SUSTAN ABLITY - Coca-Cola HBC AG€¦ · coca-cola hbc ag coca-cola hbc b-h sarajevo vision and mission ownership structure management structure strategic framework and values economic

B-H SarajevoHBC

SUSTA NAB LITYREPORT

2016

FOREWORD

ABOUT THE REPORT

ABOUT THE COMPANY

COCA-COLA HBC AG

COCA-COLA HBC B-H SARAJEVO

VISION AND MISSION

OWNERSHIP STRUCTURE

MANAGEMENT STRUCTURE

STRATEGIC FRAMEWORK AND VALUES

ECONOMIC IMPACT

SUSTAINABILITY APPROACH

MATERIAL ISSUES

RISK MANAGEMENT

ETHICS AND INTEGRITY

MARKET

OUR PRODUCTS – QUALITY COMES FIRST

BRANDS

PRODUCT QUALITY MANAGEMENT

RESPONSIBLE SALES AND MARKETING

CONSUMER SATISFACTION AND WELLBEING IS OUR PRIORITY

WINNING WITH OUR CUSTOMERS

CREATING ADDED VALUE IN PARTNERSHP WITH SUPPLIERS

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CONTENTS

WORKPLACE

THE TEAM YOU WANT TO BE A PART OF FAIR WORKING ENVIRONMENT

EMPLOYEE ENGAGEMENT

EMPLOYEE DEVELOPMENT

EMPLOYEE HEALTH AND SAFETY

ENVIRONMENT

ENVIRONMENTAL PROTECTION THE RIGHT WAY TO GO

WATER STEWARDSHIP

PROTECTION OF ENERGY RESOURCES AND CLIMATE

SUSTAINABLE PACKAGING AND RECYCLING

WASTE MANAGEMENT

COMMUNITY

THE POWER OF TOGETHERNESS

COMMUNITY DEVELOPMENT

YOUTH DEVELOPMENT

SPORT AND PHYSICAL ACTIVITY

ENVIRONMENTAL PROTECTION AND WATER STEWARDSHIP

SUPPORT TO COMMUNITY PROJECTS

GRI G4 INDEX AND INDICATORS

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CONTENTS

Dear Friends,

I am pleased to present to you the first Coca-Cola HBC B-H Sarajevo sustainability report, which showcases our initiatives and achievements in the area of sustainability.

Building a sustainable business is a strategic priority for Coca-Cola HBC B-H Sarajevo. It is an integral part of our business processes and enables us to be drivers of positive change and a reliable and desirable partner that preserves natural resources and generates added value. For years, we have been developing our practices relating to market responsibility, the environment, the local community and the workplace, as well as our reporting practices. Thus far, we have already reported and proudly shared Coca-Cola HBC's performance in the field of sustainability, as highlighted in the Group's Integrated Annual Report, which details the achievements in all 28 countries in which it operates. Our robust performance and transparent reporting practices have been recognized with Coca-Cola HBC AG being named global leader in the beverages industry by the Dow Jones Sustainability Indices (DJSI) for four consecutive years.

In defining our sustainability priorities, we continuously focus on areas that are in line with our business strategy, support our business activities, and at the same time are important for our future and that of the communities we are part of. This cannot be done in isolation from our external environment and for this reason, we regularly consult with our stakeholders, whose trust and feedback is crucial and strategically important for the improvement of our business, hence as a company we strive to preserve and strengthen this trust.

We consider our active contribution in all material aspects, determined in cooperation with our stakeholders, as our long-term goal and commitment. This has guided us in 2016, together with our Group values and in accordance with the principles of sustainability described in this Report.

We devote exceptional attention to the development of our community. And as early as 2010 the community recognized our commitment and contribution by naming Coca-Cola HBC B-H Sarajevo the most socially responsible company in Bosnia and Herzegovina. This great honor was an additional incentive for our efforts to operate in a sustainable and socially responsible manner. Our approach in this area involves establishing long-term cooperation with numerous partners from all sectors, including our suppliers, customers, state institutions and non-governmental organizations. Recognizing the problem of youth unemployment as a serious issue faced by our society, in 2016 we launched the Coke Summership summer internship program, which was soon followed by the Coca Cola Youth Empowerment program

I believe that with well-developed business strategies, our talented employees and strong partnerships, to which we are dedicated and of which we are proud, we will together successfully contribute to the prosperity and promotion of the principles of sustainable business in Bosnia and Herzegovina.

Sincerely,

Ruža Tomić Fontana General Manager of Coca-Cola HBC

for Bosnia and Herzegovina, Croatia and Slovenia

FOREWORD

The Coca-Cola HBC B-H Sarajevo 2016 Sustainability Report is our first local report designed to present our achievements in the field of sustainability to all of our stakeholders. We hope to encourage this and further develop awareness of our responsibility and the role of all our stakeholders within the society and the environment in which we operate. The compilation of this report also provides an opportunity to identify areas where there is room for improvement, upon which we will work in the upcoming period.

The report was prepared on the basis of the GRI's (Global Reporting Initiative) G4 Sustainability Reporting Guidelines.

In accordance with these guidelines, we have devoted special attention to the material issues contained within the Report, whereby for each strategic issue that can have significant economic, social or environmental impact, we take into account the views of our internal and external stakeholders in order to understand their views on the issue of integration of sustainability in our business processes. In the preparation of this Report, representatives of all departments of Coca-Cola HBC B-H Sarajevo contributed greatly, while expertise, monitoring and verification regarding the application of the GRI G4 guidelines for reporting on sustainability were provided by an expert team from the Institute of Economics in Sarajevo, comprised of professor Sead Kreso, PhD, professor Velma Pijalović, PhD, and Lejla Lazović-Pita, PhD.

Unless otherwise stated, the data presented in the Report pertains to the business of Coca-Cola HBC B-H for 2016, up to December 31st of that year. As concerns the general information and numerical data, it is distinctly stated which refer to our company Coca-Cola HBC B-H Sarajevo, which to the business unit in which we operate together with Coca-Cola HBC Croatia and Coca-Cola HBC Slovenia, which to Coca-Cola HBC AG - of which we are a member, and which to the Coca-Cola system in Bosnia and Herzegovina.

Contact person for questions regarding the report:

Alma ŠahbazPublic Affairs Manager

e-mail: [email protected]

ABOUT THE REPORT

We employ

280 people in production plant and 14 distribution centres in B&H,

subsequently creating an additional

jobs in the broader B-H economy* 3,600

More than

people participated in community sports projects

supported by Coca-Cola HBC B-H

Consumer complaint index reduced to

0.08

65%of procurement budget awarded to local suppliers.

1.29% of pre-tax profit

invested in community projects.

13.2%of our employees, through mentoring and lecturing,

donated over volunteering hours 1,500 empowering youth in BiH

For the third consecutive year we have been named

by the GfK customer satisfaction survey as the No 1supplier in the industry in B-H.

We are continuosuly working to develop a sustainable value chain,

and contribute an additional value of

. 0 5 % GDPto the B-H economy*

A record

520days without workplace injuries

44% of our cooling eqipment is HBF-free,

as all our equipment will be in the future

Energy consumption reduced by 20 %in the period between 2010 and 2016.

Water consumption reduced by

46% in the period between

2010 and 2016

Sarajevo plant awarded

EWS (European Water Stewardship) standards conformity certification by the European Water Partnership

96.3% An impressive of generated

production waste was recycled

2016 HIGHLIGHTS

C o c a - C o l a H B C B - H S a r a j e v oSUSTAINABILITY IN OUR VALUE CHAIN

12 of the

Coke Summership 20 program participants obtained employment

*The Socio-Economic Impact of the Coca-Cola System in Bosnia and Herzegovina in 2014 data. Next Study to be released in 2018.

20,000

COCA-COLA HBC AG

About the company

6

COCA-COLA HBC B-H SARAJEVO IS A MEMBER OF

Coca-Cola Hellenic Bottling Company AG (hereinafter: Coca-Cola HBC AG) is one of the leading bottlers of The Coca-Cola Company (TCCC) in the world, operating on three continents in 28 countries, from Russia to Nigeria, with a yearly sales volume of over two billion unit cases. At the end of 2016, Coca-Cola HBC AG had 56 bottling plants, 264 warehouses and distribution centers and 271 production lines, with 31,083 people directly employed, and its products reaching up to 595 million consumers.

Coca-Cola HBC B-H Sarajevo2016 Sustainability Report

Volume

383 m u.c.

Developing marketsPopulation: 76 million

GDP per capita: US$ 13,861

Volume

607 m u.c.

Established marketsPopulation: 91 million


Volume

1,068 m u.c.

Emerging marketsPopulation: 428 million


Coca-Cola HBC B-H Sarajevo buys concentrates, bases and syrups for the production of beverages, and is responsible for the distribution and sales, as well as key customer management and product promotion at the point of sale.

Coca-Cola HBC B-H consists of the administrative-production-distribution center in Hadžići, near Sarajevo, with sales and

distribution centers in Tuzla, Mostar-Ljubuški and Banja Luka-Laktaši, and a sales and administrative office in Bihać.

In 2016 a total of 280 direct employees were engaged in the production, promotion and distribution of 16.7 million unit cases of our high quality brands, catering to a population of almost four million in Bosnia and Herzegovina.

FOUR YEARS AS INDUSTRY LEADER

In September 2017, Coca-Cola HBC AG was named leader in the soft drink manufacturing industry for the fourth consecutive year in the Dow Jones World and Europe Sustainability Indices.

As in other countries, the Coca-Cola system in Bosnia and Herzegovina is made up of two companies. Since 2003, these have been Barlan B-H and Coca-Cola HBC B-H Sarajevo.

Barlan B-H is a subsidiary of The Coca-Cola Company (TCCC) in Bosnia and Herzegovina. It is responsible for strategic marketing, brand management, packaging strategy, promotion, advertising, public relations and market research.

Coca-Cola HBC B-H Sarajevo (hereinafter: Coca-Cola HBC B-H) is a subsidiary of Coca-Cola HBC AG and is a licensed bottler of products for The Coca-Cola Company in Bosnia and Herzegovina. Coca-Cola HBC AG is based in Switzerland and its shares are listed on the premium segment of the London Stock Exchange, with a secondary listing on the Athens Stock Exchange.

In April 1992, due to the war, the bottling plant's operation was interrupted.

Sales of Coca-Cola in Bosnia and Herzegovina resumed in 1996, and in October 2000 domestic production was relaunched.

The first bottle of Coca-Cola in Bosnia and Herzegovina was produced in 1975, in the bottling plant in Hadžići.

7

COCA-COLA HBC B-H SARAJEVO

The company continuously improves, innovates and optimizes its activities in order to develop a more efficient and sustainable business, and in turn, accelerate its growth, supported by a more conducive external environment.

Coca-Cola HBC B-H Sarajevo2016 2016 Sustainability Report

1969Start of distribution of

Coca-Cola products on the

market of the (then)

Socialist Republic of Bosnia

and Herzegovina.

1984

1989 1992.

1996 1998

1975

2002

2003

2004

1999

2005

20062008

2007

Construction and commencement of operations of the bottling plant in Hadžići under the name "Slovin- Ljubljana OOUR Hadžići punionica Coca-Cola pića".

Introduction of

limited edition

Coca-Cola cans

bearing the

logo of the XIV

Winter Olympic

Games being

held in Sarajevo.

Start of

operation of

Sarajevo

bottling plant

under the

name "IBP

Hadžići –

punionica

Coca-Cola

pića".

Operation of bottling

plant in Hadžići

interrupted by

outbreak of war.

Opening of Coca-Cola

Amatil representative

office in Sarajevo, and

start of distribution of

Coca-Cola products from

Croatia and Austria.

Production of first can of Coca-Cola with the label Made in Bosnia and Herzegovina in the Sarajevo Brewery.

Start of operation of consumer

information center and first free

customer info-line in Bosnia and

Herzegovina.

Coca-Cola

Beverages B-H d.o.o.

Sarajevo changes its

name to Coca-Cola

HBC B-H d.o.o.

Sarajevo, operating

within the Coca-Cola

HBC Group.

Bottling of

Olimpija natural

and carbonated

spring water

begins.

26th October –

start of production

in newly-built

bottling plant in

Hadžići.

Opening of

branch office in

Banja Luka.

Successful introduction of

HACCP standards.

Start of

domestic

production of

PET preforms.

Introduction

of second

bottling line

for PET

packaging.

Start of production

of the Cappy

Tempo brand.

Coca-Cola

HBC B-H declared

the winner in the

category

"Responsible

Business Practices"

of the state

competition for

socially-responsible

companies

"DOBRO'09".

Initiative

launched to

establish

BiHPAK.

ISO 22000

ISO 14001ISO 9001certification

certification

certification

OHSAS 18001certification.

presence in Bosnia and Herzegovina

2009

Coca-Cola Amatil split into two parts, with

Coca-Cola Beverages emerging as a new

system in which operations continue

under the name “Coca-Cola Beverages

B-H d.o.o. Sarajevo".

2012

2013

2014

2016

2015

2010

2011

Start of production of

Coca-Cola Zero.

Coca-Cola HBC B-H operates

within the joint business unit

Coca-Cola HBC Adria alongside

Coca-Cola HBC Croatia, with

Coca-Cola HBC Slovenia joining

two years later.

For the sixth

consecutive year,

Coca-Cola HBC B-H

named by visitors to

the employment portal

posao.ba as one of the

ten most desirable

employers in Bosnia

and Herzegovina.

Coca-Cola HBC B-H actively

contributes to the mitigation of

the consequences of the floods

in Bosnia and Herzegovina,

receiving special recognition

from the Red Cross Society of

Bosnia and Herzegovina and the

Federal Civil Protection

Administration. Launch of the Summer

internship program

Coke Summership.

Start of production of the

Emotion brand.

Presentation of the Socio-

Economic Impact Study of the

Coca-Cola System in Bosnia and

Herzegovina.

Coca-Cola HBC B-H

declared the most

socially-responsible

company in Bosnia

and Herzegovina at

the state

competition

DOBRO'10.

Certification according to The Coca-Cola

Company KORE requirements.

Launch of project �ist Vrbas

in cooperation with UNDP

in Bosnia and Herzegovina.

Coca-Cola HBC B-H becomes co-founder of

Ekopak.

Coca-Cola HBC B-H d.o.o. Sarajevo, Mostarsko raskršće bb, 71240 Hadžići, is wholly owned by Coca-Cola Beverages Holdings II BV, which operates in accordance with the laws of the Netherlands, headquartered at Naritaweg 165, 1043 BW, Amsterdam, the Netherlands, and registered in the Commercial Chambers of Amsterdam, reg. no. 33298456 (hereinafter: CC Beverages Holdings II B.V.).

CC Beverages Holdings II B.V. is wholly owned by Coca-Cola HBC Holdings BV, which operates in accordance with the laws of the Netherlands, headquartered at Naritaweg 165, 1043 BW, Amsterdam, the Netherlands, and registered in the Chamber of Commerce of Amsterdam, reg. no. 27590427 (hereinafter: Coca-Cola HBC Holdings BV).

Coca-Cola HBC Holdings BV is wholly owned by Coca-Cola HBC AG, which operates under the laws of Switzerland, headquartered at Turmstrasse 30, 6300 Zug, Switzerland, under the corporate registration number 170.3.037.199-9 on the London and Athens stock exchanges.

VISION

To become the undisputed leader in every market in which we compete.

MISSION

Our mission in Bosnia and Herzegovina is to refresh our consumers, partner with our customers and enrich the lives of the local communities in which we operate by offering high quality products and building citizens' trust through our everyday work as our most important asset.

About the company

OWNERSHIP STRUCTURE VISION AND MISSION

MANAGEMENT STRUCTUREThe management structure of the company consists of the Assembly as the administrative body and the Management Board of the company as the management body. The Assembly consists of one member, founder and sole owner - the company CC Beverages Holding II B.V. Since a Supervisory Board has not been appointed, the founder of the company directly monitors the operations of Coca-Cola HBC B-H.

The function of the president of the highest governing body and executive functions in the company are separated. The Assembly appoints the Management Board, which includes the General Manager and the Sales Manager of the company.

Three legal entities: Coca-Cola HBC B-H, Coca-Cola HBC Croatia and Coca-Cola HBC Slovenia, which operate in three different countries, with the same owner, are organized into a single business unit.

In July 2017, Ruža Tomić Fontana was appointed General Manager of that business unit. Prior to becoming General Manager, Tomić Fontana was the Sales Manager of the business unit.

In the period August 2015 - July 2017, which is partially covered in this report, Maria Anagyrou Nikolić performed the duties of the General Manager of the business unit.

The work of managers is evaluated through the process of assessing individual performance in relation to the set annual goals in key result areas: lead and inspire, deliver sustainable growth, innovate to drive growth, manage with excellence, and establish partnerships for growth. Annual bonuses are linked to the achievement of goals in these key areas. Board members may not participate in any activity that is or could conflict with the interests of Coca-Cola HBC B-H during and two years following the end of their mandate.

10 Coca-Cola HBC B-H Sarajevo2016 2016 Sustainability Report

PUBLIC AFFAIRS AND COMMUNICATIONS

LEGAL

MANAGEMENT BOARD GENERAL MANAGER

BUSINESSSOLUTIONSANDSYSTEMS

HUMAN RESOURCES

FINANCECOMMERCIALEXCELLENCE

MARKETINGSALESSUPPLY CHAIN

1 2 3 4 5 6 7 8 9

At Coca-Cola Hellenic we are committed to upholding six core values, along with the behaviors that support them and shape our everyday operations. Everything starts with our values. They are the DNA of our company and are key to our future success.

Authenticity

We have deeply felt values, act with integrity and do what is right, not just easy.

Excellence

We strive to amaze, with passion and speed.

Learning

We listen and have a natural curiosity to learn.

Caring for our people

We believe in our people, invest in them and empower them.

Performing as one

We believe in the power of working together, contributing in every interaction.

Winning with customers

Our customers are at the heart of everything we do.

These values create a culture that gives our people a strong sense of belonging and the self-confidence to effectively make meaningful decisions. Such an approach to doing business gives us an advantage in the market as it makes us a company with which customers want to cooperate.

Our 2020 Play to Win Strategic Framework covers material aspects of relevance to the company and stakeholders and is based on our core values and four strategic imperatives, the so-called 4Cs, representing our aim to deliver every day superior value in community trust, consumer relevance, customer preference, and cost leadership.

COCA-COLA HBC B-H STRATEGIC FRAMEWORK AND VALUES

Community trust

We build relationships based on trust, working towards three strategic goals: contributing to the wellbeing of our community, reducing our ecological footprint and promoting an active lifestyle.

Consumer relevance

We satisfy the needs of consumers by offering a wide range of high-quality products at the right price for each product. This requires ongoing commitment to quality and innovation, responsible marketing and engagement with consumers.

Customer preference

By finding new ways to succeed together within the market, we strive to be the preferred supplier of all of our customers. We undertake a series of initiatives, build and maintain successful partnerships and ensure profitable growth for our business and our customers. In order to achieve this, business ethics, the fight against corruption, and regulating and ensuring direct and indirect economic impact are crucial.

Cost leadership

We ensure sustainable business growth and cost leadership by devoting efficiency to the process of production, better use of resources, and the improvement of the procurement process. This results in a reduction in operating costs and expenditures, thus ensuring long-term sustainability.

Material issues are classified based on their importance for creating value according to four strategic pillars in order to better understand the relationship between the material aspects and Coca-Cola HBC B-H's business operations.

Unparalleled talent and high performance mindset are key enablers of our efforts to achieve our aspirational targets.

Coca-Cola Hellenic

Strategic Framework

Playto

WinWith

The Coca-Cola Companyour partners

in growthUnparalleled Talent

HighPerformance Mindset

authenticity

excellence

learningcaringfor ourpeople

performing as one

winningwith our

customers

Community Trust

CostLeadership

Consumer Relevance

CustomerPreference

11Coca-Cola HBC B-H Sarajevo2016 Sustainability Report.

ECONOMIC IMPACT

Coca-Cola HBC B-H operates in a very challenging macroeconomic environment, characterized by low rates of economic growth, high unemployment and a complex political and economic situation in the country. Flooding in May 2014 led to a slowdown in economic activity, and in 2016 we were even further exposed to pressures related to the proposals of additional fiscal burdens and problems in the operations of one of our key customers.

Despite the unfavorable macroeconomic environment, we managed to achieve good financial results and retain a leading position, owing to the firmly established strategy and dedication of our people.

Direct economic value generatedDistributed economic value

Economic value retained

2014

103,048,683.00

100,417,160.15

2,631,522.85

2015

105,298,153.00

102,866,210.45

2,431,942.55

2016

112,839,683.00

109,590,685.85

3,248,997.15

SUSTAINABILITY APPROACH

By maintaining a sustainable business, we attempt to create added value for all of our stakeholders: employees, customers, consumers, suppliers and the community, with whom we are in constant dialogue, in order to understand their needs and expectations and link them to our business strategy, where appropriate.

Our strategic partnerships are focused on the development of cross-sector cooperation, i.e. capturing synergies with non-profit organizations, relevant international organizations, government bodies and other interest groups, as the most effective way to address complex modern sustainability challenges, such as climate change and obesity.

Our comprehensive approach to sustainability includes:

EXPERTsupport when creating a sustainability and reporting strategy

The integrity of the sustainability principle in our operations is also confirmed by our internal strategic documents for the relevant fields, which are presented over the following chapters.

Our sustainability approach is in line with the Group's strategy to grow our business in a responsible, sustainable and profitable manner. It is this approach that has established Coca-Cola HBC as a leader in sustainability among beverage companies.We continuously strive to integrate sustainability into every aspect of our business.

Sustainability is an integral part of the Coca-Cola HBC culture, which is guided by our decisions and long-term investments in order to create lasting value.

The three strategic goals of sustainability of Coca-Cola HBC are:

12 Coca-Cola HBC B-H Sarajevo2016 Sustainability Report

Generate positive socio-economic impact

Minimize our environmental impact

Engage with our stakeholders

Coca-ColaHBC

sustainabilitystrategic

goals

About the company

13

95%

25%

25%

50%

10%

2%

40%

40%

30%

of the total energy we use from renewable and clean energy sources

Take

In line with its sustainability strategy, the Coca-Cola HBC has communicated a number of sustainability commitments, which are relevant to almost all aspects of our business. By 2020 we commit to:

Recover for recycling an average of of total packaging we introduce into our markets

Reduce packaging by

per liter of beverage produced

Certify over

of our key agricultural ingredients against the Coca-Cola System's Sustainable Agricultural Guiding Principles

Invest of our annual pre-tax profit into local communities

Double the number of employees taking part in volunteering initiatives during work time to

Reduce water useinternally by

Reduce direct carbon emissions intensity by

Reduce carbon emissions intensity in the value chain by

Certify

our plants inallEuropean Water

Stewardshipor Aliance for Water

Stewardship standard.

At Coca-Cola HBC B-H we strive to operate our business in such a way as to contribute to the achievement of these goals.


14

LEADERSHIP IN BUSINESS INITIATIVES

Coca-Cola HBC B-H is an active member of business associations whose activities focus on the promotion and development of socially responsible practices: the Association of Employers of Bosnia and Herzegovina, where we are a member of the Managing Board, the Society of Employers of the Federation of BiH, in which we are a member of the Working Group on Legislation and Legal Regulations, The American Chamber of Commerce in Bosnia and Herzegovina (AmCham), where we are a member of the Managing Board, and the Group of Producers of Soft Drinks and Waters at the Foreign Trade Chamber of Bosnia and Herzegovina, where we hold the function of Vice-President of the Group. We are also a member of the Council of Foreign Investors (FIC), business association Biznis Plus and one of the co-founders and a member of the Management Board of Ekopak, the authorized operator of packaging waste management system in the territory of the Federation of Bosnia and Herzegovina.

As sustainability leaders, through our membership of business associations we take the initiative to share experiences and encourage responsibility for promoting and motivating other companies to develop sustainable practices.


Responsibility for developing a sustainable business within Coca-Cola HBC B-H is shared by the Operational Sustainability (within Supply Chain Deparment) and the Public Affairs and Communications Department. In accordance with the organizational structure, the Public Affairs and Communications Unit of Coca-Cola HBC B-H reports to the Public Affairs and Communications Department Manager of the business unit, who in turn reports to the General Manager.

The Operational Sustainability Unit of Coca-Cola HBC B-H reports to the Operational Sustainability Manager of the business unit, who reports to the Regional Director for Occupational Health and Safety and Operational Sustainability of the Coca-Cola HBC.

In order to promote sustainable business practices, our stakeholders, are regularly informed of our achievements in the area of sustainability. On occasion of Coca-Cola BC Hbeing recognized as global sustainability leader in the beverage industry by the Dow Jones Sustainability Indices for the fourth year in a row, we issued a press release. Stakeholders from the public administration, as well as other interest groups on progress in the field of sustainable business, were kept up-to-date within the bottling plant visit program. In addition, we use our website as a platform for presenting the results achieved and encouraging the development of sustainable business practices.

BOSNIAN AND HERZEGOVINIAN MORE THAN YOU THINK

About the company

Value created

By running a profitable, sustainable and responsible business, we create value which is subsequently both retained in our business, making it stronger, and shared with all of our stakeholders.

Suppliers We create added value for our suppliers and improve standards in the area of employment, human rights and the protection of the environment.

EmployeesDeveloping, recognising and rewarding our people ensures a skilled and motivated workforce.

CustomersWe build strong long-term partner relationships with our customers.

CommunityWe contribute to the community directly and indirectly through job creation, paying taxes, promotion of a healthy lifestyle, protection of the environment, support of local projects, help in disaster relief and recovery.

Serving consumers and community

We offer a diverse portfolio of brands to satisfy evolving consumer preferences.

Producing cost efficiently

Through efficient combination of ingredients together with skills and determination of our employees, we produce, package, enhance sales and distribute products.

1Plant

3Bottling lines

4Warehouses and distribution centres

Warehouses and distribution centresThrough optimal use of our resources we ensure responsible and sustainable business, which is a key contributor to our profitability.

Suppliers

716

Direct employees

280

More than

14,000customers

19,385,549BAM taxes paid

Invest in the business

Create Demand

We aim to improve operating efficiency.

We apply high health and

safety standards in the area of

employment, human rights, environmental protection and

product quality.

Coca–Cola HBC B-H Sarajevo

MATERIAL ISSUES

Materiality analysis is a strategic tool that defines relevant and important issues for the company and its stakeholders. It identifies issues that can influence decision-making, actions, business, and the ability of the company to create added value, both now and in the future. For us, the assessment of material issues is a continuous process that ensures that our strategic focus remains relevant, given the environment in which we operate. It is therefore of high importance to define these issues and to involve internal and external stakeholders in the process.

In order to identify relevant economic, social and environmental issues upon which we need to focus our attention, we maintain a permanent dialogue with all stakeholders. We use different mechanisms for different types of stakeholders, ranging from daily communication on current issues to long-term initiatives such as packaging waste management initiatives or creating common values for customers, with some of the activities being carried out at the Group level, and others at the local level.

The Coca-Cola HBC B-H Materiality Matrix was the starting point for addressing the substantive issues identified by Coca-Cola HBC, based on a comprehensive analysis of issues areas across all 3 dimensions of sustainability: economic, environmental, and social, as well as feedback from internal and external stakeholders.

The second phase in the process of creating a matrix is the positioning of these material issues in our matrix of materiality based on the degree of their significance for our internal and external stakeholders and their potential economic, environmental and social impact on our business. For this purpose, in February 2017, Coca-Cola HBC B-H conducted an online survey, with the participation of:

35 internal actors from middle and senior management of the company

48 external stakeholders, drawn from the following categories: customers (distributors, key customers, customers of the catering retail chain), suppliers of raw materials and services, civil society (non-governmental organizations, universities), institutions (various levels), business associations and the media

The selection of external stakeholders involved the cooperation of all departments, with special attention being paid to ensuring adequate representation of all stakeholder groups.

The result of this process is the Coca-Cola HBC B-H materiality matrix

16

8.4 8.6 8.8 9.0 9.2 9.4 9.6 9.8 10.0

9.8

9.6

9.4

9.2

9.0

8.8

8.6

8.4

8.2

Human rights & diversity

Sustainable sourcing

Community investment & engagement

Direct & indirect economic impacts

Responsible marketing

Health & nutrition

Corporate governance, business ethics & anti-corruption

Employee well-being & engagement

Product quality & integrity

Water stewardship

Packaging recycling & waste management

Carbon & Energy

SIGNIFICANCE OF POTENTIAL ECONOMIC, ENVIRONMENTAL AND SOCIAL IMPACTS

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SCoca-Cola HBC B-H Sarajevo2016 Sustainability Report

About the company

Business associations - Association of Non-alcoholic beverages

and Water Producers within Foreign Trade Chamber of Bosnia and Herzegovina

- Association of Employers of Bosnia and Herzegovina

- Association of Employers of Federation Bosnia and Herzegovina

- American Chamber of Commerce in BiH - Foreign Investors Council - Business Plus Association

Customers - Regular visits - Customer infoline - Customers satisfaction surveys - Joint value creation initiatives - Joint business planning

The Coca-Cola Company - Daily cooperation with business

partners - Joint projects - Joint business planning

Employees - Employee engagement survey and

value index - Individual development plans - Employee council - Employee hotlines

Community - Plant visits - Meetings - Sponsorships - Partnerships

Consumers - Consumer infoline - Focus groups

NGOs - Ongoing dialogue - Partnerships - Membership

Government and regulatory bodies - Ongoing dialogue - Recycling and waste

management initiatives

Suppliers - Joint value creation initiatives - Supplier Guiding Principles

MATERIAL ISSUES

Shareholders andanalysts

- Annual meetings - Presentation of results on

quarterly basis - Continuous dilaogue

RISK MANAGEMENT

Guided by our Play to Win strategy, we define material issues based on the importance they have for the ability of our company to create value, and with the prior identification of key determinants in stakeholder dialogue. In doing so, some material matters may have a direct impact on our business, such as economic conditions, or indirect, such as issues that may have a negative impact on the reputation of the company.

Material issues are classified based on their importance for creating value according to our four strategic imperatives, with the aim of better understanding the relationship between the material issues and the business of Coca-Cola HBC B-H

of consequences. In this context, there are Group policies developed to prevent the occurrence of these risks.

Some of the risks (listed in the table) are directly linked to our material issues, and some - such as, unexpected changes in tax policy, volatility in the financial and foreign exchange markets, changes in the concentration of the retailers' market or distribution chains, cyber-attacks and loss of personal data - can jeopardize our business and reputation.In 2016 we found that risks that were not directly related to the materiality matrix could significantly impact our operations, as was the

Risk management, which includes a review, evaluation of likelihood, and an analysis of potential consequences, is one of our priorities. Coca-Cola HBC AG, as well as Coca-Cola HBC B-H, continuously identify and assess the size of potential risks, both at the level of individual activities and in the overall portfolio of activities. In this regard, we carefully and proactively strive to monitor all the changes in the environment in which we operate in order to identify and evaluate the risk magnitude in a timely manner. For each risk, we attempt to determine the potential impact and, more importantly, to develop methods of preventive action and mitigation

case with the regional financial and economic problems of one of our key customers and, unfortunately, an unplanned announcement of an increase in excise taxes on non-alcoholic beverages in Bosnia and Herzegovina.

Risk assessment is continuously performed, which of course does not mean that it is possible to identify and prevent all risks and the occurrence of all harmful events, or to eliminate their consequences for ourselves and other actors involved in our business.

Coca-Cola HBC Materiality issues and the four Cs

Community

trust

Consumer

relevance

Customer

preference

Cost

leadership

Economic Issues

Corporate governance, business ethics and anti-corruption

Direct and indirect economic impact

Health and nutrition


Product quality and integrity

Environmental Issues

Carbon and energy

Packaging, recycling and waste management


Water stewardship

Social IssuesCommunity investment and engagement

Employee engagement and wellbeing

Human rights and diversity


About the company

Failure to adapt tochanging consumerhealth trends andaddress misconceptionsabout the healthimpact of soft drinks

Failure to meet ourstakeholders'expectations inmaking a positivecontribution to thesustainabilityagenda, particularlyrelating to climatechange, packagingwaste and water usage.

– Failure to achieve our growth plans

– Damage to our brand and corporate reputation

– Loss of consumer base

– Long-term damage to our corporate reputation

– Less influence in shaping the citizenship and sustainability agenda

– Reduced profitability

– Focus on product innovation

– Expand our range of low and zero-calorie beverages

– Introduce smaller entry packs

– Reduce the calorie content of products in the portfolio

– Clearer labeling on packaging

– Promote active lifestyles through consumer engagement programs focused on health and wellness

– Water stewardship programs that reduce our water consumption and our footprint and assure sustainable end-to-end water use

– Carbon and energy management programs

– Packaging waste management programs

– Partnering with NGOs and International NGOs on common issues such as nature conservation

– Partnering with local communities to minimize environmental impact

– Focus on sustainable procurement

Health andNutrition


Carbon andEnergy

Packaging,recycling andwastemanagement

SustainableSourcing

Water stewardship

Principal risks Risk Potential impact Key mitigations Link to material issues Status

Consumer health

Climate, carbon and

water

19Coca-Cola HBC B-H Sarajevo2016 Sustainability Report

Challenging andvolatilemacroeconomic,security andpoliticalconditions canaffect consumerdemand andcreate securityrisks across ourdiverse mix of markets.

The occurrenceof quality issues,or the contamination of our products.

– Eroded consumer confidence affecting spending

– Inflationary pressures

– Social unrest

– Safety of people and security of assets

– Reduction in volume and net sales revenue

– Damage to brandand corporate reputation

– Loss of consumer trust

– Seek to offer the right brand at the right price, in the right package through the right channel

– Robust security practices and procedures to protect people and assets

– Crisis response and business continuity strategies

–Stringent quality processes in place to minimize the occurrence of quality issues

– Early warning systems (Consumer Information Centers and social media monitoring) that enable issue identification

– Robust response processes and systems that enable us to quickly and efficiently deal with quality issues, ensuring customers and consumers retain confidence in our products

Direct andindirecteconomic impacts

Productquality and integrity


Declining consumer

demand

Quality


Inadvertentnon-compliance,by the Companyor related thirdparties, withlocal laws andregulations, thatexist across ourdiverse mix of markets.

Inability to attract and retain sufficientand experiencedemployees incompetitive talent markets and an inabilityto ensure their ongoing engagement and commitment.

– Damage to our corporate reputation

– Significant financial penalties

– Management time diverted to resolving legal issues

– Failure to achieve our growth plans

– Annual 'Tone from the Top' messaging

– Code of Business conduct training and awareness

– Anti-Bribery Policy and commercial compliance training

– Internal control assurance program with local management accountability

– Risk-based internal control framework

– 'Speak Up' helpline

– Legal function in constant dialogue with regulators

– Focus on developing leadership talent

– Right people in the right positions across the business

– Focus on employee engagement ensuring support for our values

– Promote operational excellence

– Create shared value with the communities in which we work to ensure we are seen as an attractive employer

Corporategovernance,businessethics andanticorruption

Human rights and diversity

Employeewell-beingand engagement

Regulatory changes

People and talent

21



Foreign exchangeexposure arisesfrom changes inexchange rates, aswell as currencydevaluation incombination withcapital controls,which restrictsmovement of fundsand increases therisk of assetimpairment.

A continuedincrease in theconcentration ofretailers andindependentwholesalers onwhom we dependto distribute ourproducts. Theimmediateconsumptionchannel remainsunder pressure asconsumers alterconsumption habits.

– Financial loss

– Asset impairment

– Limitations on cash repatriation

– Reduced profitability

– Treasury Policy requires the hedging of 25% to 80% of rolling 12-month forecast transactional exposure

– Hedging beyond 12 months may occur if forecast transactions are highly probable

–Derivate financial instruments are used, where available, to reduce net exposure to currency fluctuations

– Continued to increase our presence in the discounter channel during 2016

– Working closely with our customers to identify opportunities for joint value creation

– Right Execution Daily (RED) strategy continues to support our commitment to operational excellence, enabling us to respond to changing customer needs across all channels

N/A

N/A

Foreign exchange

Channel mix

22



Regulations onconsumer healthand the risk of thetargeting of ourproducts fordiscriminatory taxand packaging waste recovery.

Business stoppage dueto applications or systems unavailability,or a loss of personal data, arising from data center failure or external cyber threats and vulnerabilities.

- Reduction in profitability

– Proactively working with governments and regulatory authorities to ensure that the facts are clearly understood and that our products are not singled out unfairly

– Shaping the sustainability agenda as it relates to packaging and waste recovery

– Engaging with stakeholders including NGOs and the communities in which we operate on strategies to protect the environment

– Monitoring, identifying and addressing cyber threats and suspicious internal computer activity

– Training on information management and the protection of information

– Disaster recovery testing and building resilience into our cyber risk program

N/A

N/A– Financial loss

– Operational disruption

– Damage to corporate reputation

– Non-compliance with statutory data protection

legislation

Discriminatory taxes

System availability

and cyber

attacks

23



Failure to effectively execute majorbusinesstransformations, or performance issues with third-partyproviders that we deploy as part of ourbusiness transformation

We rely on our strategicrelationships and agreements with TheCoca-Cola Company, Monster Energy and other partners.

– Under-delivery of expected transformation results

– Disengaged employees

– Reduction in profitability

– Market confidence in our ability to deliver on strategy is weakened

– Damage to corporate reputation

- Termination of agreements or unfavorable renewal terms could adversely affect profitability

– Project plans and change management strategies in place

– Board and Operating Committee conduct regular tracking of the actual performance compared to business case

– Management focus on effective

day-to-day interaction with our strategic partners

– Working together as effective partners for growth

– Engagement in joint projects and business planning with a focus on strategic issues

– Participation in 'Top to Top' senior

management forums

N/A

N/A

Strategic stakeholder

relationships

Change management

24



CODE OF BUSINESS CONDUCT

The Code of Business Conduct has established behavioral norms that make it easier to make decisions that are socially, professionally and organizationally acceptable, and which seek to protect the integrity of the company, its employees, and all stakeholders.

The Code of Business Conduct has been adopted at the Coca-Cola HBC level and applies across all countries in which the Group operates. All employees are familiar with the Code, which is based on our core values.

Our code consists of several parts:

INTEGRITY which relates to mutual cooperation, product quality, health and safety at work, business and financial documentation, company property, use of information, conflict of interest.

USE OF COMPANY ASSETSwhich relates to resources, equipment, company vehicles, products, computers, software, and company information.

CONFIDENTIAL INFORMATIONrelating to which information is secret, which public, and which documentation is considered confidential.

FAIR COMPETITION which relates to fair business competition and ethics, and sanctioning of advantages over competition obtained through illegal and unethical actions.In view of the strict provisions of the Competition Act, Coca-Cola HBC B-H has created and implemented a new Commercial

Policy, which is fully in line with European Union competition law legislation.

CONFLICTS OF INTERESTwhich refers to potential situations in which personal interests, activities and relationships of employees may conflict with the interests of the company.

The timely expression of a suspicion of a potential violation of the Code of Business Conduct allows us to address them before they turn into legal violations or health, safety and reputational risks. Therefore, we encourage the reporting of any suspicion of violation of the business code via the website or the free Speak up! helpline.

ANTI-CORRUPTION AND PREVENTION OF CONFLICT OF INTEREST

Anti-corruption procedures are specifically defined by the Anti-Corruption Policy and Compliance Handbook. This act defines our approach to preventing bribery, collusion with government officials and other parties: clients, customers, and business partners. Likewise, our corporate policy in this area prescribes clear company requirements to ensure compliance with applicable anti-corruption laws.

The policy also provides guidelines on conflict of interest and the provision or receipt of gifts and services from an associate. Cooperation with civil servants is given special attention, so the policy provides explanations of who is considered as a civil servant, what situations could be considered as incidents of corruption, and what should be done to prevent this. The Handbook stresses the Company's policy of zero tolerance toward

giving money to public officials in order to speed up the work process, and the fact that any kind of monetary or non-monetary direct or indirect giving for political purposes is likewise forbidden.

As with the Code of Business Conduct, all new employees are required to read the Policy and sign it to show that they are aware of its contents. In addition, anti-corruption trainings for employees are organized every other year. The most recent training was completed in 2016, and it covered all workers, including members of upper management.

The general induction program, passed by all new workers, also includes training on anti-corruption policies and procedures. During 2016, 45 new workers, including permanent and temporary employees, passed through this program. In this policy, the areas of finance and procurement have been identified as particularly risky areas, so the basic principles of the anti-corruption policy are also contained in the Supplier Guidance Principles - SGP, which are distributed to all suppliers.

PROTECTION AGAINST UNFAIR COMPETITION

Aware of the fact that the Rules on Protection Against Unfair Competition protect us from illegal actions of other actors in the market, we pay special attention to this issue. All our employees in the sales, marketing and finance departments have passed training conducted by experts in the field of competition, and the preparation of the Protection Against Unfair Competition Handbook is in process. Each year Coca-Cola HBC AG organizes specialized training in this area for its commercial sector employees, while certain managers are also required to take an additional online test.

ETHICS AND INTEGRITY WE DO WHAT IS RIGHT

As a socially responsible company, we strive to set the highest standards in business and, by example, encourage the development and implementation of the best business practices in Bosnia and Herzegovina, while showing a clear commitment to respect laws and high ethical principles within each business segment.


About the company

OUR PRODUCTS

MarketQUALITY COMES FIRST

Our internal and external stakeholders rated the issues of product quality and integrity as most important. and as a company committed to grow in a responsible and sustainable way, we pay special focus in this area:

We offer a wide range of high quality beverages tailored to the needs of our consumers

We take into account not only legal but also additional internal and external standards when it comes to food safety

We provide clear and useful information on the composition and nutritional value of the product, including a declaration of calorific value on the front of the packaging

In cooperation with customers and suppliers we create a common added value

Coca-Cola HBC B-H offers its end consumers a wide range of high-quality products created not only to meet the requirements of different tastes, but also those related to specific diets, lifestyles or preferences, and therefore innovate continuously.

Our range of beverages includes:

Sparkling beverages

Non-alcoholic carbonated beverages containing flavorings and sweeteners, excluding, among others, waters and flavored waters, juices and juice drinks, sports and energy drinks, teas and coffee. These are: Coca-Cola, Coca-Cola Zero, Fanta, Schweppes and Emotion. Schweppes products are registered trademarks of Schweppes Holdings Limited.

Still and water beverages

Non-alcoholic beverages without carbonation including, but not limited to, waters and flavored waters, juices and juice drinks, sports and energy drinks, teas and coffee. These are: Cappy, Cappy Pulpy, Cappy Tempo, Nestea, Olimpija, Rosa, Burn and Monster.Nestea products are registered trademarks of Société des Produits Nestle S.A. (Switzerland).

Natural spring waters

In Bosnia and Herzegovina we offer natural spring water Olimpija, carbonated and non-carbonated, and natural spring water Rosa.


Olimpija is classed as a low-mineralized water and is a registered trademark of Barlan B-H Sarajevo.

Rosa is a registered trademark of Coca-Cola HBC Serbia.

EnergyTo provide consumers with an increasingly wide choice of products for every occasion, the company is constantly evolving its product portfolio. Coca-Cola HBC B-H has recently expanded its portfolio and become the distributor of Monster Energy and Burn energy drinks.

Energy drinks total 0.4% The other total 0.1%

Coca-Cola total55.0%

Flavored waters total 0.7%

Coca-Cola Zero total1.9%

Water total5.6%

Schweppes total6.5%

Cappy total5.0%

Nestea total 1.3%

Sprite total3.3%

Fanta total20.2%

2016

27BRANDSCONTRIBUTION IN TOTAL TURNOVER


The production process involves several steps aiming at ensuring the product safety through strict quality control criteria. The main stages of production include the preparation of water and syrup, and the bottling and packaging of beverages.

In accordance with the policies of the Coca-Cola HBC , Coca-Cola HBC B-H possesses certified management and control systems that enable us to:

Fulfill the needs of our customers in accordance with the highest quality standards

Reduce our ecological footprint

QUALITY DAY IN PRODUCTION

Quality Day is dedicated to educating our employees about the quality control of raw materials, the quality standards implemented for beverages in production processes, safety issues such as the proper handling of goods, sustainable waste management, procedures in emergency situations such as fire safety and first aid, with courses designed according to the specific needs of the production, maintenance, storage and distribution departments.

The integrity of our company's products means that, at any moment, we can offer the highest quality products and respond to the needs of both our customers and consumers. The trust of our consumers is based on our continuous investment in health safety and product quality.

The main ingredients for the production of beverages sold under the brands of The Coca-Cola Company are water, concentrate, sweeteners including sugar, fruit juices, and food grade carbon dioxide.

Coca-Cola HBC B-H is in possession of six certifications and operates in accordance with the stated international standards: ISO 9001, an international standard

defining quality management system requirements

ISO 22000, a voluntary standard for certification of safety management systems in the food production sector

FSSC 22000, an internationally recognized scheme for certification of food safety systems in the supply chain, including: ISO / TS 22002-1: 2009 - Prerequisite Programs for Food Safety Part 1: Food Production, and ISO / TS 22002-4: 2013 - Prerequisite Programs for Food Safety Part 4: Manufacture of Food Packaging

ISO 14001, an international standard for identifying requirements for environmental management systems to enable an organization to develop and implement environmental policies

OHSAS 18001, a system that ensures adequate control of occupational safety and the health of workers

EWS (European Water Stewardship) standard, which addresses the implementation of Water Stewardship at site level, with a strong focus on understanding and engaging in the local river basin, as water users share risks and opportunities related to good or poor water resource management.

PRODUCT QUALITY MANAGEMENT The integrity of our company's products means that, at any moment, we can offer the highest quality products and respond to the needs of both our customers and consumers. The trust of our consumers is based on our continuous investment in health safety and product quality.

28

Market


We continuously monitor developments in quality standards, adapting our business accordingly.

Compliance with these standards, regular annual control, and any recertification procedure is evaluated and carried out by Lloyd's Register Quality Assurance Limited (LRQA).

In our practice we are guided by the principle that we always meet the strictest requirement, whether that be a requirement of domestic legislation, Coca-Cola HBC or The Coca-Cola Company - KORE requirements.

Regulatory compliance is controlled at all stages of the life cycle of the product: when purchasing raw materials, controlling raw materials, testing products, declaring products, manufacturing, controlling production, marketing and promoting, storing, distributing and recycling packaging.

In addition, we carry out a series of activities in our company, ranging from preventive measures to monitoring, as well as internal and external controls. Very strict quality control methods are implemented at every stage of the production process.

Our bottling plant sources ingredients and packaging exclusively from authorized suppliers. The ingredients we use, as well as the finished products, are tested in our quality control laboratories. In addition to controls carried out in both internal and external laboratories, The Coca-Cola Company regularly performs random testing of products from our market in its Brussels laboratory.

The high quality of the product is - to a large extent - aided by the feedback we receive from our customers and end consumers through our free infoline, as well as direct field research.

Coca-Cola HBC B-H has adopted the Total Age Management (TAM) program, a management system based on regular product age monitoring at all stages of its life cycle. The aim of this system is to ensure that the age of the product on the market is always below the established primary age specifications, in order to provide our customers and consumers with the latest products of the best quality.

As our products pass through customer warehouses (distributors, wholesalers and large customers), it is also necessary that our customers be included in the TAM, as it is crucial that only products of the appropriate primary age are delivered to sales outlets. Therefore, our team educates customers about TAM and good storage practices to ensure that only the latest products are found on the shelves of retailers.

Comprehensive management of product age on the market and in warehouses:

TAM is an integral part of everyday commercial routines, which creates advantages such as:

- A new age of management culture throughout the product life cycle

- A fresher product on the market and greater customer and consumer satisfaction,

resulting in increased loyalty and continued purchase

- Reduced system costs and increased sales volumes

- Support for initiatives to reduce the weight of packaging materials and provide

significant savings

Sparkling beverages, % age of product on the market>

PA (PA – primary age product)

Sparkling beverages, age of product in warehouses

(days)

Juices, % age of product >PA

2016

7.30

12.36

7.05

Age of product on the market

and in warehouses


One of the elements that contribute to our good corporate reputation, which our stakeholders consider to be an important material issue, is the way in which we approach the direct sales and advertising of our products.

We undertake responsible marketing practices that involve the delivery of accurate, transparent and true messages, respecting laws and applicable local regulations.

Promotional activities in Bosnia and Herzegovina are conducted by Barlan B-H, a subsidiary of The Coca-Cola Company.

The Coca-Cola Company is a leader in global marketing practices. In the context of sustainable and socially responsible marketing, the company is actively involved in the development and promotion of ethical codes that relate to responsible marketing to children, and the sale of beverages in schools (UNESDA support to the European Union Platform for Nutrition, Physical Activity and Health, EU Pledge on Advertising to Children, Global Guidelines on Marketing to Children - International Council of Beverage Manufacturer Associations). In the context of the European Union regulations on advertising to children, we have committed ourselves, as a System, to respect the authority of parents and teachers, and avoid advertising in media where more than 30 percent of the audience are children under the age of 12. The compliance of our business with this commitment is regularly checked by means of an independent audit.

In addition, we volunteered to do business in accordance with the Coca-Cola Company's global marketing commitment and global policy for front-of-pack labeling, positioning the declaration on the front of the product so that it is more visible. In order to promote a healthy lifestyle, our global responsible marketing policy promotes equality in advertising of mineral waters and natural juices, reduced packaging of products, and the promotion of sports and physical activities.

Product information

In order to respond to the growing expectations of our stakeholders, we strive to ensure accurate, clear and easily accessible information on all of our products, their ingredients, and their nutritional value.

In accordance with our Quality and Food Safety Policy, we provide specifications on:

The origin of ingredients (raw

materials)

The composition of products, including substances (raw materials) that may have an impact on the environment or people

Safe consumption of the product

Safe storage of the product

The impact of waste disposal on the environment or people

We further inform and educate our customers about the correct use and storage of our products, through brochures and special trainings, together with The Coca-Cola Company. Similarly, end-consumers can find the most important information on the product's label itself, in addition to the information available on the company's website.

Coca-Cola HBC B-H adheres to all local legal requirements related to declaration of product information, so our beverages contain information on average nutritional value (energy, fat and saturated fatty acids, carbohydrates and sugars, proteins and salt), which best describe the amount of nutrients contained in the food, including all factors that cause deviations from actual values.

In 2016, Coca-Cola HBC B-H did not record any consumer complaints regarding non-compliance with regulations and internal codes related to adequate product information, which is the best indicator of the company's performance and practice in this field.

RESPONSIBLE SALES AND MARKETING

30

CONSUMER SATISFACTION AND WELLBEING IS OUR PRIORITY

Responsible business - in addition to monitoring product quality - as a key priority for our company, implies the satisfaction and wellbeing of consumers of our products.

In this framework, both at the level of Coca-Cola HBC and also in Bosnia and Herzegovina, we focus on what we call our OBPPC strategy (Occasion, Brand, Package, Price, Channel). This means that we offer the right product at the right price, in the right package, through the right channel, for every consumption occasion. In our wide product portfolio, we offer various beverages to meet the needs of consumers with different lifestyles and habits.

In order to contribute to as great an extent as possible to the satisfaction and wellbeing of our consumers, we strive to:

INVESTin innovation and product development and offer a wide range of products in every market

PROMOTEresponsible marketing and transparency in product labeling

SUPPORTactive lifestyles, sporting and physical activities and programs

IMPROVEthe impact of all our products on health and safety

Market


Changes in lifestyle and increasing concern over the rise in the percentage of obese and overweight people, has resulted in consumers turning to low, or no-calorie products, as well as products which are perceived to have a positive impact on health and physical fitness, such as RTD-tea, juices etc.

In order to provide consumers with as wide an array of beverage choices as possible, something for everyone and every occasion, Coca-Cola HBC AG has significantly broadened its range of low-calorie and zero-calorie drinks. All of our products can be part of an active lifestyle that includes balanced nutrition and regular physical activity, and consumers who want to reduce the amount of calories they consume can choose low calorie and zero-calorie drinks and smaller packages of our beverages.

Increase in share of low and no-calorie beverages in total sales volume of Coca-Cola HBC B-H

The sale of low and zero calorie beverages in 2015 was up by 0.4 percentage points of total sales compared to 2014, and in 2016 increased by a further 0.1 percentage points.

Five of the total 14 non-alcoholic brands offered by Coca-Cola HBC B-H are low or zero-calorie.

All 14 brands are also offered in small pack sizes (less than 1L), while two are produced only in small packaging.

In addition to managing package/portion size and offering different types of packaging, we also focus on the use of sweeteners, offering low calorie products. Over the past decade, Coca-Cola HBC has globally invested heavily in research into aseptic (sterile) technology, thanks to which fruit juices are produced without added preservatives. Our products do not contain artificial flavors or colors, and we are opposed to the use of genetically modified ingredients, in accordance with our Genetically Modified Organisms - Position Statement.

In order to continually respond to the demands of our consumers, we have developed special processes and programs aimed at consumer satisfaction.

Coca-Cola HBC B-H has a special toll-free telephone line, the number of which is clearly displayed on the product labels and the company website, as well as an e-mail address to which consumers can send inquiries or complaints. In addition to answering every consumer's query, satisfaction based on the answers received is also recorded. The deadline for answering the inquiry or complaint is individually communicated to each caller, and depends on the nature of the query. All calls are monitored using a program in which the operator records all calls, complaints, and inquiries. The software generates a regular report monthly, quarterly and annually, which is then distributed across a specific distribution list.

In 2016, Coca-Cola HBC B-H recorded ten consumer complaints per one million bottles sold. Thus, the Consumer Complaints Index is 0.08, which is a decrease compared to the previous year.

E-mail: [email protected]: www.coca-colahellenic.ba

A WIDE CHOICE OF BEVERAGES KEEPING UP WITH CONSUMER LIFESTYLE TRENDS

OLIMPIJA INCLUDED ON THE LIST OF NATURAL MINERAL WATERS RECOGNIZED WITHIN THE EUROPEAN UNION

We are particularly proud of the quality of our Olimpija natural spring water and the fact that, after physical-chemical and microbiological analysis carried out at the prestigious SGS Institut Fresenius in Germany, it has been included in the List of Natural Mineral Waters recognized within the Member States of the European Union (in accordance with Article 1 Directive 2009/54/EC of the European Parliament and Council of 18 June 2009 on the exploitation and marketing of natural mineral waters).

20162014

9.1%

2015

9.5% 9.6%

31

FREE INFORMATION LINE FOR CONSUMERS

080 020 100


We cater to over 14,000 businesses: restaurants, cafes, hotels, shops, supermarkets, wholesalers and other facilities that sell our products. Out of the total sales volume, over half is sold in super and hypermarkets and local and traditional stores, while the remainder is sold via the HoReCa and other customers of the immediate consumption sales channel, such as petrol stations, kiosks, bakeries, etc.

Our customers are one of our most important partners and are at the center of everything we do. With our deep belief in Winning with our Customers, one of the core values of our business strategy, we strive to jointly create added value that is based on profitability and sustainable growth, both for our company and for our customers.

In 2016, as in the year before, our customers rated us as their best supplier, once again confirming that, by acting together with our customers, we continue to succeed, building strong and long-term partner relationships. This success is based primarily on our continuous effort to recognize the needs and monitoring of our customer service and satisfaction levels as well as on an interactive approach, which relies on joint business decision making.

In the past two years, we have had the honor of hosting our business partners on several occasions and sharing our business plans, in order to familiarize them with our processes and high standards of production and quality control in order to improve our business relationships and build long-term satisfaction.

A customer satisfaction survey is conducted every year in all Coca-Cola HBC member countries. Research is done on two tiers: by interviewing customers who run retail facilities and conducting surveys at the headquarters of key customers. In the survey, customers respond to questions about suppliers they cooperate with, and the ratings given are compared for the various vendors, in order to determine the best one.

We are very pleased that in 2016, according to the results of the GfK supplier satisfaction survey, we maintained the leading position among customers for the third consecutive year.

In the 2016 survey, an additional component of the customer satisfaction survey was introduced, related to the logistical services of the supplier, that is, the delivery of goods and the accompanying supporting activities of the supplier. We are particularly proud of the fact that we were ranked by our customers at the very top in Bosnia and Herzegovina and within other countries where Coca-Cola HBC operates.

Thanks to our focus on constantly improving customer relations, and taking into account all the changes in the market and the challenges we have faced, we consider this No 1 rating as one of our greatest successes to date

In order to be a trusted partner, we strive to produce and deliver products efficiently and responsibly. One of our key customer-oriented initiatives is Right Execution Daily (RED), the goal of which is to continually improve everyday performance in the market.

After a very rigorous and detailed review of the RED Process in Bosnia and Herzegovina in 2016 we were awarded a prestigious Certificate of Compliance with Group Standards, and the RED Index reached a record level at the end of the year - 75% of the maximum picture of success for Bosnia and Herzegovina. The RED index is the percentage of the implementation of the desired image of the market's success at every point of sale we visit, and the results we achieved best reflect the dedication of our marketing employees and the perfect day-to-day performance we strive to provide our customers with through the highest quality service.

The company has a special procedure for resolving customer inquiries/complaints and an infoline for customers through which they can send their inquiries or complaints. The number of the infoline for customers is visibly highlighted on the invoices that are delivered to them along with the supplied products. The operator records all calls, requests and complaints, and resolves each one individually. A regular monthly report is sent to the relevant responsible person.

* The number of customer complaints to one million bottles sold.

With the goal of continuous improvement of services and cooperation, a toll-free infoline is made available to customers, which provides information on the company's business, product quality and prices, orders and delivery of products, refrigeration equipment, current sales and promotions, contracts and finances. As in the case of consumers, the deadline for answering the inquiry/complaint is communicated to each caller individually, and is dependent on the nature of the request. Customers can send their inquiries and complaints via a toll-free infoline.

Market

WINNING WITH OUR CUSTOMERS

RIGHT EXECUTION DAILY (RED) INITIATIVE STRIVING FOR PERFECTION IN DAILY PERFORMANCE

FOR THE THIRD YEAR IN A ROW, ACCORDING TO GfK CUSTOMER SATISFACTION RESEARCH, WE HOLD THE LEADING POSITION IN THE SOFT DRINKS MANUFACTURING INDUSTRY IN BOSNIA AND HERZEGOVINA.

Number of customer complaints Customer complaints Index*

30

0.23

Customercomplaints

2016.

32

TOLL-FREE CUSTOMER INFOLINE

080 020 104


As a company dedicated to sustainability, we recognize the significance of the direct and indirect social and environmental impacts within the supply chain. We continue to work with our suppliers to achieve a relationship by which we will ensure or improve value creation and sustainable business of both parties in the long run.

A sustainable value chain is a key focus areas for us, since our suppliers are at the same time our partners with whom we share both values and business principles. Coca-Cola HBC B-H works with 716 suppliers, ranging from small businesses to international companies. We are supplied with a wide range of products (sugar, returnable glass bottles, cans, labels, promotional material, etc.) as well as services, and, in accordance with our aim to increase our economic contribution to BiH society, we try to increase local sourcing year over year. As a result, in 2016, 64.6% of our total procurement budget was spent on local suppliers.

In accordance with the high quality standards applied by Coca-Cola HBC B-H, we require our suppliers of raw materials and primary packaging materials to have ISO 9001 and FSSC 22000 certification, and encourage them to operate in compliance with ISO 14001, OHSAS 18001 and European Water Stewardship standards. All our associates know that we are committed to doing business in accordance with a set of values that represent the highest standards of quality, integrity and excellence. We respect the unique customs and cultures of the communities we serve. We therefore strive to develop relationships with suppliers that share similar values and operate ethically.

As part of the ongoing efforts to develop and strengthen our relationship with suppliers, we have adopted the Coca-Cola Hellenic Guidelines for all of our direct suppliers. The Supplier Guiding Principles (SGP) are founded on the belief that responsible business behavior is critical to our long-term success, which must be reflected in our relationship with and activities in the market, workplace, environment and community.

Work environment: We expect our suppliers to evaluate employees and subcontractors on the basis of their ability to perform the work at hand, not on the basis of their physical and/or personal characteristics or beliefs, and thus they are required to confirm that there is no discrimination based on race, skin color, sex, religion, political opinion, nationality or sexual orientation.

Health and safety: We expect our suppliers to provide a safe working environment and have in place policies and procedures to minimize the risk of injuries, accidents and exposure to health risks.

Child labor and forced labor, abuse of workers: We expect our suppliers to not employ persons below the age prescribed by law, nor allow physical or any other harassment or abuse.

Payment and benefits: We expect our suppliers to pay fair compensation to their employees, competitive within the industry, fairly and in full compliance with the applicable laws on salary and working time, and to provide workers with opportunities for developing their skills and abilities.

Third parties: If supplier employees, in accordance with the law, choose to be represented by third parties, we expect our suppliers to accept this in good faith and not to condemn or punish workers because of their legal participation in trade union activities.

These guidelines are part of the contracts with suppliers, and the assessment of a supplier's compliance with these guidelines is undertaken via an independent audit program.

The supplier guidelines were signed by all key suppliers in 2016, which account for 93.2% of our total annual expenses, with the highest annual turnover with one supplier being 5,264,180 BAM and the lowest being 17,413 BAM.

An overview of former and newly registered suppliers signed by SGP, percentage of procurements from BiH suppliers and total costs in EUR:

We evaluate our cooperation with suppliers once a year through our Supplier Evaluation & Authorization Procedure. This annual evaluation includes a mandatory check of quality and environmental certification and other standards. As part of the evaluation, information is collected on satisfaction with cooperation, feedback is provided to suppliers, and an action plan is created for improving cooperation with them. This encourages two-way communication and continually improves our relationships with our suppliers.

Environmental practices: We expect our suppliers to conduct their operations in a manner that protects and preserves the environment. As a minimum, we expect our suppliers to comply with applicable laws and regulations and environmental legislation in carrying out their activities in all the countries in which they operate.

Compliance with applicable laws and standards

CREATING ADDED VALUE

Market

IN PARTNERSHIP WITH SUPPLIERS

33

100% of new suppliers in

2016 signed the

SGP

93% of the total procurement

budget - for suppliers with SGP

65% of the procurement budget - for

domestic producers

Total number of suppliers

Number of new registered suppliers

Number of new suppliers that subscribed to the SGP

Percentage of new suppliers that subscribed to the SGP

Percentage of domestic suppliers to total costs

Percentage of international suppliers to total costs

Total costs in EUR

Covered costs according to SGP-u

724

139

38

27.34%

62.26%

37.74%

16,834,801

78.00%

2014

672

116

116

100%

62.64%

37.36%

17,010,900

87.59%

2015

716

175

175

100%

64.62%

35.38%

17,748,421

93.20%

2016

1 Euro = 1.95583 BAM, official fixed exchange rate.


Note: In cases of absence from work for longer periods of time, due to long-term sick leave or maternity leave, and for workers that have been employed for less than a year, active employment is expressed as a percentage and the total number of active employees in the current year is stated as a whole number.

In 2016, Coca-Cola HBC B-H had a total of 280 employees, a slightly lower figure than in the previous two years.

350

300

250

200

150

100

50 0

201620152014

Number of employees by gender

men women

50

233

48

232

49

244

THE TEAM YOU

WorkplaceWANT TO BE A PART OF

As an important part of our business strategy, we take care of our employees at Coca-Cola HBC B-H. By identifying potentials, investing in development, and adequately rewarding our employees, we create an incentive-based work environment that will attract and retain the best personnel.Our people are crucial to the sustainable development and long-term success of our business. In order to enable our employees to develop, learn and achieve personal and professional goals and be the best at what they do, the focuses of our attention are:

· Fair working environment· Employee engagement· Employee development· Health and safety

Our goals are:

· To provide our employees with a fair, ethical and inclusive workplace

· To care about our employees, and communicate with them and their representatives openly, sincerely and with respect

· To help every employee to realize their full potential and develop leadership skills

· To foster a culture that promotes health and safety in the workplace

Banja Luka

Bihać

Mostar

Sarajevo

Tuzla

Total number of employees

27

7

20

161

28

243

4

2

0

36

2

44

4

2

1

38

3 48

28

6

18

151

26

229

2014

M M F F

2015

4

2

2

36 3 47

25

6

18

151 29

229

2016

M FNumber of active employees

293 283 280

Banja Luka

Bihać

Mostar

Sarajevo

Tuzla

Total number of employees by gender

Total

28

7

19

162

28

244

4

3

0

40

2

49

4

3

1

39

3 50

28

7

19

152

27

233

2014

M M F F

2015

5

2

2

36 3 48

26

7

19

151 29 232

2016

M F

Number of employees per sales area


We respect the fundamental rights of our employees and strive to create an open and positive working environment that provides equal opportunities for all. Our Policies on Human Rights and Equality are incorporated into the training program of our managerial staff.

Our Human Rights Policy requires compliance with the provisions of the UN Global Compact and UN Universal Declaration of Human Rights. Employment of children is expressly forbidden, and accordingly, ongoing checks are carried out during the recruitment process. All workers are familiar with human rights in their daily operations.

Our Equal Opportunity Policy protects our employees from discrimination and ensures equal opportunities and the fair treatment of everyone. Coca-Cola HBC B-H fosters dialogue with trade union representatives. Within the scope of its membership of the Association of Employers of the Federation, which is a signatory of the General Collective Agreement for the territory of the Federation of Bosnia and Herzegovina, Coca-Cola HBC B-H is obliged to apply all the provisions of that contract, signed by the Federation of Employers of Federation BiH, the Government of Federation BiH and the Federation of Independent Trade Unions of Bosnia and Herzegovina on behalf of the workers of the Federation of BiH. The Agreement applies to 88% of our employees. Although Coca-Cola HBC B-H is not a member of the Association of Employers of the Republika Srpska, and therefore not a signatory of the General Collective Agreement for the territory of the Republika Srpska, as a socially responsible company we apply all of the provisions of that Agreement as they pertain to the 12% of our employees working in the territory of Republika Srpska. In 2016, Coca-Cola HBC B-H had a total of 280 workers, of which 83% were men and 17% were women, which is largely conditioned by the nature of work, which involves working at multiple locations or in factory conditions. In our company, women and men have equal chances of advancement, and possible differences in wages and benefits are not systemic, nor related to gender.

The headquarters of the senior management of the business unit consisting of Coca-Cola HBC Slovenia, Coca-Cola HBC Croatia and Coca-Cola HBC B-H, are located in Zagreb. The business unit senior management also includes 9 managers from Coca-Cola HBC B-H who perform their duties in their respective areas of responsibility in Slovenia, Bosnia and Herzegovina and Croatia. Talented workers from within the country are sent on assignment abroad, so as to enable them to gain new skills and to provide them the chance to pursue an international career. Thus, six Coca-Cola HBC B-H managers were given the opportunity to work in leading positions in other Coca-Cola HBC member countries, such as Austria, Nigeria and Serbia, and four managers from our country are working in the service of Coca-Cola HBC AG.

FAIR WORKING ENVIRONMENT

Type of employment contract

Banja Luka

Bihać

Mostar

Sarajevo

Tuzla

Total

6

3

10

24

10

53

7

4

11

15

10

47

7

2

11

13

12

45

26

7

9

178

20

240

25

6

9

176

20

236

24

7

10

174

20

235

2014

Fixed term Fixed term Fixed term Permanent Permanent Permanent

2015 2016

17% female

Structure of employees by gender

83% male


Workplace

The largest proportion of our employees is between the ages of 30 and 50, and this is also the case with regard to the company's management. In the management of Coca-Cola HBC B-H, both genders are equally represented. In 2016, 84% of workers had permanent contracts, and all workers were full-time employees.

The right to maternity leave in 2016 was taken up by seven of our employees, and was used for the full maximum 12 month duration provided by law. Of those seven workers, four continued to work for more than 12 months after returning from their maternity leave.

*The rate of fluctuations is calculated as: number of employees that left the company / average number of employees in the reporting period x 100.

Year

2014

2015

2016

25

26

23

20

21

25

1

2

2

246

234

230

0

0

0

1

0

0

Age structure The age structure of the representatives of the governing bodies

Less than 30 Less than 30More than 50 More than 50 30–50 30–50

201620152014

Maternity leave

maternity leave return to work

8

7

6

5

4

3

2 1

0

3.28% 3.80%

New employees

Employees that left the company

The rate of fluctuations

28

7

4

3

4

3

28

7

2014

M M F F

2015

5

2

26

7

2016

M F

Employees fluctuations

Gender

5.46%

GRIEVANCE MECHANISM FOR EMPLOYEES

To prevent discriminatory behavior within our company, in addition to full compliance with the Labor Law and the Rules of Work, as well as the Code of Business Conduct, we have developed a number of other mechanisms that encourage employees to report any such behavior. There is a person appointed within the company to support employees who believe that they have been exposed to abuse, whose task is to listen to employees, provide them with advice, and refer and inform them in order to resolve any alleged situation. Every employee can file a complaint to his or her line manager, the Legal Service and/or the internal audit manager, following which the situation can be resolved through mediation.

Within the company there is an Employees' Council, which, in cooperation with the Company, attempts to resolve issues related to the protection of employee rights, and develops initiatives for further improvements.

Also, employees can file a complaint in other ways, for example, via the trade union, the Employees' Council, or via the Speak up! helpline. In case of violation of the Code of Business Conduct, the procedure states that after receiving the information, the management is to assess whether the disputed situation is to be dealt with locally or through the main administration of Coca-Cola HBC. If resolved through the central administration, the case is reported to the manager responsible for the implementation of the Code of Business Conduct, while cases at the local level are resolved via internal audit under the auspices of the Department of Legal Affairs. During 2016, no complaints were filed regarding discrimination, (violation of human and employees' rights) within our company, a fact of which we are particularly proud.


37

To strengthen the loyalty, dedication and commitment of employees, we pay great attention to internal communications and the building of good mutual relationships. We respect the rights of our employees, and strive to recognize their needs. Young people have recognized us as the most desirable employer for many years, as is also the case among the professional public and our workers, who hold us in high regard according to our internal loyalty research, which we conduct every year.

In 2016, for the fifth consecutive year, Coca-Cola HBC B-H won the prestigious Employer Partner Certificate, which is awarded for advanced human resource management practices by SELECTIO, the leading consultancy company in the field of human resource management. The Employer Partner Certificate is given to organizations and companies that, regardless of their size and public exposure, meet human resource management quality standards.

At Coca-Cola HBC B-H, we have developed a framework with specific processes aiming to attract, retain, reward and motivate the best talents, and inspire our employees to be passionate ambassadors of our brands.

We approach the development of the workers strategically and systematically with the use of various programs designed to meet the needs of our employees, and with numerous workshops and tools for planning their development in a structured way across all stages of their careers and across all departments.

We have developed a system for supporting the management of the development of skills of employees (Learning Pro, e-Learning) that

facilitates the process of administering all educational programs and increases the availability of this information to the HR department, which responsible for education and development of employees, all managers and other workers with access to a computer. All of them can now follow all of their studies and trainings, and have access to the education catalogue. In addition to the list, training outlines are also included, and the workers are reminded if the deadline in which the training is to be completed is nearing.

The system includes the Manage your own career option, which gives employees the opportunity to apply for non-linear education, allowing every employee to take the initiative for personal development.

We highly value the opinion of our employees. Every year we conduct a survey of all employees' to evaluate their level of engagement. This research, which has been conducted for years in all Coca-Cola HBC countries, is completely anonymous and carried-out by an independent consulting firm, and the results obtained are taken into account when developing business and people development plans for the future.

Part of the research concerning the extent and level of employee engagement focuses on three key areas: commitment, loyalty and recommendation. Based on the results of the research, we make plans and implement actions to improve the working environment.

The My Voice survey on employee engagement and corporate values was carried out in October 2016 with an employee turnout of 93%. The employee engagement index was 97%, and the respective Value index 98%, the same as the recommendation index.

Our care for our employees is reflected in our desire to, exceeding legal requirements, provide them with special conditions and benefits, and fulfill their actual needs. The salaries of our employees are competitive in the market. In order to maintain competitiveness, we regularly compare the remuneration we offer with that of other successful companies. In addition, employees can also:

Receive bonuses and/or rewards for workplace performance, company results, or achievement of results set by recognition and reward programs

Financial support in the event of the death of a close family member or illness

Use of the canteen in the bottling plant

Attending a variety of employee events

New Year's gifts for children

Discounts on the purchase of goods and services

Anniversary awards for workers who have been employed within the company for 5, 10, 15 or 20 years

EMPLOYEE ENGAGEMENT

EMPLOYEE DEVELOPMENT

Employees participation

Employee engagement index

Values' index

Recommendation index

95%

84%

85%

92%

99%

97%

97%

99%

93%

97%

98%

98%

2014 2015 2016

Employee of the Quarter and Employee of the Year

The Employee of the Quarter and Employee of the Year recognition and reward program continued in 2016.

Five employees are rewarded quarterly. The prize can be awarded to a team, instead of an individual, if nominated. An employee of the year is rewarded annually. The prize is monetary.

The procedure for selecting the winners is defined in the Employee Rewards Procedure - Employee of the Quarter.


Workplace

Some of the many educational programs available to our employees in 2016, with focus on personal and professional development, were:

Cross-functional career - a special way of changing an internal job, reinforcing the structure of the business from within, and allowing workers a broader view of career development. The system allows only advertisement of internal positions intended for people already in the system of Coca-Cola HBC, regardless of the country in question.

Fast Forward - a development program designed for employees at different levels of management: Manage Self (MS), Manager of Others (MoO), Manager of Managers (MoM), the goal of which is to enable a full development at the current level of management and prepare employees for the transition to the next level of management within the organization (e.g. from the level of self-management to the level of management of others, i.e. a team of people). In 2016, six employees of Coca-Cola HBC B-H were involved in the project.

Operator Development Program in production (ODP) is focused on theoretical and practical training, and develops the technical skills of operators.Coca-Cola HBC B-H regularly participates in the MDP (Microbiologists Development Program) project, launched by Coca-Cola HBC to assess and enhance the skills of laboratory staff in the field of microbiology.

Coca-Cola HBC B-H regularly conducts a performance assessment program for all employees, including an evaluation of individual employee needs, based on which individual development plans are created. The People Development Forum (PDF) is a key tool for effective management of individuals' professional development, including monitoring workplace performance and individual development plans. On the basis of individual plans, a training plan for workers is also being developed. In addition to the Human Resources Department, this process involves direct superiors and the employees themselves. The emphasis during the process itself is to give feedback to workers and encourage workers' involvement.

Note: In cases of absence from work for longer periods of time, due to long-term sick leave or maternity leave, and for workers that have been employed for less than a year, active employment is expressed as a percentage and the total number of active employees, as well as hours of training in the current year, are stated as a whole number.

Open communication is the basis upon which we build a healthy and successful working environment.

We continually invest in the improvement of internal communication channels. In addition to the existing ones, such as electronic notifications, internal business meetings, suggestion boxes and bulletin boards, we improved the internal communication in 2016 with the launch of the intranet as a place where all information is placed and where every employee can, at any time, among other things, inform about events, projects, initiatives and successes.

Being aware of the importance of quality mutual communication, we participate in all events and projects aimed at strengthening connectivity and cooperation among workers both throughout Coca-Cola HBC B-H and within our business unit. Significant business events at the business unit level include the Business Unit Leadership Meeting, which is organized twice a year, and the Our Growth Story and Coca-Cola Weekend business events, in which all employees participate.

Our employees also actively participate in our Facebook group, launched in early 2016, for business unit employees, where news is posted about all events, and employees themselves post photos and videos about market actions, team work results, and moments together at meetings.

38

Number of training hours

Number of employees

Average number of training hours per employee

4,264

287

15

3,684

277

13

3,495

276

13

2014 2015 2016

Number of training hours, Coca-Cola HBC B-H

Our employees act as ambassadors of our company. One of our key initiatives is Employees as Ambassadors of the company. This is a multi-year initiative based on the insights of our production workers, their beliefs and passion for work, and the encouragement derived from this to undertake activities in order to strengthen trust in Coca-Cola brands, products and the company. Systemically, it is also about raising the awareness of workers regarding the importance of volunteering as a form of giving something valuable back to the community. With the help of the Coca-Cola Ambassador mobile application, workers always have with facts about products and the company, news from Coca-Cola World and stories from internal social networks at the tips of their fingers.

Adria Identity project

Under the guidance of the Public Affairs & Communications Department in 2016, a campaign was launched to raise the awareness of each employee within the business unit about the importance of quality internal communication and team connectivity. These messages were systematically transmitted at key internal events, where workers from all three countries were gathered.

Voice of Adria Ambassadors

In June 2016, the employees filled out an online survey on the unique characteristics of each country in our business unit and the most endearing traits of each nation, and nominated employees who best embodied the spirit of Coca-Cola's values. Ambassadors come from all three countries of the business unit, and from across all different departments, with the aim of encouraging change, promoting a positive environment and employee engagement, and informing their colleagues about and including them in the most important business unit projects and promoting the identity of each individual team.

The Voice of Adria Ambassadors' team consists of 43 members, of whom 13 are Coca-Cola HBC B-H employees.

INTERNAL COMMUNICATION


39

Coca-Cola HBC B-H pays special attention to health and safety at work, as evidenced by numerous programs and campaigns that have been carried out over the years to provide our employees with a safe workplace and to develop a workplace safety culture, which ultimately leads to an increase in employee productivity and motivation. Our employees are directly involved in programs to identify additional areas for improving safety management, helping in this way to act in a timely manner.

Coca-Cola HBC B-H, in accordance with applicable health and safety rules and regulations, applies the internationally recognized management system of OHSAS 18001, The Coca-Cola Company KORE requirements, and all applicable local laws and regulatory guidelines, and develops and applies effective systems, standards and practices of protection in accordance with the Occupational Health and Safety Policy.

The Operational Sustainability Department is responsible for health and safety at work within Coca-Cola HBC B-H, as well as the Occupational Health Board, which helps in monitoring and giving advice on occupational safety and health programs. The board consists of five members. One is determined by the Company and the others by the union, the Workers' Council, the Legal Service and the Operational Sustainability Department. In particular, this defines positions with increased risk, as well as the rights and obligations of those employed in these positions.

Top 10 Fatality Program is a program of preventive action on ten factors that can lead to a death or serious injury at work.

Fall Prevention Program is a program for implementing safety measures for safe work at heights.

Toolbox Talk Program is a program of internal workshops in which workers discuss current topics related to health and safety at work with managers on a monthly basis.

Walk the Talk is a program of inspections of internal working areas and interviews with workers, which determine deviations from safe behavioral practices related to health and safety at work.

Near Miss program eliminates potential hazards and prevents potential injuries from becoming a reality.

CAPEX program is a capital investment program and involves buying upgraded equipment, upgrading existing systems and investing in construction work to improve workplace and occupational safety.

The employee rewards program includes the Quarterly Award for the Best Driver and the Quarterly Recognition Award, for the avoidance of the greatest potential risk of injury.

Internal and external controls, inspections and constant control of employee behavior in relation to prescribed safety procedures, as well as the continuous identification of deficiencies and their effective elimination, are a viable system of continuous reduction of the probability of workplace injuries, which directly affects workplace safety.

The Health & Safety (H&S) program encompasses employees from all departments, as well as subcontractors who work for Coca-Cola HBC B-H.

In order to emphasize the importance and obligation of safety at work, a team made up of senior management is involved in all programs and communications.

Year by year we register an increase in the number of reported near-miss injuries and raise awareness among our employees of the importance of reporting them. In 2016, the number of reported near-miss injuries increased by 16% when compared to 2015.

Our health and safety at work campaigns are as follows:

World Day for Safety and Health at Work International Noise Awareness Day Annual health and safety at work campaign

EMPLOYEE HEALTH AND SAFETY

Our programs:

A record

520consecutive days

without workplace injuries


Workplace

SAFE DRIVING

When talking about workplace safety, we devote special attention to the Fleet Safety Policy, given that a large number of our employees use vehicles as an essential work tool.

Security devices and a GPS tracking system, MobileEye and Hands Free devices are installed in all company vehicles, aiming at effective monitoring of the driving style of our workers, audible warnings in the event of road safety violations, and the avoidance of the possibility of injury or traffic accidents due to the use of mobile phones while driving. Thanks to these security devices, we are able to monitor: maximum speed, mileage, fuel consumption, number of incorrect turns, maintenance of too little distance between vehicles, failure to use indicators when turning/changing traffic lane, among other things. In addition, the Vehicle Maintenance Unit has established a system of regular vehicle inspection and assessment of vehicular wear-and-tear, bumps and other damages, in cooperation with an external supplier.

Practical trainings and evaluation for high-risk drivers are organized regularly.

On an annual basis, we organize:

1. Training for safe driving 2. Eco&Safety training for safe driving 3. Online training for driving safety 4. Safe driving training, with a view to the

current changes in the traffic law, in cooperation with BIHAMK

As an incentive for our employees, we give quarterly awards to the best drivers, determined according to data collected by safety devices. At the same time, on a monthly basis we send a report with statistical, summary data for the ten best and worst drivers in the observed period to all managers and senior management. Based on these data, we are developing a plan of actions to improve the potential for safety in workplaces that involve the frequent use of company vehicles.

Training, campaigns and programs are a powerful tool to avoid risks and achieve a culture of zero tolerance for accidents. We continuously call on our employees to apply their acquired knowledge on a daily basis, actively participate in the care of others, and encourage colleagues to act in accordance with the rules. The efforts of our workers to apply preventive measures, and their work on positive indicators of health and safety at work, have yielded excellent results:

40

* Rate of injuries is calculated as: total number of injuries x 200.000 / total number of working hours. All employees are full-time employed and average number of working hours is 2.000.

In 2016, Coca-Cola HBC B-H had no work-related injuries or accidents with a fatal outcome.

* Rate of lost days is calculated as: total number of lost days x 200,000 / total number of working hours of all employees.

The rate of lost days due to work-related injuries was reduced from 64.42 in 2014, to 18.02 in 2015, and to zero days in 2016.

* Rate of lost days is calculated as: total number of lost days x 200.000 / total number of working hours of all employees.

An analysis of the rate and number of work days lost due to illness has shown that the causes of the increase are related to pregnancy absenteeism and sick leave following surgery, and that they are not related to injuries at work, working conditions or professional illnesses.

Coca-Cola HBC B-H actively monitors and tracks the injuries of all subcontractors with whom it cooperates. Subcontractors working at the site are obliged to report any work injury directly to their manager, the head of the Coca-Cola HBC B-H department who hired the subcontractor, a member of the Walk the Talk team of internal inspectors, or a person responsible for occupational safety. The sub-contractor's managers submit monthly reports on the number of working hours worked directly to the person in charge of occupational safety, as well as information on whether a worker received a work-related injury.

All obligations related to reporting violations are transmitted to subcontractors during the training we organize for them: regular annual training for permanent subcontractors (warehouse workers, distribution drivers, cleaners, restaurant employees, marketers, maintenance services), and prior to each specific task for occasional subcontractors.

In 2016, no injuries to subcontracted employees were reported.

Banja Luka

Bihać

Mostar

Sarajevo

Tuzla

Rate of lost days due to work-related injuries

192

0

0

0

0

64.4 2

0

0

0

0

0

0

0

0

0

0

0 0

0

0

0

51

0

18.02

2014

M M F F

2015

0

0

0

0 0

0

0

0

0

0 0

0

2016

M F

Total number of lost days due to work-related injuries per location

Banja Luka

Bihać

Mostar

Sarajevo

Tuzla

Total number of lost days, by gender

Total number of lost days

Rate of lost days due to illness

320

72

13

530

56

991

8

73

0

95

32

208

73

225

0

109

43 450

289

54

39

703

71

1,156

2014

M M F F

2015

85

19

1

727 17 849

32

52

42

642 56

824

2016

M FTotal number of lost days due to illness

1,199 1,606 1,673

409.21 567.49 597.5

Banja Luka

Bihać

Mostar

Sarajevo

Tuzla

Rate of injuries

1

0

0

0

0 0.34

0

0

0

0

0

0

0

0

0

0

0 0

0

0

0

2

0 0.70

2014

M M F F

2015

0

0

0

0 0

0

0

0

0

0 0

0

2016

M FNumber and rate of injuries

In 2016, Coca-Cola HBC B-H achieved a record 520 consecutive days without workplace injuries.


41

HEALTH AND WELLNESS

We create and implement initiatives for raising the awareness of employees regarding the importance of sport and active lifestyles in order to support their physical, mental and emotional health, in accordance with our Health and Wellness Policy.

Coca-Cola HBC B-H carries out a series of programs aimed at promoting an active and healthy lifestyle, and regularly invites its workers to actively participate in the sporting events we organize and in events in the community sponsored by the company.

Among the most important of these are: Sarajevo Half Marathon and Fun Run Race, the Move for Joy - Fitness Day in Tuzla, and the recreational cycling ride Giro di Sarajevo, in which in 2016, in addition to 30 workers of our company, members of employees' families also took part. Our employees also actively participate in sports and recreational events sponsored by Coca-Cola HBC Slovenia and Coca-Cola HBC Croatia. In 2016, 18 of our workers competed in the Plitvice Marathon and the 10K Night Run around Lake Bled.

Alongside colleagues from Slovenia and Croatia, 260 Coca-Cola HBC B-H employees took part in the sporting activities of the Coca-Cola weekend in Šibenik, where they had the opportunity to compete in a two-day football tournament, beach volleyball, tennis, take part in a 5 km race and experience yoga, while ten of our employees had the opportunity to compete in the giant slalom and ski with Jure Košir, Olympic medalist and Slovenian ski legend at the Coke Ski Day event in Kranjska Gora.

Each year Coca-Cola HBC B-H organizes a regular medical examination for all employees. Employees who are assigned to workplaces with special working conditions have additional examinations, which depend on the nature of their activities. The summary report on the health status of the employees are analyzed in detail and, according to the doctor's instructions, an action plan is put in place to improve the working conditions and prevent the development of professional diseases. In 2016, not a single case of occupational disease was reported. The company undertakes a number of measures every year to act preventively and prevent the occurrence of occupational illnesses:

Modernization and improvement of personal protective equipment (work gloves, ear protection, goggles, etc.)

Purchase of ergonomic chairs for workers who spend most of their working hours seated

Purchase of aids and lifting equipment in order to minimize load or provide maximum relief in manual cargo manipulation.


In this framework, our goals are:

Continuous reduction of the direct impacts of our business on the environment, as well as the indirect effects of our suppliers and partners

To be a leader in the sustainable use of water, energy and packaging and protecting the climate

ENVIRONMENTAL PROTECTION:

EnvironmentTHE RIGHT WAY TO GO

Environmental protection and sustainable use of natural resources, the improvement of environmental management and prevention of environmental pollution are just some of the significant challenges on the road to sustainable business faced by all companies. The approach to environmental sustainability adopted by Coca-Cola HBC B-H involves acting in synergy with the different stakeholders to reduce negative and increase positive environmental impacts.

Bearing in mind the most significant effects of our business on a global scale, but also within our country, we are focused on the following areas:

42

Sarajevo plant

Year

*Lpb = liter of produced beverage

2010

0.61

2010

4.09

2016

0.49

2016

2.22

2016

8.24

2010

11.8

Water consumption

L/Lpb* 1000 L

Energy consumption

MJ/Lpb

Waste g/Lpb

Recycled waste

%

2016

96.3

2010

82.5

Water stewardship

Climate and energy protection

Sustainable packaging

and recycling

Packaging waste

management

46%30%

20%

17%increase in

recycled waste

decrease in energy

consumption (MJ/L)

less generated

waste (g/Lpb)

reduction in water

consumption (L/Lpb)


ECOLOGICAL PARAMETERS

In our bottling plant, we adhere to the following ecological parameters:

Water consumption (in liters per liter of produced beverage)

Energy consumption (in mega joules per liter of produced beverage)

Total generated waste (in grams per liter of produced beverage)

Recycled waste (percentage of recycled waste in relation to the total generated waste)

The amount of waste disposed at

the city landfill (in grams per liter of produced beverage)

The Coca-Cola HBC, and therefore Coca-Cola HBC B-H, has introduced a new leading environmental parameter - Near Loss. The new parameter was introduced with the aim of raising the awareness of workers and improving the results of other parameters, and consists of the detection of possible losses of environmental resources and their timely prevention. By applying this parameter we achieved excellent results with a 90% action implementation success rate in 2016.

With our efforts to achieve the goals of reducing energy and water consumption, quantities of generated waste, and increasing the percentage of recycled waste, we are contributing to the achievement the long-term goals set at the Group level. The progress made against the targets set is monitored on weekly, monthly, quarterly and annual basis, and reporting on this is disseminated to the management, as well as the Coca-Cola HBC. It is important to emphasize that all processes in the bottling plant are included in the planning and calculation of ecological parameters: administration, production and storage.

We are proud of the fact that Coca-Cola HBC B-H was awarded first place within the Coca-Cola HBC in 2016 for best proposed and realized Near Loss for the Air Hunter program, which is aimed at detecting and preventing the loss of compressed air and CO.

43

Our operations are fully in line with current laws and regulations on environmental protection, which is confirmed by the fact that in 2016, as in previous years, no negative findings arose from inspections in this regard. In addition, internal and external interest groups can file environmental complaints through the company's official e-mail and phone, and in 2016 this complaint mechanism did not receive any complaints. In the area of environmental management, we apply the internationally recognized ISO 14001 system, as well as a number of internal procedures and policies:

Environmental Policy

Climate Change Policy

Packaging Waste and Recycling Policy

Water stewardship Policy

Fleet Safety Policy

Our approach involves the inclusion of employees at all levels, and every new employee undertakes a component related to environmental protection in the framework of their introductory training. In addition, during 2016 we held a series of trainings to improve the competencies of our employees:

Training for environmental protection and reporting of potential and actual harm to ecological resources

Training for good production and storage practices, which also include aspects related to the environment

Training on hazardous substance management and actions in the event of an incident

BIODIVERSITY

We pay close attention to monitoring the impact of our operations on protected areas and high conservation value areas in regard of biodiversity. Coca-Cola HBC B-H covers an area of 61,654 m2, and within a radius of 25 km from the bottling plant, according to information from the Cantonal Institute for Protected Natural Areas, there are the Vrelo Bosne natural monument, Skakavac Nature Park and Trebević protected landscape.

The production of soft drinks and bottling of natural spring water in our filling plant takes place in accordance with the standards and regulations on protected natural areas, and we have had no identifiable negative impact upon these regulated areas. Also, there are no endemic species from the Red List of the International Union for Conservation of Nature (IUCN) and national lists of endangered species present at the site of the bottling plant.


Environment

44

Coca-Cola HBC B-H is the first company in Bosnia and Herzegovina to have earned

Gold-level European Water Stewardship (EWS) certification Our bottling plant was awarded EWS gold status based on results achieved in 2016, and from January 2017 bears the Golden EWS certificate of the European Water Partnership (EWP).

The certification system was established within the framework of the European Water Partnership, which is focused on achieving the European Union's objectives in the field of protection and preservation of water resources with the intention of encouraging enterprises to develop sustainable policies and practices regarding their use. The EWS makes the assessment based on the following criteria: optimal consumption for the production of beverages, production processes, chemical quality and biological elements of the water itself, responsible treatment of water sources, preservation of sources and return of water to natural watercourses. Recognition is awarded in three categories: bronze, silver and gold.

The certification process has shown how successfully we are managing the processes of water use in production, whether these impact upon how our waste water affects the ecosystem, whether our production activities have an influence on watercourses, and helps us to see any potential room for further improvement of our practices and activities.

Taking into account the nature of our activities, we are focusing on increasing the efficiency of water consumption in our processes by reducing its use, recycling and renewal, and continuously investing in new innovative technologies. In addition, our objectives and courses of action are:

Sustainable use of our water sources

Minimizing water use

Treatment, purification of waste water

Reducing water use in the supply chain

Protection of local water sources and surface waters

Promoting awareness of the importance of responsible water resource management

Thanks to the implemented initiatives, from 2010 to 2016, the consumption of water per liter of produced beverages has been reduced by 46% in our bottling plant.

WATER STEWARDSHIPWater resource management is one of the key factors in the process of maintaining and improving the sustainability of our business. In addition to being the basic ingredient of our products, water is also crucial in our production process and is necessary for the cultivation of agricultural products that are ingredients in our beverages. Water is also vital for the wider community, and due to all of the above, responsible water resource management through all our processes and in our supply chain is a matter of highest importance for our business. Conscious of these facts, for each refinery within the Coca-Cola HBC, a detailed analysis of the water vulnerability assessment, i.e. the Source Vulnerability Assessment (SVA), was made, based on which a Source Water Protection Plan (SWPP) has been created, in order to ensure their sustainability. At the international level, the Coca-Cola HBC AG is a signatory of the UN Global Compact and its CEO Water Mandate initiative. This initiative aims to catch up with the problems of water resource sustainability in the areas in which it operates, within supply systems, throughout communities, and, in close cooperation with government and non-governmental organizations, participate in the shaping of public policies in this field. The Coca-Cola HBC also cooperates with the Water Footprint Network, a global platform that connects various actors interested in the sustainable and efficient use of water resources.

The existence of sufficient quantities of affordable, good quality water is essential for human health and ecosystems. Coca-Cola HBC has committed itself to reducing water consumption per liter of produced beverage by 30% between 2010 and 2020.

Our bottling plant in Sarajevo is the first and only

EWScertified bottling plant in Bosnia and Herzegovina

Water use reduced by

46% in the period between 2010 and 2016


45

All the water we use is drawn from wells located within our bottling plant.

Coca-Cola HBC B-H has distribution centers in Sarajevo, Laktaši and Ljubuški, while in Tuzla distribution takes place via a redistribution warehouse (cross-dock). The distribution centers in Laktaši, Ljubuški and Tuzla are not owned by Coca-Cola HBC B-H, therefore the process of storing and distributing our beverages is carried out by subcontractors.

* Water consumption data is not available for the Ljubuški distribution center.

In this period we carried out a series of actions to reduce water consumption in the production process, among which were:

Reduction of the chlorine concentration for water disinfection

Installation of an ECO carrier for the washing of returnable glass bottles - reduced transfers and losses of water and alkalines

Use of water from artesian well B2/Olimpija for the production of carbonated soft drinks

Collection of water from the bottle washer (water returns to the raw water tank after the first stage of treatment)

Collection of the final wash water from the bottle washer, for use on the bottle washer grill

In 2016, we further reduced water consumption by implementing the recommended Coca-Cola HBC projects, which include:

The collection and conversion of water from the last step of the CIP (Clean in Place) and its use for the first step of flushing in the CIP process, i.e. internal cleaning of production equipment

Water collection and use after backwash of carbon filters (CFs) and polisher filters (water returns to the raw water tank at the first step of water treatment)

Optimization of the CIP (Clean in Place) process

Water consumption

Water withdrawn (used)

Total water withdrawn

Estimated recycled and reused water

% recycled and reused water to

total water withdrawn

209,106

209,106

...

...

in 1000 L

202,146

202,146

21,417

11%

186,039

186,039

21,732

12%

2014Sarajevo plant

2015 2016

In 2016, we recycled and reused

12%

of the water we withdrew

from wells

Water consumption - distribution centers

Water drawn (used)

Water from waterworks (used)

Total (used)

0

587

587

1000 L

1000 L

1000 L

0

319

319

0

263

263

2014DC Laktaši

Units 2015 2016


Environment

46

Coca-Cola HBC B-H, in cooperation with its chemicals supplier, employs good manufacturing practices, which utilize the application of a business model for minimizing chemical consumption as a result of the economic interests of users and producers, while also reducing any resulting adverse environmental impacts.

The concept of cooperation with the supplier is based on the idea of cleaner production and prevention of pollution, and this concept has been implemented in the bottling plant since 2012, in partnership with our chemicals supplier.

In Bihać, Mostar, Tuzla and Banja Luka, Coca-Cola HBC B-H employees use sales offices that are not owned by the company.

WASTE WATER MANAGEMENT

The waste water from the Coca-Cola HBC B-H bottling plant passes through waste water treatment before discharge into the city collection system. The bottling plant has its own facility for waste water treatment. The quality of waste water is regularly checked, both internally and externally, by an accredited, independent laboratory. All parameters that are monitored, in compliance to domestic legislation and The Coca-Cola Company KORE requirements, ensure the suitability for discharge into surface water and the public sewage system. All actions that are defined to reduce water consumption also affect the reduction of waste water and its chemical load, while trends in the reduction of waste water and its load are also monitored. Processed technological waste water is safe for flora and fauna and can be released directly into natural water sources.

For atmospheric waters, prior to introduction into the city's sewers, oil separators were installed in the Coca-Cola HBC B-H bottling plant for the prevention of potential pollution that could come from maneuvers (loading/unloading of trucks, parking), so there is no possibility that untreated water may enter a natural body of water. Atmospheric waters are also controlled annually by an accredited laboratory. In all places throughout the bottling plant where a risk of oil leakage has been identified, there are appropriate absorbers positioned, which are controlled through regular monthly Good Manufacturing Practice (GMP) checks.

The level of chemical oxygen demand (COD) shows the quality of our wastewater and measures the amount of oxygen required for the oxidation of dissolved organic matter in the water.

The permissible limit for COD for discharging waste water into surface waters is 125 mg/L, and for the public sewage system it is 700 mg/L. In 2016 this parameter was 37% below the permissible limit for surface water (125 mg/L).

1000 L

1000 L

1000 L

0

536

536

0

43

43

0

120

120

0

120

120

0

120

120

0

n/a

0

0

251

251

0

101

101

0

11

11

0

233

233

0

115

115

0

36

36

Water consumption

– sales offices

Water drawn

(used)

Water from

waterworks

(used)

Total (used)

Unit Bihać Office Mostar Office Tuzla Office Banja Luka Office

2014 2015 2016

2014 2015 2016

2014 2015 2016

2014 2015 2016

Total water discharge by quality and

destination

Total water discharge 1000 L

COD after treatment mg/L

% Δ total water discharge by quality and

destination

% Δ COD after treatment mg/L

135,720

66

...

...

To 1000 l

118,826

64

-12%

-3%

107,649

79

-9%

23%

2014

Sarajevo plant

2015 2016


47

Coca-Cola HBC B-H continuously controls its processes and closely monitors the use of raw and auxiliary materials in every bottling plant. Due to higher production volumes in 2016, the quantity of raw materials for the production of beverages under the brand of The Coca-Cola Company and for the bottling of natural spring water increased slightly; by 2% compared to the previous year.The percentage of recycled glass used in our bottles is 15%, reflecting our focus on reducing our environmental footprint.

Climate change brings potential risks to our business in terms of reducing the availability of resources (e.g. water, fruit and sugar) and increasing energy prices, but also risks for our suppliers, customers and the communities we are part of. Tackling climate change challenges, has led us to an open dialogue with suppliers to reduce CO emissions across the entire production chain, ranging from raw material production to the management of cooling equipment on the market.

Therefore, Coca-Cola HBC committed to reducing carbon dioxide output in produced beverages in terms of g/L by 50% from direct business - scope 1 and 2, and by 25% from direct and indirect business - scope 1, 2 and 3 between 2010 and 2020.

Our approach to this complex topic includes:

Increasing the energy efficiency of our business

Transition to cleaner energy sources

Reduction of emissions in the value chain

The introduction of new technologies with low CO emissions

Promotion of good practices and raising awareness about the significance of climate change.

Sugar

Other sweeteners

Concentrate

CO

Nitrogen

PET granulate

PET preforme

Glass (bottles)

% recycled glass

Steel (caps)

% recycled steel

Plastic caps

Plastic labels

Paper labels

PE thermo i stretch foil

Cardboard

Total materials used

% Δ total materials used

kg

kg

kg

kg

kg

kg

kg

kg

%

kg

%

kg

kg

kg

kg

kg

kg

...

5,472,000

3,600,680

393,815

1,160,238

3,600

2,156,000

151,896

261,428

10

58,433

0

183,327

27,099

17,501

221,766

108,138

13,815,921

...

5,374,000

3,747,080

466,189

1,266,551

2,924

2,486,000

321,337

392,022

15

70,135

24

199,833

34,033

14,392

225,624

94,640

14,694,760

6%

5,183,200

4,127,960

481,141

1,298,817

3,150

2,327,000

235,824

630,678

15

71,200

24

199,889

33,242

14,884

234,940

131,326

14,973,251

2%

2014

Value in BAM

Sarajevo plant

Sarajevo plant

2015 2016

Materials used Units

Total non-alcoholic beverages produced

% Δ total non-alcoholic beverages produced

81,181,953

...

82,653,576

2%

83,794,758

1%

2014 2015 2016

RAW MATERIALS

PROTECTION OF ENERGY RESOURCES AND CLIMATE


48

ENERGY

Coca-Cola HBC B-H has committed itself to reducing energy consumption and the overall impact of its emissions. The largest amount of energy in our business consumed within the following business segments: bottling plant, vehicle fleet and refrigeration equipment. According to JP Elektroprivreda BiH for 2016, 22% of the electricity with which we were supplied came from renewable sources.

We have implemented a series of projects aimed at reducing energy consumption in the production process:

Replacing lighting with high-efficiency LED lighting

New pump for high and low pressure compressor

New drying system for resins at the Husky plant for the production of PET preforms

New high pressure air pump

Further reduction of the specified pressure on the compressed air system (high pressure system)

Improvement of pipeline insulation

Reducing high pressure on the machine for the production of PET bottles from 40 to 34 bar

Air Hunter program for detecting and eliminating loss of compressed air and CO

By applying various measures undertaken to rationalize the use of energy, the total energy consumption per liter of produced beverages has been reduced by 20% in 2016 compared to 2010 within our company.

Electricity (MJ)

Fuel oil (L)

Fuel oil (MJ)

Natural gas (MJ)

Propane (LPG)

Diesel

Total energy (MJ)

Fleet

Diesel (MJ)

Total BiH (MJ)

% Δ total energy used (MJ)

26,513,748

9,074

353,886

13,732,667

16,000

...

40,616,301

9,153,200

49,769,501

...

26,278,471

1,200

46,800

16,652,977

4,000

...

42,982,249

10,397,000

53,379,248

7%

27,007,502

1,000

39,000

14,298,711

0

...

41,345,213

9,688,200

51,033,413

-4%

2014

2014

Sarajevo plant

2015

2015

2016

2016

Direct energy consumption

* Data on energy consumption for the Ljubuški distribution center is not available.

Energy consumption – distribution centers

Electricity

Total

66.49

66.49

MWh

MWh

67.89

67.89

52.98

52.98

2014DC Laktaši

Unit 2015 2016

MWh

MWh

4.93

4.93

17.37

17.37

17.04

17.04

13.53

13.53

*

*

*

*

*

*

*

*

5.78

5.78

*

*

5.75

5.75

5.01

5.01

Energy consumption

– sales offices

Electricity

Total

Unit Bihać office Mostar office Tuzla office Banja Luka office

2014 2015 2016

2014 2015 2016

2014 2015 2016

2014 2015 2016

* Data on energy consumption is not available.

From 2010 to 2016 we reduced our total energy consumption by

20%

Environment


49

EMISSIONS

Among the Coca-Cola HBC's 2020 sustainability goals are the following:

To reduce direct carbon emissions by 50%

To reduce the intensity of direct carbon emissions in the value chain by 25%

The program for the prevention of atmospheric pollution and the emission of gases defines regular actions and a plan for monitoring emissions.

The main goals that we at Coca-Cola HBC B-H want to achieve in terms of reducing harmful emissions are:

Reduction of emissions in transport

Reduction of emissions from purchased electricity

Reduction of emissions from primary packaging

Reduction of emissions from the bottling plant

N.B. Data on emissions from distribution centers not owned by Coca-Cola HBC B-H are not available.

Within each defined field, we have managed to achieve a reduction in emissions. Compared to 2015, in 2016 we reduced CO emissions from the bottling plant by 14% and from the company's vehicle fleet by 7%. We also achieved a reduction in CO emissions from purchased electricity by 13%, as well as from the transport of our partners by 22%. CO emissions from primary packaging were lower by 6% in 2016 when compared to 2015.

Total production (volume)

Co from bottling plants (fossil fuels)

CO from owned fleet (fossil fuels)

Product carbonization (losses)

CO from supplied

electricity

CO in product

(not recycled source)

Total CO emissions

third party fleet (fuels)

CO from primary packagingCO from secondary packagingCO from sugar and sweeteners

1000 L

t

t

t

t

t

t

t

t

t

81,182

731

677

568

6.769

592

1,241

6,703

608

4,084

82,654

845

757

631

5.876

635

1,419

8,123

606

3,916

83,795

725

705

649

5.101

649

1,108

7,652657

4,034

Scope 1

Scope 2

Scope 3

2014 2015 2016

Scope

Summary for 2016Coca-Cola HBC B-H Units

17%decrease

in transport emissions

14%reduction in

bottling plant emissions

6%

13%

reduction in emissions from

primary packaging

reduction in emissions from

supplied electricity

Reductionin Co

emissions


Environment

50

The values represent a sum of emissions from two emitters: furnaces running on natural gas and furnaces on fuel oil. Furnaces have the option of combined combustion of natural gas and extra light oil, which is used as an alternative fuel in the event of a loss of the natural gas supply.

After submission of the report on annual emissions of pollutants, the Federation BiH Environmental Protection Fund found that the reported emission levels were below those for which compensation was prescribed, and that Coca-Cola HBC B-H, same as in previous years, was not required to pay pollutant surcharges in 2016.

COOLING DRINK EQUIPMENT

Coca-Cola HBC B-H follows the decision and commitment of The Coca-Cola Company on the use of new cooling equipment that is HFC-free. By ceasing the use of HFC-containing cooling equipment, The Coca-Cola Company shows its responsiveness, and gives proof that soft drink manufacturers can work to preserve climatic conditions.

The transition to HFC-free will reduce the direct emissions of greenhouse gases of our cooling equipment by 99%. All new coolants that Coca-Cola HBC B-H are setting up at points of sale are HFC-free, with two solutions currently in use. Cooling equipment with hydrocarbons is used in smaller refrigeration equipment, while carbon dioxide (CO) is used in equipment with higher capacity. CO is a safe, reliable and energy-efficient alternative, with a number of beneficial characteristics as a refrigerant. They do not damage the ozone layer, and are 1,430 times less damaging to the climate than typical HFCs.

In 2016, Coca-Cola HBC B-H reduced the share of HFC-containing cooling equipment by 20.5%, and increased the share of HC-containing equipment by 43.9%, with the number of CO refrigeration units more than doubling, in comparison to 2015. Likewise, in 2016 we also reduced the number of cases of leaks from cooling equipment by 18.4% when compared to 2015.

All appliances that use gas as cooling agent (cooling equipment, post-mix equipment, air conditioners, refrigerators, Husky machines) are serviced by authorized service providers and the amount of gas in the installations is tracked during its controlled destruction.

CFC / HFCF

HFC

HC

CO

Total

0

11,031

3,764

29

14,824

0

10,544

4,392

128

15,064

0

8,378

6,323

278

14,979

2014

Number of coolers in the market with different gas cooling agents

2015 2016

BOTLLING PLANT EMISSIONS

Accredited laboratories monitor the gas emissions from our furnaces and regularly control the CO and natural gas line installations.

Note: Data on annual furnace emission values are calculated on the basis of the average annual emission value of two furnaces measured by an authorized laboratory and the total annual fuel consumption and fuel-specific factors.

501.44

47.89

18.69

Nox, Sox and other emissions

by type and weight

NOx kg/yr

SO kg/yr

CO kg/yr

588.15

5.45

48.96

572.28

20.02

102.64

2014 2015 2016

44% of our coolers are HBF-free, which will be a requirement for all new cooling equipment in the future

C o HCO


51

OUR FLEET

The most significant identified environmental impacts arising from the transport of our products are fuel consumption and gas emissions.

* Coca-Cola HBC B-H own fleet only runs on diesel fuel. **Distribution trucks are owned by third parties.

Although the number of vehicles in the fleet in 2016 increased in relation to 2015, the priority in their procurement was to meet the criteria of energy efficiency, so that in the same period the total consumption of diesel was reduced by almost 7%.

For the Coca-Cola HBC B-H fleet, which consists of light vehicles, we monitor fuel consumption and the number of kilometers traveled in order to minimize the emissions of harmful gases.

In accordance with the Coca-Cola HBC B-H Fleet Safety Policy, the vehicles must not be older than five years nor have a mileage exceeding 175,000 km. All of our vehicles must meet the minimum requirements of the Euro 4 standard.

Fleet owned by Coca-Cole HBC B-H

Total energy consumption* – diesel (L

Total average consumption L/100 km

CO emissions by owned fleet (in tons)

CO emissions by third party fleet(in tons)

Total CO emissions (in tons)

Mileage by own fleet

Mileage by third party fleet**

168

246,717

5.6

677.4

1,241.3

1,918.7

4,443,125

2,484,102

173

280,235

6.2

757

1,419

2,176

4,522,175

2,875,881

178

261,139

5.7

705

1,108.4

1,814

4,543,438

2,574,539

2014 2015 2016

Fleet

When purchasing new cooling equipment, its energy efficiency is taken into account. The new generation of cooling equipment is equipped with Electronic Management Devices – (EMDs) and LED lights, which reduce power consumption.

The CO emissions from cooling units in 2016 are 23% lower than in 2015. The total number of cooling units we eliminated through controlled destruction in 2016 increased by 75% compared to 2014 with HFC gas cooling units having the highest share in the write-off.

EMD

LED

The number of energy-efficient coolants in the market

3,921

10,903

3,328

11,496

with EMD No EMD

with LED

No LED

4,368

10,696

4,167

10,897

4,399

10,580

5,900

9,079

2014 2015 2016


Packaging plays a key role in maintaining the top quality and safety of our products in the supply chain to end consumers.

Coca-Cola HBC B-H continuously works to promote sustainable packaging and searches for suitable sizes and materials that can optimize and reduce the impact of our products' packaging both during the production process and after consumption.

Our work is focused on three areas: We are continuously developing packaging that has less weight and reduces the

amount of waste

We use recycled beverage packaging materials wherever this is technically possible

We encourage consumers to properly dispose of their packaging after consuming their products, and raise awareness of the importance of separation of packaging materials, and advise them to abandon the practice of disposing of packaging in nature

These initiatives also affect the operating costs of our operations.

Through the Light-Weighting program, Coca-Cola HBC B-H has so far reduced the weight of 2L PET bottles by 22% and the weight of 0.5L PET bottles by 26%.

With the Light-Weighting program, we introduced a new, shorter1881 type thread, which allowed us to reduce the weight of plastic lids used on these bottles by up to 15%.

The weight of reusable glass bottles for key beverage categories has been reduced by 9%, and by 37% for non-returnable glass packaging.

Environment

52

WASTE MANAGEMENT AND RECYCLINGProduction waste management is a part of the ISO 14001 environmental management system in use at our bottling plant, and is implemented in accordance with the Environmental Policy of Coca-Cola HBC B-H, the requirements of the local environmental legislation and the KORE-EOSH requirements of The Coca-Cola Company.

Our approach to waste management focuses on:

Prevention

Reduction

Reuse

Recycling

In line with our approach, we set goals and increase the efficiency of projects to reduce waste generation and increase recycling rates. We cooperate with suppliers to recycle waste as efficiently as possible. Our ultimate goal is to achieve zero waste being deposited in landfills.

We keep records of all types of waste generated by our production process, as well as records of packaging waste that will arise as a result of consumption of our products on the market. Our ultimate goal is to complete the recycling cycle, or to convert already used packaging into new packaging. We are co-founder of Ekopak, the first authorized operator of the packaging waste management system in Bosnia and Herzegovina, and to this end aim to educate our consumers and promote careful disposal and recycling of packaging.

All waste that can be reused or recycled is delivered to authorized operators. Waste that cannot be recycled is classified according to specific legally defined categories, and delivered to approved landfills. According to our waste management standard, we evaluate all waste disposal sites and operators before and during engagement.

We have recycled as much as

96,3%of the generated production waste

SUSTAINABLE PACKAGING


Non-hazardous waste

Hazardous waste

Total waste

Recycled

Waste landfilled*

Composted waste

Amount of recycled non-hazardous waste

% Amount of recycled non-hazardous waste

Amount of recycled hazardous waste

% Amount of recycled hazardous waste

kg

kg

kg

kg

kg

kg

kg

%

kg

%

475,141

0

475,141

394,992

32,150

48,000

442,992

93.2%

0

...

599,700

43,660

643,360

528,450

26,250

45,000

573,450

95.6%

43,472

99.6%

674,816

15,675

690,491

637,016

24,300

13,500

650,516

96.4%

14,659

93.5%

2014

Sarajevo plant

2015

Year

2016

Total waste weight Units

* The quantities of waste landfilled waste were derived by estimation, while the quantities of all other waste were obtained by weighing. The applicable laws and regulations of Bosnia and Herzegovina stipulate that the disposal of waste at landfills is charged per m2 of administrative office space, not quantity of waste.

Note:The stated quantities and percentages of recycled waste have changed as a result of reporting methods being altered and the repeal of regulations governing the field of electrical and electronic waste management in Bosnia and Herzegovina.

Even though in 2016, compared to 2015, the total generated waste was up by 7%, we recorded a 21% growth in total recycled waste during the same period. Our continuous commitment to environmental protection is demonstrated by the fact that in the period 2014-2016 we recycled about 95% of the total non-hazardous waste on average.


THE POWER OF TOGETHERNESS

CommunityOur Play to Win strategic framework recognizes the importance of the community as a crucial element for achieving sustainable business. The long-term success and sustainability of our company's operations is not possible without the realization of the economic and social prosperity of the community that we are part of. Our programs in local communities are based on dialogue with our stakeholders and are set up as long-term partnerships in order to sustainably influence and create value for all actors. Through our business, we strive to provide additional leverage for the development of the community in which we operate. Through our business we contribute directly and indirectly to the strengthening of Bosnia-Herzegovinian society: we employ people and support jobs in the value chain, pay taxes and contributions, provide income to partners, invest in the community, raise awareness of the importance of socially responsible business and contribute to the development of the economy and raising the standards of business in Bosnia and Herzegovina.

54

Coca-Cola HBC B-H, in line with the strategic guidelines of Coca-Cola HBC AG, is directly involved in various community initiatives. We contribute to the community through strategic investments in socially responsible projects, and this involvement ranges from support through the donation of products, which we process in accordance with the Procedure regarding applications for sponsorship through products, money and equipment, to the investment of significant financial resources in partnership projects with numerous civil society organizations and their own programs and initiatives.

The focus of our activities includes:

Community development and disaster relief and recovery

Youth development

Community wellbeing

Environmental protection and water stewardship

In addition to the key areas that are the focus of our strategy, it is very important to provide support to projects of particular importance to the community.

COMMUNITY DEVELOPMENTCommitment to the sustainability and well-being of the community is a part of the Coca-Cola HBC B-H mission to which we pay particular attention. The challenging time and environment we live in requires the allocation of maximum effort, skills, time and resources to:

Contribute to the quality of life of the community in which we operate, supporting socio-economic development and environmental protection

Transparently contribute to the development of public policies, bearing in mind the protection of the natural environment, community development and economic growth

Integrate sustainability into all aspects of business, creating and developing business processes according to the needs of the community in which we operate

Community development and

disaster relief and recovery

Youth development

Community wellbeing

Environmental protection and water

stewardship


55

COOPERATION WITH THE RED CROSS SOCIETY

Our partnership with the Red Cross Society of Bosnia and Herzegovina has been ongoing since 2004 and is focused on cooperation on mine awareness activities and the importance of training for first aid provision to children of school age, the promotion of voluntary blood donation, support to the work of Red Cross public kitchens, and help in emergency situations.

Our partnership with Red Cross Society of BiH allows us to react quickly in emergency situations and ensure what is necessary - safe drinking water, as was the case when flooding struck the territory of Bosnia and Herzegovina in 2014.

Coca-Cola HBC B-H confirmed its commitment to long-term sustainable business in the war-devastated economy of Bosnia and Herzegovina by bringing one of the first and, at the time, one of the largest post-war investments to the country, and this practice of investing has continued right up to the present day. Our strategic commitment to contributing to the welfare of the community in which we operate is also recognized by our workers, who invest many hours in voluntary work in socially engaged and sustainable community projects.

Through our business operations, by generating value and revenue and expanding the value chain, we create income for workers, suppliers and the state, and strive to contribute to the community in which we operate. The contribution of large companies like ours is particularly important for a slow-growing economy like that of Bosnia and Herzegovina.

A study of the socio-economic impact of the Coca-Cola system in Bosnia and Herzegovina in 2014 showed that 92% of Coca-Cola products on the market in Bosnia and Herzegovina are produced within the country. From every BAM that purchasers spend on Coca-Cola products, 63 pfennigs remain in Bosnia and Herzegovina. Each job within Coca-Cola supports 11 more jobs in the wider economy, while 9.3 million BAM of added value (0.03% of GDP) and almost 0.03% of the workforce can be directly attributed to domestic Coca-Cola production. We also make a significant contribution to the community as a socially responsible company, which regularly pays its obligations to the state. The amount paid by Coca-Cola in Bosnia and Herzegovina for taxes to different levels of government in the country rose from 17,911,353.18 BAM in 2014 to 19,385,549.40 BAM in 2016.

In the same period, Coca-Cola HBC B-H did not exercise any rights to various available benefits or support that could be provided by the state.

Coca-Cola HBC B-H total taxes paid

Corporate income tax

Excise duties

VAT

Withholding tax (for dividends only)

Withholding tax (other)

17,911,353.18

1,828,954.00

7,454,299.80

7,750,698.00 849,055.92

28,345.45

18,062,628.72

1,684,143.00

7,854,305.10

7,776,191.00

707,950.85

40,038.77

19,385,549.40

2,260,968.00

7,987,244.10

8,348,712.00

735,682.55

52,942.75

2014 2015 2016

BAM /Year

DISASTER RELIEF AND RECOVERY


YOUTH DEVELOPMENTOne of the pillars of our social responsibility is investing in talented young people, because we believe in the power of knowledge and the progress that it brings to the wider community. In this field, we see a huge space for the creation of additional value with our partners, and thus a contribution to the prosperity of society.

Addressing the high unemployment rate of young people, which amounts to 67.6% in Bosnia and Herzegovina and represents a serious social issue, our company seeks to find innovative approaches as an employer to providing support to the community in solving this complex problem. A lack of working experience and subsequent acquisition of skills is recognized as one of the biggest obstacles faced by young people in finding employment. We helped to solve this problem faced by the community in 2016 by launching the Coke Summership summer internship program.

56

Coke Summership

The Coke Summership is a six-month summer internship program that provides educated, talented and ambitious young people with the opportunity to gain their first work experience and learn business skills in a highly professional environment and acquire knowledge through practice, perfect it, and acquire skills that will help them in their further professional development. The program is designed to provide students with experience, working three days a week with mentors on real projects within Coca-Cola HBC B-H, and spending two days a week at lectures held by senior company managers and experts from partner organizations, and in interactive workshops and visits. Skills in project management, presentation, leadership abilities, business communication and time management are just some areas in which the Coke Summership program's participants are improving. Following the completion of the program, the program participants are included in the database of potential Coca-Cola HBC B-H employees. Coke Summership is being implemented under the auspices of the Ministry of Civil Affairs of Bosnia and Herzegovina and the Sarajevo Canton Employment Service, and with the friendly support of the universities in Sarajevo, Banja Luka, Mostar and Tuzla, student organizations AIESEC, IASTE, EESTEC and EY, the Embassy of the United States of America in Bosnia and Herzegovina, and a number of other partners.

Of the nearly 1,000 applicants, after two rounds of selection, 20 young persons were given the opportunity to be part of the Coca-Cola HBC team through the Coke Summership in 2016. Thanks to the 2016 program, 10 young people found employment: six program participants were employed by Coca-Cola HBC B-H, and four by other companies.

MISLI MINE! (THINK ABOUT MINES!) AND FIRST AID COMPETITIONS

Bosnia and Herzegovina remains one of the most mine-polluted countries in the region of Southeast Europe. This threat will continue to be present on the territory of Bosnia and Herzegovina for a long time, so ongoing mine risk education activities are necessary to avoid new casualties from mines and remnants of ordnance left behind from the war. The educational competition Misli mine! for elementary school children is a very important activity in the mine risk education program. Students learn how to live safely in Bosnia and Herzegovina with interactive work and with a competitive spirit.

Coca-Cola HBC B-H and the Red Cross Society of BiH have been co-operating on the organization of the Misli Mine competition and first aid delivery competitions since 2004. Nearly 9,000 participants from all over Bosnia and Herzegovina take part in these annually. In 2016, support from Coca-Cola HBC B-H took the form of provision of beverages for contestants at the cantonal, entity and state levels.

13.2%of our employees,

through mentoring and lecturing, donated over

1,500 volunteering hours empowering youth

in Bosnia and Herzegovina

We invested

1.29%of pre-tax profit

in community projects


Community

57

VOLUNTEERINGPROVIDING PROFESSIONAL SUPPORT AND TRANSFER OF KNOWLEDGE AND EXPERIENCE TO YOUNG PEOPLE

As a company we support the participation of our employees in existing opportunities for volunteering in a way that volunteer actions and activities take place during working hours. We also seek to create new such opportunities. Our workers volunteer in various programs in which they put their expertise and time at their disposal of young people, in order to transfer knowledge and skills. The most important volunteer activity was support to the implementation of the Coke Summership youth development program, in which 37 Coca-Cola volunteer leaders participated in 2016, who held lectures presentations and interactive workshops, organized and conducted visits, volunteered as mentors on projects, and generally transferred their knowledge and helped young people to acquire and improve their business skills in the six-week student summer internship program.

PROFESSIONAL SUPPORT TO YOUNG PEOPLE: HADŽIĆI HIGH SCHOOL CENTRE

Within the framework of regular cooperation, Coca-Cola HBC B-H provides practical training in the Quality Control Service for students of the Hadžići High School Centre where they, with the mentorship of our employees, become acquainted with modern production methods. Students attend training in a physico-chemical and microbiological laboratory, and work on processes that deal with all parameters of product safety and quality control. This type of training was completed by 10 pupils in 2016.

Motivated by the success of the Coke Summership program, and in the desire to ensure the inclusion of marginalized groups in the youth employment program in Bosnia and Herzegovina, Coca Cola HBC B-H launched the Coca-Cola Youth Empowered Program and in 2017 organized four-day workshops for enhancing business and personal skills in Banja Luka i Sarajevo for 200 participants. The program is aimed at young people between the ages of 18 and 30 who have left the formal education system but who have been unable to secure or retain employment.

GRADUATE TRAINEE PROGRAM DISCOVER, DEVELOP, SUCCEED

In 2016, the realization of the training program Discover, Develop, Suceed whose goal is to identify talented students and develop their practical business skills, was completed. The program provides talented and motivated students graduates with opportunities for employment across all departments of and Coca-Cola HBC B-H as trainees in preparation for a specific role within the company. The program is designed so that the participants first get to know the company, then they work at the designated workplace and upon selected projects that are of strategic importance to it, so that at the end of the project they will be in charge of running the team.

The preparatory program lasts for a year, and offers candidates the opportunity to learn, work and develop. With a one-year trainee contract, experience in one of the largest Coca-Cola bottling systems and accelerated progress within the selected function, trainees are offered an opportunity for employment. Thanks to this trainee program, Coca-Cola HBC B-H employed two trainees in 2016, one in sales and another in the financial department.

PLANT VISIT PROGRAM

Through the plant visit program, we have had the opportunity to organize expert-guided visits to our plant on several occasions, and to present our achievements in the field of sustainability to our stakeholders. Among the visitors in 2016 were students of the Natural Sciences and Electrical Engineering faculties of the University of Sarajevo, the Burch International University, as well as pupils from the Hadžići High School Centre, the Economics High School, the Third and the Dobrinja Gymnasia from Sarajevo. In 2016, the program of visits to the bottling plant was organized for 284 university and high school students.

We support the organization of numerous projects and activities in the community focused on the development of young people. The aim is to provide support to young people in strengthening their leadership skills and their efforts to find employment as soon as possible after completing their education. In 2016, within the donation & sponsorship program, which provides refreshing drinks for project participants, we supported numerous community projects that involved over 6,000 young people.


COMMUNITY WELLBEING An active way of life is one of the key preconditions for the high-quality life of an individual and a society. Accordingly, our company has placed the promotion and development of recreational sport and physical activity as one of its strategic priorities. Sports should not be a privilege, but the right of everyone, for whatever reason. In addition to supporting traditional sporting events, we also create opportunities for participation in sporting activities.

Coca-Cola HBC B-H supports numerous sports projects in the community every year, in which more than 20,000 people participated in 2016.

HAPPINESS IS MOVEMENT

With the aim of encouraging as many people to be physically active, especially children and young people, as possible, we promote the principles of an active life among both our employees and the wider community.

Bearing in mind that the modern lifestyle has adversely affected the physical activity habits of the adult population, Coca-Cola HBC B-H launched the platform for the promotion of an active lifestyle, Happiness is Movement, in 2014. We tried to inspire as many people as possible to be active and to practice and maintain physical fitness regularly.

The two basic principles of this platform are motivating people to change their everyday behavior and to create opportunities to participate in sports. In accordance with these principles, in 2016, Coca-Cola organized and supported numerous activities initiated by amateur sports enthusiasts.

58

Coca-Cola Fitness Day Coca-Cola Fitness Day is a recreational event organized by Coca-Cola HBC B-H in partnership

with the city administration of the City of Tuzla and the Sloboda Workers' Sports Club, under the auspices of the Ministry of Education, Culture and Sports of Tuzla Canton and the Pedagogical Institute of Tuzla Canton, with the professional support of the Faculty of Physical Education and Sport in Tuzla and numerous associations and partners.

In September 2016, Coca-Cola Fitness Day brought together more than 3,000 participants, who, in addition to participating in specially designed training programs, met professional teams for measuring the body mass index and physical fitness, heard lectures by the Anti-Doping Agency of Bosnia and Herzegovina and the Red Cross of the City of Tuzla, watched presentations of the Sloboda sports club, and participated in many other sports-educational and entertainment happenings.

Thanks to the successful implementation of this event in September last year, and the excellent reactions of the participants, the project has gained the attention and support of numerous additional institutions, the professional public and new partners dedicated to the promotion of an active lifestyle in the community.

Happiness is Movement – Coca-Cola Fitness Day was first held in 2014. Over the past three years, this event has attracted nearly 9,000 participants.

20,000 Over people participated in community sports projects

supported by Coca-Cola HBC B-H


Community

59

RUNNING FESTIVAL: SARAJEVO COCA-COLA HALF-MARATHON

In September 2016, a unique festival of running in Sarajevo, featuring the Sarajevo Coca-Cola Half-Marathon and recreational racing Fun Run and Kids Run, gathered more than 2,300 participants of all ages. Although the Sarajevo Half-Marathon is competitive in nature, the race brings together a large number of recreational runners and those who want to enjoy the movement, whose primary goal is to highlight the importance of running and regular recreation for health. In addition to marking World Car Free Day every year, and raising awareness of the importance of environmental protection, the Sarajevo Coca-Cola Half-Marathon also has a humanitarian character. In 2016, the race assisted a record number of humanitarian initiatives to help children without parental care, children with disabilities, SOS Children's Village and girls' education in safe houses, which resulted in the collection of 20,000 BAM.

Five Coca-Cola HBC B-H employees, as well as two Coke Summership 2016 program participants, ran the tenth Sarajevo Coca-Cola Half-Marathon. The half-marathon generates significant revenue from tourism in Sarajevo every year, because during the race the city records over 1,000 additional overnight stays.

GIRO DI SARAJEVO

In September 2016, we continued, alongside the Giro di Sarajevo Association, City Administration of Sarajevo and numerous other partners, to promote an active lifestyle by supporting the organization of the ninth Giro di Sarajevo recreational cycling race. This traditional event, which takes place on the first Sunday in September every year, gathered more than 2,500 cycling enthusiasts who, by driving the most beautiful streets of Sarajevo, promote the use of bicycles as an economical means of transport and a healthy mode of travel, as well as tolerance between road users. We are proud that over 30 employees and their family members took part in the ride, contributing to the promotion of an active lifestyle. Every year, World Car Free Day is marked by a ride, which raises awareness of the importance of environmental protection.

Coca-Cola HBC B-H has been the partner of this largest cycling event in Bosnia and Herzegovina for nine years in a row.


ENVIRONMENTAL PROTECTION AND WATER STEWARDSHIPEnvironmental protection is high on the list of priorities for every company that seeks to be sustainable and takes care of the needs of future generations. Considering the nature of the business, the focus of our activities in this area is the protection of water, and water care is one of the priorities of Coca-Cola not only in our country, but also globally. We act very carefully when it comes to this priceless natural resource, primarily in the production process itself, reducing the consumption of water per liter of produced beverages, and in terms of adequate treatment of wastewater and investment in community development projects for the protection of water. A responsible attitude towards the environment and water resources is one of the key elements of our sustainable business, which is confirmed by the gold EWS (European Water Stewardship) certificate awarded to our bottling plant in Sarajevo.

Coca-Cola HBC's commitment to responsible water management is also evidenced by our pledge to reduce water consumption by 30% by 2020 and our continued investment in community projects aimed at protecting and conserving water resources.

CLEAN VRBAS INITIATIVE

To contribute to the achievement of these goals, Coca-Cola HBC B-H, in partnership with the United Nations Development Program (UNDP) in Bosnia and Herzegovina, the Government of Japan, 13 municipalities of the Vrbas River Basin, civil society organizations and local communities, launched the Clean Vrbas initiative. The aim of the project is to highlight the importance of water protection, assist in activities with the aim of cleaning the Vrbas River, and raise awareness about its importance for the economic development of local communities and the betterment of the 72,000 people living in the Vrbas basin, and also for the whole of Bosnia and Herzegovina. The initiative has successfully implemented numerous activities and projects, raising awareness and mobilizing citizens, sports clubs and youth groups to actively participate in the protection of the Vrbas.

In the framework of the Clean Vrbas initiative, we are continuing the mission to improve public understanding, educate and raise awareness of the importance of water protection and emphasize that preserving the Vrbas River is the responsibility of everybody. Activities in 2016, organized by rafting club Kanjon from Baja Luka, included a promotional eco-regatta and the cleaning of the banks and shores of the river, in which 250 volunteers collected more than 1,000 kg of waste and cleaned 13 km of riverbank. The promotional eco-regatta gathered all the partners of the initiative, and a unified message on the importance of preserving and protecting water and a rational use of water resources reached up to 3,700,000 people in 2016.


Community

61

Sarajevo Film FestivalAs a socially responsible company, we aim to support projects of particular importance to our community. We are very proud of our long-standing partnership with Sarajevo Film Festival, which during this period has positioned itself as one of the most important festivals in South East Europe. In addition to giving movie fans an opportunity to watch the latest films from both international and regional production houses, the festival connects the creative young people of our country with the world film scene and gives them the opportunity to engage with and contribute to it. During the time of the festival, more than 100,000 visitors, guests and tourists stay in Sarajevo, thus providing a significant boon to the tourism sector.

In addition to supporting the performing arts, through this partnership we contribute to the promotion of Sarajevo and Bosnia and Herzegovina as an important destination on the world film and cultural map, and to the development of young people, which are interests that Coca-Cola HBC B-H, as a company operating in Bosnia-Herzegovina, recognizes as its own.

We add to the festive atmosphere during the New Year and holidays that are traditionally celebrated in Bosnia and Herzegovina by supporting events such as Coca-Cola Holiday Market Sarajevo, Zimzograd Banja Luka and Advent Mostar. According to the estimates of the organizers, these events were visited by nearly 850,000 visitors in 2016.

SUPPORT TO COMMUNITY PROJECTS

We love holidays


GRI G4 INDEX AND INDICATORS

Product quality & integrity

Water stewardship

Corporate governance, business ethics & anti-corruption

Employee wellbeing & engagement


Health and nutrition

Direct & indirect economic impacts

Community investment & engagement

Packaging recycling & waste management

Human rights & diversity


Carbon & Energy

28-32

42; 44-45

10; 25

34-42

30

31; 33; 39; 41; 59

55

54-61

45-47

33-36

47

44-50

PageMateriality statements


G4 1

G4 2

G4 3

G4 4

G45

G4-6

G4-7

G4-8

G4-9

G4-10

G4-11

G4-12

G4-13

G4-14

G4-15

G4-16

G4-17

G4-18

G4-19

G4-20

G4-21

G4-22

G4-23

G4-24

G4-25

G4-26

G4-27

G4-28

G4-29

G4-30

G4-31

G4-32

G4-33

3

5

6

26

7

6

7

6

6

34-35

35

33

8-9

18-24

12;30;44

14

4

4

16-17

16-17

16-17

n/a

n/a

17

16

17

17

4

n/a

n/a

4

63-67

4

Statement from the most senior decision-maker on the relevance of sustainability to

the organisation and the organisationʼs strategy for addressing sustainability.

Strategic approach, key impacts, risks and opportunities in the context of sustainability;

table summarizing targets

Organizational profile

Name of the organization

Primary brands, products and /or services

Headquarters location

Number of countries where the organization operates

Nature of ownership and legal form

Markets served

Scale of the organization

Workforce

Percentage of total employees covered by collective bargaining agreements.

Description of the organisationʼs Supply Chain

Significant changes during the reporting period regarding the organization's size, structure,

ownership or its supply chain

List of external initiatives

Precautionary approach in risk management

List of externally developed economic, social and environmental charters, principles and

other initiatives to which the organization subscribes

List of associations and national / international advocacy organizations

Identified material aspects and boundaries

List of entities included in the organization's consolidated financial statements and those

not included in the sustainability report

Explanation of the process for defining the report content and how the organization has

implemented the Reporting Principles for Defining Report Content

Material aspects identified in the process of defining report content

Material aspects within the organization and their boundaries

Material aspects outside the organization and their boundaries

Effects of any restatements of information provided in previous reports, and the reasons

for such restatements

Significant changes from previous reporting periods in the scope and aspect boundaries

Stakeholder engagement

List of stakeholder groups engaged by the organization

Basis for identification and selection of stakeholders with whom to engage

Approach to stakeholder engagement

Key topics and concerns that have been raised through stakeholder engagement

Report profile

Reporting period

Date of most recent previous report

Reporting cycle

Contact point and addresses for questions regarding the sustainability report and its contents

GRI content index

Assurance Policies and Practices

63

Page StatusGENERAL STANDARD DISCLOSURES2016


G4-34

G4-35

G4-38

G4-39

G4-40

G4-41

G4-42

G4-51

G4-56

G4-57

G4-58

EC 1

EC 2

EC 4

EC 6

EC 7

EC 8

EC 9

EN 1

EN 2

EN 3

EN 5

EN 6

EN 7

EN 8

EN 9

EN 10

10

14

10

10

10

10;25

10;14

10

25

25

25

12

19

55

35

55

55

33

47

47

48

42

48

48

45

44

45

Governance

Governance structure

Process for delegating authority for economic, environmental and social issues

Composition of highest governance body and its committees by executive or

non-executive function, independence, tenure on the governance body, number of each

individual's other significant positions and commitments, and the nature of their commitments,

gender, membership of under-represented social groups, competences relating to economic,

environmental and social impacts, stakeholder representation

The Chair of the highest governance body is also the executive officer

Nomination and selection processes for highest governance body

Procedure for ensuring conflicts of interest are avoided and managed

Roles of highest governance body' and senior executives in the development, approval,

and updating of the organization's mission statements, strategies, policies, and goals related

to sustainability

Renumeration policies for the highest governance body and senior executives

Ethics and integrity

Values, principles, standards and norms of behavior

IInternal and external mechanisms for seeking advice on ethical and legal issues

Internal and external mechanisms for seeking advice on ethical and legal issues

Category: ECONOMIC

Direct economic value generated and distributed

Financial implications and other risks and opportunities for the organization's activities

due to climate change

Aspect: Procurement practices

Financial assistance received from government

Proportion of senior management hired from BiH at significant locations of operation

Direct economic impacts

Indirect economic impacts

Proportion of spending on local suppliers at significant locations of operation

Category: ENVIRONMENTAL

Aspect: Materials

Materials used by weight or volume

Percentage of materials used that are recycled input materials

Aspect: Energy

Energy consumption within the organization

Energy intensity

Reduction of energy consumption

Reductions in energy requirements of products and services

Aspect: Water

Total water withdrawal by source

Water sources significantly affected by withdrawal of water

Percentage and total volume of water recycled and reused



EN 10

EN 12

EN 14

EN 15

EN 16

EN 17

EN 18

EN 19

EN 20

EN 21

EN 22

EN 23

EN 26

EN 27

EN 30

EN 10

43

43

49

49

49

50

49-50

49-50

50

46

53

43

43

51

Aspect: Biodiversity

Significant impacts of activities, products, and services on biodiversity in protected areas

and areas of high biodiversity value outside protected areas

Total number of IUCN Red List species and national conservation list species with

habitats in areas affected by operations, by level of extinction risk

Aspect: Emissions

Direct greenhouse gas (GHG) emissions (Scope 1)

Energy indirect greenhouse gas (GHG) emissions (Scope 2)

Other indirect greenhouse gas (GHG) emissions (Scope 3)

Greenhouse gas (GHG) emissions intensity

Reduction of greenhouse gas (GHG) emissions

Emissions of ozonedepleting substances (ODS)

NOx, SOx and other significant air emissions

Aspect: Effluents and Waste

Total water discharge by quality and destination

Total weight of waste by type and disposal method

Identity, size, protected status, and biodiversity value of water bodies and related habitats

significantly affected by the organization's discharges of water and runoff

Aspect: Products and Services

Extent of impact mitigation of environmental impacts of products and services

Aspect: Transport Significant environmental impacts of transporting products and other goods and materials

for the organization's operations, and transporting members of the workforce




LA 1

LA 2

LA 3

LA 6

LA 8

LA 10

LA 11

LA 12

LA 14

LA 16

HR 3

HR 10

SO 4

SO 9

36

37

36

40

39

38

37

36

33

36

36

33

25

33

Category: SOCIAL

Sub-category: Labor practices and decent work

Aspect: Employment

Total number and rates of new employee hires and employee turnover by age group,

gender, and region

Benefits provided to fulltime employees that are not provided to temporary or

part-time employees, by significant locations of operation

Return to work and retention rates after parental leave, by gender

Aspect: Occupational Health and Safety

Rates of injury, occupational diseases, lost days, and absenteeism, and total number of

work-related fatalities by region

Health and safety topics covered in formal agreements with trade unions

Aspect: Training and Education

Programs for skills management and lifelong learning that support the continued employability

of employees and assist them in managing career endings

Percentage of employees receiving regular performance and career development reviews

Aspect: Diversity and Equal Opportunity

Composition of governance bodies and breakdown of employees per employee category

according to gender, age group, minority group membership, and other indicators of diversity

Aspect: Supplier Assessment for Labor Practices

Percentage of new suppliers that were screened using labor practices criteria

Aspect: Grievance Mechanisms

Number of grievances about labor practices filed, addressed, and resolved through formal

grievance mechanisms

Category: HUMAN RIGHTS

Aspect: Nondiscrimination

Total number of incidents of discrimination and corrective actions taken

Aspect: Supplier Human Rights Assessment

Percentage of new suppliers that were screened using human rights criteria

Category: SOCIETY

Aspect: Anticorruption

Communication and training on anticorruption policies and procedures

Aspect: Supplier Assessment for Impacts on Society

Percentage of new suppliers that were screened using criteria for impacts on society


PR 1

PR 2

PR 3

PR 4

PR 5

33

29

30

30

30

32

Category: PRODUCT RESPONSIBILITY

Aspect: Customer Health and Safety

Percentage of significant product and service categories for which health and safety impacts are

assessed for improvement

Total number of incidents of noncompliance with regulations and voluntary codes concerning the

health and safety impacts of products and services during their life cycle, by type of outcomes

Aspect: Product and Service Labeling

Type of product and service information required by the organization's procedures for product and

service information and labeling, and percentage of significant product and service categories

subject to such information requirements

Total number of incidents of noncompliance with regulations and voluntary codes concerning

product and service information and labeling, by type of outcomes

Results of surveys measuring customer satisfaction

67

Status key:

Fully reported

Partially reported



Coca-Cola HBC B-H Sarajevo 2016 Sustainability ReportNovember, 2016

Published byCoca-Cola HBC B-H d.o.o. Sarajevo

Translated byMaja Brkić and Andrew Lawler

Design and layout byBranko Vekić

© 2017. Coca-Cola HBC B-H d.o.o. Sarajevo. All rights reserved.

Coca-Cola® and Contour Bottle are registered trademarks of The Coca-Cola Company.

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