Treasury Wine Estates (TWE) investor relations material

Executive summary

• First half 2026 EBITS was $236.4 million, slightly above guidance, but a statutory NPAT loss of $649.4 million resulted from a $987.6 million non-cash impairment of U.S. assets.

• Underlying business momentum remained positive, with strong depletions growth in key brands and markets, especially Penfolds in China and the U.S. outside California.

• Decisive actions included suspending the interim dividend, reducing Penfolds shipments to curb parallel imports, and initiating inventory reductions in the U.S. and China.

• Settlement with RNDC in the U.S. and transition to Reyes Beverage Group are expected to stabilize distribution.

• The company transitioned to a new luxury-led divisional operating model effective 1 July 2025.

Financial highlights

• Net sales revenue for 1H26 was $1.3 billion, down 16% year-over-year, with NSR per case declining 5% mainly due to reduced ultra-luxury Penfolds sales and inventory actions in China.

• EBITS margin dropped 7.1 percentage points to 18.2%, and ROCE fell 1.7 points to 9.5%.

• Pre-material items, NPAT was $128 million, with EPS at 15.9 cents per share; statutory NPAT loss was $649.4 million.

• Net operating cash flow before interest, tax, and material items was $264.6 million, down 38.1% year-over-year; cash conversion at 82.4%.

• Net borrowings increased by $91.2 million, mainly due to lower operating cash flows.

Outlook and guidance

• Second half EBITS is expected to exceed first half results, with full-year EBITS for Penfolds and Treasury Americas forecast at approximately $400 million and $90 million, respectively.

• Treasury Collective second half EBITS anticipated to be higher than the first half.

• Full-year CapEx projected at $125 million, with a focus on essential projects only.

• Leverage anticipated to rise due to lower trailing EBITDAS and cash conversion.

• Management expects continued challenges in the U.S. market and is moderating long-term growth assumptions for the Americas.