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 $751 million post-tax non-cash impairment of US assets.

• Underlying business performance remained positive, with strong depletions growth in key brands and markets, especially Penfolds in China and Australia.

• Strategic actions include capital preservation, cost focus, inventory management, restricting shipments to limit parallel imports, and reducing customer inventory in the US and China.

• Interim dividend for H1 2026 was suspended to reduce leverage and strengthen the balance sheet, with future dividends contingent on leverage improvement and financial performance.

• Project Ascent transformation program targets $100 million in annual cost savings from FY 2027, focusing on portfolio rationalization and operational efficiency.

Financial highlights

• Net sales revenue (NSR) for H1 2026 was $1.3 billion, down 16% year-over-year, with NSR per case falling 5–5.8% mainly due to reduced ultra-luxury Penfolds sales and inventory actions in China.

• EBITS margin decreased 7.1–7.2 percentage points to 18.2%, driven by sales mix and higher operating costs.

• ROCE declined 1.7 percentage points to 9.5% due to lower EBITS.

• Pre-material items, NPAT was $128.5 million, EPS 15.9 cents per share; statutory NPAT loss was $649.4 million.

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

Outlook and guidance

• Second half EBITS expected to be higher than first half, with improved momentum in California post-distribution transition.

• Penfolds FY 2026 EBITS forecast at ~$400 million, margin ~40%.

• Treasury Americas FY 2026 EBITS expected at ~$90 million, excluding RNDC settlement impacts.

• Treasury Collective H2 2026 EBITS expected to exceed H1.

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