Tata Tea Ltd

1
Tata Tea Ltd The Tetley Group Tata Coffee
Ltd Performance for the Quarter September, 2005
October 29,2005
2
Presenter Panel

• P. T. Siganporia (Managing Director Tata Tea)
• K. Pringle (Executive Vice Chairman CEO - The
  Tetley Group)
• L Krishna Kumar (Senior Vice-President Finance
  I.T. Tata Tea)
• P. Unsworth (Managing Director, Supply Support
  - The Tetley Group)
• M H Ashraff (Managing Director - Tata Coffee Ltd)
• M D Kumar ( Vice President, Finance Tata Coffee
  Ltd)

3
Tata Tea Group Highlights for the Quarter

• Strong operating performance across the Group
• Brand volume increase in Indian domestic market
• Recovery in GB and promising growth in developing
  markets
• Improved coffee realisations
• Favourable impact of South India plantations
  restructure
• Improved operating margins
• Results in
• Consolidated Income of Rs 797.85 crores up 4
  over PY
• Consolidated PBT before exceptional items at Rs
  137.86 crores up by 31
• Consolidated PAT of Rs 101.21 crores - up 33
• Consolidated EPS of Rs 18 up by 33

4
Turnover Profit GrowthQ2
Rs/crores
5
Turnover Profit GrowthHalf Year
Rs/crores
6

• Tata Tea Ltd
• Performance Review September,2005
• (PTS )

7
Tata Tea Stand Alone Highlights for the Quarter

• Strong operating performance
• 10 brand volume increase
• 15 increase in brand value
• Favourable impact of South India plantations
  restructure
• Continuous Improvement in operational income and
  profitability over 8 quarters
• Results in
• Income from operations of Rs 239.20 crores up 2
  over PY despite exit from major parts of South
  India Plantations
• Operating Profits at Rs 59.21 crores up by 12
• PBT before exceptional items at Rs 83.52 crores
  up by 20
• PBT at Rs 81.84 crores up by 17
• PAT of Rs 62.39 crores - up 17

8
MAT Value Market share
5
6
31
-30
Source All India, AC Nielsen Retail Audit ,
September 2005
ALL FIGS are Moving Annual Totals
9
Tata Tea Ltd Brand Performance Highlights

• Q2 volumes grow by 10 over previous year through
  higher investment in brand building
• H1 growth 13 compared to PY first half
• Value Market share in September05 at 20.6
  compared to 19.7 PY September

10
Brand Performance First Half

• Tata Tea
• Volume Growth rate of 15
• Tata Tea Gold with a market share of 2 grows
  by 36
• Tata Tea Agni brand volume growth of 24 post
  restaging brand end of previous financial year

11
Brand Performance First Half

• Chakra Gold
• Achieves 6 volume growth driven by key trade
  initiatives
• Kanan Devan
• Kanan Devan Key growth in Kerala by 30 led by
  KD Strong through successful promotions
• Overall volume growth of 20

12
Brand Performance First Half

• Gemini
• 3 volume growth enhancing regional brand
  dominance
• Tetley - The new face of tea
• Flavoured tea bag strategy driving growth of
  Tetley brand
• 36 growth - development of tea bag segment
  gathers momentum

13
Plantation Performance

• Significant improvement in profitability of
  plantation operations despite impact of lower
  auction prices mainly driven
• Favourable impact of Kanan Devan restructuring
• Substantial crop increase and improved capacity
  utilisation through bought green leaf operations
  in North India
• Continued productivity improvements across
  plantations
• Sale of 6 South India estates on a commercial
  basis to Tata Coffee awaiting formalisation of
  approvals
• Alternate business model development under
  address in North Plantations

14
Tata Tea LtdFinancials(LKK)
15
Financial Performance Q2

• Operating income growth of 2 despite exit from
  major parts of South India Plantations
• Expenditure decline despite increase in sales
• Operating Profit up by 12
• PBT before exceptional items at Rs 83.52 crores
  up by 20
• PAT at Rs 62.39 crores up by 17

16
Operating Profit Growth 12

• Brand volumes realisation growth driven by
  higher investments in brand building expenditure
• Lower auction prices impact plantation
  performance
• Overall expenditure lower pursuant to reduction
  in staff cost due to South India plantation
  operation restructure
• Substantially higher crop, green leaf purchase
  and overall productivity improvement in North
  India plantations
• Stringent cost controls all across the Company

Rs/crores
17
Treasury Operations

• Higher mutual fund and dividend income
• Cost of debt remains stable at 6
• Net interest cost at lower levels due to lower
  gross interest and increase in interest income
• Debtors/sales _at_25 days remains stable

18
Financial Performance September,2005
19
Tata Coffee Ltd

• Performance for Q2
• (MHA MDK)

20
Tata Coffees Businesses
TCL Businesses
Soluble Coffee
Marketing
Plantations
Coffee
Spray Dried
Brands
Vending
Agglomerated
Pepper
Freeze Dried (In Progress)
Timber
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Q2 Highlights

• Strong Operating Performance
• Surge in Coffee realization y-o-y
• Significant Growth in Plantation Profit
• Improved performance of Marketing, Timber Value
  Addition Curing Divisions
• Reduced Interest Cost
• Results in
• Total Income up 4 at 53.41 Crores - reducing the
  gap from Q-1
• Operating Profits at Rs 8.28 Crores up by 171
• PBT at Rs 8.93 Crores up by 170
• PAT at Rs 6.62 Crores up by 136
• EPS at Rs 5.31 vs Rs 2.25

22
Financial Performance September 2005
23
New Initiatives

• Acquisition of 5 Tea Estates 1 Coffee Estate
  from Tata Tea being completed
• Freeze Dried project Expected to go on stream
  in end 2006, enabling entry in the top segment
  Instant Coffee Markets
• Instant Coffee Production base in Uganda -
  Negotiations at an advanced stage

24
The Tetley Group Performance Review
September,2005

• PU

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Highlights

• A strong Quarter 2 sales performance despite
  tough conditions.
• Overall sales now up 5.2 so far this year.
• GB has reversed the trend of last year - up 4
  from successful promotions and focussed
  advertising.
• Launches in Russia, Pakistan, Bangladesh,
  Kazakhstan and South Africa all showing growth.
  Up 34 in aggregate.
• Acquisition of Good Earth in the USA a major
  platform for growth going forward.
• EBIT for the year is down with investment behind
  sales growth and development of new products and
  markets.
• PAT at the half year is up by 18 with lower
  interest costs following re-financing and the
  once-off gain on closure of the pension scheme.

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Key Financials

• Quarter on quarter
• Sales up 4.7m (10), largely in GB and
  Australia.
• EBIT up 0.5m (6), despite increased investment
  in growth
• PAT up 0.2m (5), lower interest following
  re-financing
• YTD
• Sales up 5, largely GB, but also Australia,
  Empirical (US Foodservice), Poland and developing
  markets
• Higher AP and investments in new products and
  markets impact EBIT
• Pensions credit and lower interest have resulted
  in PAT growth.

27
Sales

• Quarter on quarter
• GB performed strongly following a slow Q1. More
  promotional activity.
• USA had a slower quarter following a good Q1.
  Ice tea market under pressure.
• Elsewhere, Australia had a strong quarter as a
  new broker was taken on. Canada delayed launch
  of new packaging format expected to bounce back
  in Q3.
• YTD
• GB up 2 having more than recovered the ground
  lost at Q1.
• USA is in line year on year, despite declining
  black tea market.
• Australia is the strongest RoW contributor.
  Poland also continues to make good progress.

28
Growth in new markets

• Good progress continues to be made
• In aggregate, sales ahead of last year by 34
• Now represents 4 of Group sales during the first
  half

29
EBIT

• EBIT up 6 in the quarter and down 5 for the
  year to date
• Lower tea costs have been offset by
• Pricing pressures in the UK
• Stronger promotional programme
• Supply chain demands of UK retailers

30
PAT

• Exceptional items in 04/05 included the cost of
  reorganising the UK supply chain. In 05/06 the
  credit represents the curtailment gain on the
  closure of the UK pension scheme.
• Interest is lower than last year following the
  re-financing in February 05 and the debt paid off
  since that time.
• Tax reflects the higher EBT and a once off credit
  taken last year.

31
Build special teas business

• Acquired Good Earth teas October 2005 the
  Fastest growing US special tea brand with a
• 3.7 market share
• 16m turnover
• Important step in growing special teas business
  around world
• US market West Coast strength, distribution
  access

32
Market share performance

• A robust performance in established markets
• Canada
• record monthly specialty teas share at 25.5
  (val)
• Overall market share strong at 45.1 (val)
• GB
• Highest ever market share in tea bags at
  30.4(val)
• Sales 6 YTD (market tracking -2)
• Australia
• Sales ahead of budget
• Share robust at 20.6 (vol)
• France
• English Breakfast 50s/100s have exceeded their
  Lipton equivalents for the first time ever.
• Estonia
• Share up 5 to 9.9 (val)

33
Performance against strategy

• Aim to strengthen our business in existing
  geographies
• result strengthened key leadership positions in
  the UK and Canada,
• Good Earth acquisition strengthen special teas
  business
• Aim expansion into new geographies
• result new business gained in Pakistan, Poland
  sales up 45, Bangladesh increased market share
  planning S Africa launch
• Aim new product and business development in
  range of tea categories
• result New packaging formats in Canada and
  France, Canadian Chai teas and new organic range
  new GB RTD teas new Australian special teas
• Aim building supply and support capability
• result successfully leveraging capability to
  supply new markets. Ongoing review of supply
  chain configuration.

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Tata Tea Ltd

• Consolidated Accounts

LKK
35
Group Companies
36
Q2 - Total Income up by 4

• Increase in Tata Tea brand volumes offsets
  auction sales reduction on exit of partial South
  Plantations
• Strong performance by GB developing markets
  partly offset by slow US sales
• Improved coffee realisations
• Improved instant tea performance
• Increased investment income

87.50
769
119.57
798
Rs/crores
37
Q2 -Profit before Tax Exceptional Items Up
by 31

• Profit improvement
• Improved efficiencies
• Favourable GAAP adjustments
• Stringent cost control
• Interest cost savings

87.50
105.04
119.57
137.86
Rs/crores
38
Q2 - Profit after Tax 33

• Exceptional Items include
• ()Profit on Transfer of a single estate in TTL
• (-)ESS amortisation - Rs 2.08 crores
• Current quarter profits include Q1 profits of
  Rallis India Ltd ( Rs 0.66 crores)

87.50
82.93
76
119.57
101
97.03
Rs/crores
39
Financial Performance September,2005
40

• Way Forward

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CHALLENGER BRAND EIGHT CREDOSTHE WAY WE DRIVE
OUR BUSINESS

• Break with your immediate past
• Bring in the light house identity
• Assume thought leadership of the category
• Create symbols of re-evaluation
• Sacrifice
• Over commit
• Use advertisng and publicity as a high leverage
  asset
• - Become idea centred and not consumer centred
• - Flying unstable

42
Tata Tetley Strategic Focus

• Strengthen our business in existing geographies
• Expansion into new geographies
• New product development and building business in
• Black Tea
• Fruit and Herbal Infusions
• Ready to Drink Teas
• Out of home
• Building operational capability to enable the
  commercial business to achieve growth
• Management Strength

43
Challenging for leadership in tea across the
world
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• Questions Answers

45
Thank You