Treasury Wine Estates continues its focus on building its business in regions outside of China, with no sign of tariffs easing on the mainland. CEO Tim Ford said 1H22 results marked a company shift from a mindset of ‘recovery and restructuring’ to ‘growth and innovation’.
Net sales revenue (NSR) fell 10.1 per cent due to the significant drop in supply to China and the divestment of its US commercial portfolio.
Premiumisation remains the focus, with 83 per cent of NSR coming from TWE’s Premium and Luxury portfolios.
Snapshot
- 28% Earnings Before Interest, Tax, SGARA and Material items (EBITS) growth excluding China;
- NSR down 10.1% to $1,267m;
- NSR per case up 16% to $95.6m;
- Luxury and Premium contribution to global NSR up 83%;
- Net Profit After Tax (NPAT) down 7.5% to 109.1m; and
- NPAT and EPS, before material items and SGARA, both declined approximately 5% to $163.2m and 22.6 cents per share respectively.
Ford said the restructuring of the business was working and the performance of South-East Asia markets were strong and performing better than expected.
The company’s focus on premiumisation was reflected in 83 per cent of NSR coming from the Premium and Luxury portfolios.
1H22 saw Treasury Americas largely complete the divestment of Provenance, Chateau St Jean and surplus supply chain assets, in addition to the acquisition of Frank Family Vineyards.
Penfolds managing director Tom King said demand for the Penfolds Californian range was significant from around the world, while the wines were developed with the American market in mind first and foremost.
TWE said it maintains a significant profile in China and still sees a demand for Penfolds in the channels they do have available, even with significant price increases. It is now focused on its wines produced outside of Australia to maintain a brand presence in the country.
Ford said TWE expects trading conditions for FY22 to be broadly consistent with the first half of the year.
