ACTIONKING - Phoenix Group · 2019-08-01 · The PHOENIX group is mindful of the impact of its business activities on people and the environ-ment. It is responsible for around 37,000

Sustainability Report 2018/19

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SUSTAINABILITY REPORT 2018/19

CONTENTS

LEADERSHIP AND RESPONSIBILITY

3 LetterfromtheExecutiveBoard 4 ExecutiveBoardofthePHOENIXgroup 5 Sustainableleadershipofthecompany 5 Companyprofileand

economicdevelopment 6 Sustainabilitymanagement

OUR AREAS OF RESPONSIBILITY

12 Valuecreationforcustomers andthecompany

12 Ensuringfutureviability13 Innovationmanagementsystemestablished13 Risk-basedqualitymanagement14 Focusingoncustomersatisfaction14 Innovativelogisticssolutions15 Reducingcompliancerisks16 Sustainabilityinthesupplychain

17 Environmentalprotection17 Conscioususeofresources18 Handlinghazardousand

non-hazardouswaste19 Energyefficiencyandemissions21 Moreeco-friendlytransport

22 Supportingemployees22 Employment23 Professionaldevelopment

ateverycareerstage24 Improvingdialogueandcommunication24 Occupationalhealthandsafety

26 Commitmenttosociety27 Forafuturewithagoodqualityoflife27 PHOENIXPharmaceuticsScienceAward

FURTHER INFORMATION

28 Reportprofile29 Listofkeytopics30 Factsandfigures34 GRIContentIndex38 Glossary39 Imprint

Inourday-to-daybusiness,wetake caretointegratesustainabilityintoour processes. Our Sustainability Report entitled»TAKINGACTION«highlightswhatwehaveachievedinthelastyear.

LETTERFROMTHEEXECUTIVEBOARD

Dearreaders,

AsoneofEurope’s leadinghealthcareprovidersandafamilybusinessthattakesa long-termapproach,wewanttomakeanimportantcontributiontowardsbuildingahealthyfuturewithagoodqualityoflife.Whetherdigitalisation,climatechange,environmentalpollution,ortheshortageofskilledpersonnel,wearemembersofsocietyandwanttoplayapositiveroleinshapingtheseissuesofkeyimportanceforthefuture.Itisforthisreasonthatweaimforgrowththatcreatesvalueforourcompanyandsocietyinequalmeasure–acrossEuropeandallnationalborders.

Asthetitleofthisyear’sSustainabilityReportindicates,wehavebeen»TAKINGACTION«infiscalyear2018/19tosupporttheongoingdevelopmentofoursustainabilitystrategyandoursustainabil-itymanagementsystem.Wehavemadeanumberofimportantachievements.

Aspartofthematerialityanalysisthatwasrepeatedin2018,weusedanonlinequestionnairetosurveyourstakeholdersineightcountries.Morethan3,000peopledefinedthesustainabilitytopicswithinourfourareasofresponsibilityandassessedourimpact.Forthefirsttime,theExecutiveBoardadoptedasharedunderstandingof sustainability for thePHOENIXgroup that clearlyexpressesourresponsibleattitude.Inthisdocument,wedeclareourcommitmenttotheglobalSustainableDevelopmentGoalssetbytheUnitedNations–andwearecurrentlyworkingontheircompany-wideimplementation.

Inthelastyear,onthebasisofthestakeholdersurvey,webegantoworkonnewsustainabilitygoalsthatwilldetermineourcourseforthenextthreeyears.Withregardtotheenvironment,wewould like to improve our carbon footprint while also lowering costs by optimising route planning.Inaddition,wewillintroducealternativestoplasticbagsinourownpharmacies.Eachofouraround150 millioncustomercontactseachyearoffersanopportunitytoencourageachangeinthinkingandreducetheconsumptionofplastic.

»As one of Europe’s leading healthcare providers and a family business that takes a long-term approach, we want to make an important contribution towards building a healthy future with a good quality of life.«

Furthermore,wewouldliketopromotehealthyworkingconditionsandacultureofrespectfulcoop-erationforourapproximately37,000employees.Alongsideincreasingemployeecommitment,wehavealsosetanewtargettodecreasetheillnessrate.Wedidnotfullysucceedinachievingtheprevioustargetbeforetheendofthe2018/19reportingyear.

Actioninthecurrentfiscalyear–2019/20–iscentredondevelopingmeasuresthatwillallowustoachieveourobjectives.Wealsoaimtogivespecialattentiontointernalcommunication,sothatouremployeesareawarethattheirday-to-dayeffortsformthebasisofoursustainabledevelopment.Afterall,everysingleoneofuscancontributetosustainabilityatPHOENIX–evenwithwhatmayappeartobesmallsteps.

Wearegladthatyouaretakingthetimetosupportusonourpathtowardssustainablegrowth.

OliverWindholz HelmutFischer FrankGroße-Natrop StefanHerfeldChief Memberofthe Memberofthe MemberoftheExecutiveOfficer ExecutiveBoard ExecutiveBoard ExecutiveBoard Finance OperationsandLogistics Retail

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Letter from the Executive Board

FRANK GROSSE-NATROP MemberoftheExecutiveBoardOperationsandLogistics

STEFAN HERFELD MemberoftheExecutiveBoard Retail

OLIVER WINDHOLZ ChiefExecutiveOfficer

HELMUT FISCHER MemberoftheExecutiveBoard Finance

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Executive Board of the PHOENIX group

ThePHOENIXgroupismindfuloftheimpactofitsbusinessactivitiesonpeopleandtheenviron-ment. It is responsible foraround37,000employees, fordealingwithpharmaceuticalwaste andtransport-relatedCO2emissions,andforthecommunitiesinwhichthecompanyoperates. Inviewofthisresponsibility,thePHOENIXgrouptakesgreatcaretointegratesustainabilityinto its processes.

COMPANY PROFILE AND ECONOMIC DEVELOPMENT

ThePHOENIXgroup,headquarteredinMannheim,Germany,isaleadinghealthcareproviderandoneofthelargestfamilybusinessesbothinGermanyandinEurope.Itscoreinterestsarepharma-ceuticalwholesaleandpharmacyretail.Subsidiariesalsooperateinrelatedbusinessareas,andtheiractivitiescomplementthisofferingwithservicesforthepharmaceuticalindustry,ITsystemsforpharmacies,andlogisticssolutions.Witharound37,000employees(previousyear:around34,000),thecompanymakesavitalcontributiontocomprehensivehealthcare.

ThePHOENIXgroupisactivein27countriesinEurope(previousyear:26).Initscorebusiness,thecompanyoperates163distributioncentres(previousyear:154)andmorethan2,500pharmacies(previousyear:2,237).Thismakesitsgeographicportfoliohighlydiversified.Asthegroup’slargestmarket,Germanymakesuparoundone-thirdofgrouprevenueasinthepreviousyear,amountingtoapproximately€25.8 billioninfiscalyear2018/19(previousyear:€24.9 billion).Thiscorrespondstoariseofalmost4 percent(previousyear:1.9 percent).Atthesametime,totaloperatingperfor-manceincreasedbyalmost5 percent(previousyear:4.3 percent)to€33.0 billion(previousyear:€31.5 billion),andearningsbeforeinterest,taxes,depreciation,andamortisation(EBITDA)rosebyaround1 percentto€471.1 million(previousyear:€468.0 million).

SUSTAINABLE LEADERSHIP OF THE COMPANY

PHOENIXGROUP:LINKBETWEENMANUFACTURERANDPATIENT

PharmaceuticalIndustry

WholesaleRetail

Hospitals

Doctors

Patient HealthcareLogistics

25.8 €billionIN GROUP REVENUE EMPLOYEES

37,140

DISTRIBUTION CENTRES IN

16327C O U N T R I E S

PHARMACIES IN

2,50014 C O U N T R I E S

MORE THAN

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Inpharmaceuticalwholesale, thePHOENIXgroup isnumberone in13countries. Itoperates itspharmacy retailbusinessmainly in theUnitedKingdom,Norway, theNetherlands,Serbia, Romania,theBalticstates,theCzechRepublic,Hungary,Switzerland,SlovakiaandMontenegro.Thegroup’sstrongpharmacybrands includeBENU,Apotek1 (Norway),RowlandsPharmacy(UnitedKingdom)andHelpNet(Romania).Italsoofferscompaniesinthepharmaceuticalindustryitsservicesalongthepharmaceuticalsupplychain.

CorporatemissionstatementcommunicatescorevaluesThecorporatemissionstatementofthePHOENIXgroupplaysanoverarchingroleinourdaily activities. ItmakesthePHOENIXcorporatephilosophyaswellas itsvision,mission,strategy, andvaluestransparent.Asafamilybusiness,wemakeourowndecisionsandpursuealong-termstrategy.Thisincludesstrivingforthehighestpossiblequalityinourdailywork,whilealsomaintainingahighlevelofcostawareness.Thisapproachdemonstratesthatwetakeourresponsibilitiesveryseriously.Ourvisionofbeingthebestintegratedhealthcareprovider–whereverweare–canonlybeachievedwithmotivatedandloyalemployees.Theirday-to-dayactivitiescontributetotheoverallsuccessofthePHOENIXgroup.Thisallowsustofulfilourresponsibilities,bothnowandinthefuture.

Vision: To be the best integrated healthcare provider – wherever we are.

Mission: To deliver health. Across Europe.

Values: To be reliable, proactive, respectful.

SUSTAINABILITY MANAGEMENT

ThevaryingconditionsintheEuropeanmarketsrequireustohandlemanysustainabilitytopicsatalocallevel.Nevertheless,thePHOENIXgrouphasacommonviewofwhatresponsiblebusinessandsustainablecompanymanagementmeanforus.Inordertoclearlyexpressthisgroup-wideattitude,weadoptedasharedunderstandingofsustainabilityinthereportingyear.

ThePHOENIXgroup’sunderstandingofsustainabilityThePHOENIXgroupiscommittedtosupportingtheworldwideSustainableDevelopmentGoalssetbytheUnitedNations.Thisappliestoalldivisionsofthecompanyandtoeachofthecountriesinwhichweoperate.AsoneofEurope’sleadinghealthcareprovidersandafamilybusinessthattakesalong-termapproach,wewanttomakeanimportantcontributiontowardsbuildingahealthyfuturewithagoodqualityoflife.

»As a family business, we take a long-term approach and act responsibly. For a healthy future with a good quality of life.«

Ouractiontosupportsustainabilitystemsfromourcorporatemissionandourvalues,throughwhichweareactivelycommittedtobeingthebestintegratedhealthcareprovider.Weconfrontthemajorchallengesoftheday,whetherdigitalisationorclimatechange.Weaimforgrowththatcreatesvalue–bothforourcompanyandforsociety.Inparticular,wecan–andwewantto–contributetothehealthandwell-beingofthepeopleofEuropebydevelopingsustainablelogisticsconcepts,usingresourcessparingly,providinggood,safeworkingconditions,andsupportingouremployees.

Inourday-to-daybusiness,wetakecaretointegratesustainabilityintoourprocessesalongtheentiresupplychain.Ouractionsareguidedbyhighstandardsofcompliance,quality,safety,andtransparency.WeshoulderourresponsibilityacrossallnationalbordersinEurope.Weconsistentlypursueourgroup-widetargetsandadaptourimplementationapproachtomeettheneedsofourcustomersandofthepeoplewholivelocally.

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EstablishingsustainabilityattheheartofourorganisationandprocessesWeaimtointegratesustainabilityconsiderationsintoallrelevantprocesseswithinthePHOENIXgroup.Thisalsoappliestotheactivitiesofalloursubsidiaries,newlyacquiredcompanies,andourrelationshipswithourstakeholders.Asaresult,wemakeitclearthatcorporatesuccessandsocialresponsibilitygohandinhand.

TheChiefExecutiveOfficerofthePHOENIXgroupassumestheoverallresponsibilityforsustainability.ThePHOENIXgroup’ssustainabilityteamisanchoredwithintheGroupCommunicationsdepartment.ItregularlyworkstogetherwiththeCEOofthePHOENIXgroupand,inexchangewithspecialistdepartments,actsasthecentralpointofcontactforallsustainabilityissuesrelatingtothePHOENIXgroup.

Intermsofsustainability,wehaveagroup-widemanagementstructure.GiventhevaryingconditionsintheEuropeanmarkets,weremaintruetoourprincipleofhandlingmanysustainabilitytopicsatalocallevel.Non-financialdataiscollectedbylocalsustainabilityrepresentativesinthesubsidiaries–anactivitythatiscoordinatedbythecentralsustainabilityteam.Wecontinuetotakeacentralisedapproachtogroup-wideprojectssuchastheemployeesurvey,reducingthecostofpharmaceuticalwaste,andtalentmanagementforthewholeofEurope.Inordertopromoteknowledgesharingacrossthecompany,theformationofnetworks,andtheexchangeofbestpractices,thesustainabilityrepresentativesmeetregularlytodiscussalloverarchingissues.

SUSTAINABILITY ORGANISATION

GROUP LEVEL COUNTRY LEVEL

CountryManagement

Localsustainabilityteams

ChiefExecutiveOfficer ofthePHOENIXgroup

GroupCommunications/Sustainabilityteam

GroupControlling/Specialiseddepartments

>>

>>>>

> >

> >

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ReadjustmentinrelationtokeysustainabilitytopicsGRI102-42,GRI102-43,GRI102-44,GRI102-46,GRI102-47,GRI102-49

WeregularlyperformamaterialityanalysisinlinewiththerequirementsoftheGlobalReportingInitiative(GRI)–mostrecentlyinspring2018.Anextensive,onlinestakeholdersurveywasusedtodefinethesustainabilitytopicswithinthePHOENIXgroup’sfourareasofresponsibilityandassessourimpactonthesetopicareas.

WehaveassignedcorrespondingGRIStandardstothetopicsidentifiedassignificantandonwhichthePHOENIXgroupreports.Ourareasofresponsibilityhaveagainthisyearprovidedthebasicstructureofourreportintheformofchapters:

° Valuecreationforcustomersandthecompany Theessentialissuesforourownvaluecreationareadherencetoqualitystandards,comprehen-

siveavailabilityofdrugs,secureprocessingofcustomerdata,cooperationtocombatcounterfeitpharmaceuticals,productresponsibility,customersatisfaction,andourresponsibilityalongthesupplychain.

° Environmentalprotection AtPHOENIX,weareabletomakeaconsiderablecontributiontowardsenvironmentalprotectionby

continuouslyreducingpharmaceuticalwaste,loweringourconsumptionofresources,ensuringourbuildingsareenergyefficient,andmakingsureourtransportlogisticsareascleanaspossible.Weaccuratelyrecordthegreenhousegas(GHG)emissions Glossary p. 38 thatweproduceandworktosteadilyminimisethembyoptimisingrouteplanning.

° Supportingemployees Itisouraimtocreateanattractiveandsecureworkenvironmentforallouremployees.Thisisthe

onlywaywecanretaintalentedpeopleinourcompanyinthelongterm.Tothisend,weinvestintheirfurthertraininganddevelopmentintheformofEurope-wideprogrammes.Ouractivitiesinthisareaalsofocusonensuringfairworkingconditions,aremunerationmodelbasedonequalpay,diversityandequalopportunitieswithinthecompany,andworkplacehealthandsafety.

° Commitmenttosociety Wehavebroughttogetheroursocialcommitmentmeasuresunderthemotto“Togetherfora

healthyfutureforchildren”.Ouractionisprimarilyfocusedonthehealthofchildrenandsupport-ingpharmaceuticalresearch.Allgroup-wideactivitiesarealwayscarriedoutincompliancewiththerelevantlawsandstandards.Westrictlyadheretoouranti-corruptionguidelinesandtheapplicableguidanceondonationandsponsorshiprequests.

MATERIALTOPICSFORPHOENIXCSRMANAGEMENTACCORDINGTO AREAS OF RESPONSIBILITY

Economic,ecological,andsocialimpactsofthePHOENIXgroup: low medium high

SocietyEmployees

EnvironmentValuecreation

Diversityandequalopportunities

Transportandlogistics

Emissions

Socialcommitment

Collaborationtocombatcounterfeitpharmaceuticals

Supplychain

Economicstability

Compliancewith lawsandstandards

Energy

Waste

Consumptionofresources

Adherencetoqualitystandards

CustomersatisfactionSecureprocessingofcustomerdata

Long-termtalentretentionFairworkingconditions

Remunerationmodels basedonequalpay

StaffdevelopmentOccupationalhealth

andsafety

Comprehensiveavailability ofpharmaceuticals

Productresponsibility

Increasingimportanceofstakeholders

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NewtargetsleadthewayforwardWewanttobeabletomeasurethecontributionthatweasacompanymaketowardscreatingvalue,protectingtheenvironment,supportingouremployees,andbenefittingsociety.Onlyinthiswaycanweincreasethepositiveimpactofourbusinessactivitiesanddecreasethenegative.ThatiswhythePHOENIXgrouphasdefinedcompany-widetargetswithinthefourareasofresponsibilityandusesconcretemeasurestoimplementthem.Ourgroup-widesustainabilitymanagementsystemnotonlydocumentsthedegreetowhichthetargetsarebeingmetbutalsospecifiesthecountry-specificobjectivesforwhichthesubsidiariesareresponsible.

Weachievedthefollowingtargetsin2018(comparedwith2014/15):

° Reductioninthecostsofpharmaceuticalwastebymorethan10 percent

° Introductionofgroup-widedataprotectionguidelinesAcrossEurope,around70 percentofemployeeswithacomputerworkstationreceivedonlinetrain-ingindataprotection,particularlyintheEuropeanGeneralDataProtectionRegulation.Weaimtorunthisonlinetrainingforallemployeesduringfiscalyear2019/20.Weweredisappointedtonotethatwehavenotfullyachievedtomeetourtargetofreducingtheillnessratebyonepercentagepoint.Inthepastyear,therefore,wedirectedevengreaterintensityandstrategicfocusintoour sustainabilityprogrammeanddefinednewtargetsandassociatedmeasuresforsustainability managementatthePHOENIXgroup.

COMPANY-WIDESUSTAINABILITYGOALS

Areas of responsibility Commitment Sub-goals

VALUE CREATIONIntegrationof sustainability into oursupplychain

Inclusionofsustainability-related questionsinthecustomer satisfactionsurvey

ENVIRONMENTReductionof negativeimpactson theenvironment

Introductionofsustainablecarrierbags toourpharmacies

Optimisationofrouteplanningandreduction relativetobusinessgrowth,takingaccountofenvironmentallyfriendlyconsiderations

EMPLOYEES

Promotionofhealthy workingconditions andacultureof respectfulcooperation

Reductionoftheillnessrateby8percentfromthree-yearaverageby2021/22

Increaseinemployeecommitment of8percentby2020

SOCIETY Togetherforahealthy futureforchildren

Developmentofacorporatecitizenship strategyby2020;concentrationofour socialcommitmentactivities

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Planninganimpact-orientedapproachwiththeSDGsThePHOENIXgroupiscommittedtosupportingthe17SustainableDevelopmentGoals(SDGs)setbytheUnitedNations.OurfirstSDGworkshop,designedtoboostcompany-wideimplementation,washeldin2018.TheaimoftheinteractiveformatwastoraiseawarenessoftheSDGs,deepenknowledge,andcategoriseourexistingsustainabilitymeasuresinthecontextoftheSustainableDevelopmentGoals.Participantsintheworkshopalsodiscussedcreativeandinnovativeideas,aswellasopportunitiesfordevelopment.Thetwo-dayeventtookplaceinBelgrade,Serbia.Itwasattendedbyatotalof16employeesfrom15countries.

Aspartofthestakeholdersurveyin2018,wealsoaskedourstakeholderstoassignourmeasurestothedifferentdevelopmentgoals.Accordingtotheresponses,themostsignificantimpactsmadebythePHOENIXgroupprimarilyrelatetoSDG3(GoodHealthandWell-Being),SDG8(DecentWorkandEconomicGrowth),andSDG12(ResponsibleProductionandConsumption).In2018,wealsodevelopedaconceptforanin-depthanalysisoftheimpactoftheprioritisedSDGs.

PartnershipanddialoguewithourstakeholdersGRI102-40GRI102-42,GRI102-43

Theinterestsofourstakeholdersareespeciallyimportantwhenitcomestoestablishingthedirectionofoursustainabilitystrategy.Wevalueourcooperativedialoguewiththemandidentifytheirexpecta-tionsbymeansofregularstakeholdersurveys.In2018,weconductedaEurope-widesurvey,whichwassupportedbymorethan3,000participantsfromamongouremployees,suppliers,customers,subcontractors,andotherbusinesspartners.

Aspartofthisexercise,weaskedourinternalandexternalstakeholderstoevaluatethesustainabilityperformanceofthePHOENIXgroupandidentifyotherpotentialsustainabilitytopics.Weaimtomakefurtherimprovementswithregardtosustainabilityandtoensurethatweareimplementingeffectivemeasuresinthekeyareasinwhichactionisrequired.

Comingtogethertoachieveourgoals:attheSDGworkshopinBelgrade,PHOENIXsustainability managerfrom15countriesfocusedtheirattentionontheSustainableDevelopmentGoalssetbytheUnitedNationsandtheirsignificanceforPHOENIX.TheirfindingsrevealedthatPHOENIXismakingitsgreatestcontributiontoSDGs3,8,and12.Our sustainabilitymanagementfocusesonthesegoals.

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STAKEHOLDER MANAGEMENT

EMPLOYEES AND MANAGEMENT

PHARMACIES AND

HOSPITALS

PHARMACEUTICAL COMPANIES

BUSINESS PARTNERS AND

SUBCONTRACTORS

INVOLVEMENT OF EMPLOYEES AND MANAGEMENT

° Regularmeetingswithemployeerepresentatives

° Communicationandinformationonkeyissuesviainternalsocialplatform/intranet,employeeevents,notices

° Initiativesandprojectsindistributioncentresandpharmacies

TOPICS

° Promotinghealthandsafetyintheworkplace

° Compliance

° Secureprocessingofcustomerdata

INVOLVEMENT OF PHARMACIES AND HOSPITALS

° Regularcommunicationwithcustomerrepresentatives

° Cooperationwithassociations° Customersatisfactionsurveys

TOPICS

° Productresponsibility° Compliance

° Secureprocessingofcustomerdata

INVOLVEMENT OF BUSINESS PARTNERS AND SUBCONTRACTORS

° Regularmeetings

° JointinitiativesandprojectsTOPICS

° Productresponsibility° Secureprocessingofcustomerdata

INVOLVEMENT OF THE PHARMACEUTICAL INDUSTRY

° Regularcommunicationwithcustomerrepresentatives

° Cooperationwithassociations° Managementmeetingsaboutbusinessdevelopment

° Customersatisfactionsurvey

TOPICS

° Ethicsandintegrity° Productresponsibility° Secureprocessingof

customerdata

GRI102-40,GRI102-43,GRI102-44

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VALUE CREATION FOR CUSTOMERS AND THE COMPANYEnsuringthequalityofourproductsalongtheentiresupplychainisourhighestpriority.Inaddition,responsibleand legal conduct withinthePHOENIXgroupandinourrelationswithcustomersandsuppliersformsanimportantcornerstoneofourcorporatecultureandiscrucialtothesuccessofourcompany.Themarkets inwhich thePHOENIXgroupoperatesare inastateofupheaval. Thechanges,especiallythoseresultingfromregulatoryinterventions,arereflectedinincreasedpressureonmarginsandcosts.Atthesametime,thereisahighlevelofcompetitioninthemarket.Companiesinthepharmaceuticalsectorarefacingenormouschallengesassociatedwithdigitali-sation–challengesthatweareaddressingbydevelopingnewbusinessactivities. Inorderto identifyupcomingrequirementsatanearlystage,itisimportantforustomaintainregularcommu-nicationandmeasurethesatisfactionofourcustomers.

ENSURING FUTURE VIABILITY

WiththeJUMPinitiativethatwelaunchedin2018,wearepursuingtheaimoffurtheroptimisingouroperationalprocessesandtherebymakingasignificantcontributiontoensuringthefuture viabilityofourlogisticsnetwork.TheSAFEfocustopicisaimedatreducinglossesduetobreakageandexceededexpirydatesthroughoutthegroup.OurestablishedWarehouseExcellenceinitiative Glossary p. 38suppliesimportantdatawithregardtoidentifyingthecausesofdamageandimple-

mentingideasforimprovementthatareaimedatavoidingrisks.Wehavealsoincorporatedthetopicintoourprocurementstrategy.Againstthebackdropofincreasingdigitalisation,wehavebeenimplementingprojectsfortheelectronictransmissionofbatchtrackingthroughoutEuropefor severalyearsnow.

InGermany,welaunched“Fitforthefuture”and“Fit4Two”intheUnitedKingdom:twooptimisationprogrammesthataimtopositionourorganisationeffectivelyforthefuture.Afurthermilestoneismarkedbythedevelopmentofourpharmacyportfolio,particularlyinrelationtooursuccessfulretailbrandBENU.WealsolaunchedourfirstEurope-widecategorybrand,LIVSANE,in2017,whichisnowavailablein14countries.Inthecourseofreorganisingourcategorybrands,wefoundedPXGPharmaGmbHasasubsidiaryofthePHOENIXgroupduringthereportingyearinordertorestruc-turethesupplychainintheareaofprivatelabelsandtobetterbundlevolumesinthefuture.Furtherdetailedinformationcanbefoundinour 2018/19 annual report.ThePHOENIXgroup’spharmacynetwork,withmorethan13,500independentpharmaciesinthecompany’scooperationandpartnerprogrammes, isthelargestof itskindinEurope.ThePHOENIXPharmacyPartnershipactsas theEurope-wideumbrellaforthePHOENIXgroup’s13pharmacycooperationprogrammesin16countries.

AcquisitionsandinvestmentsAnimportantelementofourstrategyistogroworganicallyandthroughtargetedacquisitionsandcontinuallyexpandourmarketposition.Infiscalyear2018/19,weacquiredtwocompaniesinRomania:thepharmaceuticalwholesalerFarmeximS.A.andthenationwidepharmacychainHelpNetFarmaS.A.Asaresult,thePHOENIXgrouphastappedintoanewandattractivemarket.

01

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https://www.phoenixgroup.eu/fileadmin/media/company/pdfs-en/phoenixgroup-code-of-conduct.pdf

https://www.phoenixgroup.eu/fileadmin/media/investor-relations/ar/2019/PHOENIX_group_Annual_Report_2018-19_web.pdf

Inthepastyear,thePHOENIXgrouphasinvestedapproximatelyhalfofitsearningsintheexpansionandmodernisationofdistributioncentres,automation,logisticsservicesforthepharmaceuticalindustryaswellas in themodernisationof itspharmacies.Wecontinued theONEproject in Denmarkandplantoopenthestate-of-the-artwarehouseanddistributioncentreinthesecondhalfof2019.Inthefirstquarterof2018/19,wecommissionedahighlyautomatedwarehousesysteminTampere,Finland.WearealsoinvestingintheconstructionofanewwholesalesiteinPrague,CzechRepublic.Youcanfindmoredetailedinformationinour 2018/19 annual report.

INNOVATION MANAGEMENT SYSTEM ESTABLISHED

Ourstrategicgoalistodevelopanevenmorecomprehensiverangeofpioneeringproductsandservices forourcustomers.At thesametime,our innovationprojectsarealsohelpingus to reinforcethecompany’ssustainabilityprinciple.Forexample,oneinitialstartingpointinvolves digitalworkingmethodsandamoveawayfrompaper-baseddocuments.Byadoptingelementsofanopeninnovationapproach,wealsohopetoboostthefutureinvolvementofemployeesintheinnovationprocessandfurtherenhancethepotentialfordevelopment.

»The Corporate Business Innovation business unit and the newly founded PXG Health Tech GmbH are helping us to actively shape the future of healthcare.« DR. TOBIAS BUCHER, HeadofCorporateBusinessInnovation//CEOPXGHealthTechGmbH

The Corporate Business Innovation department focuses on the digital transformation and the developmentofnewbusinessactivities,thussecuringthefutureviabilityofourcompany.ThePXGhealth Tech GmbH also plans to advance trends and innovations in the healthcare sector evenmorespecifically.ItreportsdirectlytotheChiefExecutiveOfficerandisincontinuousdialoguewith internationaldecision-makerswhoforman innovationnetworktogetherwith internalexperts.OurFinnish subsidiaryMedaffcon is also among the areas of our businessmaking a contribution. Itsuppliesresearchers,pharmaceuticalmanufacturers,andhealthcareproviderswithtoolstomakedata-driven decisions that enable the provision ofmore effective treatment and care tailored toindividualpatients.Youcanfindmoreinformationaboutouractivitiesinour 2018/19 annual report.

RISK-BASEDQUALITYMANAGEMENT

Asafeandreliablesupplyofpharmaceuticals isonlypossiblewith impeccablequality in the supplychain.Thisextendsfromproductstorageinaccordancewithregulations,aswellasto accuratedeliveriestopharmaciesandhospitalsthroughtotheoptimalavailabilityofdrugsforendconsumers.AllPHOENIXgroupcompaniesabidebytheguidelinesforgooddistributionpractice(GDP)aspublishedbytheEU.Todoso,theymustoperateeffectivequalityassurancesystemstoensurethatmedicinalproductsarestored,handled,anddistributedinaccordancewithcountry-spe-cificlegislation.Complianceismonitoredthroughinternalauditsandofficialinspectionsbyexternalbodies.QualitymanagementatthePHOENIXgroupisbasedonrisk,asperGDPrequirements.InaccordancewithDINENISO9001:2015,ourqualitymanagementsystemisprocess-orientedandcloselyintegratedintotheorganisation’sstrategy.Ninety percentofthecompaniesbelongingtothePHOENIXgrouparecurrentlycertifiedinlinewiththisstandard.

EUDirective2011/62/EU(EUFalsifiedMedicinesDirective,orFMD),aimedatcombattingthefalsi-ficationofpharmaceuticals,enteredintoforceon9February2019.Allprescription-onlydrugsmustnowbearauniqueidentifierintheformofatwo-dimensionalbarcode.Drugpackagingalsoneedstofeatureasealtopreventtampering.ThePHOENIXgrouphasbeenheavilyinvolvedinthisjointprojectbetweentheassociationsrepresentingdrugmanufacturers,wholesalers,andpharmacies.Thecompanybeganpreparationsforthesesignificantchangesatanearlystageandhasfollowedthroughontheirimplementation.

OursolutionhingesonthePHOENIXFMDCloud,whichisaflexible,reliable,andcost-effectivemethodforourpartners.Ourgoalistofurtherimprovetheeffectivenessandsecurityofthesupplychainintermsofproductqualityandpatientsafety.

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FOCUSING ON CUSTOMER SATISFACTION

Inallofthecountriesinwhichwearepresentinthewholesalesector,wecarryoutregularsurveystoassessourcustomersatisfactionlevels.Thesepollsgiveusimportantinsightsregardingourstrengthsandweaknesses.WealsogainvaluableideasforimprovingcustomerretentionthroughthePHOENIXgroup’sEurope-widecooperationandpartnerprogrammes.

Eachnationalsurveyiscarriedoutinatwo-yearcycle.Inthepastyear,theywereruninBosnia,Croatia,theCzechRepublic,Denmark,Hungary,Kosovo,Macedonia,Montenegro,theNetherlands,SerbiaandSwitzerland.Theresultswerehighlycountry-specific.Theyrevealedpositivetrendsin satisfactionandcustomerretentionaswellascertainopportunitiesforoptimisation.Thesewereindividualtoeachcountry,andweplantousethemtomakefurtherimprovements.Thesurveyscarriedoutin2018alsoshowedthattheissueofdigitalisationisonourcustomers’minds.Further-more,theincreasinglegalrequirementsplacedonpharmaciesinthevariouscountriesarebecomingmoresignificantforourcustomers.

ComparedacrossEurope, thisyear’s leader intermsofcustomersatisfaction isourCroatian subsidiary.Atalmost86 percent,itssatisfactionratingisexceptionalandwellabovethemarketaverage.Generally,our regularsurveys reveal that thenumberofextremelyorverysatisfied PHOENIXgroupcustomersisveryhigh,asistheloyaltyofourcustomersinthewholesalesegment.

Followingthepresentationoftheresults,managementrepresentativesfromthevariouscountrieswillattendaworkshoptodevelopmeasureswiththeaimofincreasingcustomersatisfaction.Ideally,thesemeasureswillbeimplementedwithinthenexttwoyearsandmonitoredbytheExecutiveBoard,whichwillholdhalf-yearlydiscussionswiththelocalManagingDirectors.

INNOVATIVE LOGISTICS SOLUTIONS

ByusingPHOENIXPharmahandelGmbH&CoKG’sstate-of-the-artTrack&Tracesystem,weareabletomonitortransporteditemsinrealtimeandatanygivenmoment.Thisinnovativemethod ofdeliverytrackinghasbeenrolledoutoverthelasttwoyearsinGermany.ThesystemoffersadvantagesbothforthePHOENIXgroupanditspartners.Itisnowveryrarethatdeliverycontainersaremixedup,forgotten,orincorrect.Inaddition,delayscanbedealtwith,theunderlyingcauseseliminated,andtransparencyinlogisticsincreased.Track&TraceisalreadyinuseincountriessuchasHungary,theNetherlands,Sweden,SwitzerlandandtheUnitedKingdom.Inprinciple,itcouldbeextendedtoallPHOENIXsubsidiaries.

ThetransmedGDPSolutionsserviceincludesGDP-complianttransportsolutionsforthedirect,on-timedistributionofpharmaceuticalproductsfrommanufacturerstopharmacies,clinics,anddoctors’surgeries.Byusingspeciallyinsulatedandclimate-controlledvehicles,wemakesurethattransportationwithinGermanydoesnotadverselyaffectthequalityoftemperature-sensitivedrugs.

InordertomeettherequirementsoftheGDPguidelinesthatwereupdatedin2013,thenumberoftransportvehicles inSwitzerlandandtheUnitedKingdomfittedwith temperaturemonitoring systemsisgraduallybeingincreased.TransportationhasbeenGDP-compliantintheNetherlandssince2016.InEstonia,theprocessofequippingournewvehicleswithaGPS-basedtemperaturealarmsystemisongoing.

14


REDUCING COMPLIANCE RISKS

ResponsibleandlegalconductformsavitalcornerstoneofthePHOENIXgroup’scorporatecultureandiscrucialtothesuccessofourcompany.Ourinternalcomplianceguidelinesprovidetheframe-workforthis.Ourkeymeasuresincludeempoweringouremployeestoactlawfullyandwithintegrityaswellasoptimisingourbusinessprocessestoreducecompliancerisksforthelongterm.

Toachievethis,thePHOENIXgrouphasestablishedagroup-widecomplianceorganisation,completewiththenecessaryprocesses,andhasappointedlocalcompliancemanagersinallcountries.

Thecompliancesystemrestsonfivepillars:

° anti-corruptioncompliance,

° competitioncompliance,

° anti-money-launderingcompliance,

° thecodeofconduct,and° sanctionscompliance.

Byadoptingthesanctionscomplianceguidelines,thePHOENIXgrouphasmadeacommitment–tothebestof itsknowledge–nottoconductanytransactionswithpersonsororganisationsappearingonsanctionslistsheldbytheEU,France,GreatBritain,theNetherlands,Switzerland,theUnitedNations(UN),ortheUnitedStates.Toguaranteethis,anautomatedsolutionthatscreensallbusinesspartnersagainstsanctionsliststwiceadayhasbeenintroduced.Inthereportingyear,wealsoextendedourcomplianceguidelinestoincludecomplianceprinciplesandanti-money-launderingguidelines.Youwillfindmoredetailsonour website.

Tocommunicatethecontentsoftheabove-mentionedpillarsofourcompliancesystemandtoensureallemployeesbehavelawfully,werunregulartrainingsessionsacrossthegroup,mostlyintheformofe-learning.Employeesinso-calledfocusgroups(forexample,thosewhoareincontactwithcustomersorsuppliersorhavetheauthoritytomakebusinessdealsaswellasallmanagers) additionallyreceivein-persontrainingoncompliance.Attheendoffiscalyear2018/19,atotalof

15,929employeeshadbeentrainedviacompliancee-learningand3,683viain-personcompliancetraining.Thenewadvancedtrainingcourseswillalsocovertheanti-money-launderingguidelines.Potentialrisksorviolationscanbereportedviaourexternal,web-basedwhistle-blowersystem.Thiscanbedoneanonymously,ifrequired.

FocusingondataprotectionItisimportanttothePHOENIXgroupthatwehandlethedatabelongingtoourcustomers,businesspartners,andemployeesinaccordancewiththelawandinatrustworthymanner.ThePHOENIXgrouphasestablishedagroup-widestructurefordataprotection.Inrecentyears,theissueofdataprotec-tionhasbecomeincreasinglyestablishedinthecompanybymeansofguidelinesandprocesses.TheHeadofCorporateDataProtectionisbasedinGermanyandreportsdirectlytotheExecutiveBoard.Ineachforeignshareholdinganddomesticsubsidiary,aDataProtectionOfficeroracontactpersonfordataprotectionhasbeenappointedtoserveasthefirstportofcallfordatasubjectsandforlocalsupervisoryauthorities.Wehopetoexpandthegroup-widecooperationthathasalreadybeenestablishedevenfurtherinfuturesothatwecanbenefitfrombestpracticesinindividualcom-paniesandtransferthemtoothers.Alongsideitsinvolvementinotherorganisations,PHOENIXinGermanyisamemberoftheGermanAssociationforDataProtectionandDataSecurity(GDD),anaffiliationthatfacilitatesanongoingexchangeofideasandtherepresentationofitsinterests.

BackinDecember2017,thePHOENIXgroupintroducedgroupdataprotectionguidelinesbased onthenewGeneralDataProtectionRegulation(GDPR).Thegroupguidelinesenteredintoeffecton25May2018andapplytoallemployees.Anyinformationrelatingtopossibledatabreachescanbesubmittedviaagroup-widereportingtool,whichcanbeaccessedinternallyaswellasexternally.InadvanceoftheGDPR’sintroduction,wepreparednewcontracttemplates,dataprotectionnotices,andprocessesfordataprotectionimpactassessments.

Throughtheprovisionoftrainingtoallemployees,weaimtoensurecompliancewithallguidelinesandlawsgoverningdataprotection.Forthisreason,around70 percentofouremployeesacrossEuropeweretrainedonthenewGeneralDataProtectionRegulationbymeansofthegroup-widee-learningcourseduringfiscalyear2018/19.

15


https://www.phoenixgroup.eu/en/company/compliance/

SUSTAINABILITY IN THE SUPPLY CHAIN

InthePHOENIXgroup,theprocurementoftradegoodsandnon-tradegoodsisorganisedata locallevel.TheGeneralProcurementInternationaldepartmentisresponsibleformanycross-bordermattersrelatingtonon-tradegoodssuchassoftwarelicencesandofficematerials.Thesubsidiar-iesalsohavetheirownprocurementdepartmentsandstaffchargedwithpurchasingtradeandnon-tradegoods.

InGermany,PHOENIXPharma-EinkaufGmbH(PPE)isresponsiblefortheprocurementoftradegoods.TheGeneral ProcurementGermany department has control over the purchasing of non-tradegoodssuchascapitalgoodsandservices.ItsremitalsoincludesriskpreventionalongtheentiresupplychainforgoodsprocuredfortheGermansites.Wemaintainpositiveandtrustingrelationships,especiallywithourdirectsuppliers.Weexpectthemtomeetenvironmentalandsocialstandards.

In2017,thePHOENIXgroupincorporatedaseriesofsustainabilitycriteriaintoitsstrategicprocure-mentprocessesandadopteditsown Supplier Code of Conductfortheprocurementofindirectgoods.Thisdocumentisnowestablishedacrossallcountriesasanintegralpartoftheprocurementprocessesusedtosourceindirectgoods.Init,wecallfortherecognitionoftheUnitedNations’UniversalDeclarationofHumanRights.From2019,thePHOENIXgroupwillrequireitssuppliers,especiallythetopsuppliersinallcountries,tocomplywithenvironmentalandsocialstandards. Ourbusinesspartnersmustalsocommittoensuringoccupationalhealthandsafetyfortheiremployees,tocombattingcorruption,tomakingcontinuousimprovementstotheirenvironmentalfootprint,toguaranteeingdataprotection,andtoobservingrelevantsocial,ethical,andenvironmentalstandards,aswellastoencouragingthesamefromtheirsuppliers.WereservetherighttoverifywhetherornottheSupplierCodeofConductisbeingobserved.

OursubsidiaryintheUnitedKingdomhasestablishedbestpracticestocreateamoresustainablesupplychain.Allnewsuppliersandtheircontractualpartnersareinvestigatedinstandardisedduediligenceprocesses.Theseincludeexaminingsustainabilitystrategiesandinsurancepoliciesaswellasinformationrelatingtoemployeesandriskassessments.Existingsuppliersareregularlyreviewedbymeansofaquestionnaireonperformanceandservice.

Infiscalyear2018/19,thematerialgroupscoveringtransport,consultancy,buildings,andmainte-nanceandfacilitymanagementservicesaswellastemporarypersonnelmadeupthegreatest proportionofindirectprocurementvolumes.

CommitmenttoupholdhumanrightsTherespectofhumanrightsissomethingthePHOENIXgrouptakesveryseriously.WerigorouslyabidebytheUnitedNations’UniversalDeclarationofHumanRightsandalsorequirethatourpartnersalongtheentiresupplychainfollowourlead.Forthisreason,ourSupplierCodeofConductencom-passesrequirementssuchasabanonchildandforcedorcompulsorylabouranddiscrimination inadditiontotherightstofairpayandfreedomofassociation.Possiblehumanrightsviolationscanbe reported anonymously by internal and external parties via the group-wide compliance whistle-blowersystem.Anysuchreportswillbesystematicallyinvestigated.Violationsbythird partiesmayresultintheterminationofcontracts,thematterbeingreportedtoregulatoryauthoritiesand/orthepolice,andtheaffectedPHOENIXgroupcompanytakingcivilactionagainsttheoffendingparty,whereappropriate.Inthereportingyear,therewerenoreportsofviolationsofthiskind.

16


https://www.phoenixgroup.eu/fileadmin/media/responsibility/GP_Supplier_Code_of_Conduct_Version_Nov._2018.pdf

CONSCIOUS USE OF RESOURCES

ThePHOENIXgrouptakescaretoconservenaturalresourcesinitsadministrativeprocesses.Forexample,theoverallproportionofsustainablyproducedFSC/PEFCpaperusedattheGermanysiteinthereportingyearwas59percent(previousyear:45percent).Thefigurereachedover65percent(previousyear:80percent) inItaly,andaround70percent(previousyear:66percent) inthe UnitedKingdom.

Anotherareaof focus isonreducingpaperconsumptionthroughdigitisation. In theGermanfinancedepartment,forexample,morethan145,000sheetsofpaperhavebeensavedsince2015bynolongerprintinginvoicesandreceiptsbutstoringthemindigitalform.InGermany,ourcreditcontroldepartmentnowmainlyworkswithpurelyelectronicfiles.WehavelaunchedEurope-wideprojectsinvolvingtheelectronictransmissionofbatchtrackinginformation.Incooperationwithmanufacturers,wealsoaimtodigitaliseprocessesandfurtherminimisepaperconsumptionintheformofinvoicesandreceipts.

Moreover,thePHOENIXgroupusesthedigitaltravelexpensesprogrammeWinTripSaaSthroughoutthecompany,thusfacilitatingapaperlessprocess.Theincreaseinresourceefficiencyalsoincorpo-rates theuseofprintersandcopiers inouroffices.Asageneralprinciple, theequipment in Germany is therefore set to print double-sided and in black and white. More than 78 (previousyear:80)percentofallprintoutsareproducedinblackandwhite.Wehavealsoputup aposterabovealmostall theprinters inGermany to raiseawarenessamongemployeesof eco-friendlyuserbehaviour.

Moreeco-friendlyshoppingbagsWeareincreasinglyactinginaccordancewithecologicalcriteriainourpharmaciestoo.Forexample,alongsidepaperbags,themajorityofourBENUbrandpharmaciesswitchedtoonlyusingcarrierbagsmanufacturedfromsugarcane,arenewablerawmaterial,atthestartof2018.Meanwhile,Apotek1inNorwayhasbeentakingcaretoensurethatthepaperbagsitusesareFSCcertified.ThisindicatorofsustainableforestryalsoappliestoalltheproductpackagingforourcategorybrandintheRetailbusinessarea,totheextentthatthisispossibleforindividualproducts.

ENVIRONMENTAL PROTECTIONClimatechange,theanticipatedscarcityofnaturalresources,andpollutionoftheenvironmentbypoorlydegradablewastematerialsareamonggreatchallengesofourtimes.Weacknowledgeourenvironmentalresponsibilitiesandwanttokeeptheimpactofourcorporateprocesseslow.Atthesametime,wearefocusingontheareasofactivityinwhichwecanachievethemost.

Oneofourmostimportantstartingpointsistoreducepharmaceuticalwaste,aproblemassociatednotonlywithhighcostsbutalsowithecologicalrisksforthePHOENIXgroup.Atthesametime,weareworkingcontinuouslytominimisetheproductionofnon-hazardouswaste,reducepapercon-sumption,andmaintainourhighrateofrecycling.Ourcorebusiness–thestorageandtransportofdrugs–involvestheconsumptionofenergyandfuel,whichresultsintheemissionofgreenhousegases.WeaccountforbothinourenergymonitoringsystemandinthePHOENIXgroup’scarbonfootprintanalysis.Bydoingso,weobtainvaluableinsightintoopportunitiesforoptimisation.Inaroundone-third(previousyear:one-third)ofoursubsidiaries,environmentalmanagementiscarriedoutviaamanagementsystemthatcomplieswithISO14001.

02

17


HANDLINGHAZARDOUSANDNON-HAZARDOUSWASTE

Wehavea legalobligationtotakeexpiredproductsor itemswithdamagedpackagingoutof thesupplychainandtoproperlydisposeofthemashazardouswaste.Werecordthecostofthepharmaceuticalwaste Glossary p. 38thatisgeneratedduetomissedexpirydatesanddamagetopackagingasakeyindicatorandcontrolparameter.Itgoeswithoutsayingthatwealsomonitorthevolumeofwastethatisproduced.Aswellashazardouswaste,PHOENIXgroupprocessesgeneratenon-hazardouswaste.Thenon-hazardouswaste thatwesend for recyclingor reprocessingincludesplastics,glass,paper,andcardboard.

AvoidingpharmaceuticalwasteWehavetakenawiderangeofmeasuresinrecentyearstoachieveourreductiontarget,andoursubsidiarieshavemadeuseoftheirparticularopportunitiesforaction.Acommonobjectiveofalloftheprojectsinvolvedwastopreventthegenerationofpharmaceuticalwasteattheearliestpossiblestage.TheapplicationofstandardpracticesandoperatingprocedureswithinthescopeofqualitymanagementandincompliancewiththeGDPguidelinesarecrucialhere.Acentralroleisplayed bythetraininggiventoouremployeesinthedistributioncentres.Thiscoverscarefulhandlingofpackages,visualinspectionstoensurethatpackagingisundamaged,checkingtheexpirationdateatthetimeofdelivery,acautiousapproachtocuttingopenboxes,andensuringoptimaltempera-turesduringtransportationandincoldstorage.

Since2017,wehavepooledallouractivitiesaimedatcuttingso-callednegativedifferencesinourcompany-wideSAFEprogramme.Negativedifferencescomprisefinancialburdensthatnotonlyresultfrombreakageandexpirationbutalsodeliveryerrors,missingparts,andstockclearances.By2020,weaimtoreducethecostsincurredby30percentcomparedwiththefiguresfor2016/17.Atthesametime,wenegotiatewithourpartnersuppliersinthepharmaceuticalindustrytoobtainoptimisedreturnsconditionsforitemsthatarenolongerfitforsale.

Inthepastyear,wealreadyachievedourstrategictargetofa10percentreductioninthecostofpharmaceuticalwasteby2018/19.Inthereportingyear,thecostsincurredamountedto€27.39million,comparedwith€34.69millioninthereferenceyear2014/15,whichrepresentsacostreductionofaround21.0percent.Asaproportionoftotaloperatingperformance*,costsfellduringthisperiodfrom0.13percentto0.08percent.

Adjustedforspecialandnon-recurringeffects,thequantityofpharmaceuticalwasteregisteredinthereportingperiodwasaround1,380tonnes,whichcorrespondstoanincreaseof3percent comparedwiththepreviousyear.Overall,werecordedanincreaseof19percentinthereportingperiod.TheincreaseisprimarilyduetotheconsequencesofaflooddisasteratourItaliandistribu-tioncentreinLamezia.Inaddition,ournationalcompaniesinDenmark,Lithuania,andSlovakia disposedofincreasedquantitiesofpharmaceuticalwasteonbehalfofindustrialpartners.

Increasingreuseofnon-hazardouswasteAdjusted forspecialandnon-recurringeffects,24,428 tonnes (previousyear:23,852 tonnes) ofnon-hazardouswastewasgeneratedinthereportingperiod.This isanincreaseofroughly 2(previousyear:3)percentcomparedwiththepreviousyear.Overall,werecordedanincreaseof 6percent,whichispartlyduetoimproveddataacquisitionsinindividualsubsidiaries.TheincreasewasalsoduetotheinclusionoftheRetaildivisionintheUnitedKingdom.Thewasteisoverwhelminglyrecycledorreused.Asaresult,85percent(previousyear:84percent)ofnon-hazardouswastere-enteredthematerialscycleinthereportingyear.Anyremainingunwantedmaterials,resulting,forexample,frompowergenerationandmixedwaste,aredisposedofinanenvironmentallyfriendlymannerbyspecialistcompanies.

* Followingharmonisationmeasures,thetotaloperatingperformanceisnowusedasthereferencevalue.

PHARMACEUTICALWASTEBYREGION

in tonnes

Germany

194 123164

WesternEurope

183

488

260

NorthernEurope

850 800752

PHOENIXgroup

1,4321,600

∆ 3%1,3831,344

Eastern Europe

205 190168

2016/17 2017/18 2018/19 Lfl1)2018/19

1) Inordertoensurethecomparabilityofthecurrentdatawithpreviousyears,wehaveadditionallyadjustedthemforspecialandnon-recurringeffects(first-timeconsolidationofRomaniaandfloodingofLamezia).

18


InGermany, theamendedCommercialWasteOrdinance (GewAbfV)hasbeen in forcesince August2017,withtheaimofrecoveringatleast90percentofrecyclablematerials.Highercostsforresidualwasteareincurredintheeventofafailuretoreachthisrecyclingquotabecauseunre- coverablewasterequirespre-treatmentpriortothermaldisposal.Thedisposalofcommercial

wastemustalwaysbefullydocumentedbyus,andthedegreeofachievementover90percentmustbecertifiedannuallybyaspecialist.

Asadistributorthatplacesimportedtradegoodsonthemarket,thePHOENIXgroupisalsosubjecttotheGermanPackagingLaw(VerpackG),whichsupersededthePackagingOrdinance(VerpackV)atthestartof2019.Inthereportingyear,wepreparedourselvesforthenewrequirements,whichincludeextendedregistrationandreportingobligationsaswellasincreasedrecyclingrates.

ENERGY EFFICIENCY AND EMISSIONS

Asoperatorsandusersof163distributioncentresacrossEurope,weregardefficientbuilding technologyasoneofthebestwaysofachievingenergysavingsandareductioningreenhousegasemissions.Wealreadyadheretothisprincipleintheplanningandimplementationofnewbuildingprojects,asprovenbytheobservanceofefficiencystandardsduringtheconstructionofournewdistributioncentreinGotha,Germany.

ApproximatelyoneinfivesubsidiarieshaveenergymanagementcertificationinaccordancewithISO50001.Theoperationofourbuildingsisregulatedbyanenergymonitoringsystem,whichisboththeprerequisiteforthefulfilmentoftheEuropeanUnion’sEnergyEfficiencyDirectiveandtheestablishmentofenergymanagementsystems.Acertifiedenergyauditorinitiatesimprovementprocesseswithinthecompanyandsupportstheir implementation.Weusethefindingsofthe regularenergyaudittopressaheadwithsuitableenergy-savingmeasures,suchasourongoingLEDmodernisationprojectandtheoptimisationofheatingandair-conditioningsystems.

Energy-savingpotentialthroughstate-of-the-arttechnologyInanotherareaofaction,thePHOENIXgroupistappingintotheefficiencypotentialofoperationalprocessesandthusinvestingintechnologicalinnovations.Oneexampleofthisistheconversiontoenergy-efficientaircompressors intheGermandistributioncentreatFreiburg,Hamburg,BadKreuznach,andMannheim(AugsburgandHanauinplanning),withpredictedenergysavingsofbetween23and51percent.Thismodernisationstepalsoallowsthewasteheatthatisgeneratedtobefedintotheheatingsystemsofbuildingsandfacilities.

Germany WesternEurope NorthernEurope PHOENIXgroupEastern Europe

NON-HAZARDOUSWASTEBYREGION

in tonnes

8,621 8,0798,012 7,78210,174

9,005

4,224 4,0394,245

23,15825,237

23,852

2,531 2,9452,590

2016/17 2017/18 2018/19 Lfl1)2018/19

∆ 2%24,428

1) Inordertoensurethecomparabilityofcurrentdatawithpreviousyears,wehaveadditionallyadjustedthemforspecialandnon-recurringeffects(first-timeconsolidationofRomaniaandexpansionofdatacollectiontoincludeRetailNetherlandsandUnitedKingdom).

1)Displayofvaluesincl.specialandnon-recurringeffects2)Includingtreatmentplantsandcomposting.

DISPOSALMETHODSFORTHEPHOENIXGROUP’SNON-HAZARDOUSWASTE1)

15% (3,876t) Otherformsof wastedisposal2)

18% (4,421t) Reuse

67% (16,940 t) Recycling

19


Adjustedforspecialandnon-recurringeffects,wereducedelectricityconsumptionby1percentcomparedwiththepreviousyear.Overall,werecordedanincreaseof22percentinthereportingperiod.Therearevariousreasonsforthisincreaseinconsumption.Forexample,thedataacquisi-tioninGreatBritainwasexpandedduringthereportingperiodtoincludethepropertyportfolio.IntheNetherlands,electricityconsumptionroseinlinewiththenumberofnewlyaddedpharmacies.InGermanyandsomeotherEuropeancountries,theincreaseinelectricityconsumptionispartlyduetothehotsummer.Inaddition,ourRomaniansubsidiaryisincludedinthedatacollectionforthefirst time.Meanwhile, theconsumptionofdistrictheatingbothadjustedandoverall fell in comparisonwiththepreviousyear.ThisispartlyduetothefactthatinthenationalsubsidiariesinDenmark,twowarehouseswerenotusedduringthewintermonthsandinSerbia,woodpelletswereusedforheatinginsteadofdistrictheating.

IncreasedgreenhousegasemissionsThegreenhousegasemissionscausedbythePHOENIXgrouproseby1percentintheyearunderreview,adjustedforspecialandnon-recurringeffects.Intotal,theincreaseamountedtoapproxi-mately14percentandisdueinparticulartotheintegrationofourRomaniansubsidiaryandthe

retailorganisationintheUnitedKingdomintothedatacollectionprocess.Inregionalterms,thegreatestlevelofharmfulemissionswasregisteredinWesternEurope(includingGermany),followedbyEasternEuropeandNorthernEurope.

TotalGHGemissions(Scope1 – 3)1) Glossary p. 38

CO2e in tonnes 2016/17 2017/18 2018/19 Lfl2) 2018/19 ∆ Lfl 2018/19

Scope 1 total 20,786 25,219 32,046 26,585 5%

Scope 2 total 52,660 55,987 71,912 56,268 1%

Scope 3 total 92,191 90,943 91,585 91,585 1%

TotalGHGemissions ofthePHOENIXgroup 165,638 172,149 195,543 174,438 1%

1)Explanationofdifferentreportedvaluesinthepreviousyear:Forthefirsttimethisyear,wearereportingCO2emissions inCO2equivalents.Therefore,theyarenolongerdirectlycomparablewithpreviouslyreportedvalues.

2)Inordertoensurethecomparabilityofcurrentdatawithpreviousyears,wehaveadditionallyadjustedthemforspecialandnon-recurringeffects(first-timeconsolidationofRomaniaandexpansionofdatacollectiontoincludeRetailNetherlandsandUnitedKingdom).

CONSUMPTION OF ELECTRICITY OF THE PHOENIXGROUP

CONSUMPTION OF DISTRICT HEATING OF THEPHOENIXGROUP1)

inMWh inMWh

179,435

2018/192017/18

147,656139,385

2016/17

21,14021,610

2018/192017/18

21,782

2016/17

1) InWesternEuropeancountries,heatinggasandelectricityarepredominantlyusedinsteadofdistrictheating.2) Inordertoensurethecomparabilityofcurrentdatawithpreviousyears,wehaveadditionallyadjustedthemforspecialandnon-recurringeffects(first-timeconsolidationofRomaniaandexpansionofdatacollectiontoincludeRetailNetherlandsandUnitedKingdom).

∆ –1%146,393

Lfl2)2018/19

∆ –5%20,615

Lfl2)2018/19

2016/17 2017/18 2018/19 Lfl1)2018/19

TOTALGREENHOUSEGASEMISSIONS(SCOPE1-3)

intCO2eper€mtotaloperatingperformance

5.485.92 ∆ – 3 %

5.325.46


2018/192017/182016/17 Lfl1)2018/19

20


MOREECO-FRIENDLYTRANSPORT

Efficientandeco-friendlylogisticsatthePHOENIXgrouparebuiltonthefoundationsofourmodernvehiclefleet,transparentdatabase,andresource-efficientdrivingstyle.Onthisbasis,weaimtocontinuallyminimisetheGHGemissionscausedbytransport.

Adjustedforspecialandnon-recurringeffects,ourtransportemissionsroseby1percentinthereportingperiodcomparedwiththepreviousyear.Overall,werecordedanincreaseof5percent,whichisattributableinparticulartotheintegrationofourRomaniansubsidiaryintothedatacollectionsystem.Inthereportingyear,oursubsidiarytransmedwithcompanies inAustria,Bosniaand Herzegovina,CzechRepublic,Germany,Serbia,SlovakiaandSwitzerlandcoveredadistanceofaround1.81millionkilometreswithjustunder2,900vehicles.Shortleasetermsof36monthsonaverageallowtransmedtorunamodern,fuel-efficientfleet.Thecompanymaintainsadetailedoverviewof itsvehicles’ features.Thismeans itcananalyse theannualmileageperbranch, informationaboutthecategoriesandmodelsofvehicles,andthefueltypesused.Whenpurchasingnewvehicles,transmedensuresthattheycomplywithcurrentpollutantstandards.

transmedregularlyprovidesitsemployeeswithinformationaboutfuel-efficientdriving.Thewiderangeofmeasuresformoreeco-friendlyoperationincludes,forexample,switchingofftheenginewhenmakingadeliveryaswellasensuringoptimalloading.OurSerbiansubsidiaryrewardsfuel-ef-ficientdrivingwithmonetaryincentives,forexample.

Tamro,theSwedishsubsidiaryofthePHOENIXgroup,isusingeco-friendlyfuelsbasedonbiodiesel(HVO100) Glossary p. 38inconjunctionwithitslogisticspartners.Consumptionincreasedby23percentfrom0.77millionlitresto1.01millionlitresintheperiodreported.Themajorityoftrans-portsforthePHOENIXgrouparecarriedoutbysubcontractors.

Germany WesternEurope NorthernEurope PHOENIXgroupEastern Europe

2016/17 2017/18 2018/19 Lfl2)2018/19

TOTALGHGEMISSIONSBYREGION(SCOPE1 – 3)1)

intCO2e

53,921 52,90753,971 58,89980,648

66,383

20,993 18,40819,903

165,638

195,543∆ 1%

174,438172,149

31,84243,579

31,892



Lfl1)2018/19

∆ – 3%3.23 1)

1) Inordertoensurethecomparabilityofcurrentdatawithpreviousyears,wehaveadditionallyadjustedthemfor specialandnon-recurringeffects(first-timeconsolidation ofRomania).

1) Owntransportsandtransportsbysubcontractors. Displayofvaluesincl.specialandnon-recurringeffects.

SHAREOFTRANSPORTEMISSIONS 1) COMPARED TO TOTAL EMISSIONS

43% Other emissions

57% Emissionsfromtransport

TRANSPORT EMISSIONS

intCO2eper€mtotaloperatingperformance

3.43

2017/18

3.343.32

2018/192016/17

21


SUPPORTING EMPLOYEESThesuccessofourcompanyreliesonmotivatedandcommittedemployees.Atthesametime,wefacegrowingchallenges,suchastheshortageofskilledpersonnelanddemographicchange,towhichwemustfindanswersthroughacoherentHRstrategy.ThisisaresponsibilityofCorporateHR,whichreportsdirectlytotheExecutiveBoard.Itisparticularlyimportanttousthatweofferouremployeesattractiveworkingconditionsandinterestingcareeropportunities.Thekeypillarsofourcorporatecultureincludeopendialogueandgoodrelationsbetweenmanagementandemployees.Inthe code of conduct thatappliestoallemployeesofthePHOENIXgroup,wepledgetoupholdtheprinciplesofequalopportunitiesandmutualrespect.Asaresult,everyemployeereceivesthesametreatmentandthesameopportunitiesineveryaspectoftheemploymentrelationship.Webaseouremployees’remunerationontheirrespectivequalifications,professionalandpersonalaptitude,aswellasontheirperformance.Thecreationofasafeandhealthyworkenvironmentalsohas amajorimpactonthesatisfactionandproductivityofouremployees.

EMPLOYMENT

Attheendoffiscalyear2018/19,thePHOENIXgroupemployed37,140staff(previousyear:33,944)within27countries(previousyear:26)inEurope.Thenumberofemployeesthusroseby9.4 percentcomparedwiththepreviousyear,dueinparticulartothefirst-timeconsolidationofthecompaniesinRomania.At5,704(previousyear:6,032), the largestnumberofemployees isregistered in theUnitedKingdom,followedbytheNetherlandsat4,723(previousyear:4,547),Norwayat4,293(previousyear:4,037),andGermanyat4,292(previousyear:4,311).

TheproportionoffemalestaffemployedbythePHOENIXgroupinthereportingyearwasaround71 percent(previousyear:70 percent).Ofthesefemaleemployees,14,352(previousyear:12,004)were in full-timepositions,whereas the number ofmen in full-time employmentwas8,672 (previousyear:7,902).Thetotalnumberoffull-timeequivalentshasincreasedby11.3 percentto30,897(previousyear:27,749).Part-timepositionswereoccupiedby2,205malePHOENIXemployees(previousyear:2,236)and11,911femalestaff(previousyear:11,802).Theproportionofemployeesworkingpart-timethusamountedto38percent(previousyear:41percent).

REGIONALDISTRIBUTIONOFEMPLOYEES(2018/19)

12% (4,292) Germany

39% (14,426) WesternEurope

28% (10,665) Eastern Europe

21% (7,757) NorthernEurope

03

22


https://www.phoenixgroup.eu/fileadmin/media/company/pdfs-en/phoenixgroup-code-of-conduct.pdf

PROFESSIONAL DEVELOPMENT AT EVERY CAREER STAGE

Webelieveitisimportanttorecogniseouremployees’potentialandsystematicallydeveloptheirabilities.Toachievethis,weuseanefficientandcomprehensivesystemoffurthertraininginallcountries,whichallowsstafftoenhancetheirprofessionalskillsandbreathenewlifeintotheir personaldevelopment.Weruntargetedinductionprogrammesandtrainingcoursesforouremploy-eestosuittheirareaofresponsibility.Mandatoryelementsincludetrainingingooddistributionpractice(GDP),thecodeofconduct,theanti-corruptionguidelines,andthecompetitioncomplianceguidelines.Topicsrelatingtooccupationalhealthandsafety,personnelmanagement,legalconsider-ations,dataprotection,IT,andlanguagesalsoplayakeyroleintheprofessionaldevelopmentofouremployees.Inadditiontoface-to-faceinstruction,wemainlyusee-learningsystems,withwhich

ouremployeescanundertakeefficient,independenttrainingonavarietyoftopics.AtEuropeanlevel,wearealsosteadilyintensifyingtheexchangeofbestpracticesfortheimplementationoftrainingconceptsthroughourexcellenceprogrammes.

AnimportantelementofstaffdevelopmentatthePHOENIXgroupistheannualemployeereview.Thesereviewsmaybeorganiseddifferentlyinthevarioussubsidiaries,butstructuredfeedbackandthesupportofemployeesintheirprofessionaldevelopmentiscommontoall.Inthereportingyear,68.8 percent1)ofourworkforcehadanemployeereview.

TalentmanagementforinternationalleadersThePHOENIXgroupendeavourstofillmanagementpositionsprimarilyfromwithinthecompany.Tothisend,wehaveestablishedcross-bordersuccessionplanningfortoppositions,whichopensupinternationalcareeropportunitiesforourmanagerswhilestrengtheningtheirconnectiontothecompany.Ourtalentmanagementschemeunderpinsthisapproach.Itdetermineskeypositions,identifiestopperformers,andprovidesoptimalopportunitiesforpromotion.Infiscalyear2018/19,thereweremorethan250PHOENIXgroupmanagersinthetalentmanagementprogramme.Weofferappropriatedevelopmentprogrammesformanagersatvariouslevels:

° TopManagementEducationProgramme(TMP),

° SeniorManagementEducationProgramme(SMP),and

° MiddleManagementEducationProgramme(MMP)

Inthelastyear,wecompletelyredesignedtheMiddleManagementEducationProgrammeonthebasisofthepreviouslyestablishedEuropeanManagementDevelopmentProgramme.WelaunchedthenewSeniorManagementEducationProgrammeinthereportingyeartoalsodevelopseniorman-agerswithpotential(managersfromthesecondhighestlevel)bymeansofagroup-widetalentprogramme.Thelattertwoprogrammesfocusonleadershipskillstrainingandthepromotionofacultureofcooperationacrossnationalbordersandfunctions.Since2017,alltopmanagersofthePHOENIXgrouphavecompletedtheTopManagementEducationProgramme.Thedynamicsofthe programmeandtheresultingnetworkwillcontinuetobeusedinnewformatsinthefuture.

41%

59%

33,944

42%

58%

34,145

Part-time Full-time

EMPLOYEESBROKENDOWNINTOFULL-TIME/PART-TIME

asof31January

2017/18 2018/19

38%

62%

37,140

2016/17

1)Bulgaria,CzechRepublic,Latvia,Switzerland,andtheUnitedKingdomarenotincludedinthevalue.

23


OpportunitiesforapprenticesandstudentsThePHOENIXgroupoffersmotivatedyoungpeopleawiderangeofwaysinwhichtostarttheircareers,includingworkexperienceplacements,apprenticeships,anddualstudyprogrammes.Asat1October2018,thePHOENIXgroupemployed115apprenticesand14studentsondualpro-grammesatitsGermansubgroup.Dualstudydegreesgivestudentstheopportunitytocompletepartoftheirtrainingatoneofoursubsidiaries.Infiscalyear2018/19,studentsgainedexperienceinItalyandHungary.

IMPROVING DIALOGUE AND COMMUNICATION

Wecultivateacorporateculturebasedondialogue,whichisshapedbythevaluesenshrinedinourcorporatemissionandourgroup-wideleadershipguidelines.Ontheonehand,communicationtakesplaceviatheannualperformancereviewbetweenmanagersandstaff.Ontheotherhand,wewanttoassessouremployees’levelofsatisfactionintheirjobsbymeansofdirectsurveys.Wealsoaimtoenhancedigitalemployeecommunicationinfuture.Since2019,wearethereforegraduallyintroducinganappthatwillenableouremployeestocommunicateacrossdivisionsandnationalborders.Moredetailsareavailableonour website.

SurveyconfirmsemployeesatisfactionAspartofagroup-wideemployeesurveyinautumn2018,around34,000employeesacrossEuropehadtheopportunity toassessthePHOENIXgroupasanemployer. Intheanonymoussurvey conductedbyCorporateHR incooperationwithanexternal serviceprovider, 64 per centof theworkforcegavefeedbackontheirindividualworkingsituation.MostemployeessaidthatthePHOENIXgroupremainstherightemployerforthem.Manyofthemwereverysatisfiedwiththeirworkenvironment.Furthermore,theemployeesratedleadershipperformanceasgood.Comparedwiththefiguresfor2015,mostcountrieshadeitherimprovedtheirleadershipratingorkeptitstable.

Itbecameclear that theemployees incountriesorbusinessareas inwhichaneffectiveand efficient follow-upprocesswascarriedout following theemployeesurvey in2015 feelmorestronglyconnectedwiththePHOENIXgroup.However,weseeanoverallneedforimprovement in order to increase the level of commitment throughout thePHOENIXgroup. In future, the

ExecutiveBoardofthePHOENIXgroupwillreceiveaquarterlyprogressreportonthefollow-upprocessanddiscuss thedevelopmentstatuswith themanagement teams in the respective countriesonaregularbasis.In2020,therewillalsobeapulscheckinallcountriestomeasurethedevelopmentofthecommitment. 2018/19 annual report, p. 69.

DialoguewithemployeerepresentativesThePHOENIXgroupsetsgreatstorebyitscooperativerelationshipwiththeemployeerepresenta-tives,followinginternationallyrecognisedstandardsaswellasthelegalframeworkofeachindividualcountry.OneexpressionofthisistheworkscouncilfortheEuropeancompany(“SE”),whichwasestablishedin2018andreflectstheinternationalnatureofthecompanystructure.Thispanelof 38memberscorrespondinglyengagesindialoguewithcompanymanagementoncross-borderissuesandprojects,suchastheemployeesurvey,work–lifebalance,andoccupationalhealthman-agement.Assuch,thepanelofemployeerepresentativesisalsoactivelyinvolvedinthecompany’skeysustainabilitytopicsatgrouplevel.

OCCUPATIONAL HEALTH AND SAFETY

Wehaveaspecialresponsibilityforthehealthofouremployeesandthereforetakecaretoensuresafeworkingpractices.Aspartofourqualitymanagementsystem,weguaranteestrictcompliancewiththerelevant lawsandregulationsof the individualcountriesandof theEuropeanUnion. Systematicriskassessmentsforeachworkplacearemandatory,asistheimplementationofappro-priatepreventativemeasures.Inthisarea,weareworkingtofurtherexpandouroccupationalhealthmanagementsystemandtodecreasethegroup-wideillnessrateinthecompany.

Ourapproach:promotinghealthandpreventingaccidentsAnoccupationalhealthmanagementsysteminthesubsidiariessupportsthedecreaseintheillnessratethroughnumerousprojects,includinghealthdaysatthedistributioncentres.Thesefocusonmeasuressuchasearlycancerdiagnosis,adviceonmanagingstress,andhealthyeating.Aswellascorporateintegrationmanagement,effectiveandrespectfulconversationsbetweenmanagersandemployeesaboutreturningtoorabsencesfromworkalsomakeanimportantcontribution.

24


https://www.phoenixgroup.eu/index.php?id=451&L=1


Wewerenotfullyabletoachieveourtargetofa1percentagepointreductionintheillnessratebyfiscalyear2018/19(referenceyear2014/15).Inthereportingyear,theillnessratewas4.08 percent(previousyear:4.05 percent)andhasthusrisenslightlycomparedwiththepreviousyear.Therearedifferentreasonsforthisatcountrylevel.Forexample,theunusuallyseverefluepidemicatthebeginningof2018ledtoanincreaseintheillnessrateintheEasternEuropeansubsidiaries.Ourgoalistoreducethegroup-widesicknessrateby8percentfromthree-yearaverageby2021/22.Furthereffortsareneededtoachievethisgoal.Wearecurrentlyworkingonpracticalmeasuresthataretobeimplementedthroughoutthegroupinthefuture.

Regularemployeetrainingmakesthegreatestcontributiontoaccidentprevention.Themaintopicsarefireprotection,workplaceergonomics,correctliftingtechniques,andthesafeoperationofmachineryandequipmentinthedistributioncentres,especiallyforklifttrucks.Verycloseattentionisalsopaidtoprotectiveworkwearinalloursubsidiaries.

WithinthePHOENIXgroup,weregistered413injuries(previousyear:451)resultingfromaccidentsatworkduringthereportingperiod.Comparedwiththepreviousyear,thiscorrespondstoadeclineof8.4 percent(previousyear:22.8 percent).Withatotalofaround52.71millionactualworking

hours(previousyear:50.51million),thisequatestoacompany-wideaccidentrateof7.84accidents (previousyear:8.93)peronemillionworkinghours.Incomparisonwiththepreviousyear,thisisareductionof12.3percent(previousyear:24.7 percent). Totalrecordableinjuryfrequency(TRIF)

per one million working hours 2016/17 2017/18 2018/19

Injurieswithlosttime 1) 584 451 413

Actualworkinghours 49,244,669 50,505,980 52,711,629

Totalrecordableinjuryfrequency(TRIF) 11.86 8.93 7.84

1)Reportingbasedonlocalregulationsandincludeswork-relatedandtravelaccidents.

HealthcarepartnershipsPHOENIXinGermanyhasbeencooperatingwithpmeFamilienservicesinceautumn2018.Thisorganisationsupportsemployeesthroughdifficultsituationsintheirprivateandprofessionallivesbyprovidingadviceandarangeofservices.Inthe2018/19reportingyear,pmeFamilienservicereceivedatotalof25enquiriesonvarioussubjectsrelatingtocoachingforpersonallifecircum-stances,childcare,andlookingafterrelativesinneedofcare.PHOENIXemployeesintheUnitedKingdomhavebeenbenefittingfromasimilar,around-the-clockserviceforseveralyears.Since2016,employeesinGermanyhavealsohadtheopportunitytoleaseabicycleincollaborationwiththe company JobRad and boost their health by takingmore exercise. There are currently 303ofthesebicyclesinuse,ofwhich128areconventionalbikesand175electric.

OursubsidiaryinItalyhasestablishedprotectivemechanismsforitsemployeestoshieldthemagainstelectromagneticfieldsintheworkplace.PHOENIXstaff inAustriacantakeadvantage ofmedicalmassagesandhealthchecks.OurEstoniansubsidiarygivesitsemployeesfreeflu vaccinations,anditsoccupationalhealthmanagementsystemisfocusedonpromotingsports.OuremployeesinNorwayenjoysubsidisedaccesstofitnessstudiosorothersportingactivities,whilethoseinDenmarkcantakeouthealthinsurancecoveratadiscount.

SICKNESS RATE

in%

2017/18

4.05

2018/19

4.084.47

2014/15(referenceyear)

25


GuidelinesensurecompliantbehaviourItisessentialthatalldonationandsponsorshipactivitiesarecarriedoutinaccordancewithlegalrequirements.ThePHOENIXanti-corruptionguidelines–whichapplytothewholegroup–mustthereforealwaysbeobservedwhenweorganiseourprojects.Furthermore,weadoptedguidelinesfordonationandsponsorshiprequestsinMarch2017,whicharealsoapplicablegroup-wide.Thisdocumentprimarilycontainscriteriaandhelpfulinformationfortheselectionofsuitableprojectsforallsubsidiariesandourpartners.Italsodefinestheactivitiesthatwillnotbesupported.Theseincludeeventsheldbypoliticalpartiesorbranchesofgovernment.ItalsoexcludesprojectsfromwhichPHOENIXgeneratescorporateadvantagesaswellasthepromotionoforganisationsthatareopposedtoourinterestsorcoulddamageourcompany’sreputation.Oursubsidiariescontinuetomakedecisionslocallyabouttheprojectstheysupportintheirrespectiveareas.

Sothatourengagementachievesamoregoal-orientedcontributiontosociety,wewanttogiveoursocialcommitmentactivitiesagreaterstrategicfocusinfuture.Forthisreason,wearecurrentlyworkingonacompany-widecorporatecitizenshipstrategy,whichwewilladoptin2020.

»TOGETHER FOR A

HEALTHY FUTURE FOR CHILDREN«

FOCUS OF OUR SOCIAL COMMITMENT

Promoting pharmaceutical

research

Supporting charitableinstitutions suchashospitalsand

day-carecentres, aswellasregional

institutions

Helpingtosecure futuregenerationsof qualifiedpersonnel bysupportingschools

anduniversities

Group-wide charitableprojects, suchassupportfor KULTURBRASe.V.

inFortaleza, Brazil

COMMITMENT TO SOCIETYWeaimtouseourresourcestomakeapositivecontributiontothecommongood,beyondthescopeofourcorebusiness.Theassumptionofsocialresponsibilityispartofourcorporatephilos-ophyandfirmlyrootedinourvalues.Wehavesummedupourapproachtosocialcommitmentunderthemotto“Togetherforahealthyfutureforchildren”.Wefocusourassistanceonareaswherewehaveparticularexpertise.Aboveall,wesupportpharmaceuticalresearch,charitableorganisationssuchashospitals,children’sday-carecentres,andregionalinstitutions,group-wideprojectsinsupportofthecommongood,aswellasschoolsanduniversities.Indoingso,wearebuildingonselectedflagshipprojectsandsmallersocialinitiativesinthevicinityofoursites.Ouremployeesarealsoinvolvedinvariouswaysinarangeofcharitableprojects.ThePHOENIXgroupsupportsthemintheirefforts,toppingupthedonationstheyhavecollectedbyacertainamount, forexample.

04

26


FORAFUTUREWITHAGOODQUALITYOFLIFE

Forover25years,thePHOENIXgrouphasbeensupportingKULTURBRASe.V.,anassociationbasedinGermanyandBrazil.Theassociation’scoreactivityistheoperationofaday-carecentreinFortaleza,Brazil,inwhichabout100schoolchildrenagedbetween3and13currentlyattendschoolandreceiveregularmeals.Sinceitwasopened,theschoolhassupportedandcaredforaround1,200disadvantagedchildren.Theassociation’sadministrativefunctionsinGermanyareunder-takenbyvolunteers.ItisanchoredthatoneofPHOENIXemployeesisalwaysinvolvedwithKUL-TURBRASe.V. Video Kulturbras.

»What is being achieved at Kulturbras fits exactly with the motto of our social commitment ‘Together for a healthy future for children’. All children, wherever they are born, should have the same opportunities in life.«OLIVER WINDHOLZ, ChiefExecutiveOfficer

Oursubsidiaries’otherimportantprojectsincludesupportforSweden’sQueenSilviaHospital;theNationalSocietyforthePreventionofCrueltytoChildren(NSPCC),theBritishHeartFoundation,andcancerresearch intheUnitedKingdom;aswellasvariouscharitablefoundationsforthewell-beingofchildrenandlocalsocialwelfareorganisationssupportedbytheBENUpharmaciesinHungary.AspartoftheDoGoodcampaign,TamroinEstoniadonatedaround3,000pharmaceuticalproductstofamiliesinneedduringthereportingyear.

InRomaniain2018,HelpNetFoundationandFarmeximtogetherdonatedover130,000eurosforcharitableprojects,includingtheorganisation“SavetheChildren”Romania,severalday-carecentresforchildrenwithdisabilitiesand illnessesandorphanages.Thismeant thatRomania -after Germany-hadthesecondlargestinvestmentinthecommongood.ForthePHOENIXgroupas awhole,thetotaldonationinfiscalyear2018/19amountedtoapproximatelyEUR1.2million (previousyear:EUR0.9million).

PHOENIXPHARMACEUTICSSCIENCEAWARD

ThePHOENIXPharmaceuticsScienceAwardhasnowbeenoneofour flagshipprojects for morethan20years.Duringthistime,wehavereinforcedtheoriginalintentionofmaintainingandpublicising cutting-edge research in Germanywith the objective of using this approach tostrengthenthepharmaceuticalsupplychain.Everyyear,anindependentjurysiftsthroughinnova-tive,originalworkwithpharmaceuticalrelevancefromGermany,Austria,andSwitzerland.Fromtheseentries,prizewinnersareselectedinfourcategories.Theaccolade,withatotalvalueof€40,000,isoneofthemostprestigiousscienceprizesintheGerman-speakingworld.Itisalso theonlyawardthatrecognisesthelatestworkfromanentirescientificfield.InOctober2018, theScienceAwardwaspresentedforthetwenty-secondtime.Theresearchcarriedoutbythe prizewinnersinvestigatedtheuseofso-calledmagicmushroomstotreatdepression,harnessingbacteriaforstate-of-the-artwoundcare,fightingnon-alcoholicliverdiseases,andtheroleoftheproteinPlexin-B2intheperceptionofpaininadults. Science Award.

Around100disadvantagedchildrenbetweentheagesofthreeandthirteencometotheKulturbrasday-carecentreeveryday.Oncethere,theyaregivenmealsandcanplaywithotherchildreninacarefreeenvironment.

27



https://www.phoenixgroup.eu/en/company/science-award/

REPORT PROFILE

FoundationandreportingprinciplesThePHOENIXgroupaimstocommunicatetransparentlyandtoseekdirectdialoguewithitsstake-holders.Thisreportonfiscalyear2018/19providescomprehensiveinformationaboutourcompa-ny’ssustainabilityactivities.IthasbeenpreparedinaccordancewiththeGlobalReportingInitiative(GRI)Standards:Coreoption.WesubmittedthereportforreviewbytheGRIMaterialityDisclosuresService,whichconfirmedthattheMaterialityDisclosures(102-40to102-49)havebeencorrectlylocatedinthereport.

ThePHOENIXgrouphaspublishedoneSustainabilityReportannuallysincefiscalyear2014/15.Thisreportrelatestothefiscalyearfrom1February2018to31January2019and,wheneverpossi-ble,alsocontainscomparabledatarelatingtothepreviousyearoryears.Inthisreport,wedescribethedevelopmentandtheresultsofourcompany’ssustainabilityactivitiesfromallofthesubsidiar-iesandtheirdomesticaffiliates.Individualkeyfiguresfromthe2017/18reportingyearhavehadtobeadjustedinthereport.Thefiguresusedinthetableshavebeenrounded.Thetotalsdonotalwaysaddupexactly.

BasisofconsolidationGRI102-45,GRI102-48

ThetermPHOENIXgroupreferstotheentirePHOENIXgroupasdepictedinthe2018/19annualreport.Inthereportingperiod,thecompanyincreasedinsizethroughthefollowingsignificantacquisitions.On31July2018,thePHOENIXgrouptookovertheRomanianpharmaceuticalwhole-salerFarmeximS.A.andthenationwidepharmacychainHelpNetFarmaS.A.Theprocessofcol-lectingdataforthe2018/19SustainabilityReportencompassedbothcompanies,althoughnotalldatawasavailableinthefirstyear.Inrelationtotheenvironment,thekeyfiguresincludeonlysomeofthedataontheretailbusiness,whichisindicatedineachcase.Anydeviationsfromthereportboundariesforotherkeyfiguresareexplainedinthecorrespondingfootnotes.Forthefirsttimethisyear,wearereportingCO2emissionsinCO2equivalents.WereportdirectandindirectgreenhousegasemissionsusingUKDefraConversionfactors2018andVDAemissionfactors2017.For emissionsfromdistrictheating,weuseUKDefraConversionfactors2018.

EditorialnotesThecopydeadlineforthe2018/19SustainabilityReportwas12June2019.Forthesakeofsimplic-ity,wereferthroughoutthisreporttoemployees,customers,etc.Thesetermsareusedtosignifypeopleofallgendersonanequalbasis.

TheSustainabilityReportisalsoavailableinGermanandcanbedownloadedfromour website.

FURTHER INFORMATION

28



Key topics GRI Aspects Location of the impacts

Cooperationtocombatcounterfeitpharmaceuticals CustomerHealthandSafety,Socio-EconomicCompliance Internalandexternal

Supplychain ProcurementPractices External

Productresponsibility CustomerHealthandSafety,MarketingandLabelling Internalandexternal

Widespreadavailabilityofpharmaceuticals IndirectEconomicImpacts External

Adherencetoqualitystandards CustomerHealthandSafety Internalandexternal

Customersatisfaction CustomerHealthandSafety,MarketingandLabelling Internalandexternal

Secureprocessingofcustomerdata CustomerPrivacy Internalandexternal

Consumptionofresources Energy,Materials Internalandexternal

Transportandlogistics Energy,Emissions Internalandexternal

Energy Energy Internalandexternal

Waste EffluentsandWaste Internalandexternal

Occupationalhealthandsafety OccupationalHealthandSafety Internal

Diversityandequalopportunities Employment,DiversityandEqualOpportunity,Non-Discrimination,MarketPresence Internal

Long-termtalentretention Employment,DiversityandEqualOpportunity,TrainingandEducation Internal

Staffdevelopment TrainingandEducation Internal

Remunerationmodelsbasedonequalpay DiversityandEqualOpportunity,Non-Discrimination Internal

Fairworkingconditions Employment,Non-Discrimination Internal

Socialcommitment IndirectEconomicImpacts External

Compliancewithlawsandstandards Anti-Corruption,Anti-CompetitiveBehaviour,EnvironmentalCompliance, Socio-EconomicCompliance

Internalandexternal

Economicstability EconomicPerformance,Anti-Corruption,Anti-CompetitiveBehaviour Internalandexternal

LIST OF KEY TOPICS GRI102-44,GRI102-47,GRI102-49

29


Addedvalue

2016/17 2017/18 2018/19

Totaloperatingperformance 1) in€m 30,232.8 31,526.2 33,045.1

Revenue in€m 24,436.7 24,909.8 25,812.2

Totalincome in€m 2,567.6 2,667.9 2,781.2

EBITDA in€m 429.3 468.0 471.1

Profitbeforetax in€m 247.4 264.2 –30.8

Equity in€m 2,639.9 2,646.6 2,806.6

Equityratio in% 30.5 31.7 33.5

Netdebt in€m 1,643.0 1,783.0 1,432.6

Companyrating(Standard&Poor’s) 2) BB + BB + BB +

Employees(total) 34,145 33,944 37,140

Employees(full-time) 26,611 27,638 29,631

1)Totaloperatingperformance=revenue+handledvolume(handlingforservicecharge).2)CompanyratingforPHOENIXPharmahandelGmbH&CoKG.

Economic value retained of the PHOENIX group in EUR m

2016/17 2017/18 2018/19

Netturnover 24,436.7 24,909.8 25,812.2

Communityinvestments 0.913 0.914 1.192

Personnelexpenses 1,289.2 1,342.4 1,420.8

Operatingcosts 22,833.3 23,246.4 24,064.6

Taxesandfees 118.2 80.2 84.7

Dividendsandinterestpaymentstoinvestors 74.7 66.4 72.6

Economicvalueretained 120.4 173.5 168.3

Environment

TotalGHGemissions(Scope1 – 3) 1) Glossary p. 38


Scope 1 total 20,786 25,219 32,046 26,585 5%

Scope 2 total 52,660 55,987 71,912 56,268 1%

Scope 3 total 92,191 90,943 91,585 91,585 1%

TotalGHGemissions ofthePHOENIXgroup 165,638 172,149 195,543 174,438 1%



TotalGHGemissionsbyregion(Scope1 – 3) 1)


PHOENIXgroup 165,638 172,149 195,543 174,438 1%

Germany 53,921 53,971 52,907 52,907 –2%

WesternEurope 58,899 66,383 80,648 68,454 3%

Eastern Europe 31,842 31,892 43,579 34,668 9%

NorthernEurope 20,993 19,903 18,408 18,408 –8%



FACTS AND FIGURES

30


Emissionsfromdirectenergyconsumptionincluding owntransportbyregion(Scope1)1)

CO2e in tonnes 2016/17 2017/18 2018/19 Lfl 2) 2018/19 ∆ Lfl 2018/19

PHOENIXgroup 20,786 25,219 32,046 26,585 5%

Germany 2,064 2,382 3) 2,244 2,244 – 6%

WesternEurope 12,496 15,918 16,398 16,268 2%

Eastern Europe 4,312 4,928 11,331 4) 6,000 22%

NorthernEurope 1,914 1,991 2,073 2,073 4%



3)Explanationofdeviatingreportedvalueinthepreviousyear:Hamburgreportedadifferentfigureforgasconsumption in2017/18.

4)DatacollectioninBosnianotpossiblefortransportemissionsin2018/19.Therefore,thepreviousyear’svaluewasassumed.

Emissionsfromindirectenergyconsumptionbyregion(Scope2)1)


PHOENIXgroup 52,660 55,987 71,912 56,268 1%

Germany 18,221 17,618 17,941 17,941 2%

WesternEurope 13,157 17,156 29,415 17,351 1%

Eastern Europe 11,860 11,725 16,745 13,164 12%

NorthernEurope 9,439 9,488 7,812 7,812 – 18%



Emissionsfromsubcontractedtransport byregion(Scope3)1)


PHOENIXgroup 92,191 90,943 91,585 – –

Germany 33,636 33,970 32,723 – –

WesternEurope 33,246 33,310 34,835 – –

Eastern Europe 15,670 15,239 15,504 – –

NorthernEurope 3) 9,640 8.424 4) 8,523 – –


2)noadjustmentsnecessary3)LatviaandNorwayarenotincludedinthevalue.4)Explanationofdifferentreportedvalueinpreviousyear:Swedenreportedadifferentvaluefortheconsumption ofHVOin2017/18.

Consumptionofdistrictheatingbyregion

in MWh 2016/17 2017/18 2018/19 Lfl1) 2018/19 ∆ Lfl 2018/19

PHOENIXgroup 21,782 21,610 21,140 20,615 – 2%

Germany 4,507 4,594 4,530 4,530 – 1%

WesternEurope 0 0 230 230 ~

Eastern Europe 3,870 3,298 4,172 3,647 11%

NorthernEurope 13,404 13,718 12,208 12,208 – 11%

1)Inordertoensurethecomparabilityofcurrentdatawithpreviousyears,wehaveadditionallyadjustedthemforspecialandnon-recurringeffects(first-timeconsolidationofRomania).

31


Consumptionofelectricitybyregion

in MWh 2016/17 2017/18 2018/19 Lfl1) 2018/19 ∆ Lfl 2018/19

PHOENIXgroup 139,385 147,656 179,435 146,393 – 1%

Germany 32,050 30,936 31,553 31,553 2%

WesternEurope 40,238 49,399 74,765 49,910 1%

Eastern Europe 20,698 20,915 30,935 22,748 9%

NorthernEurope 46,400 46,406 42,181 42,181 – 9%


Non-hazardouswastebyregion

in tonnes 2016/17 2017/18 2018/19 Lfl1) 2018/19 ∆ Lfl 2018/19

PHOENIXgroup 23,158 23,852 25,237 24,428 2%

Germany 8,621 8,012 8,079 8,079 1%

WesternEurope 7,782 9,005 10,174 9,542 6%

Eastern Europe 2,531 2,590 2.945 2) 2,768 7%

NorthernEurope 4,224 4,245 4.039 3) 4,039 – 5%


2)Datacollectionof“totalotherwaste”inBosniaandBulgarianotpossiblein2018/19.Theaveragevalueofthelastthreeyearswasassumed.

3)DatacollectionnotpossibleinLatviain2018/19.Theaveragevalueforthelastthreeyearswasassumed.

Pharmaceuticalwastebyregion

in tonnes 2016/17 2017/18 2018/19 Lfl1) 2018/19 ∆ Lfl 2018/19

PHOENIXgroup 1,432 1,344 1,600 1,383 3%

Germany 194 164 123 123 – 25%

WesternEurope 183 260 488 271 4%

Eastern Europe 205 168 190 2) 189 13%

NorthernEurope 850 752 800 800 7%

1)Inordertoensurethecomparabilityofthecurrentdatawithpreviousyears,wehaveadditionallyadjustedthemforspecialandnon-recurringeffects(first-timeconsolidationofRomaniaandfloodingofLamezia).

2)DatacollectioninBosnianotpossiblein2018/19.Thepreviousyear’svaluewasassumed.

32


Employees

Totalemployeesandfull-timeequivalents(FTEs)byregion1)

2016/17 FTE

2017/18 FTE

2018/19 FTE

2016/17 Employees

2017/18 Employees

2018/19 Employees

PHOENIXgroup 27,664 27,749 30,897 34,145 33,944 37,140

Germany 3,508 3,434 3,449 4,434 4,311 4,292

WesternEurope 11,664 11,398 11,355 15,294 14,653 14,426

Eastern Europe 6,861 7,168 10,097 7,315 7,660 10,665

NorthernEurope 5,631 5,749 5,997 7,102 7,320 7,757

1)Perduedate31January.

Employeesbygender,typeofemploymentandregion

2018/19

in figuresTotal Full-time

malePart-time

maleFull-time

femalePart-time

female

PHOENIXgroup 37,140 8,672 2,205 14,352 11,911

Germany 4,292 1,473 339 942 1,538

WesternEurope 14,426 3,080 1,179 3,117 7,050

Eastern Europe 10,665 2,680 143 6,821 1,021

NorthernEurope 7,757 1,439 544 3,472 2,302

Sickness-relatedabsenteeism1)

in hours

2016/17

Sickness- related

absenteeism/employee

2017/18

Sickness- related


2018/19

Sickness- related


PHOENIXgroup 2,395,356 70 2,406,548 71 2,534,887 68

Germany 540,683 122 513,278 119 534,089 124

WesternEurope 846,403 55 937,939 64 986,598 68

Eastern Europe 411,840 56 390,603 51 436,883 41

NorthernEurope 596,429 84 564,728 77 577,317 74

1)Figuresshownarethetotalofpaidandunpaidsickhours.

Totalrecordableinjuryfrequency(TRIF)

per one million working hours 2016/17 2017/18 2018/19

Injurieswithlosttime 1) 584 451 413

Actualworkinghours 49,244,669 50,505,980 52,711,629

Totalrecordableinjuryfrequency(TRIF) 11.41 8.93 7.84

1)Reportingbasedonlocalregulationsandincludeswork-relatedandtravelaccidents.

33


GRICONTENTINDEX

ThisreporthasbeenpreparedinaccordancewiththeGRIStandards:Coreoption.Thisreport, entitled“TAKINGACTION”,wassubmittedforreviewbytheGRIMaterialityDisclosuresService.TheGRIServicesteamconfirmedthattheMaterialityDisclosures(GRI102-40to102-49)havebeencorrectlylocatedinthereport.

GRI Standard Page Omissions/Comments

GRI101:Foundation2016

GRI102:GeneralDisclosures2016

ORGANISATIONAL PROFILE

GRI102-1:Nameoftheorganisation 5

GRI102-2:Activities,brands,products, andservices

5

GRI102-3:Locationofheadquarters 5

GRI102-4:Locationofoperations 5f.,AR52f.

GRI102-5:Ownershipandlegalform AR35

GRI102-6:Marketsserved 5f.

GRI102-7:Scaleoftheorganisation 5,30

GRI102-8:Informationonemployees andotherworkers

22,33

GRI102-9:Supplychain 16

GRI102-10:Significantchangestothe organisationanditssupplychain

12f.,16,24,26

GRI102-11:Precautionaryprincipleorapproach 13,15

GRI102-12:Externalinitiatives 10

GRI102-13:Membershipofassociations 15


STRATEGY

GRI102-14:Statementfromseniordecision-maker 3

ETHICS AND INTEGRITY

GRI102-16:Values,principles,standards, andnormsofbehaviour

6

GRI102-17:Mechanismsforadviceand concernsaboutethics

15

GOVERNANCE

GRI102-18:Governancestructure 4,7,AR41

GRI102-20:Executive-levelresponsibilityfor economic,environmental,andsocialtopics

7

GRI102-21:Consultingstakeholdersoneconomic, environmental,andsocialtopics

10f.

GRI102-22:Compositionofthehighest governancebodyanditscommittees

AR40f.

GRI102-25:Conflictsofinterest 38f.

GRI102-32:Highestgovernancebody’srole insustainabilityreporting

ThisreportwasreviewedandapprovedbytheManagementBoard.

AR=AnnualReport2018/19

34







STAKEHOLDER ENGAGEMENT

GRI102-40:Listofstakeholdergroups 10f.

GRI102-41:Collectivebargainingagreements In2018/19,around46(previousyear:54)percentofemployeesinEuropewere coveredbycollectiveagreements.

GRI102-42:Identifyingandselectingstakeholders 8,10

GRI102-43:Approachtostakeholderengagement 8,10f.

GRI102-44:Keytopicsandconcernsraised 8,11,29

REPORTING PRACTICE

GRI102-45:Entitiesincludedinthe consolidatedfinancialstatements

28,AR90f.

GRI102-46:Definingreportcontent andtopicBoundaries

8

GRI102-47:Listofmaterialtopics 8,29

GRI102-48:Restatementsofinformation 28

GRI102-49:Changesinreporting 8,29

GRI102-50:Reportingperiod 28

GRI102-51:Dateofmostrecentreport 1August2018

GRI102-52:Reportingcycle yearly

GRI102-53:Contactpointforquestions regardingthereport

39

GRI102-54:Claimsofreportingin accordancewiththeGRIStandards

28,34

GRI102-55:GRIContentIndex 34

GRI102-56:Externalassurance Athird-partyauditwas notperformedin2018/19.


KEY TOPICS

GRI201:EconomicPerformance2016

GRI103ManagementApproach2016 (incl.103-1,103-2,103-3)

12

GRI201-1:Directeconomicvaluegenerated anddistributed

5,30

GRI203:Indirecteconomicimpacts2016


26

GRI203-2:Significantindirect economicimpacts

27

GRI204:Procurementpractices2016


16

GRI204-1:Proportionofspending on local suppliers

InGeneralProcurement,productsandservicesareprimarilyprocuredfrom suppliersinthecountryinwhichthecompanyislocated.

GRI205:Anti-corruption2016


15

GRI205-2:Communicationandtrainingabout anti-corruptionpoliciesandprocedures

15

GRI205-3:Confirmedincidentsofcorruption andactionstaken

Noincidentsbecameknownintheyearreportingyear.

GRI206:Anti-competitivebehaviour2016


15

GRI206-1:Legalactionsforanti-competitive behaviour,anti-trust,andmonopolypractices

Intheperiodreportedtherewerenolegalproceedingsduetoanti-competitive behavior,cartelandmonopolyformation.

35




GRI301:Materials2016


17

GRI301-1:Materialsusedbyweightorvolume 17

GRI302:Energy2016


19

GRI302-1:Energyconsumptionwithin theorganisation

20,31f.

GRI302-4:Reductionofenergyconsumption 20

GRI305:Emissions2016


19,21

GRI305-1:Direct(Scope1)GHGemissions 21f.,31

GRI305-2:Energyindirect(Scope2)GHGemissions 20,31

GRI305-3:Otherindirect(Scope3)GHGemissions 20,31

GRI305-4:GHGemissionsintensity 21

GRI306:EffluentsandWaste2016


17

GRI306-2:Wastebytypeanddisposalmethod 18f.,32


GRI307:EnvironmentalCompliance2016


17ff.

GRI307-1:Non-compliancewithenvironmentallaws andregulations

Wearenotawareofanyincidents.Theintroductionofagroup-widereportingsystemiscurrentlyunderreview.

GRI401:Employment2016


GRI401-1:Newemployeehiresand employeeturnover

22f.,33 PHOENIXcannotcurrentlyreportonfluctuationbecausethedataisnotavailable.Acorrespondingdata collectionisbeingreviewed.

GRI401-3:Parentalleave Inthe2018/19reportingyear,144 employeesinGermanytookparentalleave.Wearecurrentlyexaminingtheestablishmentofauniformdata collectionsystemacrossEurope.

GRI403:OccupationalHealthandSafety2016


24f.

GRI403-2:Hazardidentification,riskassessment, andincidentinvestigation

25,33

36



GRI404:TrainingandEducation2016


23f.

GRI404-1:Averagehoursoftraining peryearperemployee

Trainingsaredefineddifferentlyinourcountries.Forthisreason,wedonot currentlyhaveanyreliabledataontheaverageannualnumberofhoursfor trainingandfurthereducation.Wearecurrentlyexaminingtheestablishment ofauniformdatacollectionsystem.

GRI404-3:Percentageofemployees receivingregularperformanceand careerdevelopmentreviews

23

GRI405:DiversityandEqualOpportunity2016


22f.

GRI405-1:Diversityofgovernancebodies andemployees

22,33,AR41 Agroup-widedefinitionanddatacollec-tionarecurrentlybeingworkedon.

GRI405-2:Ratioofbasicsalaryand remunerationofwomentomen

22

GRI406:Non-discrimination2016


22

GRI406-1:Incidentsofdiscrimination andcorrectiveactionstaken

PHOENIXemployeescancontacttheGroupComplianceManagerbytelephoneore-mailintheeventofsuspiciouscases.ThecontactdetailsamongothersarecommunicatedintheCodeofConductandintheCompliancePrinciples.Discrimi-nationcasescanbereportedanonymouslyaroundtheclockviatheonlinewhistle-blowersystem.Casesreceivedaretrackedandreviewedaccordingly.


GRI416:CustomerHealthandSafety2016


12ff.

GRI416-1:Assessmentofthehealthand safetyimpactsofproductandservicecategories

13

GRI416-2:Incidentsofnon-compliance concerningthehealthandsafetyimpacts ofproductsandservices

Intheyearunderreview,therewereno indicationsofviolationsofthehealthandsafetyimpactsofourproducts.

GRI417:MarketingandLabeling2016


13

GRI417-2:Incidentsofnon-compliance concerningproductandserviceinformation andlabeling

Intheyearunderreview,therewereno indicationsofviolationsinconnectionwithproductandserviceinformation.

GRI418:CustomerPrivacy2016


15

GRI418-1:Substantiatedcomplaints concerningbreachesofcustomerprivacy andlossesofcustomerdata

Nosubstantiatedcomplaintsfrom authoritieshavebeenreceivedthroughourdatabreachtool.Complaintsare generallyhandledlocally.Across-borderviolationoftheprotectionorlossof customerdataisalsonotknown.

GRI419:SocioeconomicCompliance2016


13,15,18f.,26

GRI419-1:Non-compliancewithlawsand regulationsinthesocialandeconomicarea

Nocomplaintswerereceivedintheyearunderreview.Theintroductionofagroup-widereportingtooliscurrentlyunder review.

37



AbbreviationsFMD FalsifiedMedicinesDirective2011/62/EUFTE full-timeequivalentGDD GermanAssociationforDataProtectionandDataSecurityGDP GoodDistributionPracticeISO InternationalOrganisationforStandardisationNSPCC NationalSocietyofthePreventionofCrueltytoChildrenTRIF totalrecordableinjuryfrequency

EuropeanHealthcareDistributionAssociation(GIRP)GIRPistheumbrellaorganisationforpharmaceuticalwholesalersinEurope.Itisanon-profitbodythatrepresentsthenationalassociationsofmorethan750pharmaceuticalwholesalersserving 33Europeancountries,includingmajorpharmaceuticaldistributioncompanies.

FalsifiedMedicinesDirective(FMD)2011/62/EUThisdirectivefromtheEuropeanParliamentandEuropeanCouncilcomprises,amongotherthings,theregulationsformanufacturingandimportingpharmaceuticals,placingthemonthemarket andtheirwholesaledistributionintheEuropeanUnion.Italsolaysdownprovisionsconcerningactivesubstances.

GoodDistributionPractice(GDP)Standardfortheproperdistributionandhandlingofpharmaceuticals.

Greenhousegas(GHG)emissionsThemainnaturalgreenhousegasesarewatervapour(H2O),carbondioxide(CO2),methane(CH4), ozone(O3)andnitrousoxide(N2O).Inaddition,humanactivitieshavereleasedothersubstancesclassedasgreenhousegases,suchashalocarbons(CFC,HCFC,HFC,andPCF)andsulphurhexafluoride.Theuseoftheabove-mentionedsubstancesiseitherpartlyorwhollyprohibitedorrestricted.TheyareclassifiedasGHGemissions.EmissionsarecategorisedasScope1,Scope2,orScope3,dependingontheirimpact.Scope1includesalldirectemissions.IndirectemissionsfromtheconsumptionofelectricityordistrictheatarecoveredbyScope2.Scope3relatestoallotherindirectemissions,suchasthetransportofacompany’sgoodsbysubcontractors.

HVO100Biodieselthatisextractedfromwastematerialssuchasusedgreaseandcookingoils,aswellasvegetableoilsfromoil-bearingcrops.

PharmaceuticalwastePharmaceuticalproductsthatexpiredorweredamagedduringpackingordistribution.Pharma-ceuticalwastemustbehandledwithcareanddisposedofathazardouswastetreatmentfacilities.

WarehouseExcellenceInitiativeAninitiativethatwaslaunchedin2013andcentresonmakingcontinuousimprovementstoqualityandperformanceinourdistributioncentres.Ininitialworkshops,localwarehouseemployeeslearnthebasicsofleanmanagement.

GLOSSARY

38


IMPRINT

PublisherIngoSchnaitmannHeadofCorporateCommunicationsStefanieGöndöcs CSRandCommunicationsManager PHOENIXgroup

PHOENIXPharmaSECorporateCommunicationsPfingstweidstrasse10 –1268199MannheimGermanyPhone+49(0)62185058503Fax +49(0)[email protected]

Conceptandeditingincooperationwithakzentekommunikationundberatunggmbh,Munichwww.akzente.de/en

DesignandrealisationincooperationwithHGBHamburgerGeschäftsberichteGmbH&Co.KG,Hamburg,Germanywww.hgb.de

TranslationTargetLanguagesGmbHWaldhoferStraße10269123Heidelberg,Germanywww.target-languages.com

PhotographsThomasGasparini(MotiveoftheExecutiveBoard)AllotherpicturesbyPHOENIXgroup

©PHOENIXPharmaSE,Mannheim,Germany. Allrightsreserved.

TranslationoftheGermanversion.TheGermanversionisbinding.Translation:TargetLanguagesGmbH, Dossenheim,Germany

DataforthisreporthavebeengatheredEurope-wide,consolidatedandpreparedbymeansofCSRmanagementsoftwareby

39


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