Treasury Wine Estates (TWE) H1 2025 earnings summary

Executive summary

• Luxury-led strategy drove strong 1H25 results, with EBITS up 35.1% to $391.4 million and margin up 2.8ppts to 25.3%, led by Penfolds and DAOU growth offsetting Premium Brands softness.

• Luxury portfolio NSR rose 52% (18.2% organic), now 55.8% of group NSR; premium and commercial portfolios declined 4.9%-5% due to global softness at lower price points.

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

• DAOU integration in Treasury Americas progressing, with DAOU NSR up 11% and synergy target upgraded to $35 million USD.

• Net profit after tax rose 32.5% to $220.9 million, with EPS at 27.2 cents; cost of doing business increased due to DAOU acquisition and Penfolds brand investment.

Financial highlights

• Group NSR increased 20.2% reported and 5.1% organic to $1.54 billion; NSR per case rose 16% to $137.5.

• EBITS margin expanded to 25.3%; NPAT up 32.5% to $220.9 million; EPS before material items and SGARA up 20.1% to 29.5 cents.

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

• Interim dividend of 20.0 cents per share, 70% franked, up 17.6% year-over-year; payout ratio 68%.

• Net debt/EBITDAS at 2.0x; total available liquidity $1.2 billion.

Outlook and guidance

• FY25 EBITS expected at ~$780 million, at the lower end of $780–810 million 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 for FY26 and FY27.

• Treasury Americas EBITS expected to be second-half weighted, with DAOU momentum and synergy realization.

• Treasury Premium Brands aims for 2H25 EBITS in line with prior year, aided by cost reductions and improved top-line.

• Full-year cash conversion expected at ~80% (excluding non-current luxury/premium inventory changes).