nine months ended dec 2009/10 financial results peter unsworth, ceo
TRANSCRIPT
Nine Months Ended Dec 2009/10Financial Results
Peter Unsworth, CEO
• One global beverage group with brands that touch billions of lives
• Our direction is set and momentum is gathering pace
Integrated and transforming
Key Highlights
• Group operating income for the quarter up 21% at Rs 1549 crores
• Group operating income for the nine months up 18% at Rs 4248 crores.
• Group PBT before exceptional for the quarter up by 17% at Rs 165 crores
• Group PBT before exceptional for the nine months up by 21% at Rs 477 crores
Strategy – New Pillar- Sustainability
Brands
Distrib-
ution
Process
People
Product
Profit
Sustain-ability
Sustainability Strategy
• Climate Change – Reduce carbon footprint by 25% by 2015
• Packaging – No packaging to landfill by 2015
• Ethical Sourcing – By 2015 all raw material components and packaging is sourced sustainably
• Water – Measure our impact and reduce water usage
Measure – Refine Targets – Invest – Monitor - Improve
• Strong market position in the UK 26.8% volume; 24.9% value – but need to invest in brand and variants (see slide)
• Tetley maintains leadership position in Canada 40.8% volume; 36.2% value –
competition strong
• Tata Tea continues its market leadership with 20.1% volume share and achieves leadership position in value with a share of 22.0% - brand strengthens
• EOC seen strong growth performance resulting in improved market share
Our brand health is strong…
UK – growing away from black tea
… and we continue to invest
• New Tetley global brand architecture complete to be rolled out over next year
• EOC Sales team was able to generate increased customer engagement, using social media to drive brand momentum
• New Good Earth global proposition created
• Good Earth national TV advertising campaign launched in the UK and well received
GeographyVolume % Value %
2009 Change 2009 Change
GB 26.8 -2.5 24.9 -1.0
Australia 17.6 -0.7 11.7 -0.3
Canada 40.8 +0.2 36.2 -0.3
Czech Republic 20.6 -2.9 15.8 -0.6
Poland 4.6 -0.6 7.5 -1.4
France 9.4 +0.1 9.0 +0.1
USA –Tea 7.9 -1.0 5.9 -0.2
USA- Coffee 4.7 +0.5 4.9 +0.5
India 20.1 -0.9 22.0 +0.7
(Source A.C.Nielson)
Market Share- (12 months MAT)
BRANDED OPERATIONS
Group Sales- Brand wiseBrandwise Sales Breakup YTD DEC 2009
Indian Tea Brands30%
Jemca1%
Vitax2% Others
8%
Eight O Clock18%
Good Earth1%
Tetley40%
Brandwise Sales Breakup YTD DEC 2008
Indian Tea Brands27.8% Vitax
1.6%Jemca0.7%
Others5.4%
Eight O Clock17.1%
Good Earth1.5%
Tetley45.9%
New products perform – Innovation accelerates
•Tetley Green Tea challenges Twinings for leadership in UK, almost double competitor in Canada.
•T4Kidz to be launched in UK
•Tetley Redbush – brand leader with 31% share in UK.
•Tetley Infusions well received by Canadian consumers – hitting budget
•T!on successfully piloted in Chennai region and now rolled out in Tamil Nadu
•Grand coffee now introduced to the portfolio
Group Sales- Category wiseCategorywise Sales Breakup YTD DEC 2008
Coffee15.37%
Tea73.23%
Others2.80%
Plantn & Extrctn.8.60%
Categorywise Sales Breakup YTD DEC 2009
Plantn & Extrctn.7.10%
Others1.87%
Tea71.61%
Coffee19.42%
Expansion into new channels and geographies• EOC expanding to new and alternate channels of distribution
• Poland distribution contributes – Tetley sales up 32% yoy
• Russia plan underway and Grand now delivering to the results
• Middle East launch underway (see photos).
• South America launch into new markets agreed
Tetley Launch into Euromarche – Riyadh Jan 2010
World class processes continue to be built• TBEM Dipcheck assessment
underway – external assessment this year
• Development of SAP template for global systems
• Outsourcing of systems and production under review
• S&OP system fully in place and operating
• Internal Audit process standardized and Group wide
In Summary
• Input prices continue to challenge
• Good performance in a tough market.
• Strategy gathers momentum – regional growth, innovation agenda and new category competencies.
TATA Beverage Group
One company, multiple brands transforming to become
The global leader in ‘good for you’ beverages
THANK YOU
Nine Months Ended Dec 2009/10Financial Results
L Krishna Kumar, CFO
Key Themes for the quarter ended Dec 2009
• Strong performance in difficult economic & trading conditions
• Increase in input costs largely recovered through price increases
• Investment behind brand building and new products
• Benefits in interest due to reduction in interest costs
Financial Highlights
• Group operating income for the quarter up 21% and up 18% for the nine months ended Dec 09.
• Group EBIT for the quarter is up by 11% and 16% for the nine months ended Dec 09
• Group PBT before exceptional for the quarter is up by 17% and 21% for the nine months ended Dec 09
• Group Profit after tax before share of MI and Associate, lower to prior year – attributable to exceptional Fx gains in prior year.
In Rs. Crs
2009 / 10 2008 / 09 Variance Particulars 2009 / 10 2008 / 09 Variance
1549 1284 265 Total Operating Income 4248 3588 660
170 153 17 EBIT 469 404 65
165 141 24 Profit before Exceptional Items 477 395 82
-3 576 -579 Exceptional Items 31 784 -753
161 717 -556 Profit Before Tax 508 1179 -671
100 494 -394 Profit after Tax 353 808 -456
92 396 -304 Consolidated Net Profit 360 690 -330
Qtr ending Dec 31 YTD ending Dec 31
• Group operating income up by 21% for the quarter - growth in brand sales driven by volume increases, price increases and inclusion of Russia business.
• Cost increases mainly on commodities• Volume growth in tea • Volume growth in coffee• Price increases in tea
• Increase in advertisement and selling expense• Higher investments behind brand building• Higher promotional expenses• Higher investment in product innovation
Performance Analysis for the quarter ended Dec 2009
• Exceptional items in the current quarter- ESS amortisation costs Rs 2 crores and reorganisation costs Rs 1 crores. Previous year included significant unrealised gain on USD deposits due to favourable exchange movement.
• Average tax rate is higher than the previous year mainly due to change in taxable profit mix.
• Increase in share of profits in associate is attributable to rise in associate profits (Amalgamated Plantation Pvt Ltd) vs loss in PY. CY also excludes share in profit of Rallis due to stake sale.
• Fall in share of Minority interest is due to shift in profits from TTGB – PY had exception exchange gains.
• EPS for the quarter (not annualised) at Rs 14.91 (Rs 64.06) driven by exceptional item. Net of impact on exceptional items EPS (not annualised) - for the quarter at Rs 15.30 (Rs 12.03) reflecting underlying growth.
Performance Analysis for the quarter ended Dec 2009
Total Income– QTR & YTD
In Rs. Crs
2009 / 10 2008 / 09 Variance Total Income 2009 / 10 2008 / 09 Variance
316 309 7 USA 961 794 167
101 80 21 Canada & South America 247 215 32
339 316 23 GB & Africa 924 905 18
227 90 136 Europe & Middle East 411 241 170
427 361 66 South Asia 1228 963 265
34 37 -2 Asia Pacific 91 96 -5
106 91 14 Total Others 386 374 13
1549 1284 265 Total Income 4248 3588 660
YTD ending Dec 31Qtr ending Dec 31
Total Income (Branded Operations) YTD Dec
Actuals YTD
South Asia32%
Asia Pacific2%
USA25%
Canada & South America
6%GB & Africa
24%
Europe & Middle East11%
PY YTD
South Asia30%
Asia Pacific3%
USA25%
Canada & South America
7%GB & Africa
28%
Europe & Middle East7%
Robust Balance Sheet Position
Previous period's figures have been regroup and rearranged to the extent necessary to conform to current periods figures
In Rs. Crs
Item December 09 March 09Shareholders Funds 5,290 4,675
Loans 2,530 2,431
Deferred Tax 52 48
Total 7,872 7,154
Fixed Assets:
Goodwill 3,169 3,027
Others 791 798
Investments:
Long Term 308 341
Current 258 10
Cash/Cash equivalent 2,743 2,861
Recoverable for NIPD - 213
Net Operating Working Capital 673 221
Provisions/Pension liabilities (71) (325)
Miscellaneous Exp to the extent not written off 1 8
Total 7,872 7,154
Net Debt +470 +653
Performance over Time
3216
3588
4248
292 395 477
0
500
1000
1500
2000
2500
3000
3500
4000
4500
DEC 07 DEC 08 DEC 09
In R
s L
akh
s
Total Income PBT Before Exceptionals
Strategy in Place and Journey Started
Investment focus will be brands
Entry into wider beverage category
Focus on six regions
Products, brands, distribution, peopleand processes
Focus on the branded business and development of global brands
Broader branded portfolio and expansion into new categories
Wider global footprint – global not international
Integrated global business
Summary of Quarter Results
Strong performance in difficult conditions
Strong, well financed business platform
The journey has begun to becoming…
A global leaderin good for you beverages!
THANK YOU