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Highlights

  • Treasury Wine operates a global wine business with a portfolio of premium, luxury and commercial wines
  • In FY23, EBITS zoomed by 11.4% YoY to AUD 583.5 million
  • In FY24, the company expects to see improvement in its EBITS margin

Treasury Wine Estates Limited (ASX: TWE) is an ASX-listed company engaged in the production and sourcing of grapes and wine production, marketing and distribution. The segments of the company comprise Australia and New Zealand, America, Asia, Europe, Middle East, and Africa (EMEA).

In the financial year 2023, the company recorded a 3% YoY increase in gross profit to AUD 1,074.6 million and 16.6% YoY increase in NPAT to AUD 376.1 million. During the state period, EBITS increased by 11.4% YoY to AUD 583.5 million, however revenue decreased to AUD 2,488.3 million from AUD 2,531.8 million in FY22. The revenue for the period fell due to drop in Treasury America’s premium product line sales volume and decrease in Treasury premium brands’ commercial portfolio sales volume.

Recent business update

On 13 December 2023, the company shares through an ASX-filing that it has concluded the planned acquisition of DAOU Vineyards. As part of the transaction, the company offered 13,150,038 shares, which is worth USD 100 million.

Through an ASX update dated 29 November 2023, the company shared that the retail shortfall bookbuild for the retail section of its fully underwritten 1 for 9.45 pro rata accelerated renounceable entitlement offer of new shares has been finalized. The amount raised via the entitlement offer is expected to be AUD 825 million.

Outlook

In FY24, the company is confident to witness growth in its earnings before interest, taxes and SGARA (EBITS) margin. The company’s long-term focus is to achieve high single-digit average earnings growth with an EBITS margin of over 25% and to maintain sustainable top-line growth.

The distribution of group EBITS is expected to be inclined towards 2HFY24, with around 45% expected in the first half and the rest expected in the second half.

Share performance of TWE

TWE shares closed 1.71% down at AUD 10.34 apiece on 4 January 2024. Including this, TWE’s share price has decreased by 20.49% in the last nine months and fell by 12.13% in the past three months.

The 52-week high of TWE is AUD 14.687, recorded on 1 February 2023, and the 52-week low is AUD 10.19, recorded on 28 November 2023.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 04 January 2024. The reference data in this report has been partly sourced from REFINITIV.