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Nine Months Ended Dec 2009/10 Financial Results

Nine Months Ended Dec 2009/10 Financial Results. Peter Unsworth, CEO. Integrated and transforming. One global beverage group with brands that touch billions of lives Our direction is set and momentum is gathering pace. Key Highlights.

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Nine Months Ended Dec 2009/10 Financial Results

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  1. Nine Months Ended Dec 2009/10Financial Results Peter Unsworth, CEO

  2. Integrated and transforming • One global beverage group with brands that touch billions of lives • Our direction is set and momentum is gathering pace

  3. 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

  4. Brands Distrib- ution Product Profit Sustain- ability People Process Strategy – New Pillar- Sustainability

  5. 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

  6. Our brand health is strong… • 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

  7. UK – growing away from black tea

  8. … 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

  9. Market Share- (12 months MAT) (Source A.C.Nielson)

  10. Group Sales- Brand wise BRANDED OPERATIONS

  11. 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

  12. Group Sales- Category wise

  13. 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 Expansion into new channels and geographies

  14. Tetley Launch into Euromarche – Riyadh Jan 2010

  15. 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

  16. In Summary • Input prices continue to challenge • Good performance in a tough market. • Strategy gathers momentum – regional growth, innovation agenda and new category competencies.

  17. TATA Beverage Group One company, multiple brands transforming to become The global leader in ‘good for you’ beverages THANK YOU

  18. Nine Months Ended Dec 2009/10Financial Results L Krishna Kumar, CFO

  19. 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

  20. 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.

  21. Performance Analysis for the quarter ended Dec 2009 • 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

  22. 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.

  23. Total Income– QTR & YTD

  24. Total Income (Branded Operations) YTD Dec

  25. Robust Balance Sheet Position Previous period's figures have been regroup and rearranged to the extent necessary to conform to current periods figures

  26. Performance over Time

  27. Strategy in Place and Journey Started Focus on the branded business and development of global brands Investment focus will be brands Broader branded portfolio and expansion into new categories Entry into wider beverage category Wider global footprint – global not international Focus on six regions Integrated global business Products, brands, distribution, people and processes

  28. 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!

  29. THANK YOU

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