TATA Tea Group

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TATA Tea Group 2008/2009 Results
Presentation Peter Unsworth
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Introducing The Tata Tea Group

• Creating a global leader in
• branded good for you beverages
• Five businesses being operationally integrated
  and transformed to make one global beverage group

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Led by a Single Management Team

• Peter Unsworth CEO Tetley Group
• Percy Siganporia MD Tata Tea, Chairman MEMW
• Hamid Ashraff MD Tata Coffee
• L Krishna Kumar Chief Financial Officer
• Nalin Miglani Chief HR Officer
• John Nicholas Chief Marketing Officer

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Key Highlights for 2008/09

• Strong performance with resilient core categories
  in difficult economic and trading conditions
• Product portfolio expands
• Strong brand growth in our target categories
• Integration and transformation

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Key Highlights for 2008/09

• Group operating income up 12 at Rs 4874 crores
• Group PBT before exceptional up 21 at Rs 531
  crores
• Group PBT lower by 39 at Rs 1256 crores as
  compared PY figure of Rs 2060 cr
• PY figure include one time profit on sale of
  EBI amounting to Rs 1608 crores

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The Pillars of our Business Strategy
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Products Categories
Moving from a tea and coffee company to a wider
beverage business spanning six product
categories
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Brands
A new central marketing function driving global
brands management and innovation
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Distribution
Expansion into new geographies underway Russian
entry recently announced
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People
A single management team and six
consumer/customer focused regions
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Process
Gaining scale economies through common systems
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The Business Strategy Products Categories
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Innovation Drives Category Growth
Water Expansion of Himalayan water range into
more cities in India RTD National launch of
Tetley Iced Tea following successful test market
in Canada National launch of Tetley Infusions
(iced tea concentrate sachets) in Canada Test
market launch of T!on juice drinkin India
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Expansion of Product Portfolio
Tea National launch of Tetley Red Tea in
Canada National launch of Good Earth Organic teas
in UK Coffee National launch of Good Earth
Organic Coffee in USA
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The Business Strategy - Brands
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The Business Strategy - Global Regional Brands
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Global Brands Performance Highlights
Record brand shares in both Canada and
France launched into UK and Canada (Tea), US
(Coffee) Premium, Agni and Gold all exhibiting
strong growth post the Jaago Re campaign and
despite increased consumer pricing
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Regional Brands Performance Highlights
strong gains in both rate of sale and
distribution in continued growth after brand
relaunch awarded Product of the Year by Polish
consumers
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Focus on Brands

• Ability to drive marketing excellenceacross
  different countries and cultures
• Heres a flavour...

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Focus on BrandsThe Growth Story of Tetley Redbush
Following the success of the 40s pack larger
pack sizes and new variants have been introduced
In the UK Tetley Redbush is the No. 2 brand in
the UK with a 26 market share
Introduction into the Canadian market in 2008
One of the fastest growing brands in the UK
tea segment
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Focus on BrandsThe Impact of the Jaago Re
Campaign
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Focus on BrandsEight OClock Coffee 100
Colombian Drives Brand Growth

Source IRI, 52 weeks ended 3/22/09 Internal
sales data F09
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Design of Tata Tea Group Organisation
Now Six Regions GB Africa Europe Middle
East USA Canada South America South Asia Asia
Pacific
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Regional Highlights
GB and Africa Retained UK tea categorypartnershi
p with Tesco Acquired CTC givingwest coast
presence in South Africa
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Regional Highlights
USA Recent new CostCo and Walmart
listings South Asia Launched T!on and extended
distribution of Himalyan
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Regional Highlights
Europe Middle East Entry into Russian
market Canada South America Launch of Tetley
RTD Iced Tea into over 6,000 conveniencestores
across Canada
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Russia Market Entry
Russia is the 2 tea market in the world Recent
51 acquisition of Grand A major
Russianpackaging and distributioncompany in
coffee and tea
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The Business Strategy - People
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Building a global organisation
New single management structure in place New and
distinct company values defined Integrated Global
Reward Strategy
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US Restructuring well underway

• Centralized HQ for three US businesses
• Cross fertilization of ideas across tea and
  coffee brands
• Management and administration is consolidated
  reducing cost
• Full integration expected to be realised by end
  of 2009/10

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World class processes continue to be built

• Development of global information systems to
  support global integration
• Consolidated global financial systemin place
• Drive global efficiencies
• Balanced scorecard for strategy implementation

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Outcomes of Strategies The Global Picture
Multi category portfolio
Global consumer brands
Global distribution coverage
World-class business processes
The place to be for exceptional talent
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The Tata Tea Group

• A global leaderin good for you beverages
• THANK YOU

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TATA Tea Group 2008/2009 Financial Results L
Krishna Kumar, CFO
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Key Highlights for 2008/09

• Strong performance in difficult economic
  trading conditions but resilient core portfolio
• Increase in input costs largely recovered through
  price increases
• Benefits from effective management ofsterling
  currency risk

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Key Highlights for 2008/09

• Continued improvements in product portfolio and
  new launches
• Initial costs of restructuring absorbed
• Strong brand growth in our target categories

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Performance 2008/09

• Group operating income up 12 - growth in brand
  sales, price increases and favourable currency
• Group PBT before exception up 21 - Cost
  increases offset by interest savings
• Cost increases mainly on commodities, growth
  initiatives like water launch, brand
  launch/support in US, UK and Canada

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Performance 2008/09

• Other cost increases market driven impact on
  domestic defined benefit retirement schemes
• Group PBT lower mainly on account of one off
  items
• One off items in the CY-exchange gain on surplus
  cash Rs 814 Crs (realised component Rs 471 Crs)
  actuarial provisions in UK Rs 54 Crs, last year
  gain on sale of EBI shares Rs 1607 Crs
• EPS Rs 113 (Rs 250) EPS excluding exceptional
  items Rs 47.87 (Rs 41.50) reflecting improvement
  in underlying performance

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Strong Brand Growth for 2008/9Coming from Tata
Tea and Eight OClock Coffee
IndianTea Brands 19.4
IndianTea Brands 21.1
Jemca 0.7
Tetley 42.2
Jemca 0.7
Vitax 1.4
Tetley 48.5
Vitax 1.6
Others 13.7
Others 16.1
Good Earth1.4
Good Earth1.4
Eight OClock 16.9
Eight OClock 14.9
Source Internal
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Robust Balance Sheet Position
Indian Rupees Crores
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Standalone PerformanceTata Tea Ltd
Optg income of Rs 1379 Crs for the year compared
to Rs 1153 Cr in the prior year. Reflective of
growth in brands and price increases
Operating incomeUp 20
Operating EBITDown 15
Strong brand performance with recovery of
commodity cost increases and lower export
profitability, Retiral benefits cost increases
driven by market conditions. EBIT at Rs 142 Crs
Investment income including dividends from Group
companies results in PBT at Rs 239 Crs
PBT before exceptionalsUp 4
Exceptional expenditure in the current year
reduces PBT to Rs 229 crs. PY had profit on sale
of North India Plantation Operations
PBTDown 41
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Standalone PerformanceTata Coffee Group
Operating incomeUp 21
Operating income of Rs 1121 Crs compared to Rs
925 Crs in the prior year. Strong branded sales
in the US coupled with favourable Fx translation
and higher plantation sales
Operating EBIT Up 1
Strong brand performance offset by investment
behind Good Earth launch, lower export
profitability translates to a growth of 1. EBIT
at Rs 148 Crs
Loan restructuring drives lower interest costs
results in PBT before Exceptional items at Rs 83
Crs up 16
PBT before exceptionalsUp 16
Exceptional expenditure relating to US
reorganisation reduces PBT to Rs 70 Crs, down 2
PBTDown 2
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Strategy in Place and Journey Started
Investment focus will be brands
Focus on the branded business and development of
global brands
Entry into wider beverage category
Broader branded portfolio and expansion into new
categories
Focus on six regions
Wider global footprint global not international
Products, brands, distribution, people and
processes
Integrated global business
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Summary of Year End Results

• Strong performance in difficult conditions
• Strong, well financed business platform
• The journey has begun to becoming
• A global leaderin good for you beverages!

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THANK YOU