General Manager Message

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2 General Manager Message From the very beginning of our journey we have begun to adopt serious sustainability targets and commitments which were embedded in our Company s mission and values. CSR plays a considerable role in our business plans and the way we assess our employees performance. In every aspect of our business we are committed to inspire a better future for our people and the communities we serve. These commitments represent a paramount part of our overall strategy and are in the grounds of our business Growth Story. We have a well-established Sustainability Plan with stretch targets across a wide variety of social and environmental issues that are vital for our business. While we bring into life sustainable initiatives and programs, as well as progress from year to year, we recognize the need to report quantifiable metrics and targets related to our social performance and economic impact. I would like to draw your attention on the ambitious targets Coca-Cola HBC has announced which means that we will continue to concentrate our efforts on water and energy usage optimization, sustainable packaging as well as realize number of initiatives all this in aim to augment the Community well-being. I would like to give the importance to employees engagement in Sustainability initiatives stressing on how every single one of us at Coca-Cola Hellenic Armenia can contribute to supporting business growth and assure a sustainable future for it. Within our Company we know that these issues as well as the new Sustainable Development Goals cannot be tackled by one company or industry sector working alone. Private sector, governmental and non-governmental organizations will need to work in close partnership to build a more sustainable world. We will continue to work with stakeholders as we currently do on environmental issues and will seek for new partnerships towards positive changes. We have been demonstrating exceptional work for keeping with our commitments. And we re receiving recognition for our achievements which may also be the measurement of our Sustainability progress. Christoph Speck General Manager Coca-Cola Hellenic Bottling Company Armenia 2

3 About Report The Report is prepared by Coca-Cola Hellenic Bottling Company Armenia and is outlining industrial, socio-economic and ecological programs lead by the Company which altogether are shaping the Company s Sustainability Strategy. The main priorities of this report are description of programs and achievements in Product Quality, Employees Health and Safety, Environmental Protection and Community Support areas. The report covers results of Company in the period Jan 1st Dec 31st,

4 About Coca-Cola Hellenic Bottling Company Armenia Coca-Cola Hellenic Bottling Company Armenia (CCHBC Armenia) is a subsidiary of one of the world s largest producers of soft drinks, the Coca- Cola Hellenic Bottling Company (Coca-Cola HBC). CCHBC Armenia has been operating in Armenia since We are the sole authorized bottler of products of The Coca-Cola Company in Armenia. As part of Coca-Cola Hellenic, we are also the only distributor of other brands of Coca-Cola Hellenic Bottling Company, such as Dobriy and Rich juices and nectars, Fuze teas, Burn energetic drinks and Powerade sports drink. 4

5 Coca-Cola Hellenic Bottling Company 2020 Sustainability Commitments In Coca-Cola HBC, sustainability is at the core of all aspects of production, from sustainable raw material sourcing and responsible use of water and energy to environmentally friendly packaging and waste management. It has also become part of the DNA of our business, impacting all decisions and nearly everything we do. Sustainability considerations are part of product development, procurement decisions and our efforts to engage our employees. In 2017, we were named global beverage industry leader in the Dow Jones Sustainability Indices ( DJSI ) for the fourth consecutive year and we were also recognized by the CDP (formerly the Carbon Disclosure Project), scoring an A for Climate and Water. Our 2020 commitments highlight our determination to grow our business responsibly, profitably and sustainably. They are part of our long-term strategy that has enabled us to become leaders in sustainability among beverage companies. 5

6 Water Saving achievements at Coca Cola Hellenic Bottling Company Armenia in 2017 Water is considered as one of the main components of life on earth. Responsible water use during manufacturing processes is one of sustainable development priorities of CCHBC Armenia. In 2017, we have reduced our water use by 4% as compared to last year U S E D L I T E R S O F WAT E R F O R P R O D U C T I O N O F O N E L I T E R O F B E V E R A G E Used in 2016 Used in 2017 We promote our employees to report water loses and water saving initiatives. In 2017 we have received more than twice reports than in WAT E R S AV I N G R E P O R T S Reports 2016 Reports

7 Carbon Footprint reduction of Coca Cola Hellenic Bottling Company Armenia in 2017 Another sustainable development priority of CCHBC Armenia is Carbon Footprint reduction. Main components of carbon footprints our business are energy used for manufacturing of our products (expresses in MJ of energy used for production of 1 liter of beverage) and fuel used for delivery of our products (expressed as liters of fuel per million kilometers driven). In 2017, we have achieved reduction of energy use by 7% in manufacturing of our production as compared to last year M J E N E R G Y U S E D F O R P R O D U C T I O N O F O N E L I T E R O F B E V E R A G E Used in 2016 Used in 2017 In 2017, we have delivered 1,2 mln physical cases more products than last year, at the same time we decreased fuel use by 7% L I T E R O F F U E L P E R K M D R I V E N Used in 2016 Used in

8 Waste footprint minimization of Coca Cola Hellenic Bottling Company Armenia in 2017 Generation of waste during manufacturing processes is inevitable process. As a responsible producer, we assure recycling or reuse of waste generated in our premises to minimize landfill. Recycling effectiveness is expressed as percent of waste recycled from total generated. In 2017 we have increased recycling rate by more than 2% than last year, achieving 98,6% of all waste to be either recycled or reused R E C YC L I N G R AT E O F WA S T E G E N E R AT E D D U R I N G M A N U FA C T U R I N G, % Recycled in 2016, % Recycled in 2017, % 8

9 Water stewardship In 2017, CCHBC Armenia has joined the International Alliance for Water Stewardship scheme. Membership to this scheme is granted to those organizations who take care of minimization and promotes responsible water use both within their premises and in community. Those organizations are collectively work to address water related challenges. Stewardship is about taking care of something that we do not own. Stewardship approaches that focus on the management of common pool resources like forests, fisheries or, in our case, freshwater resources, are based on the principle of collective accountability for the sustainable management of those resources and are, therefore, based on collective responses. The water stewardship network covers many major international organizations such as WWF, Ecolab, Sealed Air, The Nature Conservancy Fund, Nestle, General Mills etc. 9

10 Health and Safety Health and Safety of our Employees is the highest priority of our sustainable development strategy. In our everyday operation, we promote safety work practices and improve work conditions for every person working in our company, either permanent staff or contractors. We promote our employees to report any unsafe N E A R M I S S R E P O R T S condition or any improvement which can bring to safer work environment. These types of reports are called Near Miss reports. In 2017, we greatly increased engagement of personnel in reporting Near Miss conditions. Health and Safety is also in agenda of company supervisors and managers. Supervisors on monthly basis are doing Health and Safety discussions with employees. These discussions are called Tool Box talks. In 2017 we have activated a program called Walk the Talk. During this program company Managers are doing periodic walks in company areas and hold discussions of H&S topics with employees. Any topic for improvement of health and safety condition is recorded and tracked for completion. We continuously work on renovation of fleet and delivery of safety driving knowledge to our drivers. We monitor number of accidents per million of kilometers driven. In 2017 we significantly decreased this indicator. As a result of our efforts, we have reduced number of First Aid cases from 11 to 4 (2016 vs 2017) and did not have severe injury of our employees or contractors in S U P E R V I S O R S T O O L B O X T A L K S M A N A G E M E N T W A L K T H E T A L K S 1 14 C A R A C C I D E N T S P E R M I L L I O N O F D R I V E N K I L O M E T E R S

11 Quality of our Products Stable and reliable quality and safety of our products are another priority of our company s sustainable development. We track and manage quality of our products by monitoring Consumer Complaints, Product Freshness and Manufacturing Statistical Process Control. In 2017, we had received 8 product quality complaints from consumers, which was significantly less than in Our products, as any other food product, is bearing most of its taste and flavor when it is fresh. We monitor age of products on the market to assure our consumers always receive freshest products. Product Freshness is expresses as % of product found on the shelf with age of above half of its shelf life (for example, shelf life of Coca Cola 0.5 PET is 4 months, so any product found on the shelf above 2 months old is regarded as less fresh). In 2017, we had significand improvement of freshness index in both Soft Drinks and Juices categories C O N S U M E R C O M P L A I N T S 35 F R E S H N E S S I N D E X : C A R B O N A T E D P R O D U C T S, % O F P R O D U C T A B O V E F R E S H N E S S A G E F R E S H N E S S I N D E X : J U I C E S, % O F P R O D U C T A B O V E F R E S H N E S S AGE

12 Company Employees Engagement in Sustainability Programs We constantly promote our employees to engage more and more into company s sustainability strategy execution by organizing various health and safety or environment protection related activities, completions and games. For rising Environmental awareness and engagement of our employees, every year we hold nature cleaning and tree planting campaigns. In 2017, we joined Yerevan s environmental initiative: Make Armenian Clean again. We visited Victory Park and cleaned it. In 2017 we also established Sustainability Ambassadors program. Ambassadors are chosen from every department and they are the ones which are most sustainability minded and promote sustainability among their colleagues. In celebration of World Environment Day, we organized competition among our employees called I recycle. Employees were asked to show recycling examples at home. Best employees were awarded with prizes. 12

13 For raising Driving safety awareness, we established collaboration with Road Police of RA and brought Seat Belt promoting device to our company. The device is stimulating front collision at 40 km/h and the person in the device experience seat belt protection effect. For further increase of safety awareness of forklift drivers, we organized a competition with elements of both efficient work and safety. Winners were the ones who were working most efficient and with no health and safety risks. To promote Near Miss reporting among office employees, a competition was held and winners, those who presented the most and valuable Near Misses, were given gifts. We constantly work with our contractors, raising their awareness and compliance to H&S norms and regulations. 13