Treasury Wine Estates (TWE) has reported its 2017 financial result, with a reported net profit after tax of $269.1m, which is up 55 per cent on last year.

The strong result also saw the company’s earnings before interest, tax, SGARA and material items (EBITS) increase by 36 per cent to $455.1m on a reported currency basis. The performance was driven by impressive increases in Asia and the Americas, and TWE’s Chief Executive Officer, Michael Clarke was understandably pleased with the result.

“I am delighted to report a strong F17 result, highlighted by robust earnings growth across every region and accelerated EBITS margin and ROCE accretion,” Clarke said.

“This result was delivered despite continuing to sell through short vintages of Luxury and Masstige wine, and highlights our continued focus on strategic customer partnerships in all our markets, significantly enhanced sales and marketing execution, and optimisation of our cost base.”

Net sales revenue also increased for TWE, up by 7.6 per cent to $2.4bn, with the company reporting that its purchase of the Diageo Wine business in the US continues to deliver profitability to the company.

In Australia TWE said it had seen 24 per cent EBITS growth to $111.1m, which was driven by above-category volume growth. The company added this was “supported by outstanding consumer and brand-led activations, price realisation in Luxury and continued optimisation of supply and overhead costs”.

The increase in breadth of TWE’s brand portfolio in Asia and the continued route-to-market optimisation being seen particularly in China and Japan helped to deliver 47 per cent EBITS growth to $150.1m in the region.

The Americas is still marginally ahead of Asia after reporting 44 per cent EBITS growth to $189m, which was driven by the integration of the Diageo Wine business.

Looking ahead TWE said it continues to be positive with the company “delivering against its strategy of transitioning from an agricultural to a brand-led, high performance organisation”.

The company said it remains committed “to a journey of margin accretion, that over time delivers an EBITS margin of 25 per cent”.

Clarke added: “Delivering revenue growth and margin accretion over time remains a priority, supported by our investments in building closer, more efficient and strategic partnerships with customers and by positioning TWE as the wine supplier of choice across multiple brand portfolios and countries-of-origin.”

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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