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June 2, 2021

MMK’s digitalisation strategy to bring RUB 6.3 billion NPV* by 2025

Pavel Shilyaev, MMK CEO, announced this figure at an extended conference in Magnitogorsk entitled "MMK on its way to Digitalisation".

The event was held in person and remotely. Among the conference’s in-person participants were the Company's top management, heads of structural divisions and representatives of the customer divisions of digital developments. All MMK employees with an interest in the development of digital technologies at the Company were able to join the event via Zoom. In addition, an online broadcast of the conference was available on the Company’s YouTube channel. About 700 MMK employees took part in the conference. All conference participants had the opportunity to ask questions to the event’s key speakers.

According to Pavel Shilyaev, MMK's digitalisation strategy is practical in nature and was formed on the basis of a comprehensive assessment of business needs and potential effects from its implementation. Currently, there are about 200 digital initiatives with a total budget of RUB 5 billion in the corporate portfolio with an implementation horizon of about five years. The average payback period for these initiatives is three years. About 80% of the projects are revenue-generating initiatives and their implementation will bring the Company RUB 6.3 billion of NPV over 5 years and add 4.3% to EBITDA. A further 10% of projects are supportive, while the remaining 10% are research projects.

Vadim Feoktistov, MMK's Chief Information Technology Officer and Director of MMK-Informservice, gave an overview of MMK's digitalisation strategy at the conference. According to him, the portfolio of projects and initiatives implemented as part of the digitalisation strategy corresponds to global technological trends and covers almost all business processes and functional areas. In particular, 48 projects touch upon issues of data analytics development, 22 cover digital twin applications, 51 cover the industrial internet of things and 44 cover the digitalisation of employee interaction. In addition, a number of projects respond to such technological trends as the development of cloud services, the use of robots and unmanned tools, and increasing the mobility of technology.

The implementation of the Company's digitalisation strategy is managed by a dedicated team of experts. A Digitalisation Committee, which includes MMK's senior management, has been established and is successfully operating, as well as competence centres: a project office, centres for mathematical modelling, robotics, software development, the Internet of Things, etc. Deloitte Consulting is a key partner for MMK in developing approaches to managing digitalisation and implementing digital solutions.

The conference participants' reports reflected the progress and implementation of new digital projects. Among them are personnel control in hazardous areas, development of the corporate marketplace, application of the industrial internet of things technology for diagnosing the condition of equipment in the long product shop, digital passports for the warehouse in the sinter charge preparation shop, and the product quality control system by technological routes. Artem Petrov, MMK's Chief Digital Transformation Officer, spoke about the main areas of development for further company-wide digitalisation.

Closing the conference, Pavel Shilyaev, MMK CEO, noted: "In 2020, despite all the difficulties associated with the pandemic, we continued to work towards digital development, we did not stand still, we developed infrastructure, built up tools and competencies, created the necessary elements of the organisational structure and started the implementation of new projects. Further development of digitalisation depends on all of us, our common involvement and our interest in using digital tools to improve the efficiency of internal and external processes at MMK."

* NPV (Net Present Value) is an indicator which demonstrates the effectiveness of an investment in a given project by the ratio of the amount of cash flow over the lifetime of the project reduced to its present value. 




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