Treasury Wine Estates (TWE) has reported net profit after tax of $250m, which the company says has been driven by its $10-30 premium portfolio and improved cost of doing business.

TWE reported EBITS of $510.3m, with the profit drivers being moderated by ongoing impacts from the global pandemic, significantly reduced shipments to Mainland China in F21 following the implementation of import duties and higher cost of goods sold on Australian sourced wine.

TWE’s Chief Executive Officer Tim Ford said: “F21 was a year of both significant change and achievement for our business, with the financial results we have announced today a testament to the commitment and strength of our global teams.

“Most pleasingly, despite a backdrop of significant external disruption, we have delivered on the priorities we set for ourselves at the start of the year, and therefore we remain very well placed to deliver on the long-term growth ambitions we set out in our TWE 2025 strategy.”

In Australia volume declined 7.8 per cent and net sales realisation (NSR) increased 1.8 per cent, which TWE said was driven by:
Increased contribution from the Luxury and Premium portfolios, driven by TWE’s focus brands;

Price uplift and optimised investment across select Premium portfolio brands; and

Reduced contribution of Commercial portfolio volumes

TWE said it expects Australian wine market volume and value growth to be driven by the Luxury and Premium price points, a trend which has continued strongly through the pandemic for trusted and well-known brands.

The company reported that in the retail channel, market growth continues to be driven by above $10 price points, with the Premium price segment the biggest contributor to category growth in F21. TWE’s focus brand portfolio continues to perform strongly, led by Pepperjack, St Huberts the Stag, Wynns, 19 Crimes and Squealing Pig.

In addition, Penfolds Bins and Icons delivered strong gains in Australia and New Zealand through F21, with NSR up 15 per cent.

Looking ahead TWE said it is positive on its outlook across key markets outside Mainland China with its focus to be on delivering continued momentum behind the Premium portfolio. The company added that it will continue to execute plans to deliver growth for Penfolds Bins and Icons, with encouraging performance having been delivered in F21, and particularly in the fourth quarter of the financial year.

On TWE’s outlook, Ford said: “In F22, we enter a new phase for TWE under our brand portfolio divisional operating model, led by Penfolds, Treasury Premium Brands and Treasury Americas. Whilst it’s early days in this change program, it is already very clear to our teams that with each division focused on their unique strategic priorities and performance accountabilities, we are better positioned to take advantage of previously untapped growth opportunities across the globe.

“This is a truly exciting stage in our journey as we progress deliberately and at pace towards our ambitions and goals.”

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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