Integrated Report of Grupa Azoty 2022

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While developing our stakeholder map, we identified stakeholder groups that have a significant impact on, or are in turn impacted by, the Grupa Azoty Group. We actively engage in discussions about topics relevant to specific stakeholders and to our Group, the form and frequency of interaction being tailored to the needs of those interested. Responsibility for maintaining this dialogue lies with the heads of relevant functional areas of the Group companies.

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Key stakeholder groups:

Shareholders – when making decisions, the Group always adheres to the criterion of economic viability, thus addressing the primary expectations of its shareholders as the goal is to earn profits, secure a return on capital, and drive value.
Capital market institutions and associations – the terms and conditions of financial products offered to the Grupa Azoty Group depend on how its financial condition and growth opportunities are assessed. Moreover, the majority of banks in Poland follow global trends, necessitating the integration of sustainability criteria into potential borrower assessments.
Employees, local communities – employees represent the key capital of Grupa Azoty S.A. as the company’s long-term success depends on their performance, ingenuity, and expertise. The Group recognises the role its companies play in the local communities and responsibility for its immediate environment. We initiate actions in response to local needs and contribute to the development of the regions where our companies are located by supporting culture, education and sports.
Suppliers – without fostering good relations with and ensuring proper choice of its trading partners, the Grupa Azoty Group would not be able to manufacture high-quality products or build a competitive advantage.
Customers – the significance of our customers cannot be overstated, as they enable the Group to sell its products, provide jobs for its workforce, and multiply the capital invested by its shareholders.
Public administration – public authorities have a law-making function, affecting the Group’s macro environment. Local authorities, which govern the regions where our plants are located and make key decisions for their development, have influence on the local communities and immediate environment of the Group’s plants. For this reason, the Grupa Azoty Group aims to support selected initiatives of the local governments, thereby contributing to development of the respective regions.

Shareholders, investors, brokerage houses, analysts, rating agencies
What stakeholders want to know:	How we build relationships:	How often we engage:
dividend, share price impact of COVID-19 on the Group’s business the Group’s growth strategy, investment and acquisition plans status of key investment projects with special focus on Polimery Police market challenges and opportunities, e.g. with regard to digitalisation and innovation risk management, with particular focus on ESG, climate and operational risks environmental management performance and plans procedures to be followed for share transfer transactions analysis of financial results short-term prospects for business segments effect of acquisitions on the Grupa Azoty Group’s performance, synergies achieved activities planned under the European Green Deal framework procedures to be followed for share transfer transactions	General Meetings of Shareholders earnings conferences one-on-one meetings newsletter investor conferences regular meetings in the form of site visits special occasion meetings Wall Street conference organised by the Polish Association of Retail Investors investor chats	quarterly financial reporting quarterly earnings conferences ongoing communication and publication of current reports General Meetings of Shareholders convened at least once a year dialogue and meetings on an as-needed basis

Capital market institutions and associations
What stakeholders want to know:	How we build relationships:	How often we engage:
approach to implementing new regulatory requirements related to the TCFD package risk management, with particular focus on ESG and climate risks inquiries made in connection with disclosure requirements opinion polling questions asked when regulatory changes are proposed impact of COVID-19 on the Group’s business corporate governance opinion polling questions asked when regulatory changes are planned	contact links on the website	ongoing communication in line with disclosure requirements quarterly earnings conferences participation in conferences, meetings and training

Capital market media
What stakeholders want to know:	How we build relationships:	How often we engage:
requests for the Group’s comments on current events or its position on specific media reports or economic news the Group’s impact on economic and social development impact of COVID-19 on the Group’s business situation on the natural gas and CO₂ emission allowances markets Grupa Azoty Group strategy activities planned under the European Green Deal framework, investment and acquisition plans	cooperation with investor websites press conferences email correspondence and telephone contact participation in meetings held by the Group	quarterly earnings conferences ongoing communication

Local communities
What stakeholders want to know:	How we build relationships:	How often we engage:
expectations as to continued social engagement activities questions concerning new forms of activity as part of partnership with farmers/rural communities questions about participation in conferences and events consultations in the event of regulatory changes	meetings with local community representatives (artists, teachers, athletes, businessmen and others) site meetings, participation in local events integrated report participation of the Group employees in projects for the benefit of local communities as part of employee volunteering initiatives	dialogue session site meetings on an as-needed basis outdoor events

Suppliers
What stakeholders want to know:	How we build relationships:	How often we engage:
consolidation changes at the company and their consequences for the company’s trading partners	direct communication with contact persons designated by the Group companies website industry meetings, trade fairs integrated report	as needed – on an ongoing basis and periodically

Customers
What stakeholders want to know:	How we build relationships:	How often we engage:
loyalty schemes and alignment of the Group’s products and services with expectations of a broad group of customers new channels and methods of communication about the Group’s products implementation of new innovative products and technologies	website and social media Grupa Azoty Group image surveys integrated report	ongoing activities, opinion/satisfaction surveys once a year

Industry organisations
What stakeholders want to know:	How we build relationships:	How often we engage:
environmental impact of the Group environmental initiatives implemented at the Group Grupa Azoty Group strategy joint project opportunities	participation in industry events participation of Group representatives in the work and initiatives of industry organisations promotion of good practices implemented at the Group	as needed – on an ongoing basis and periodically

Environmental organisations
What stakeholders want to know:	How we build relationships:	How often we engage:
environmental impact of the Group environmental initiatives implemented at the Group Grupa Azoty Group strategy with special focus on the Green Azoty project	website and social media email communication	as needed – on an ongoing basis and periodically

Local and central government administration, regulator
What stakeholders want to know:	How we build relationships:	How often we engage:
approach to implementing new regulatory requirements consultations in the event of regulatory changes	contact links on the website	as needed – on an ongoing basis and periodically

Research institutions
What stakeholders want to know:	How we build relationships:	How often we engage:
research and development initiatives carried out at the Group joint R&D project opportunities	participation in events website integrated report	as needed – on an ongoing basis and periodically

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Agricultural producers and farmers represent a special group of our stakeholders. We recognise that, when selecting a particular fertilizer, farmers take into account the product’s quality, but also access to comprehensive expert advice, local training opportunities, the manufacturer’s visits at farms, its R&D work on new fertilizer products and application technologies, and assistance in soil testing. We support sustainable precision agriculture through educational initiatives targeted at farmers and agricultural advisers. We have the relevant expertise and share it via the press, television and internet.

Our collaboration with farmers goes back many decades. We understand their needs and help them deal with both current and future challenges. We closely monitor the agricultural landscape of Poland for any emerging trends, including a decreasing number of small and medium-sized farms (1-20 ha) and a rising share of large agro producers (>50 ha). We acknowledge the impact of these changes on the fertilizer market. Large farms, with much more substantial financial and logistic resources, have the capacity to make one-off purchases of fertilizers in volumes sufficient for the whole year at the most favourable prices.

What we know about Polish farmers and agriculture¹ :

50 years – average age of the Polish farmer,
63% of farmers use smartphones,
62% of farmers use laptops,
77% have Internet access,
19% of farmers use tablets,
28% are satisfied with their financial condition.

¹ The Grupa Azoty Group’s survey prepared by Kantar TNS.

Best practice

Grounded in Knowledge

We have run the Grounded in Knowledge nationwide programme for many years now, offering free-of-charge soil pH testing and soil nutrient analysis. The project is aimed at promoting optimum fertilizer application technologies matching the crop type and nutrient content of soil, as well as fostering the development of new fertilization technologies and fertilizer products that cater to the needs of Polish farmers. Our field consultants provide fertilizer advice to promote sustainable nutrient management. Rational application of nitrogen and compound fertilizers helps prevent nutrient pollution, while increasing soil pH reduces soil degradation.

In 2022, the number of farms participating in the programme was 794, while the area on which soil testing was performed totalled 23 thousand ha. In partnership with Regional Chemical and Agricultural Stations, we tested approximately 9.5 thousand soil samples. The results indicate that major challenges for farmers include the need to address soil acidification (34% of the soils were categorised as very acidic or acidic) and ensure an adequate content of accessible forms of phosphorus (37% of the soils had phosphorus deficiencies).

Launched in 2015, the Grounded in Knowledge initiative has already reached almost 7 thousand farms and tested nearly 80 thousand soil samples from more than 195 thousand ha.

The nawozy.eu platform is a comprehensive source of knowledge on fertilizers and fertilizer application. It provides farmers and food producers with quick access to all necessary information on the properties, composition and optimal application of fertilizers offered by the Grupa Azoty Group. In 2022, we published 166 expert tips, 125 articles, 728 news items, 249 pieces of local news and 89 video materials. The website has registered more than 542 thousand visits and over 1.32 million views. The average visit duration was 4 minutes and 22 seconds. In 2023, we intend to launch a revamped version of the website, developed in line with the latest technological trends. The platform is complemented by the nawozy.eu channel on YouTube, where in 2022 we published 91 films, viewed 2.95 million times.
Our Agrolider magazine is a popular source of expert knowledge on agriculture and fertilization. In 2022, the magazine (published in 66 thousand copies) was among the four most popular ones in Poland, having attracted 18% of the farming readership.

We are a knowledge partner in Agrorewolucje, an online entertainment and education show featuring influencers that has gained popularity across the industry. The third season of this series started in 2022. The nine episodes so far have shown the transformation of three unprofitable farms into profit making undertakings, attributed in part to the application of the Grupa Azoty Group fertilizer products.
From February to April 2022, a fifth edition of the We Care for the Polish Land lottery was run to stimulate customer purchasing activity and increase customer loyalty among farmers. In 2022, the lottery received over 42.7 thousand entries, 30% more than in 2021. The participants won 213 prizes, including 209 prepaid cards worth PLN 1,000 each, 3 monthly prizes worth PLN 10 thousand each, and a John Deere 5075E tractor.

BEST PRACTICE

Grupa Azoty Police runs the polifoska.pl website providing advice for farmers and comprehensive information on the Group’s products. In 2022, the website was visited by 307,167 unique users.

The Group also runs the NONSTOP Fertilizers YouTube channel, dedicated to fertilizers and fertilizer application, but also presenting the latest local news and fun facts from the agricultural world. In 2022, films published on NONSTOP Fertilizers were viewed 2,950,999 times.

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The key scientific partner of the Grupa Azoty Group is the Łukasiewicz Research Network – New Chemical Syntheses Institute. We collaborate with Network experts to develop new products and technologies. Smart fertilizers, tailored to the specific needs of various crops as well as the nutrient content in soils, deserve a special mention.

We engage in discussions and share our experience with other chemical producers during the Polish Chemical Industry Congress, a leading industry event, of which Grupa Azoty is a long-standing strategic partner.