Australia’s Treasury Wine Estates (TWE) posted a 34% rise in net profit after tax at AUD360.3 million in the past year thanks to booming sales in Asia.
Asia alone contributed 37% growth in EBITS (earnings before interest and taxes) at AUD205.2 million to the company, which owns brands including Penfolds, Lindeman’s and Wolf Blass.
The result, however, represented a 1.5% fall in revenue to AUD2.5 billion. This is part of an ongoing process of premiumisation in which the company reduced the volume of wine but increased the return per case.
TWE CEO Michael Clarke described the result as stellar. “The momentum in our business, together with the strength of our organisational talent, brand portfolios, operating models and customer partnerships, enabled us to execute transformational changes to our operating model in the US and still deliver strong profit growth,” he says.
The company expects growth of 25% in EBITS in 2019. “F19 is set to be an exciting year for TWE,” says Clarke.
“We have the wine, the brands, the business models and the organisational talent to propel our company into its next phase of growth that will see TWE become the world’s most celebrated wine company.”
In 2018, Americas reported a 2% fall in earnings to AUD193.0 million but a margin up two percentage points to 20.1%, reflecting the impact of changes to the route-to-market in the US, which reduced shipments.
Europe reported 21% EBITS growth to AUD49.5 million.
Australia and New Zealand reported 23% EBITS growth to AUD136.1 million driven by premiumisation in Australia, strong retail partnerships, and ongoing focus on managing costs.
(the writer can be contacted at: SLawMathews@thewinechronicle.com)