Treasury Wine Estates (TWE) H1 2025 earnings summary

Executive summary

• Luxury-led strategy drove strong 1H25 results, with EBITS up 35.1% to $391.4m, led by Penfolds and DAOU growth, offsetting lower Treasury Premium Brands performance.

• Luxury portfolio NSR rose 52% (18.2% organic), now 55.8% of Group NSR; premium and commercial portfolios declined 4.9%.

• Penfolds saw robust growth in Asia, especially China, with successful re-establishment of the Australian COO portfolio.

• DAOU integration in Treasury Americas progressing, with synergy target raised to US$35m.

• Net profit after tax rose 32.5% to $220.9m, with EPS up 20% to 29.5cps.

Financial highlights

• Group NSR increased 20.2% reported, 5.1% organic, reaching $1.54bn; NSR per case up 16% to $137.5.

• EBITS margin expanded 2.8ppts to 25.3%; gross profit margin improved 5.1ppts to 47.5%.

• Net profit after tax up 32.5% to $220.9m; EPS before material items and SGARA up 20.1% to 29.5cps.

• Cash conversion at 90.4% (83.8% excluding inventory changes); net operating cash flow up 56%.

• Interim dividend of 20.0cps, up 17.6%, payout ratio 68%.

Outlook and guidance

• FY25 EBITS expected at ~$780m, at the lower end of prior $780–810m guidance, mainly due to reduced expectations for Treasury Premium Brands.

• Penfolds targets low double-digit EBITS growth and margin of 43–45% for FY25; 15% annual EBITS growth targeted for FY26 and FY27.

• Treasury Americas' FY25 EBITS expected to be weighted to 2H25, with DAOU synergy realization.

• Treasury Premium Brands targets 2H25 EBITS in line with prior year, aided by cost reductions.

• Full-year cash conversion expected at ~80% (excluding inventory changes); CapEx for FY25 to be slightly higher, with up to $65m in growth CapEx planned.