Treasury Wine Estates (TWE) Investor Update summary

Business and Financial Performance

• FY25 EBITs expected at approximately $770 million, a 17% year-on-year increase, driven by luxury brands Penfolds and DAOU.

• Penfolds anticipates low double-digit EBITs growth in FY25, with further low to mid double-digit growth in FY26, especially in Asia.

• Treasury Americas' FY25 EBITs growth is led by DAOU, but premium portfolio performance lags, and modest growth is expected in FY26 due to US economic uncertainty.

• Treasury Collective's top-line decline is expected to moderate in FY26, aiming for medium-term stabilization.

• Luxury wine fundamentals remain strong globally, with luxury wine sales growing 5% in 2024 and positive trends in China and the US.

Strategic Initiatives and Capital Management

• Transition to a luxury-led divisional model effective July 1, with Penfolds, Treasury Americas, and Treasury Collective as key divisions.

• An on-market share buyback of up to 5% of issued capital will be launched with the FY25 results, reflecting confidence in strategy and undervalued share price.

• Leverage is targeted at approximately two times by end of FY25, with strong cash conversion and a dividend payout ratio of 55–70% of NPAT.

• Free cash flow in FY26 is expected to support maintaining leverage at two times, with buyback size adjusted accordingly.

• Continued investment in luxury brands, supply chain transformation, and global distribution capabilities.

Divisional and Market Updates

• Penfolds holds a 29% share of the luxury wine market in China, with strong performance and positive momentum across Asia.

• Treasury Americas' NSR per case and EBITs margin remain strong, with DAOU and Frank Family accounting for two-thirds of NSR.

• Distributor transition in California is underway for Treasury Americas, with expected disruption built into forecasts.

• Treasury Collective focuses on stabilizing premium portfolio volumes and driving growth in priority brands like 19 Crimes and Matua.

• Treasury Collective's portfolio is weighted toward brands like Wolf Blass, Lindeman's, and 19 Crimes, with a strong presence in the Americas and ANZ.