TATA TEA LTD

ANNUAL GENERAL MEETING

2003/04
PRESENTATION TO
SHAREHOLDERS
8th September 2004
 Outline of Presentation

 Performance Highlights

 Market Outlook - India

 Challenging for Leadership in Tea

 Performance Highlights

 Significant performance improvement by the Tata

Tea Group which includes subsidiaries Tata Tea GB
(the Tetley Group), Tata Coffee & Tata Tea Inc
 Global Revenues for the TTL Group of Companies
are Rs. 3112 Crores
 Tata Tea Revenues at Rs 839 Crores
 We are the No 2 Global Branded Business in Tea
 Tata Tea Ltd
Consolidated Accounts of the Group

Rs/crores 2003/04 2002/03

Turnover 3112 2968
Operating Costs 2596 2534
Depreciation 83 89
EBIT 433 345
Interest 132 166
PBT 301 179
Tax 91 63
PAT 210 116
Share of Associate Company P/L 3 (23)
Minority Interest (8) (11)
Adjusted Profit after Tax 205 82
Earnings per share(post minority interest)-Rs 36.46 14.68
 Tata Tea Ltd
Annual Results-2003/04
Rs/crores 31/3/04 31/03/03
Sales 784 756
Operating Costs 687 670
PBIDT 97 86
Interest 10 14
Depreciation 22 23
Operating PBT 65 49
Investment/Other Income 55 51
PBT 120 100
Tax 28 29
PAT 92 71
Earnings Per Share 16.28 12.56
 Tea Company Comparisons
2003/04

Rs/crores

TTL North North South South

Company Company Company Company
1 2 1 2
Turnover 839 188 196 136 148

PBT 120 (9) 8 5 5

PAT 92 (8) 7 5 3
 The Tetley Group
Post Acquisition Performance

₤ ‘ mn
1999/00 2003/04
Acquisition Year
Turnover 246 251

EBITDA 28 46

PAT 6 16
 Market Outlook - India

 Adverse weather conditions impact India tea production during early

season triggering higher prices at auctions
 Early 2004, Indian production setbacks offset higher Kenya and
Africa origin production.
 Indian domestic consumption of tea grows at 1.5% pa irrespective of
competition from other beverages
 India’s (Accenture Study based) marketing drive to develop Pakistan,
Russia, Germany & Mid-East customer specific exports enhance
performance in 2004 reducing domestic tea availability
 CTC prices harden in India and influence global prices despite Africa
and other origin influence.
 Price levels across auction centres in India show improvement from
Rs 59/kg(June’03) to Rs 68/kg(June’04)
 Challenging for Leadership in Tea

 The competitive canvas is now global with the Tata Tea

operations strategically integrating with Tetley, to address
opportunities for growth and manage the risk of address as a
composite team
 Consumer mindsets for tea will determine our opportunity for
growth rather than tea as defined by our current plantation
holdings, black tea, packet and teabag formats and formulations
 We may be No. 2 today in size globally, but, we must be No. 1
in the way we address the global opportunity for growth and
building customer relationships with sustainability
 Challenging for Leadership in Tea

 ‘Challenger Brand’ thinking will drive strategy and structure to

realise our vision
 Consumer insight driven inputs will determine areas of address.
 Globally benchmarked or bespoke process development will
systematically eliminate costs and allow leverage of better value
proposition delivery to consumers
 We shall do so observing TATA values and pursue the Tata Group
purpose in our own unique way by improving the quality of life and
well being of all stakeholders, even as we hold our consumers and
customers top-of-mind in everything that we do
 Tetley - Market Share

 GB–Tetley continues to outperform major competitors with m.a.t.

July Vol. market share at 28.3% up by 1.5% (No.1 brand)
 Canada – Tetley outperforms major competitor with m.a.t. July Vol.
market share at 38.8%, (No.1 brand ) leading Black tea with 43%
and Specialty tea with 22.5% Vol. market shares.
 Australia – Tetley teabag m.a.t. July Vol market share moves up to
20.7% growing by 0.8% (No. 3 brand)
 USA – Market share up to 11.2% growing by 0.7% (No.3 brand)
 France, Poland, Portugal, Spain, Jamaica & Baltic’s improve
performance during the period
 Russia, Pakistan, Bangladesh & Kazakhstan, new market entry
programs expand brand footprint
Innovation Driven Growth
Major Geographic entries

Russia – Sept 2004

-8,000 distribution

outlets

Bangladesh – Feb 2003

- 30,000
distribution
outlets

Pakistan - Jan 2004

-60,000 distribution
outlets
 Global Opportunity for ‘Tea’
 Growing Black tea markets define opportunity for geographical
expansion of portfolio in overall Black tea
- Potential sector revenue of Rs 48,000 Crs.
 Top 30 ‘Tea’ markets account for 90% of the market volume in
the packaged black tea segment
 Tata Tea & Tetley present in only 35% of this market – with a
combined revenue of Rs 3000 Crs.
 Green / Fruits & Herbal / Flavours / Specialty tea account for
49% value of all global packaged tea revenues !
- Potential sector revenue of Rs 48,000 Crs.
 RTD operates in a beverage arena that is at Rs 128,000 Crs.

SIGNIFICANT POTENTIAL FOR ADDRESS OF REVENUE GROWTH

Consumers define the success of
Tata Tea

THANK YOU