Tata Tea Ltd

1
Tata Tea Ltd The Tetley Group Performance
for the Quarter September, 2004
October 29,2004
2
Presenter Panel

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

3
Group Highlights for the Quarter

• Strong operating performance across the Group
• Brands perform well across all markets
• Improved Plantation Operations
• Improved operating margins
• Leads to
• Consolidated Turnover of Rs 769 crores - up 9
• Consolidated PAT of Rs 76 crores - up 55
• Consolidated EPS of Rs 13.54 up by 55

4
Outline of Presentation

• Tata Tea Ltd Performance Review (PTS LKK)
• The Tetley Group Performance Review (KP PU)
• Tata Tea Consolidated Financials (LKK)
• Way Forward (KP)
• Questions Answers

5
Outline of Presentation

• Tata Tea Performance Review (PTS LKK)
• The Tetley Group Performance Review (KP PU)
• Tata Tea Consolidated Financials (LKK)
• Way Forward (KP)
• Questions Answers

6

• Tata Tea Ltd
• Performance Review September,2004
• (PTS LKK)

7
Black Tea Scenario
Source Carritt Moran
8
Value Market share
Source All India, AC Nielsen Retail Audit ,
April 2004
ALL FIGS are Moving Annual Totals
9
Aim To grow Tata Tea brand value share
Lead Brand Market Share
Value share All India, AC Nielsen Retail Audit
Future Strategy Innovation growth of Tata Tea
to enhance value
10
Aim Increasing the Rate of Innovation
Sales contribution from new initiatives
Future Strategy New initiatives projects will
fuel growth
11
Aim Innovating growth Tata Tea Gold
Most successful category innovation in last
decade
Value Share All India, AC Nielson Retail Audit
Future Strategy Multiply innovation led growth
12
Tata Tea LtdFinancials
13
Strong Financial Performance Q2

• Top-line growth of 16
• Operating Profit up by 49
• PBT at Rs 69.81 crores up by 57
• PAT at Rs 53.20 crores up by 52
• EPS Rs 9.46 per share up by 52

14
Operating Profit Growth 49

• Continuous growth in brand volumes
• Improvement in Plantation Operations
• Operating expenditure higher due to higher sales
  and increased purchased teas for own brands
• Stringent cost controls

Rs/crores
15
Profit after Tax Growth 52

• Higher Investment income
• Higher effective tax rate

Rs 120.34
Rs/crores
16
Treasury Operations

• Term debt reduced by 9 to Rs 179 crores
• Cost of debt declines from 6.3 pa in the
  previous financial year to 5.6 pa
• Net interest cost at same levels despite decline
  in interest income
• Debtors/sales _at_7

17
QUARTERLY RESULTS SEPTEMBER,2004
18
HALF YEARLY RESULTS SEPTEMBER,2004
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Outline of Presentation

• Tata Tea Performance Review (PTS LKK)
• The Tetley Group Performance Review (KP PU)
• Tata Tea Consolidated Financials (LKK)
• Way Forward (KP)
• Questions Answers

20
The Tetley Group Performance Review
September,2004

• (KP PU)

21
Mixed Start to The Year

• Continued improved EBIT and PAT Performance
• Changed promotional mix still affecting net sales
  particularly in GB
• Strong volume market shares in very competitive
  markets
• Core black tea markets continue to decline (GB
  2, Canada regular -2 and US -3)

22
Financial Performance

• Group Sales running 7 behind last year (4 after
  eliminating FX translation losses)
• Operating profit and EBIT up 2
• PAT at 7.7m up 12
• Strong net cash position 17.7m (16 higher than
  last year)

23
EBIT

• Key issues
• 7 reduction in sales partially offset by 11
  reduction in cost of sales
• Changed promotional mix results in reduced AP
  spend
• GB advertising increased to support launch of
  Specialty Teas in Canisters
• Continued focus on overheads delivers 1.4m
  benefit
• Investment in Developing Markets increases- 0.8m

24
Profit Before Tax

• Key issues
• Increased non-recurring expenditure
• Reduced interest charges (down 5)
• Reduction of 0.8m in tax

25
Net Cash Flow

• Key issues
• Increase in working capital
• 5.0m increase in stock mainly in preparation
  for the National GB promotion planned for
  November

26
Market Performance

• GB 9 lower sales and 7 lower EBIT than 2003/04
• US improved volumes (up 12) and net sales (up
  3) in local currency.
• Canada sales in local currency flat to 2003/04,
  EBIT 13 ahead of last year due to cost of sales
  and overhead savings and some AP phasing
  benefits
• Australia Steady growth in volumes (up 7) and
  sales (up 4) further augmented by cost of sales
  and overhead savings continue to deliver EBIT at
  record levels
• International Tea volumes, net sales and EBIT
  all still ahead of last year

27
Outline of Presentation

• Tata Tea Performance Review (PTS LKK)
• The Tetley Group Performance Review (KP PU)
• Tata Tea Consolidated Financials (LKK)
• Way Forward (KP)
• Questions Answers

28
Tata Tea Ltd

• Consolidated Accounts

LKK
29
Group Companies
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Profit before Tax 26

• Branded Tea volume growth worldwide
• Exceptional Expense items of Rs 8 crores
• EPS up by 55 at Rs 13.54 per share

Rs/crores
31
Tata Tea LtdConsolidated Accounts of the Group
Q2
32
Tata Tea LtdConsolidated Accounts of the Group
Half Year
33
Improved Half Year Performance
Consolidated EPS
34
Tata Tea Ltd Share Price Movement
35
Outline of Presentation

• Tata Tea Performance Review (PTS LKK)
• The Tetley Group Performance Review (KP PU)
• Tata Tea Consolidated Financials (LKK)
• Way Forward (KP)
• Questions Answers

36

• Way Forward
• (KP)

37
Turnover Mix-Half Year 2004/05
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Group Highlights for the Quarter

• Strong operating performance across the Group
• Brands perform well across all markets
• Improved Plantation Operations
• Improved operating margins
• Leads to
• Consolidated Turnover of Rs 769 crores - up 9
• Consolidated PAT of Rs 76 crores - up 55
• Consolidated EPS of Rs 13.54 up by 55

39
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

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Challenging for leadership in tea across the
world
41

• Questions Answers

42
Thank You