August 11, 2017

Tata Global Beverages announces results for quarter ended June 2017

Consolidated results for the quarter:

  • Group Profit before exceptional items at Rs218 crore, up 9 percent
  • Group consolidated net profit at Rs142 crore, up 19 percent

Tata Global Beverages (TGB) today announced its results for the quarter ended June 2017.

For the quarter, revenue from operations, at Rs1,704 crore, grew 1 percent in underlying terms. Sales growth during the quarter was muted due to introduction of GST in India and phasing of promotions in developed markets.

Profit before exceptional items at Rs218 crore is higher by 9 percent as compared to the corresponding quarter of the previous year, reflecting good cost management, lower commodity and finance costs, partially offset by higher advertising spends. The group’s consolidated net profit for the quarter, at Rs142 crore, increased 19 percent due to improved operating performance, higher exceptional income and lower losses from its joint ventures and associates. The company’s joint ventures had a strong quarter, with a turnover growth in excess of 20 percent.

TGB has decided to restructure its operating model in Russia by entering into an agreement to transfer ownership and operational responsibility of its Russian business unit to Skodnya Grand LLC and to grant post completion of the transaction, a five-year renewable license agreement for its Russian brands to Tea Trade LLC. TGB will continue to retain ownership of its brands in Russia. The new owner will continue to manufacture and sell TGB’s existing brands and products, for which TGB will receive royalties.

TGB has also disposed its stake in its Chinese joint venture, Zhejiang Tata Tea Extraction Company.

The quarter saw continued focus on brand campaigns and strengthening our key brands.

In India, the Tata Tea Jaago Re campaign, Alarm Bajne se Pehle Jaago Re, launched earlier this year, moved into its second phase, urging people to drive the change they wish to see. While the first phase of the campaign showcased the ‘reactive’ nature of people and introduced a new form of activism – ‘pre-activism’, the second phase aims to inspire people to pre-act and drive a behavioural change by signing petitions on issues currently plaguing the country – women safety and sports encouragement.

Tetley continues to strengthen its portfolio of super teas. It recently launched super green tea, Sunshine, which is green tea blended with vitamin D, and super green tea, Matcha, in the UK, which has finely milled rich green tea powder known for its unique taste and natural healthy goodness. In the US, the Good Earth tea brand, which was recently relaunched through an online digital boutique, is receiving positive market feedback. In Canada, Tetley launched its ready-to-drink range of iced teas in three flavours: Lemon Ginger, Orange Blossom Peach Mango and Hibiscus Pomegranate Berry. In India, Tata Tea piloted a ready-to-drink iced tea, Tata Tea Fruski, in Delhi and Western Uttar Pradesh. The beverage combines green tea with ayurvedic ingredients and is available in mango and orange flavours.

Eight O’Clock Coffee in the US recently expanded its line of infusions with three new varieties: Super Spice, Acai Glow and B6 Metabolism.

Super Spice is a medium roast blended with turmeric and cinnamon – a perfectly balanced, smooth, mild-spiced blend to awaken the senses. Acai Glow, also a medium roast, features acai berry for a rich, fruity, vibrant coffee experience. B6 Metabolism is dark roasted and crafted to help support normal energy yielding metabolism with a fruit and herbal blend rich in vitamin B6.

The water portfolio made good progress during the quarter. Himalayan natural mineral water clocked good revenue growth due to acquiring new key accounts. Tata Gluco Plus and Tata Water Plus also recorded good growth.

Ajoy Misra, MD and CEO, TGB, said, “The company recorded significant profit growth last quarter, driven mainly by improved operating performance. Our joint ventures in India — Nourish Co and Tata Starbucks — have also performed very well. We will continue to pursue aggressive growth through base business rejuvenation, innovation and category expansion. Health and wellness continues to be a key focus area for Tata Global Beverages, and our recent innovations are built around this trend. We are also premiumising our brands by creating enhanced beverage experiences for consumers through vitamin enhanced teas, indulgent and specially curated tea blends, flavoured waters and coffees catering to varied consumer needs”.