabilities for the payment of dividends in the amount of EUR 20,146 thousand;
  • other liabilities in the amount of EUR 24 thousand; and
  • derivatives in the form of interest rate swaps (IRS) in the amount of EUR 913 thousand.

Telekom Slovenije's financial liabilities in the amount of EUR 361,473 thousand relate to the following:

  • loans and borrowings in the amount of EUR 340,414 thousand;
  • the payment of dividends in the amount of EUR 20,146 thousand; and
  • derivatives in the form of interest rate swaps (IRS) in the amount of EUR 913 thousand.

Lease liabilities

The lease liabilities of the Telekom Slovenije Group amounted to EUR 83,574 thousand as at 31 march 2024 and were up by EUR 8,490 thousand relative to the end of 2023.

The lease liabilities of Telekom Slovenije amounted to EUR 92,231 thousand as at 31 March 2024 and were up by EUR 10,452 thousand relative to the end of 2023.

Fair value hierarchy

In view of the accounting policies and breakdown, the fair value of financial and non-financial assets and liabilities is to be determined in certain cases. The Group and the Company apply the following hierarchy in determining fair values:

Level 1: determination of fair value directly by referencing the official published price on an active market; Level 2: other models used to determine fair value based on assumptions and material impact on fair value in line with observed current market transactions with the same instruments either directly or indirectly; and Level 3: other models used to determine fair value based on assumptions and material impact on fair value that are not in line with observed current market transactions with the same instruments and investments.

The table below only includes information regarding classification to the fair value hierarchy for assets and financial liabilities measured at fair value and for which fair value is disclosed.

Book and fair values of the Telekom Slovenije Group's financial instruments as at 31 March 2024

in EUR thousand Book value Fair value Level 1 Level 2 Level 3
Non-current financial assets
Investments in shares and interests listed on
the stock exchange, measured at fair value
through other comprehensive income		 2,246 2,246 2,246 0 0
Investments in shares and interests not listed
on the stock exchange, measured at fair
value through other comprehensive income		 284 284 0 0 284
Loans granted 2 2 0 2 0
Other non-current financial assets 16 16 0 16 0
Operating receivables 18,950 18,950 0 18,950 0
Current financial assets
Loans granted 4 4 0 4 0
Other current financial assets 1,002 1,002 0 1,002 0
Trade and other receivables 167,876 167,876 0 167,876 0
Cash and cash equivalents 35,311 35,311 0 35,311 0
Non-current financial liabilities
Borrowings 306,610 306,610 0 306,610 0
Liabilities for interest rate swaps 913 913 913
Other liabilities 21,651 21,651 0 21,651 0
Current financial liabilities
Borrowings 33,804 33,804 0 33,804 0
Other financial liabilities 20,170 20,170 0 20,170 0
Trade payables 100,205 100,205 0 100,205 0

Book and fair values of the Telekom Slovenije Group's financial instruments as at 31 March 2023

in EUR thousand Book value Fair value Level 1 Level 2 Level 3
Non-current financial assets
Investments in shares and interests listed on
the stock exchange, measured at fair value
through other comprehensive income		 2,170 2,170 2,170 0 0
Investments in shares and interests not listed
on the stock exchange, measured at fair
value through other comprehensive income		 284 284 0 0 284
Loans granted 2 2 0 2 0
Other non-current financial assets 16 16 0 16 0
Operating receivables 19,685 19,685 0 19,685 0
Current financial assets
Loans granted 7 7 0 7 0
Other current financial assets 1,039 1,039 0 1,039 0
Fair value of interest rate swap 0 0 0
Trade and other receivables 171,055 171,055 0 171,055 0
Cash and cash equivalents 55,479 55,479 0 55,479 0
Non-current financial liabilities
Borrowings 306,578 306,578 0 306,578 0
Other liabilities 23,336 23,336 0 23,336 0
Current financial liabilities
Borrowings 30,598 30,598 0 30,598 0
Other financial liabilities 2 2 0 2 0
Trade payables 123,746 123,746 0 123,746 0

Book and fair values of Telekom Slovenije's financial instruments as at 31 March 2024

Book value Fair value Level 1 Level 2 Level 3
2,246 2,246 2,246 0 0
284 284 0 0 284
16,478 16,478 0 16,478 0
18,948 18,948 0 18,948 0
18,192 18,192 0 18,192 0
157,463 157,463 0 157,463 0
25,484 25,484 0 25,484 0
306,610 306,610 0 306,610 0
913 913 913
21,384 21,384 0 21,384 0
33,804 33,804 0 33,804 0
20,146 20,146 20,146
82,305 82,305 0 82,305 0

Book and fair values of Telekom Slovenije's financial instruments as at 31 December 2023

in EUR thousand Book value Fair value Level 1 Level 2 Level 3
Non-current financial assets
Investments in shares and interests listed on
the stock exchange, measured at fair value
through other comprehensive income		 2,170 2,170 2,170 0 0
Investments in shares and interests not listed
on the stock exchange, measured at fair value
through other comprehensive income		 284 284 0 0 284
Loans granted 19,560 19,560 0 19,560 0
Operating receivables 19,684 19,684 0 19,684 0
Current financial assets
Loans granted 17,966 17,966 0 17,966 0
Other current financial assets 36 36 36
Trade and other receivables 161,533 161,533 0 161,533 0
Cash and cash equivalents 44,376 44,376 0 44,376 0
Non-current financial liabilities
Borrowings 306,578 306,578 0 306,578 0
Trade payables 17,316 17,316 0 17,316 0
Current financial liabilities
Borrowings 30,598 30,598 0 30,598 0
Trade payables 108,222 108,222 0 108,222 0

Fair values at levels 2 and 3 of the hierarchy were estimated using the discounted cash flow valuation technique. The Group and the Company did not record any transfers between fair value levels during the reporting period.

Contingent liabilities from lawsuits

On 28 February 2024, the Ljubljana District Court sent Telekom Slovenije a lawsuit filed by T-2, demanding, inter alia, that the court find that Telekom Slovenije does not have the right to request the submission of collateral in accordance with contracts concluded on the basis of sample offers for local access at a fixed location (WLA) and central access at a fixed location (WCA). Telekom Slovenije requires operators to submit collateral to protect its business interests and minimise the risk of the non-payment of obligations under the above-described contracts. In T-2's annual report for 2022, published in November 2023, the auditor identified the existence of significant solvency risk under the point 'Significant uncertainty' in connection with a going concern, and stated that the situation points to material uncertainty about that company's ability to continue as a going concern. Telekom Slovenije implements all measures to mitigate risk in accordance with concluded contracts and valid legislation, and in a consistent and non-discriminatory manner. The Company responded to the aforementioned lawsuit by the prescribed deadline.

Contingent liabilities from guarantees issued

The Group had provided the following guarantees as at 31 March 2024:

  • performance guarantees and warranty bonds in the amount of EUR 11,657 thousand (at the end of 2023: EUR 11,741 thousand); and
  • other guarantees in the amount of EUR 939 thousand (at the end of 2023: EUR 1,020 thousand).

The Company had provided the following guarantees as at 31 March 2024:

  • performance guarantees and warranty bonds in the amount of EUR 8,570 thousand (at the end of 2023: EUR 8,480 thousand); and
  • other guarantees in the amount of EUR 85 thousand (at the end of 2023: EUR 28 thousand).

None of the above stated liabilities meet the conditions for recognition under liabilities in the statement of financial position, and the Group does not expect any material consequences as the result thereof.

Related party transactions

Related parties of the Company include the Republic of Slovenia as the majority shareholder of Telekom Slovenije, other shareholders, members of the Management Board, members of the Supervisory Board and their family members.

Transactions with individuals

Individuals (members of the Management Board and Supervisory Board) held 1,178 shares in Telekom Slovenije as at 31 March 2024, representing a holding of 0.01802%.

No loans to related individuals were approved in the period January–March 2024.

Transactions with owners and their related parties

The majority owner of Telekom Slovenije is the Republic of Slovenia, which together with Slovenski državni holding (SDH), holds a 66.8% participating interest.

Parties related to owners include those companies in which the Republic of Slovenia and SDH together hold a direct participating interest of at least 20%. A list of the aforementioned companies is published on SDH's website (http://www.sdh.si/sl-si/upravljanje-nalozb/seznam-nalozb).

The total value of transactions is presented in the table below.

Telekom Slovenije Group Telekom Slovenije
in EUR thousand 31 March 2024 31 December
2023		 31 March 2024 31 December
2023
Outstanding trade receivables 4,071 4,659 3,666 3,898
Outstanding trade payables 1,768 4,214 1,709 4,055
VAT liabilities 5,591 5,655 5,563 5,490
Income tax payable -346 -889 -72 -442
Liabilities for the payment of dividends 0 0 0 0
in EUR thousand I – III 2024 I – III 2023 I – III 2024 I – III 2023
Operating revenues 5,215 5,961 5,711 4,393
Purchase costs of material and services 4,821 7,805 4,603 7,519
in EUR thousand I – III 2024 I – III 2023 I – III 2024 I – III 2023
VAT payment 15,507 13,539 15,016 13,573
CIT payment 805 982 597 788
Dividends paid 13,533 0 13,533 0

Transactions with Group companies

Telekom Slovenije recorded the following transactions with Group companies:

in EUR thousand 31 March 2024 31 December 2023
Receivables due from companies in the Group
Subsidiaries – gross amount 3,271 3,330
Subsidiaries – impairment -15 -15
Subsidiaries – net amount 3,257 3,316
Borrowings to companies in the Group
Subsidiaries – gross amount 34,664 37,516
Subsidiaries – impairment 0 0
Subsidiaries – net amount 34,663 37,516
Liabilities to Group companies
Subsidiaries 32,697 33,092
in EUR thousand I – III 2024 I – III 2023
Net Group revenue 3,324 3,342
Subsidiaries 3,324 3,342
Purchase of material and services in the Group 5,285 5,007
Subsidiaries 5,285 5,007

Loans to subsidiaries

in EUR thousand 31 March 2024 31 December 2023
GVO, d.o.o. 4,517 4,517
TSmedia, d.o.o. 502 492
IPKO 17,000 20,000
Soline, d.o.o. 1,985 1,789
SIOL, d.o.o., Zagreb 261 313
SIOL, d.o.o., Sarajevo 3,868 3,920
Infratel, d.o.o. 3,724 3,654
SIOL Prishtina LLC 2,807 2,832
Total to subsidiaries 34,664 37,516

All transactions between related parties are executed at market terms.

Events after the reporting date

Events after the reporting date are described in the business section of this report, in Section 6 Significant events after the reporting date.

There were no other events after the reporting date that could have a significant impact on the presented financial statements during the first three months of 2024.

7.3 Financial instruments and risk management

The financial risks to which the Telekom Slovenije Group and Telekom Slovenije are most exposed in their operations are credit risk, solvency risk and interest rate risk. Exposure to individual types of financial risks is assessed regularly. The appropriate measures to manage those risks are implemented based on an assessment of potential negative effects on financial stability.

Credit risk

Credit risk is the risk of financial loss if a subscriber or contracting party fails to settle their obligations in full or fails to settle them at all.

The maximum exposure to credit risk equals the book value of financial assets.

Telekom Slovenije Group Telekom Slovenije
in EUR thousand 31 March 2024 31 December
2023		 31 December
2023
Loans granted 6 9 34,670 37,526
Deposits 1,002 1,039 0 36
Trade and other receivables 186,013 189,808 176,231 180,775
- of which trade receivables 178,134 179,731 168,820 171,583
Cash and cash equivalents 35,311 55,479 25,484 44,376
TOTAL 222,332 246,335 236,385 262,713

The credit risk to which the Group and Telekom Slovenije are exposed derives primarily from default by subscribers (retail) and by operators (wholesale). The highest exposure to credit risk is seen in trade receivables. The latter amounted to EUR 178,134 thousand as at 31 March 2024 at the Group level, a decrease of EUR 1,597 thousand relative to the end of 2023. Telekom Slovenije's receivables make up the majority of the Group's trade and other receivables. Most receivables are unsecured. The Group's receivables are accounted for by a large number of individuals and legal entities. Its largest customers are operators, where turnover generally flows in both directions, which reduces net credit exposure. We assess that there is no significant concentration of credit risk vis-à-vis a particular customer or economic sector.

Procedures aimed at the management of receivables are implemented at Group companies and include the monitoring of business partners' credit ratings, the collateralisation of receivables, the monitoring of high-traffic subscribers and debt collection activities. Debt collection activities are carried out according to a valid reminder timetable and via specialised external service providers.

Maturity analysis of the Telekom Slovenije Group's trade and other receivables as at the reporting date

31 March 2024 31 December 2023
in EUR thousand Gross
amount		 Expected
% of
credit
losses		 Impairment Net
amount		 Gross
amount		 Expected
% of
credit
losses		 Impairment Net amount
Total trade receivables 199,829 -21,695 178,134 200,927 -21,196 179,731
Trade receivables not past due 162,270 0.4% -691 161,579 165,270 0.5% -784 164,486
Past due
- up to and including 30 days 9,948 5% -477 9,471 8,799 5% -412 8,387
- from and including 31 days up to
and including 60 days		 3,454 11% -375 3,079 3,754 11% -415 3,339
- from and including 61 days up to
and including 90 days		 1,843 15% -273 1,570 781 18% -137 644
- from and including 91 days up to
and including 180 days		 2,127 71% -1,509 618 2,493 46% -1,135 1,358
- from and including 181 days up to
and including 365 days		 2,460 84% -2,055 405 2,735 87% -2,371 364
- from and including 366 days up to
two years		 7,227 83% -5,973 1,254 6,642 83% -5,486 1,156
- over two years 7,557 100% -7,560 -3 7,650 100% -7,653 -3
- trade receivables in insolvency
proceedings		 2,943 95% -2,782 161 2,803 100% -2,803 0
Total trade receivables past due 37,559 -21,004 16,555 35,657 -20,412 15,245
Other trade receivables 7,879 0 7,879 10,077 0 10,077
Total trade and other receivables 207,708 -21,695 186,013 211,004 0 -21,196 189,808

Maturity analysis of Telekom Slovenije's trade and other receivables as at the reporting date

31 March 2024 31 December 2023
in EUR thousand Gross
amount		 Expected
% of credit
losses		 Impairment Net
amount		 Gross
amount		 Expected
% of credit
losses		 Impairment Net
amount
Total trade receivables 185,405 -16,585 168,820 187,747 -16,164 171,583
Trade receivables not past due 154,596 0.5% -759 153,837 158,789 0.5% -787 158,002
Past due
- up to and including 30 days 9,465 5% -471 8,994 8,126 5% -405 7,721
- from and including 31 days up to and
including 60 days		 3,226 11% -355 2,871 3,509 11% -386 3,123
- from and including 61 days up to and
including 90 days		 1,676 15% -251 1,425 598 15% -90 508
- from and including 91 days up to and
including 180 days		 1,680 80% -1,344 336 1,628 45% -733 895
- from and including 181 days up to and
including 365 days		 1,630 90% -1,468 162 2,239 90% -2,025 214
- from and including 366 days up to two
years		 3,316 64% -2,121 1,195 3,108 64% -1,988 1,120
- over two years 7,544 100% -7,544 0 7,457 100% -7,457 0
- trade receivables in insolvency
proceedings		 2,272 100% -2,272 0 2,293 100% -2,293 0
Total trade receivables past due 30,809 -15,826 14,983 28,958 -15,377 13,581
Other trade receivables 7,411 0 7,411 9,192 0 9,192
Total trade and other receivables 192,816 -16,585 176,231 196,939 -16,164 180,775

The Telekom Slovenije Group and Telekom Slovenije also monitor credit risk in other areas of operations. Credit risk is low in terms of maintaining funds on business account and in the form of deposits due to a stable banking system and the high liquidity of banks. As a result, expected credit losses have not been recorded for cash and cash equivalents and deposits.

The Group is also exposed to credit risk associated with receivables from loans to employees, but that risk is assessed as low because they are repaid when employees' wages are paid. Expected credit losses have thus not been recorded for those loans.

Telekom Slovenije is exposed to credit risk arising from receivables from loans granted to subsidiaries. The Company regularly monitors and supervises the operations of its subsidiaries and their ability to repay loans. Expected credit losses have thus not been recorded for those loans.

Maturity of loans granted

Telekom Slovenije
in EUR thousand 31 March
2024		 31 December
2023		 31 March
2024		 31 December
2023
Loans granted due for payment 0 0 0 0
Loans granted not due for payment 6 9 34,670 37,526
- in less than 3 months 2 3 4,935 1,487
- between 3 and 12 months 2 4 13,257 16,479
- between 1 and 2 years 2 2 8,253 11,321
- between 2 and 5 years 0 0 4,338 4,350
- over 5 years 0 0 3,888 3,890
Total 6 9 34,670 37,526

Solvency risk

The Telekom Slovenije Group regularly settles its obligations. The Group's solvency is the result of the active planning of cash flows, ensuring the appropriate maturities and the diversification of financial debt, the financing of Group companies, and the optimisation of working capital and cash. Liquidity risk at the Group level is managed by the controlling company, which plans and monitors subsidiaries' financing needs, and provides them the sources they require.

The majority of the Group's financial liabilities relate to three long-term syndicated loans in the total amount of EUR 240.1 million with associated interest, a long-term loan in the amount of EUR 100.8 million from the European Investment Bank with associated interest, and lease liabilities in the amount of EUR 83.7 million at the Group level and EUR 92.2 million at the Company level.

Telekom Slovenije did not have any loan instalments fall due for payment during the first quarter of 2024.

The Group and Telekom Slovenije have raised short-term funding from banks to ensure sufficient liquidity. The liquidity reserve in the form of revolving loans and an overdraft facility on the business account in the total amount of EUR 55 million was not drawn down as at 31 March 2024.

Maturity of the Telekom Slovenije Group's financial liabilities as at 31 March 2024 and 31 December 2023 based on contractual non-discounted payments

Not past due
in EUR thousand Up to 3
months		 Between 3
and 12
months		 Between 1
and 2
years		 Between 2
and 5
years		 Over 5
years		 Total Book value of
liabilities
31 March 2024
Loans and
borrowings		 25,314 21,883 46,411 180,515 121,062 395,185 340,908
Other financial
liabilities		 22 20,148 0 0 913 21,083 21,083
Trade and other
payables		 65,237 34,968 13,628 7,754 269 121,856 121,856
Financial liabilities
from leases		 4,938 7,723 13,258 26,482 52,155 104,556 83,691
Total 95,511 84,722 73,297 214,751 174,399 642,680 567,538
31 December 2023
Loans and
borrowings		 887 43,849 45,556 181,391 122,681 394,364 337,700
Other financial
liabilities		 0 2 0 0 0 2 2
Trade and other
payables		 93,881 29,866 11,839 5,476 6,021 147,083 147,083
Financial liabilities
from leases		 5,246 6,279 11,831 23,703 46,193 93,252 75,084
Total 100,014 79,996 69,226 210,570 174,895 634,701 559,869

Maturity of Telekom Slovenije's financial liabilities as at 31 March 2024 and 31 December 2023 based on contractual non-discounted payments

Not past due
in EUR thousand Up to 3
months		 Between 3
and 12
months		 Between 1
and 2
years		 Between 2
and 5
years		 Over 5
years		 Total Book value of
liabilities
31 March 2024
Loans and
borrowings		 25,314 21,883 46,411 180,515 121,062 395,185 340,908
Other financial
liabilities		 0 20,146 0 0 913 21,059 21,059
Trade and other
payables		 62,255 20,051 13,506 7,754 125 103,691 103,691
Financial liabilities
from leases		 5,459 9,061 11,285 28,005 58,006 111,816 92,232
Total 93,028 71,141 71,202 216,274 180,106 631,751 557,890
31 December 2023
Loans and
borrowings		 887 43,849 45,556 181,391 122,681 394,364 337,700
Trade and other
payables		 91,945 16,278 11,716 5,476 125 125,540 125,540
Financial liabilities
from leases		 5,864 7,658 9,986 25,275 48,422 97,205 81,779
Total 98,696 67,785 67,258 212,142 171,228 617,109 545,019

Interest rate risk

Interest-rate risk is the risk of the negative impact of a change in market interest rates on the Group's operations. The exposure of the Group and Company to interest rate risk as at 31 March 2024 derives from a potential change in the EURIBOR reference interest rate. We hedge exposure to interest rate risk through:

– the raising of loans with a fixed interest rate; and

– the conclusion interest rate swaps (IRS).

The Company concluded an interest rate swap (IRS) in February 2024 for the purpose of mitigating interest rate risk. It thus raised the proportion of loans bearing a fixed or hedged interest rate to 51.9%. Other liabilities derive from long-term loans bearing variable interest rates.

Exposure to interest rate risk

Telekom Slovenije Group Telekom Slovenije
in EUR thousand 31 March 2024 31 December 2023 31 March 2024 31 December 2023
Financial instruments with variable
interest rate
Financial liabilities 162,143 237,143 162,143 237,143
Net financial liabilities 162,143 237,143 162,143 237,143

The table does not include non-interest-bearing financial instruments and instruments bearing a fixed or hedged interest rate, as they are not exposed to interest rate risk.

Sensitivity analysis

The sensitivity analysis illustrates the impact of a change in the EURIBOR reference interest rate on the profit before tax of the Group and Company on the reporting date.

Interest rate risk table

January
to March
2024		 Interest rate increase/decrease Effect on profit before tax in EUR thousand
Telekom Slovenije Group Telekom Slovenije, d.d.
EURO +100 bp -1,621* -1,621*
EURO -100 bp 1,621* 1,621*
2023 Interest rate increase/decrease Effect on profit before tax in EUR thousand
Telekom Slovenije Group Telekom Slovenije, d.d.
EURO +100 bp -2,371* -2,371*
EURO -100 bp 2,371* 2,371*

* The calculation applies to the previous 12 months.

EURIBOR interest rate value

EURIBOR Value as at 31 March 2024 Value as at 31 December 2023 Change
(in percentage points)
3-month 3.892 3.909 -0.017
6-month 3.851 3.861 -0.01

Capital management

The objectives of the Group's and Company's capital management are to ensure capital adequacy, and thus long-term liquidity and financial stability, which ensures the best possible credit rating for the financing of the Group's and Company's operations and further development, and consequently the maximisation of shareholder value.

The Group and Company monitor changes in equity using the debt-to-equity and equity-to-total assets ratios. The Group's net financial debt includes loans received and other financial liabilities, less current financial assets and cash and cash equivalents. When adopting decisions relating to capital management, the Group also follows the financial covenants under loan agreements.

Debt-to-equity and equity-to-total assets ratios of the Telekom Slovenije Group and Telekom Slovenije as at 31 March 2024 and 31 December 2023

Telekom Slovenije Group Telekom Slovenije
in EUR thousand 31 March 2024 31 December 2023 31 March 2024 31 December 2023
Borrowings and other financial liabilities 445,071 412,262 453,704 418,955
Current assets, and cash and cash equivalents -36,317 -56,525 -43,676 -62,378
Net financial liabilities 408,754 355,737 410,028 356,577
Equity 629,742 658,638 597,188 630,189
Total assets 1,310,342 1,317,866 1,244,089 1,250,315
Debt-to-equity ratio 64.9% 54.0% 68.7% 56.6%
Equity-to-total-assets ratio 48.1% 50.0% 48.0% 50.4%

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