Treasury Wine Estates (TWE) H2 2024 earnings summary

Executive summary

• Fiscal 2024 EBITS rose 12.8% to AUD 658.1 million, driven by strong luxury wine growth in Penfolds and Treasury Americas, with DAOUU/DAOU contributing in H2.

• Luxury net sales revenue (NSR) grew 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 (TPB); adjusted NPAT grew 8.3%.

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

• DAOU acquisition completed, with global expansion and integration plans underway.

Financial highlights

• Group NSR increased 13.1% (reported) to $2.7 billion, with luxury now ~50% of group NSR.

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

• EBITS margin held at 24.0%; EPS increased 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%.

• Leverage at 2.0x net debt/EBITDAS, expected to return to 1.5–2.0x range in FY25.

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 DAOUU integration and luxury-led growth, targeting margin improvement toward high 20% range.

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

• F25 cash conversion expected at ~80%, excluding changes in non-current Luxury and Premium inventory.