Treasury Wine Estates (TWE) H1 2026 earnings summary

Executive summary

• EBITS for H1 2026 was $236.4 million, within guidance but down 39.6% year-over-year, with statutory NPAT showing a loss of $649.4 million due to a significant non-cash impairment of US assets.

• Underlying brand performance remained strong, with positive depletions growth in key markets, especially for Penfolds in China and Australia, despite overall lower sales.

• Decisive actions were taken to address parallel imports, reduce customer inventory, and strengthen the capital structure, including suspending the interim dividend.

• The TWE Ascent transformation program is progressing, targeting $100 million annual cost improvement and portfolio optimization.

• 2H26 EBITS expected to exceed 1H26, with improved momentum in California post-distribution transition.

Financial highlights

• Net sales revenue for H1 2026 was $1,297.7 million, down 16% year-over-year, with declines across all divisions.

• EBITS margin decreased by 7.1 percentage points to 18.2%; ROCE declined to 9.5%.

• Statutory NPAT loss of $649.4 million, driven by a $987.6 million non-cash impairment of US assets.

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

• Net borrowings increased by $91.2 million; leverage at 2.4x, in line with guidance.

Outlook and guidance

• 2H26 EBITS expected to be higher than 1H26, with Penfolds FY26 EBITS forecast at ~$400 million and Treasury Americas at ~$90 million, excluding RNDC settlement impacts.

• Treasury Collective H2 EBITS expected to exceed H1.

• Full-year CapEx forecast at ~$125 million, with tight control on non-essential spending.

• Full-year leverage anticipated to rise due to lower trailing EBITDAS and cash conversion.

• Transition to a new Luxury-led divisional operating model effective 1 July 2025.