MAGNIT PJSC (MGNT)
Magnit has started to introduce SAP into commercial operation

19-Oct-2021 / 11:20 MSK
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.


 

Magnit HAS STARTED TO INTRODUCE SAP INTO COMMERCIAL OPERATION

 

Krasnodar, Russia (October 19, 2021): Magnit PJSC (MOEX and LSE: MGNT; the Company, Magnit), one of Russia's leading retailers, announced the start of the key stage of implementation of its SAP-based digital transformation. In October, the Company commenced operation of several SAP solutions as well as a new store back office system developed in-house.

The new solutions are implemented within the so-called "pilot scope" for now. After the pilot stage, they will be rolled out across the entire chain, provided that they demonstrate stable performance. The roll-out will be split into several stages, which will enable the Company to minimize its operational risks and make the massive transition to SAP as easy and simple as possible. Pilot launches will continue till the end of 2022, with the roll-out planned for completion in 2025. The Company expects that the impact from the Program's implementation may amount to billions rubles over a number of years. The Company plans to begin assessing the actual impacts in 2023, when half of its stores will use the solutions.

At the present time three pilot business units and two Magnit Cosmetic stores in Krasnodar use the new solutions. As of today, the Company has launched SAP S/4HANA (end-to-end inventory and financial accounting solution, a digital core combining all corporate business processes), SAP CAR (state-of-the-art transactional data storage), SAP ATT (solution for ensuring operations' compliance with product traceability laws), SAP Process Orchestration (tools for rapid business processes automation, integration and optimization).

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Jan Dunning

Magnit's President and CEO

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"We continue focusing on business performance despite significantly ramping up our expansion efforts this year. Our current work on optimizing various business processes and building a better customer experience is directly linked to modernization of our IT landscape. By transitioning key business processes, including store back office operations to SAP solutions Magnit will be able to significantly reduce expenses and achieve maximum possible centralization and transparency of its business processes."

Starting this October, SAP is used by employees from the Shared Services Center (SSC), Accounting Department, Budgeting & Controlling Directorate, and other units of the Company. The new system is used to keep records for the purposes of corporate accounting, tax management, treasury management, and IFRS-compliant accounting, as well as real estate, procurement of goods and services, sale of non-commercial assets, inventory accounting.

For the two pilot stores, employees from the SSC and the Department for Control & Audit started performing accounting and controlling procedures for product distribution and retail sales using SAP S/4HANA and SAP CAR. Now, logistics managers, specialists from the Commercial Procurement and Category Management Support Directorate, and IT staff can all use SAP to monitor consistency and accuracy of product distribution, master data transfer, and the solution's integration with other systems. Today, over 450 users are already working in SAP.

The two pilot Magnit Cosmetic stores in Krasnodar also employ a new in-house back office system, which is aligned with SAP's document flow structure and objects and has built-in integration mechanisms. A modern store back office system will provide a number of advantages to store employees by optimizing and simplifying data entry, automating routine manual operations, creating a transparent system for keeping records, and enabling the store to view data in sync with the central accounting system. In addition to that, the transition to the new tool will facilitate seamless integration and establishment of a unified structure of back office documents and SAP solutions, provide a clear and simple user interface, and increase the speed and quality of development. The new back office system is being developed using the Agile methodology.

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Svetlana Medvedeva

Head of ERP Transformation Program at Magnit

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"The launch of SAP solutions and our new store back office system represents an important step in developing Magnit's business. Our Company continues to grow, and we have to support that growth using advanced technology. All participants of the ERP Transformation Program (project teams, colleagues from various business units, IT specialists) have put in a colossal amount of effort to implement these state-of-the-art systems in our pilot stores. This stage is just the first step on the journey outlined in our Transformation Program, which is the largest digital initiative in the history of Russian retail."

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For further information, please contact:

 

Dina Chistyak

Head of Investor Relations 
dina_chistyak@magnit.ru

Office: +7 (861) 210 9810 x 15101

 

Media Inquiries                    Twitter

press@magnit.ru                    @MagnitIR

 

 

 

 

 

Note to editors

 

Public Joint Stock Company "Magnit" is one of Russia's leading retailers. Founded in 1994, the company is headquartered in the southern Russian city of Krasnodar. As of June 30, 2021, Magnit operated 39 distribution centers and 22,344 stores (15,348 convenience, 469 supermarkets and 6,527 drogerie stores) in 3,802 cities and towns throughout 7 federal regions of the Russian Federation.

In accordance with the reviewed IFRS 16 results for 1H 2021, Magnit had revenues of RUB 822.2 billion and an EBITDA of RUB 94.4 billion. Magnit's local shares are traded on the Moscow Exchange (MOEX: MGNT) and its GDRs on the London Stock Exchange (LSE: MGNT) and it has a credit rating from Standard & Poor's of BB.

 

 

Forward-looking statements

 

This document contains or may contain forward-looking statements that may or may not prove accurate. For example, statements regarding expected sales growth rate and/or store openings are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements. Any forward-looking statement is based on information available to Magnit as of the date of the statement. All written or oral forward-looking statements attributable to Magnit are qualified by this caution. Magnit does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances.

 



ISIN: US55953Q2021
Category Code: MSCU
TIDM: MGNT
LEI Code: 2534009KKPTVL99W2Y12
OAM Categories: 3.1. Additional regulated information required to be disclosed under the laws of a Member State
Sequence No.: 124633
EQS News ID: 1241703

 
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