PJSC Magnit: Magnit Plans to Save about 600 Million Rubles Annually thanks to Centralization of Financial Function

MAGNIT PJSC (MGNT) 
Magnit Plans to Save about 600 Million Rubles Annually thanks to 
Centralization of Financial Function 
 
28-Jul-2020 / 11:30 MSK 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
Press-Release | Krasnodar | July 28, 2020 
 
            Magnit Plans to Save about 600 Million Rubles Annually thanks to 
                                        Centralization of Financial Function 
 
Krasnodar, July 28, 2020: Magnit PJSC (MOEX and LSE: MGNT; the Company), one 
      of Russia's leading retailers, successfully completed migration of its 
financial function from all 65 regions of its presence to the Shared Service 
       Center (SSC). Now, Magnit's SSC will keep centralized accounts of all 
         transactions and perform payroll calculations for over 300 thousand 
  employees from all of branches, districts, distribution centers, and motor 
                                                      transport enterprises. 
 
            Centralization of the financial function (accounting and payroll 
  calculations) in the SSC will enable Magnit to save around 27% of its cost 
         before migration, or around 470 million rubles, annually. Thanks to 
 implementation of an electronic document flow system and robotic automation 
    of business processes in the SSC, the target level of labor savings will 
                                               reach 40% by the end of 2020. 
 
    The migration of the financial and HR functions to the SSC took a little 
              over a year-a record-breaking time, considering the fact that, 
 internationally, this process usually takes 2 to 3 years on average. Such a 
     quick transition was possible due to rapid deployment of the electronic 
   document flow system and digital archives in all of the Magnit's offices, 
                                                       branches, and stores. 
 
  The Company is actively working on implementing robotic automation for SSC 
   business processes-it already has in place the respective framework (RPA) 
         and has established an RPA Competencies Center. To expedite routine 
 procedures, Magnit has launched two pilot robots. These virtual assistants, 
 built using the Blue Prism platform, prepare salary certificates and 2-NDFL 
    income tax statements and monitor the movement of the Company's property 
between its responsible business units. By the end of the year, Magnit plans 
     to launch a total of 11 robots to optimize, among other things, revenue 
    reconciliation, shipping manifest processing, cash collection, and other 
                                                                 procedures. 
 
         "The Shared Service Center enables us to standardize, automate, and 
      significantly improve efficiency of key business processes, which were 
   previously handled by regional teams. Thanks to the centralization of the 
   financial function and payroll calculations, we've achieved continuity in 
terms of transfer of requests from the client to the responsible party, made 
     document processing as transparent and fast as possible, and integrated 
 modern IT solutions aimed at increasing the level of service. Next, we plan 
  to take over all financial functions for Magnit's subsidiaries. We'll also 
            continue to look for possibilities to increase the efficiency of 
      centralization of auxiliary functions,"-said Sergey Stafeyev, Magnit's 
                                                                 Deputy CFO. 
 
                                    For further information, please contact: 
 
Dmitry Kovalenko 
 
Director for Investor Relations 
 
Email: [e-mail] 
 
Office: [phone] 
 
Dina Chistyak 
 
Director for Investor Relations 
 
Email: [e-mail] 
 
Office: [phone] x 15101 
 
Media Inquiries 
 
Media Relations Department 
 
Email: [e-mail] 
 
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, 2020, Magnit operated 38 distribution centres 
  and 20,894 stores (14,581 convenience, 472 supermarkets and 5,841 drogerie 
       stores) in 3,710 cities and towns throughout 7 federal regions of the 
                                                         Russian Federation. 
 
 In accordance with the unaudited IFRS 16 management accounts results for 1H 
    2020, Magnit had revenues of RUB 763.4 billion and an EBITDA of RUB 86.9 
     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 forward-looking statements that may or may not prove 
  accurate. For example, statements regarding expected sales growth rate and 
   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.:   78331 
EQS News ID:    1103635 
 
End of Announcement EQS News Service 
 
 

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July 28, 2020 04:30 ET (08:30 GMT)