Treasury Wine Estates (TWE) H2 2024 earnings summary

Executive summary

• Fiscal 2024 saw strong luxury wine growth, with EBITS up 12.8% to AUD 658.1 million, driven by Penfolds, Treasury Americas, and DAOU's H2 contribution.

• Luxury NSR rose 30% group-wide (14.5% organic), with Penfolds and Treasury Americas each surpassing $1 billion in NSR for the first time.

• Statutory NPAT declined to AUD 98.8 million due to a AUD 318.1 million non-cash impairment in Treasury Premium Brands; adjusted NPAT grew 8.3%.

• DAOU acquisition completed, contributing strong 2H24 EBITS and supporting global expansion plans.

• Strategic focus for FY25 includes reestablishing Penfolds in China, integrating DAOU, creating a global Premium Brands division, and divesting commercial brands.

Financial highlights

• Group NSR increased 13.1% to $2.74bn, with luxury now ~50% of group NSR.

• NSR per case up 14.2% to $125.2, driven by luxury mix shift.

• EBITS margin held at 24.0%; EPS before material items up 1.4% to 52.3cps.

• Cash conversion was 82% (95% excluding inventory build); final dividend of AUD 0.19/share, full year AUD 0.36/share, up 16%.

• Net debt/EBITDAS at 2.0x, with total liquidity at $1.2bn.

Outlook and guidance

• FY25 EBITS expected in AUD 780–810 million range, driven by luxury growth in Penfolds and Treasury Americas.

• Penfolds margin to improve to 43–45% in FY25, with low double-digit EBITS growth expected.

• Treasury Americas to focus on DAOU integration and luxury-led growth, targeting margin improvement toward high 20% range.

• Premium Brands expects stable top line and EBITS in line with PCP, excluding one-off asset sales.

• Focus on expanding Penfolds in key markets and improving Premium brand execution ahead of the Global Premium division launch.