Phosagro 2022 Integrated Report

DRIVING SUSTAINABLE

soil fertility

PhosAgro Group has stood strong boasting unprecedented flexibility: even under these circumstances, we were able to ramp up supplies, primarily to markets in friendly countries.

Victor Cherepov,

Chairman of the Board of Directors of PJSC PhosAgro

The top priority for our team was to ensure seamless operations at all of our production sites, deliver fertilizers on time, and take care of our employees and their families.

Mikhail Rybnikov,

Chief Executive Officer of PJSC PhosAgro

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FOSTERING

collaboration

MEETING

the growing demand

ACHIEVING

shared goals

MAINTAINING

best practices

STRENGTHENING

our partnerships

FOSTERING

collaboration

FOSTERING

collaboration

As one of the world’s leading mineral fertilizer producers, PhosAgro has a special responsibility for ensuring food security. But we cannot achieve this goal alone. With this in mind and in full compliance with the UN Sustainable Development Goals, we place close and trusting collaboration with a wide range of partners at the heart of our business philosophy.

In December 2021, the International Fertilizer Association confirmed PhosAgro’s status as an Industry Stewardship Champion for its responsible and sustainable approach to production.
This award goes to companies committed to continuous improvement, transparency and best HSE practices.

PhosAgro is the first Russian company chosen by the UN Food and Agriculture Organization (FAO) to run a global soil protection initiative. In 2022, PhosAgro and FAO launched the Russian Soil Laboratory Network (RUSOLAN).
over 800labs
in the global network

MEETING

the growing demand

MEETING

the growing demand

In November 2022, the world’s population exceeded eight billion people and may hit the ten billion mark by 2050. In this context, the use of fertilizers is one of the most promising ways to avert the global threat of hunger, and constructive cooperation between international organisations, governments, fertilizer producers and consumers is critical to maintaining resilient and reliable global fertilizer production and supply chains.

Despite normal temporary fluctuations, the long-term growth in global demand for mineral fertilizers has been steady. In Russia and the CIS, consumption grew by 6% in 2022. Building on PhosAgro’s contribution to meeting this growing demand, we further increased production in 2022.
4.6 %
y-o-y growth in PhosAgro’s mineral fertilizer production

Boosting supplies to the rapidly grow- ing markets of Latin America is one of our key priorities. In 2022, PhosAgro Group products were certified in Brazil and earned the Environmental Quality Label from the Brazilian Association of Technical Standards.

ACHIEVING

shared goals

ACHIEVING

shared goals

PhosAgro is a successful and thriving business. But what’s more, we are at the heart of an extensive network of diverse economic, environmental and social ties and partnerships. This is why we can celebrate our achievements together with our shareholders, contractors, employees, local communities and consumers of our products in Russia and all over the world.

PhosAgro is a major taxpayer and employer in its regions of operation. Fully aware of our responsibility for the sustainable social and economic development of local communities, we have more than tripled our support for social and charitable projects in the reporting year.
203 %
y-o-y increase in social investments

Efficient use of resources, including water, is an integral part of our strategy. In 2022, PhosAgro joined the UN Global Compact’s CEO Water Mandate, a global commitment platform for corporate water stewardship.
-1 %
reduction in water withdrawal per tonne of products

MAINTAINING

best practices

MAINTAINING

best practices

We believe it is important to continue to be guided by best practices in this essential area and to make sure all our internal standards and procedures are aligned with both Russian statutory requirements and the most reputable national and global guidelines.

Last year, PhosAgro saw major reshuffles in its Board of Directors composition. Maintaining a meaningful share of independent directors on the Board remains a key priority for us.
4 independent directors currently
on PhosAgro’s Board of Directors

We engage in ongoing and consistent efforts in the area of anti-corruption. We have the Anti-Corruption Policy and Code of Ethics in place, run anti-corruption control of our procurement activities, and work to prevent conflict of interest and train our employees as needed.
А1
PhosAgro was awarded the highest ranking in the Russian Business Anti- Corruption Rating by the Russian Union of Industrialists and Entrepreneurs

STRENGTHENING

our partnerships

STRENGTHENING

our partnerships

We appreciate the partnership that we have with our securities holders and are committed to open, full and timely communication with them while also taking into account any feedback they may have.

In 2022, PhosAgro paid dividends of
RUB.1,563
per ordinary registered uncertified share

PhosAgro’s shares are among the most liquid Russian securities and in September 2022 were included in the Blue Chip Index of the Moscow Exchange. An indicator of the market for Russia’s most liquid and well performing shares, the index is based on prices of transactions for shares of the 15 leading issuers.

The Company’s Role
in the Industry

Share of PhosAgro Group’s supplies in the key sales markets (share of compound and complex fertilizers in the region’s total imports), 2022 estimates, %

No. 1

World’s producer of high-quality phosphate rock (P₂O₅ content at 39% and above) globally

Top 5

global producer of DAP/MAP by capacity

No. 1

in terms of urea and mineral fertilizer capacity concentrated at one production facility (Apatit, Cherepovets) in Europe

Our mission and values

As one of the world’s leading mineral fertilizer producers, PhosAgro assumes a special responsibility for global food security. We offer high-quality, eco-efficient fertilizers, supply them and train farmers how to apply them in the most sustainable manner.

Caring for Earth fertility for prosperous lives

OUR

mission

OUR

vision

Global presence

Organic growth and development

Healthy lifestyles and occupational health and safety

Eco-efficiency

Social responsibility

Innovation and digital transformation

OUR

values

Leadership

Teamwork

Expertise

Reliability

Improvement and innovation

Safety

Ethics

Business model

use

Market and technology insights
Management, production and sales competencies
Energy and water
Mineral resources and materials
Partner, supplier and customer relationships
Public and private infrastructure
Finances

DEVELOPMENT

MINERAL RESOURCES

PRODUCTION

LOGISTICS

SALES

APPLICATION

secure

Sustainable soil fertility
Basis for making safe food products
New research and technological innovations
Well-paid jobs and social benefits
Educational initiatives and upskilling opportunities
Large-scale purchases of local products and services
Consistent tax payments and local community development
Contribution to international programmes addressing global challenges
Sustainably high returns on investment

Strategy

Strategy to 2025

In 2022, PhosAgro continued to make good progress towards the goals of its Strategy to 2025 approved by the Company’s Board of Directors in 2019. Despite the changing external environment, we consider most objectives of the Strategy to 2025 to be relevant and achievable and continue to implement respective projects and programmes. Our record-high production of 11.1 mt of mineral fertilizers and other chemical products in the reporting year is an important milestone along this journey.

Key highlights

FINANCIAL

OPERATIONAL

SUSTAINABLE DEVELOPMENT

FINANCIAL

Revenue, RUB bln

Adjusted net profit, RUB bln

Dividend payments, RUB bln

OPERATIONAL

Output by key product, kt

Sales by key product, kt.

SUSTAINABLE DEVELOPMENT

Pollutant emissions, kg per tonne of finished and semi-finished products

GHG emissions (Scope 1), kg of СO2-eq. per tonne of finished and semi-finished products

Waste water discharge into surface water bodies, m³ per tonne of products and semi-finished products

Share of recycled and decontaminated hazard class 1–4 waste, %

Employee satisfaction and loyalty, %

Average annual training hours per employee, hour

LTIFR (own staff), per 1 mln man-hours

Workplace fatalities (corporate staff)