Analyst Presentation
May 2012
Agenda
Summary Financials
Macro Environment
Operating Performance Highlights
Financial Review
2011-12 Summary Financials – vs Prior Year
Group income at Rs 6630 crores up 10% against prior year reflecting
favourable translation impact and improved performance in most major
markets.
EBIT at Rs 527 crores is higher than prior year by 4% aided by favourable
translation impact and improved operating performance.
Investment in new growth areas through alliances
Profit before exceptional items at Rs 551 crores improves over previous
year by 14% due to reduction in interest costs.
PAT ahead of prior year by 48% aided by improved operational
performance, lower interest and lower effective tax rate. The increase will
be 62% based on like to like accounting policies.
Macro Environment
Volatile exchange market
• USD/GBP strengthen against most
currencies
• Favourable translation impact
Commodity costs remain firm
• Tea prices remain firm
• Coffee prices reduces from earlier
high but still higher than prior year but
marginally lower than budget
Interest rates
• Softness continues in short term rates
in international markets
• Short term interest rates harden in
India
• Company gains by restructuring/
repaying high cost debts
Continuing competitive intensity.
Operating Performance Highlights
Strong performance in India – portfolio growth. Continue volume and
value market leadership
Favourable impact of cost interventions
Good coffee performance in Russia continues.
Strong performance in instant coffee units and coffee plantation units
UK – maintains market share despite black tea market declining 3% yoy.
Market leadership in Redbush / Decaff teas continues. Strong
performance in green – No 2 position in UK. Significant growth in Tea
Pigs – our premium brand
Canada continues market leadership – significant distribution gains for
new blends/products launched in market. Strong innovation agenda
continues.
US coffee performance impacted by firm commodity costs over price
recovery.
Operating Performance Highlights – South Asia
12% Top line growth for the year over previous
year with portfolio growth
Maintained MAT market volume and value
leadership with 19.6%^ and 21.3%^ respectively
“Soch Badlo” campaign launched to celebrate 25
Chart
Title activities undertaken
years of theBar
brand.
Various
improved visibility, improved distribution and
resulted in brand portfolio growth.
• Soch Badlo digital campaign won 3 awards
at Goa Fest 2012
Gaon Chalo (Rural penetration) continued and
footprint extended to 8 more states.
^ AC nielsen MAT – Mar 12
Operating Performance Highlights – CAA
Canada
• Tetley continues to be volume and value leaders.
• New blends/ products launched in earlier months reports
significant distribution gains
• Strong innovation agenda
• Substantial interest generated for the Tetley Foodservice
programmes
US
Bartranslation
Chart Title
• Price increases and favourable
improves top-line
performance. Higher commodity costs and increased
merchandising costs erode margins.
• EOC new mid-size bag rollout very successful.
Australia
• New lines (fruit and herbal, decaff green) gaining distribution.
Strong performances by Tetley Chai Latte and Extra strong
Operating Performance Highlights – EMEA
UK – maintains top-line in a competitive intensive
market wherein the black tea market has declined by
3%,
Market leaders in UK for Tetley Decaff and Tetley
Redbush. Green tea volume growth year on year. (No
2 position in UK)
Teapigs brand of super premium teas continue to
grow with distribution gains. Some teapigs SKU won
the Great Taste award with lemongrass scooping the
Bar Chart Title
3 gold star awards.
Strong coffee performance in Russia with continued
focus on distribution and increased listing in key
accounts.
Recovery of Tetley brand continues in Poland. Gain
of 6 ppts in volume share which is at 4.5%.
Operating Performance Highlights – Non Branded
Business
Tata coffee registers a record turnover
and profit aided by improved
realisation in coffee plantations and
improved ICD performance
Bar Chart Title
India and US instant tea operation
stable.
China commenced commercial
operations
Performance Highlights – Other Key Initiatives
Nourishco operations grow - Launch of
Tata Water Plus and Tata Gluco Plus
JV formed with Starbucks
Investments made to Kerela Ayurveda
for product development activities
Activate – increase in stake to 43.1%.
Financial Review
Group Financial Review
Quarter ending March
Actual
PY
Variance
1734
1566
168
162
132
19
Particulars
(In Rs crores)
Year ending March
Actual
PY
Variance
Total Operating Income
6631
6003
628
30
EBIT
527
509
18
23
(4)
Other Income
94
97
(3)
(14)
(34)
20
(70)
(121)
51
167
121
46
551
485
66
(40)
56
(96)
Finance Cost
Profit Before Exceptional
Items
Exceptional Items
23
9
14
127
177
(50)
Profit Before Tax
574
494
80
(29)
(64)
35
(142)
(202)
60
98
113
(15)
432
292
140
(20)
(11)
(9)
(15)
20
(35)
(24)
(17)
(7)
Minority Interest in
consolidated profit
(61)
(58)
(3)
54
85
(31)
Consolidated Group Profit
356
254
102
Tax
Profit After Tax
Share of Profit from
Associates
Regionwise Income from Operations
Rs Crores
Quarter Ending March
Varianc
Actual
PY
e
Particulars
(In Rs Crores)
Year Ending March
Varianc
Actual
PY
e
BRANDS
336
302
34
USA
1352
1227
125
155
135
20
Canada ,South America & Australia
497
483
14
491
437
54
CAA
1849
1710
139
428
402
26
GB & Africa
1468
1356
112
191
187
4
Europe & Middle East
763
708
55
619
589
30
EMEA
2231
2064
167
442
407
35
South Asia Brands
1886
1687
199
10
5
5
Other Beverages
29
22
7
1561
1437
124
Total Brands
5995
5483
512
158
121
37
Total Non Branded Operations
582
478
104
15
8
7
54
43
11
1734
1566
168
6631
6003
628
Other and Eliminations
TOTAL OPERATING INCOME
Exceptional Items
YTD
MARCH
YTD
MARCH
201
2010
137
44
-
37
Cost incurred for long-term initiative and new projects
(24)
-
(19)
Reorganization cost incurred in relation to business
restructuring
(15)
(31)
(3)
(5)
Redundancy costs incurred in relation to business
restructuring
(24)
(16)
(13)
-
Loss on assets relating to discontinued business
initiatives
(18)
-
-
-
Provision for future payments under contractual
obligation
(21)
-
(6)
-
New product development cost
(9)
-
-
-
Provision for settlement of claims
(6)
-
-
-
Employee Separation Scheme in India
-
(21)
-
(1)
Others
2
(4)
(40)
56
Total
23
9
Q4
Q4
Item
2012
2011
(Rs Crores)
-
44
Profit on sale of non-core investment
-
37
Actuarial gain on defined benefit pension scheme of
an overseas subsidiary
(10)
-
(8)
Balance Sheet
March 2012
March 2011
Shareholder’s Funds
5631
5065
Loans
916
1041
Other Non Current Liabilities
330
252
Deferred Tax (net)
66
64
6943
6423
Goodwill
3469
3038
Others
824
765
Long Term
474
480
Current
93
107
Cash & Other Deposits
1408
1522
Net Operating Working Capital
610
441
Other Non Current Assets
65
71
TOTAL
6943
6423
NET CASH POSITION
+585
+587
Particulars
(In Rs Crores)
SOURCES OF FUNDS
TOTAL
APPLICATION OF FUNDS
Fixed Assets:
Investments :
2011-12
2010/11
2009/10
2008/09
2007/08
2006/07
2005/06
2004/05
133
124
124
108
92
92
67
56
124
Dividend History
Exceptional Dividend
Dividend
THANK YOU
HYPERLINKS
Commodity Costs Trends – Coffee “C” Price
Currency Movements
1.68
GBP vs RUB vs INR
1.66
60.00
55.00
50.00
USD/GBP
1.62
1.60
45.00
1.58
40.00
1.56
1.54
35.00
1.52
30.00
1.50
1.48
25.00
Jan- Feb- M Apr- M Jun- Jul- Aug- Sep- Oct- N Dec- Jan- Feb- M Apr- M
11 11 ar- 11 ay- 11 11 11 11 11 ov- 11 12 12 ar- 12 ay11
11
11
12
12
Month
USD/GBP
INR/USD
RUB/USD
USD/RUB & USD/INR
1.64
Commodity costs trends - Tea
Average Kolkata Price 08-12
170.00
160.00
150.00
140.00
130.00
120.00
110.00
100.00
90.00
80.00
70.00
60.00
50.00
40.00
1
3
5
7
9
11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51
Sale
2009
2010
2011
2012
Commodity costs trends - Tea
Mombasa Average Price (2008-2012)
350
Price (US$/Kg)
300
250
200
150
100
1
3 5 7
9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49
2009
2010
Auction
No. 2011
2012