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 portfolio growth in Penfolds and Treasury Americas, with DAOU contributing in H2.

• Luxury 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; adjusted NPAT grew 8.3%.

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

• Final dividend of AUD 0.36/share declared, up 16%.

Financial highlights

• Group NSR increased 13.1% to $2.74bn (4.4% organic), with luxury growth offset by lower premium/commercial shipments in TPB.

• NSR per case rose 14.2% to $125.2, reflecting portfolio shift to luxury.

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

• Cash conversion was 82% (95% excluding inventory build); net debt/EBITDAS at 2.0x.

• ROCE at 10.9%; dividend payout ratio 72%.

Outlook and guidance

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

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

• Treasury Americas to focus on DAOU 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 sale gains.

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