#1Tetley IMMUNE TAYA TA Gold ZENC Himalayan TATA GLOBAL BEVERAGES FLAVOURS OF GROWTH INVESTOR PRESENTATION for Quarter ended June 2019 EIGHT ICLOCK Tetley EIGHT OCLOCK Tetley Tetley COLD COLD COLD INUSIONS INFURSIONS INFUSIONS 192 Tetley Creen lea ginger, mint & lemon TATA сна? Tetley#2Disclaimer FLAVOURS OF GROWTH Certain statements made in this presentation relating to the Company's objectives, projections, outlook, expectations, estimates, among others may constitute 'forward-looking statements' within the meaning of applicable laws and regulations. Actual results may differ from such expectations, projections etc., whether express or implied. Several factors could make a significant difference to the Company's operations. These include climatic conditions, economic conditions affecting demand and supply, government regulations and taxation, natural calamity, currency rate changes, among others over which the Company does not have any direct control. TATA GLOBAL BEVERAGES 2#3Agenda 1 Executive Summary 2 Strategic Pillars 3 Business Profile 4 Performance at a Glance 5 Business Performance 6 Quarterly Financial Performance 7 M&A Update 8 Recognition 9 Sustainability Initiatives TATA GLOBAL BEVERAGES FLAVOURS OF GROWTH 3#4Executive Summary 1 Consolidated Group Revenue of Rs. 1897 cr for quarter ended June 2019 grew by 5% FLAVOURS OF GROWTH 2 EBITDA of Rs. 268cr for quarter ended June 2019 grew by 7% while Profit before Tax grew by 3% 3 India Branded Business grew 7% by value and 8% by volume for the quarter 4 US Coffee grew 4% while other International Business grew 3% by volume 5 TGBL and TCL (Consumer Products Business) merger as per schedule 6 Definitive agreements related to acquisition of Consumer Business of Dhunseri Tea being signed. Transaction to close shortly TATA GLOBAL BEVERAGES 4#5Strategic Pillars Profitable Growth FLAVOURS OF GROWTH Investing for Growth Merger of TCL Consumer Products Business with TGBL Acquisition of Dhunseri Tea Consumer Business Operationalized freeze-dried coffee plant in Vietnam Expansion of Tata Operational Efficiency New tea packaging unit underway at Odisha Supply chain network optimization Improve operating efficiency across plant operations Structure Simplification S&D Transformation Redefined matrix architecture Simplified global management structure Outsourcing of non-core activities to TCS Increasing domestic reach Digitization to optimize the value chain Product Innovation (+) Non-black tea innovations including Supers tea 2.0 in Canada Tetley Cold Infusions variants in UK EOC Barista and Flavours of America in US Cha and Starbucks TATA GLOBAL BEVERAGES LO 5#6* CANADA Tetley, Tata Tea 40+ Countries | Consolidated Revenue: INR 1897 Cr | Branded Business: INR 1656 Cr 4% 22% US Tetley, Teapigs, Tata Tea, Good Earth Eight O' Clock EUROPE Tetley, Teapigs, Jemca, Vitax 17% 54% INDIA Tata Tea, Tetley Himalayan, Fruski, Tata Cha Non-Branded Business INR 243 Cr: Tata Coffee (82%) and Others (18%) Does not include inter-segmental eliminations ...AND 3% OTHERS#7• Market Context FMCG growth in India* 25% 20% 15% 10.6% 10% 5% 80.0 Exchange rates FLAVOURS OF GROWTH USD/INR 100.0 GBP/INR 75.0 95.0 16.2% 15.7% 92.2 91.8 13.4% 89.9 69.6 69.7 69.1 10.0% 70.0 90.0 90.5 90.5 87.6 65.0 66.7 67.4 85.0 65.2 0% 60.0 80.0 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Apr May Jun Apr May Jun FMCG growth in India Q1 FY19-20 Q1 FY18-19 Q1 FY19-20 Q1 FY18-19 FMCG growth is India slowing down owing to weakening rural demand India's GDP growth in Q1FY20 slowed down to 5.8% (5-year low) Household spending growth rate was lower in Q4FY19 (8.1%) compared to Q3FY19 (8.4%) TATA GLOBAL BEVERAGES In Q1, Rupee has appreciated against GBP by 2% (average) whereas depreciated against USD by 5% (average) TGB Group revenue's increased 0.6% on account of exchange fluctuation (+1.1% for USD denominated and -0.2% for GBP denominated businesses) Uncertainty around a deal or a no-deal Brexit continues to drive the market. GBP weakness continuing. Source: *Nielsen & tradingeconomics.com 7#82 years CAGR 200 Market Context Commodity Costs# Rs/kg 200 157 146 152 150 ■+2% 150 131 119 100 99 97 +3% 106 96 100 50 FLAVOURS OF GROWTH Market Growth Trends (MAT value basis)* $c/lb US -14% UK 4% 2% Canada 7% 0 Q1 FY17-18 Q1 FY18-19 Q1 FY19-20 North India Tea South India Tea 50 Q1 FY17-18 Q1 FY18-19 Arabica Coffee Q1 FY19-20 400 2500 -1% $c/kg $/MT 2037 278 2000 1742 -3% 300 247 1408 206 1500 200 -17% -14% 1000 -7% 100 500 Regular Black US Speciality UK Fruit & Herbals Canada Speciality Q1 FY17-18 Q1 FY18-19 Q1 FY19-20 Kenya tea Q1 FY17-18 Q1 FY18-19 Robusta Coffee Q1 FY19-20 Benign tea prices in India as against declining Kenyan tea Coffee prices continue to be low #Source: North India and South India tea auction (Tea Board of India) | Mombasa tea auction (EATTA) | International Coffee Exchange TATA GLOBAL BEVERAGES Regular Black tea category is declining across key international markets where growth is being led by Non-Black teas While in India both categories continue to grow Source: *Nielsen 8#9Performance at a Glance In INR Cr FLAVOURS OF GROWTH INDIA US Coffee Other International (UK, Canada and Others) Tata Coffee (incl. Vietnam) CONSOLIDATED Revenue 969 261 493 204 1,897 Revenue Growth -1% -3% 7% 30% [Underlying Growth] [-5%] [-3%] 5% [4%] Volume Growth [Branded] 8% 4% 3% Key Brands ΤΑΤΑ ΤΕΑ EIGHT O'CLOCK Tetley SINCE 1837 TATA GLOBAL BEVERAGES Does not include inter-segmental eliminations 9#10Business Performance QUARTER ENDED JUNE 2019 10#11India FLAVOURS OF GROWTH +7% Revenue Growth • GROWTH DRIVERS Overall Tea sales grew 7% by value for the quarter Tata Tea Premium and Agni revenues grew in double digits Recent launch Spice Mix revenue grew aggressively (>50%+) compared to last year OTHER UPDATES Chakra sales witnessed marginal de-growth due to market slowdown in Tamil Nadu due to acute water crisis Increased competitive intensity among National players Profitability impacted due to higher investments behind brands and higher tea costs +8% Volume Growth (Branded) 15.3% EBITDA Margin I TATA SEA Chakra Gold It's raining deliciousness. Introducing. Happy Monsoon Menu TATA 7110 Recent Chakra Gold TVC in AP has led to improvement in market share TATA GLOBAL BEVERAGES New Monsoon food menu launched in Tata Cha stores was well received Fruski reach expanded with launch in major MT and e-commerce stores 11 I I I I I I I I I I I I I I I I I I I I#12FLAVOURS OF GROWTH US Coffee -1% Revenue Growth I . GROWTH DRIVERS EOC's Barista and Flavors of America both continue to gain distribution EOC bags volume grew while the revenue declined owing to higher promotion spends and increased competitive intensity OTHER UPDATES K-cups volumes declined -5% Underlying Revenue Growth +4% Volume Growth I I I 1 m Barista Blends EAST Blends TARK ROAST EPC EPC SHOP NOW CAFFE AMERICANO RED EYE ROAST COFFEE MT KENWO EARLY RISER EARLY RISER HOUSE BLEND NOW INTRODUCING FLAVORS OF AMERICA I I 1 I 1 EARLY RISER chigan Vermont California Texas Hawall I EQC EQC EOC EOC EOC I I HOUSE DECAF EOC exhibit strong performance in E-commerce TATA GLOBAL BEVERAGES EOC new launch 'Early Riser' set up on Amazon I I VERMONT CALIFORNIA CHERRY PIE MAPLE BOURBON TOASTED ALMOND TEXAS PECAN PRALINE HAWAII COCONUT CREAM I I I New launches Barista and FOA gaining traction 12 | I#13GROWTH DRIVERS Other International - UK +2% Revenue Growth I I • Tetley growth driven by good performance in Discounters in UK Tetley Cold Infusions market share is now >20%* of the category in UK Margins improved OTHER UPDATES FLAVOURS OF GROWTH In UK, Tetley's green tea value share declined owing to category decline and intense competitive intensity Increased competitive intensity in terms of brands spends and range rationalization by retailers +4% I Underlying Revenue Growth +6% Volume Growth COSMOPOLITAN PROMOTION SHAKE UP THE ORDINARY Live life on your terms and boost. your mood with a few small steps, including the new Tetley Cold Infusions L ife can get pretty hectic- which means we sometimes forget to take and inject some fun back grind. But that doesn't have to mean major changes, sometimes it's the small things that can go a long way to making the everyday not quite so regular Switch up your routine with these easy mood-boosters for a life that's a little less ordinary... CALL THE SHOTS Something as simple as pideng up the you need to gala atto pen Dites the Whatsapp chats and go back 2986miy STAY HYDRATED it's been proven that drinking water wa top up your energy les tos-and with Ty Cold GO OFFLINE your phone is tak COLD BREW brews in cold water! NEW 40 TEARAGE Tetley SINCE 1937 I NEW I I Scaling up Tetley Cold Infusions with high impact advertisement in UK TATA GLOBAL BEVERAGES NO ADDED SUGAR ALL NATURAL FLAVORS LESS THAN 3 CALORIES teapigs, teapigs, COLD COLD BREW BREW LYCHEE CUCUMBER APPLE YEA ROSE TEA Tea pigs cold brew stocked in premium retailers in UK DECAF SLEEP EASY Decaffeinated black tea with Lemon Balm, Vanilla & Lavender Tetley Decaf Sleep easy speciality tea launched 13 Source: *Nielsen I I I I I I I#14Other International - Canada FLAVOURS OF GROWTH . GROWTH DRIVERS Revenue growth driven by Speciality teas (Category grew +8%* by value and by volume in the quarter) Tetley speciality gained 1%* value market share in this quarter +4% Tetley Supers value share has achieved 1.6%* of Specialty tea I segment and continues to grow OTHER UPDATES Tetley Regular tea facing headwinds Plans to increase in store-display and social media support for Tetley Regular Revenue Growth I I I +5% Volume Growth Tetley ANTIOX APPLE CINNAMON with VITAMIN C 409 WITAMIN C PEACH GINGER &DANDELION 40g VITAMIN 20 Tetley MATCHA PURS GREEN TEA WITH HATCHA Tetley Tetley CRANOP REDT 72 227g F 3424 Tetley Supers 2.0 to start shipping in Canada- Building upon the success of Supers 1.0 TATA GLOBAL BEVERAGES Tetley Regular continues to dominates the black tea category I I I Tetley Aced I I I I Tetley Iced Tetley Iced Tetley 20 Tetley Iced Peach Herbal Tea I 40 g I Tetley Iced tea Limited Edition display launched in May 2019 I I I 14 Source: *Nielsen 1#15I I I I I Tata Coffee (incl. Vietnam) FLAVOURS OF GROWTH +30% Revenue Growth GROWTH DRIVERS Robust growth registered in both Instant Coffee and Robusta Plantation businesses. Coffee Trading sales at 2.5x of last year Higher Instant coffee volumes with strong performances in South East Asia and Europe Coffee plantations records strong volume growth OTHER UPDATES Instant coffee prices softening globally Tea production impacted due to dry weather conditions. +18% Vietnam plant operational - first orders shipped in Q1 Volume growth 8.5% EBIT Margin TATA GLOBAL BEVERAGES 15#16JV-Tata Starbucks GROWTH DRIVERS FLAVOURS OF GROWTH OTHER UPDATES 23% Revenue Growth 5 new stores opened this quarter. 'Starbucks delivery' revenue continues to grow Awarded as ET's "India's 100 Best Companies to Work For 2019" Strong focus on social media to drive consumer engagement and sales with campaigns like #ComedywithStarbucks Limited time offer 'Summer 1'- a special drinks menu was successful 151 Stores 8 Cities in India STARBUCKS COFFEE COMPANY 'Food 3.0' initiative- a new food menu launched was an instant success TATA GLOBAL BEVERAGES India's largest "Coffee-forward" store in Bengaluru India's Best Companies To Work For 2019 THE ECONOMIC TIMES An award that truly belongs to our partners d's Be Compani Congratulations to the 100 Best Companies to Work For in the Country JK PAPIR LTD I METRO VIP MetLife I Awarded as India's 100 Best I Companies to Work For 2019 16#17I I I I JV - Nourish Co FLAVOURS OF GROWTH +8% Revenue Growth +1% Volume Growth • GROWTH DRIVERS Tata Gluco Plus had a strong momentum in AP and Telangana aided by a hot summer and media investment Tata water Plus PET displayed robust growth benefiting from distribution expansion The 'Conde Nast Traveler – Himalayan Sparkling Top Restaurant Awards' builds 'Raw & Fine' credentials for the brand Himalayan Traveller SPARKLING Rs.20/- 500ml T P I OTHER UPDATES GTM transition for Himalayan from PepsiCo network to VBL franchise TATA CO GAS MINUS ENERGY PLUS TATA WAND TATA Be Himalayan Untouched Unprocessed Himalayan SKU launched for "on-the- go" consumption at price of Rs. 20 TATA GLOBAL BEVERAGES RESTAURANT AWARDS 2018 Top Restaurant Awards sponsored by Himalayan sparkling water I | I I I L MONY Tata Gluco Plus expanding distribution in existing and new markets 17#18Associate Companies- APPL & KDHP FLAVOURS OF GROWTH • • APPL Good revenue growth of +8% achieved with improved average price realization over LY owing to a buoyant Orthodox tea market Operating profit negatively impacted due to provision made for expected wage increase Although Orthodox tea prices are buoyant, the risk of volatility remains owing to political scenario in Iran KDHP • • Revenue grew by +3% due to higher average price realization Crop production impacted by dry weather conditions Profitability impacted by unexpected interim wage increase TATA GLOBAL BEVERAGES 18#19Quarterly Financial Performance QUARTER ENDED JUNE 2019 19#20Highlights In INR Cr REVENUE FROM OPERATIONS STANDALONE +7% CONSOLIDATED 969 909 1803 Q1FY19 Q1FY20 EBITDA 167 -11% FLAVOURS OF GROWTH Q1FY19 +5%* 1897 Q1FY20 *+5% growth at constant currency basis REVENUE: India Business grows (Vol +8%; Value +7%) International Business degrows - mainly US coffee (-5%), partly offset by improvement in UK (+4%) in constant currency terms Tata Coffee incl. Vietnam +30%-higher volumes in instant coffee, coffee plantations and coffee trading 148 250 +7% 268 Q1FY19 Q1FY20 Q1FY19 Q1FY20 TATA GLOBAL BEVERAGES EBITDA: India Business - profitability impacted by higher tea costs and spend behind brands International Business profitability improves- mainly in UK and US Favorable impact of change in accounting of lease 20#21Financials PARTICULARS STANDALONE CONSOLIDATED INR Cr Q1FY19 Q1FY20 Change% Q1FY19 Q1FY20 Change% REVENUE FROM FLAVOURS OF GROWTH 909 969 7% 1,803 1,897 5% OPERATIONS EBITDA 167 148 -11% 250 268 7% EBITDA Margin 18.4% 15.3% 13.8% 14.1% GROUP CONSOLIDATED NET PROFITS: PBT (Before Exceptional 216 166 -30% 235 231 -2% Higher by 11% mainly due to - Items) PBT (Before Exceptional • 23.7% 17.1% 13.0% 12.2% Lower Exceptional Items Items) % • Lower tax charge PBT PAT PAT % 216 158 -37% 217 223 3% 148 106 -28% 134 149 12% 16.3% 10.9% 7.4% 7.8% CONSOLIDATED NET PROFIT (incl. JVs and Associates) TATA GLOBAL BEVERAGES ΝΑ ΝΑ 128 142 11% 21#22Segment-wise performance PARTICULARS REVENUE RESULTS FLAVOURS OF GROWTH BRANDED BUSINESS REVENUE 1% INR Cr Q1FY19 Q1FY20 Change% Q1FY19 Q1FY20 Change% 16% ■ India Tea Branded Business 15% 53% Tea 1,314 1,373 4% 210 198 -5% ■ UK Tea Other Markets-Tea US Coffee ■ Other Markets-Coffee Coffee 292 283 -3% 44 44 51 17% 15% Others 10 6 -41% (4) (3) -11% BRANDED BUSINESS RESULTS Total Branded 1,616 1,662 3% 250 245 -1% Business Non Branded 20% 193 243 26% 18 21 16% Business Less: Inter-segment ■Tea (6) (7) Revenue ■ Coffee Unallocated expense 80% (net) Total (50) (43) 1,803 1,897 5% 217 223 3% TATA GLOBAL BEVERAGES#23M&A Update FLAVOURS OF GROWTH • • • Tata Chemicals Limited - Consumer Products Business Merger process is on track as per the scheduled timeline The Scheme application is currently under review with SEBI and the Observation Letter, if any, from SEBI is awaited Post approval from SEBI, TGB would file its application with National Company Law Tribunal (NCLT) Dhunseri Tea & Industries Limited (DTIL) - Consumer Business Due diligence for the acquisition completed Definitive agreements agreed to be signed between parties • Transaction expected be completed soon (subject to CPs being complied) TATA TATA CHEMICALS LIMITED Dhunseri TEA & INDUSTRIES LIMITED लाल घोडा काला घोडा TATA GLOBAL BEVERAGES STA TEA MIM EIGI चाय 100% Pure Assam CTC Tea aw 1 kg चार पैक में DHUNSERI TEA काला घोड़ा चाय 23#24Recognition MANUFACTURING Dubai OBAL CVENTION Reshaping Board' Du 2 9 also presentation of GOLDEN PEACOCK India's Best Companies To Work For 2019 THE ECONOMIC TIMES WORKPLACE co and Innovation tion Khal Indore Packeting Centre won the prestigious 'Golden Peacock National Quality Award 2018-19' PRODUCT An award that truly belongs to our partners Congratulations to the 100 Best Companies to Work For in the Country STARS AWARDS BEST GREEN BUSNESS AWARD HOOD AND BEVERAGE SECTOR METRO VIP MetLife Tata Coffee Limited FLAVOURS OF GROWTH SUSTAINABILITY TATA TATA COFFEE "BEST GREEN BUSINESS AWARD IN F&B SECTOR" BY ET NOW Tata Starbucks awarded as the winners of 'India's 100 Best Companies to Work For 2019' CSR Tata Coffee awarded ET's 'Best Green Business Award' for sustainable and green practices at its plantations ADVERTISING great taste 2018 Tetley UK won four Great Taste Awards 2018 TATA GLOBAL BEVERAGES DARE School recognised as one of the Best Special Educational Schools in Brainfeed School Excellence Awards 2018 TATA TEA ALARM BAJNE SE PEHLE Jaago RE Tata Tea "Jaago Re" received 4 EMVIES from The Advertising Club Bombay 24#25Sustainability Initiatives TGBL joined UK Plastics Pact with commitment to 100% reusable, recyclable, compostable plastic packaging by 2025 THE UK PLASTICS PACT P FLAVOURS OF GROWTH Himalayan water exported to USA is certified Carbon NeutralⓇ by Natural Capital Partners CERTIFIED CARBON NEUTRAL Circular Economy Carbon Neutral Focus Areas Water Stewardship 100% Tetley tea in International Business is Rainforest Alliance certified. Tata Tea brands 57% trusted certified RAINFOREST ALLIANCE CERTIFIED EST 1981 Sustainable Sourcing Climate Leadership Community Development, Project Jalodari installed water recharge structures in production units and water security for hill communities Improving Lives program of UNICEF and ETP will reach 250,000 members of Assam's tea communities TATA GLOBAL BEVERAGES CDP -12% of total energy consumption from renewable sources. GHG emissions decreased by 30% in 2010-2019 25#26For more Information Visit our website: http://www.tataglobalbeverages.com TATA GLOBAL BEVERAGES Making a lasting difference in tea, coffee and water, the world over. Company Brands Investors Sustainability Media Careers ☑ TATA Our brands With multiple global brands, we delight with 300 million servings of our delicious natural beverages, every day. Global imprint Our products are enjoyed across Asia, Africa, USA, Europe, Australia and the Middle East. Latest news Tata Global Beverages and Tata Chemicals announce transaction to combine Consumer Businesses to create a focused Consumer Products Company > Browse our brands > Learn more > View all news TATA GLOBAL BEVERAGES لا FLAVOURS OF GROWTH Contact Us: Rakesh Sony [email protected] +91 22 6121 8400 Ibrahim Lodhger [email protected] +91 80 6717 1200 Satya Muniasamy [email protected] +91 80 6717 1200 Write to us at: [email protected] 26