Treasury Wine Estates has reported a strong first-half, with Penfolds, Treasury Americas and Treasury Premium Brands all delivering improved EBITS growth and margin expansion.

Treasury Wine Estates (TWE) has reported its first-half results for the 2023 financial year, with strong earnings growth across the business and an 18.7 per cent increase in net profit after tax (NPAT) to $193.7m.

EBITS grew by 17.2 per cent to $307.5m, which TWE said was driven buy price increases across several brands, global supply cost savings, and importantly, growth in its luxury portfolio. Luxury wine continued to see strong growth trends in all of TWE’s key markets.

TWE has split into three businesses and each component reported strong results. Penfolds saw a 10 per cent increase in EBITS to $181.6m with strong top-line performance delivered in a number of markets including Australia, plus Asia and EMEA.

TWE said the expansion of Penfolds multi-country of origin portfolio was a highlight in the first-half of the year, with the inaugural French Collection release and the launch of One by Penfolds, including Penfolds’ first wine produced in China.

Treasury Americas reported a 35.2 per cent increase in EBITS to $115.2m, and net sales revenue increased 4.1 per cent driven by favourable foreign exchange rates and supported by the performance of key Luxury portfolio brands including Frank Family Vineyards and Beaulieu Vineyard, in addition to continued growth for Matua and innovation within 19 Crimes.

It was also a good result for Treasury Premium Brands with a 15.4 per cent increase in EBITS to $45m.

TWE’s Chief Executive Officer Tim Ford said: “We are very pleased to have delivered strong progress towards our financial growth objectives in 1H23, with EBITS growth of 17 per cent driven by improved revenue per case and EBITS margin expansion across all divisions.

“Our Luxury wine portfolios in particular continue to perform exceptionally well across all markets and channels, and the fundamentals of the category are expected to remain strong at these higher price points.

“We consider this set of results to be an important and additional proof point of our teams’ ability to navigate the changing and variable economic, consumer and market dynamics, whilst maintaining our focus on the delivery of our financial objectives.”

Looking ahead TWE said its long-term financial objective remains to deliver sustainable top-line growth, high single-digit average earnings growth and a Group EBITS margin target of 25 per cent. Supporting this objective will be continued portfolio premiumisation, growth in distribution, demand and availability for TWE’s priority brands, cost optimisation and category leading, consumer-led innovation.

The results also included a vintage update for all its regions, with TWE saying of Australia: “Good winter and above average spring rainfall kicked the season off to a solid start across South-Eastern Australia. However, continued high rainfall and humid weather, followed by significantly cooler temperatures across most regions, has delayed the season by as much as three weeks.

“Drier conditions across late December and January, with increased warm weather, has raised confidence for a high-quality harvest but with likely below average volumes. The good rainfall across Australia has resulted in the replenishment of important water resources, which will benefit future vintages.”

Andy Young

Andy joined Intermedia as Editor of The Shout in 2015, writing news on a daily basis and also writing features for National Liquor News. Now Managing Editor of both The Shout and Bars and Clubs.

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