2 March 2017

NLMK and SAP create a Co-Innovation Lab

NLMK Group, an international steelmaking company with operations in Russia, Europe and the USA, has signed a Memorandum of Understanding with SAP, global leader in the corporate software market. The document was signed by Oleg Bagrin, NLMK Group CEO, and Bernd Leukert, member of the Executive Board of SAP SE, Products & Innovation.

The partnership intents to create a Co-Innovation Lab, the first of its kind in the Russian steel sector. The laboratory will focus on research, ideation and prototyping of innovative solutions that can then be developed and deployed in the metals & mining industry.

To achieve this, the companies will bring together their respective expertise and share their knowledge, manpower and research to enable prototyping, testing and deployment. NLMK Group’s specialists will work with SAP developers and researchers to develop new solutions in process analysis, user interface, Internet of Things, machine learning, predictive analytics and production planning systems.

Oleg Bagrin, NLMK CEO, said:

“With this agreement, we are reaching a new stage in the long-standing partnership between NLMK and SAP. SAP technology combined with NLMK infrastructure will enable development of solutions that will bring steel making technology and business processes to the next level.”

Bernd Leukert, member of the Executive Board of SAP SE, Products & Innovation, noted:

“With our joint development efforts with NLMK Group we leverage global and Russian experience in the technology industry. This will allow us not only to create effective solutions that can solve essential challenges of metallurgical enterprises, but also to give them an opportunity to increase competitiveness in the international market with a truly new approach to IT, the development of specialized technologies and an industry-specific digital steel platform.”

About SAP

As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device – SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable more than 345,000 business and public sector customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit www.sap.com.

About NLMK Group

NLMK Group is the largest steelmaker in Russia and one of the most efficient in the world. NLMK Group’s steel products are used in various industries, from construction and machine building to the manufacturing of power-generation equipment and offshore windmills.

NLMK operates production facilities in Russia, Europe and the United States. The Company’s steel production capacity exceeds 17 million tonnes per year.

NLMK has the most competitive cash cost among global manufacturers and one of the highest profitability levels in the industry. In 9M 2016, the Company generated $5.7 billion in revenue and $1.4 billion in EBITDA. As of 30 September 2016, Net debt/EBITDA stood at 0.39х. The company has an investment grade credit rating from S&P and Fitch.

NLMK’s ordinary shares with a 16% free-float are traded on the Moscow Stock Exchange (ticker "NLMK") and its global depositary shares are traded on the London Stock Exchange (ticker "NLMK:LI"). For more details on NLMK shareholder capital, please follow the link.

In 2016 NLMK Group received Steel Industry Leadership Award from S&P Global Platts, a global analytical agency.