Tata Global Beverages announces good growth in revenues and profits

Significant investments in brands and restructuring initiatives mark a successful quarter

Consolidated Results: Income from Operations at Rs. 1933 crores, up by 4% Consolidated Group Net Profit at Rs. 180 crores, up by 51%

Tata Global Beverages Limited today announced its results for the quarter ended 30th September, 2013. It reported steady growth in revenues and significant increase in Group net profit.

For the quarter, Income from Operations at Rs. 1933 crores increased by 4% year on year reflecting good performance in some key markets coupled with favourable foreign exchange impact. After considering exceptional items, Group Consolidated Net Profit is 51% higher than in the same period in the previous year, reflecting the favourable impact of exceptional items.

During the quarter, Tata Global Beverages invested significantly in its brands in various geographies around the globe. In the USA, the iconic Eight O’clock coffee brand was relaunched with new blends, a sleek new red pack design and a highly visible advertisement campaign. In India, the Company’s flagship brand, Tata Tea, launched its new “Jaago Re” campaign, titled the “Power of 49” and urging women to exercise their power of vote, in the run-up to elections. In Russia, Grand Coffee was relaunched with a new brand positioning and improved blends. In the United Kingdom, an innovative 360-degree marketing campaign, titled “Find Sydney”, was successfully launched, inviting consumers to participate in a contest built around one of the iconic Tetley Tea folk.

The Company’s brands of water – Himalayan water, Tata Water Plus and Tata Gluco Plus – continued to make good progress during the quarter. Tata Gluco Plus also launched a new grape flavor, which has met with very good market response. Tata Starbucks – a joint venture between Tata Global Beverages and Starbucks – now has 27 Starbucks stores across the cities of Mumbai, Delhi and Pune. The stores continue to witness excellent consumer response.

The Company also implemented, during the past few months, a series of new investments and restructuring initiatives designed to drive future growth and performance, and also to focus on core operations. This includes the following:

• A significant restructuring of the Canadian sales and distribution operations was concluded. Tata Global Beverages is the market leader in the Canadian tea market, and this move will further strengthen the business.
• The Company’s subsidiary, Tata Coffee, successfully commissioned a new instant coffee facility in Theni, India, which will help drive future strategy and growth for high-quality value added coffee.
• The Company entered into an agreement with Tata Realty and Infrastructure Limited for development of its property in Bangalore.
• The Group’s overseas subsidiaries identified and accounted for an other than temporary diminution in value of investments in an US based beverage company.
• The Company’s Board of Directors has also approved, at its meeting held on 12th November, a merger between Tata Global Beverages Limited (TGBL) and Mount Everest Mineral Water Ltd. (MEMW), with a view towards creating value for shareholders of both Companies, and optimally leveraging the power of the Himalayan water brand in the years ahead. This merger is subject to statutory and other approvals.

Mr. Harish Bhat, Managing Director and CEO of Tata Global Beverages said – “We continue to record steady growth in a challenging global operating environment. Notwithstanding differing economic conditions in various countries, our focus continues to be consistent investment in our brands of tea, coffee and water, to create millions of moments of beverage magic for our consumers. The significant brand re-launches and marketing campaigns of the quarter, ranging from Eight O’clock Coffee in the USA, to Tetley in the United Kingdom and Tata Tea in India are strong testimony to this commitment. In addition, the slew of restructuring moves and new business investments we have announced and implemented will help create a more efficient, growth-driven and future-focused Organisation.”