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8/3/2019 AGM 2010 11 Presentation
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Annual General Meeting2010-11
Percy Siganporia MD Tata Global Beverages Limited
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Sharply escalating coffee and tea commodity costaggravate a challenging marketing environment. Wehave delivered a strong top-line performance withhealthier brand metrics despite an erosion of theoperating profit.
Brand investment continues as promotional spendsare enhanced.
Investment in new growth areas through alliances andnew product development continues duringchallenging year.
2010-2011 highlights
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Top-line Performance Highlights
Total operating Income +6% at constant Fx rates
5 year Top-line CAGR at 14%
Rs Crores
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In most geographies outside India weak consumer confidence impactsFMCG and beverage category. In India the pace of growth slows down
Sharp cost increases in commodities impacts Gross Margin. Price increases in major markets enabled by strong brands. Multiples in US, UK, Canada and other western markets trade for
margin and share. Maintaining market share become key focus ofbrand activity.
In India improved performance in the 2nd half improves brand volumeand value shares.
Adverse Exchange rates reduce Top-line by 3% Lower global interest rates impact interest earnings. Our recent alliances set the stage to ensure long term shift in business
focus
Key Operating Dynamics for 2010-11
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Operating Performance Highlights
South Asia
Maintained Volume leadership and resume challenge for valueleadership in India
Jaagore.com A first of its kind website in India centered on
social awakening won awards and appreciation
from media/public/NGOs
Refreshed consumer proposition forTata Tea Premium upswing in share of mind/share of purchase reversal of declining volume and market share trend
Chakra Gold New campaign strengthens the open up your mind
proposition, popular among consumers
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Operating Performance Highlights
UK, Europe and Africa (EMEA)
Investment behind Tetley brand in UK lead to enhanced brandhealth measures
Return of the legendary Tetley Tea Folk in the UK after nearly adecade
Strong position in Specialty category in UK. Achieved brand leadership in Decaf, Redbush Fastest growing Green tea brand in UK
New products launched UK : T4Kids, Tetley Soya, Tetley Handy Pack, Tetley Green
Blueberry, Lemongrass and Honey
Africa : Laager Rooibos Cappuchino and Milkshakes 4 Kidz. Europe : Poland Tetley Black & Green, Plantation Fresh
Distribution gains are recorded in Europe -Ukraine, Belarus, Moldova, Middle East - UAE, Kuwait, Qatar and Oman. UK- new channels of distribution in Holland and Barrett and WH
Smith
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Operating Performance Highlights
Canada, America and Australia (CAA)
Strong consumer communication for Tetley Infusions in Canada, well receivedby consumers.
Achieved a No 1 position in Herbal Tea category in Canada New product launches
Canada
Infusions - White tea with Cherry and Orange Blossom and Red tea with strawberryand Raspberry
Herbal Tea - Tetley MojitoUSA Enhanced Real Brew, Real Brew Pour & Stir in EmpiricalAustralia
Tetley for Soy, Billy Campfire and Kitchen Brew variants. Distribution gains
Canada in the foodservice business. USA : Coffee Kroger, Meijer, Wegmans, Sprouts, BJs and
CVS and increased points of distribution in WalmartTea Points of distribution increased in Walmart, Target,
Kroger, Raley, Safeway and Natural Food Stores
Selling price increases in coffee to counter commodity cost increases Manufacturing restructuring in USA to drive synergies.
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Non Branded Operations
Entry into new export marketsimproves Instant coffee performance.
Improved realisations in Coffeeplantations in India aided by thecommodity boom
Operating Performance Highlights
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Sales Trend over 3 years
+10%
+34%
+31%
+19%
Sales Improvement attributable strong brand performance, acquisition in
Russia and improved performance by coffee extraction business.
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Strategic alliances to fuel further growth
Acquired 31%* on a fully diluted basisof Rising Beverages LLC whichmanufactures and markets a range ofvitamin and flavour enhanced waterusing unique powder dispensingtechnology, under the Activate brand
Signed JV with Pepsi-Co in the area ofnon-carbonated, RTDs focused onhealth and enhanced wellness. NamedNourishCo Beverages
Tata Global Beverages Ltd & KeralaAyurveda Limited sign MOU to formJV for Product Development
* Subsequent investments, post year end, has increased the stake in Rising Beverage LLC to 43%
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Market Capitalisation TGBL
July 2011 Rs
6567 Crores
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Significant Increase in Dividend Payout
Rs Crores
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Commodity Costs - Tea
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Commodity Costs - Tea
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Commodity Costs - Coffee
ICE C
Return
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