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Highlights

  • TWE acquired a 75% stake in Ningxia Stone & Moon Winery and DAOU, enhancing its luxury wine portfolio.
  • DAOU acquisition is expected to create synergies of over USD 20 million by FY26.
  • In FY24, TWE recorded a 13.1% YoY rise in NSR to AUD 2,739.8 million, driven by luxury wine brands.
  • The company anticipates EBIT growth fuelled by Penfolds and Treasury Americas' portfolios, with FY25 EBITS projected between AUD 780-810 million.

ASX-listed Treasury Wine Estates Limited (ASX:TWE) manages wine business through three key activities, wine production, grape growing and sourcing and wine marketing, sales and distribution. Recently, the company has expanded its portfolio through acquisition of DAOU – a luxury wine brand. Business integration is in progress and synergies of over USD 20 million are anticipated by the financial year 2026 (FY26). The acquisition is anticipated to enhance TWE’s market position and offer value creation opportunities.

On 10 December 2024, TWE announced the acquisition of a 75% stake in Ningxia Stone & Moon Winery Co. Ltd. for consideration of AUD 27.5 million. This winery is in China’s Ningxia region and features 43 hectares of luxury vineyards, a modern facility, and a cellar door. This acquisition bolsters TWE’s commitment to enhancing its luxury wine portfolio, particularly Penfolds China portfolio.

Recent financial performance

In the first quarter of FY25 (1QFY25), TWE recorded double-digit organic group net sales revenue (NSR) growth over the previous corresponding year. Penfolds delivered positive results especially in Asia and Australia with strong customer re-orders during events such as China’s Mid-Autumn Festival.

In FY24, the company reported NSR of AUD 2,739.8 million, up 13.1% YoY, gross profit of AUD 1,242.2 million, up 11.3% YoY and net profit after tax (NPAT) of AUD 407.5 million, up 8.3% YoY.

Growth in the NSR was driven by the luxury portfolio, including Penfolds and Treasury Americas. However, statutory NPAT fell by 61.1% YoY due to a post-tax impairment of AUD 318.1 million within Treasury Premium Brands.

Outlook for FY25

Continued demand from Penfolds is expected to drive low double-digit EBIT growth in FY25. Meanwhile, changes in distributor arrangements are anticipated to enhance the performance of the Treasury Americas’ luxury portfolio in 1QFY25.

TWE anticipates FY25 EBITS to range between AUD 780-810 million, fuelled by its luxury brands.

By FY26, TWE plans to create a Global Premium Division and integrate DAOU while divesting non-core commercial brands. The integration is expected to deliver USD 20 million in synergies.

Share performance of TWE

TWE shares closed 2.77% lower at AUD 10.54 per share on 13 January 2024. Over the past year, TWE’s share price has increased by almost 4.36% andin the past three months, the share price has dropped by approximately 12.96%.

52-week high of TWE is AUD 13.01, recorded on 4 April 2024 and 52-week low is AUD 9.98, recorded on 10 January 2024.

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 13 January 2025. The reference data in this report has been partly sourced from REFINITIV.