Treasury Wine Estates (TWE) | SNAPSHOT
Profile: Treasury Wine Estates (TWE) is one of the largest listed wine companies in the world. It produces and distributes luxury, masstige (mass produced more affordable wines which are marketed as more a premium product) and commercial wines. Its brands include Penfolds, Beringer and Wolf Blass. It owns and operates vineyards across the globe, including in the Barossa Valley in Australia, Marlborough in NZ, Napa Valley in the US and in Tuscany, Italy.
History: TWE dates to 1843, with the establishment of Linderman’s Vineyard in the Hunter Valley region of NSW. In 1844, Penfolds Wine was established in Adelaide, SA. Over time TWE grew through various mergers and acquisitions as well as the establishment of new vineyards. In 2001, Southcorp and Rosemount Estate merged, becoming Australia’s largest wine company. In 2005, Foster’s acquired Southcorp, combining it with its subsidiary Beringer Blass, forming Foster’s Wine Estates. In 2010, Foster’s wine business was renamed Treasury Wine Estates. TWE was demerged from Foster’s and listed on the ASX in 2011.
Earnings composition: In FY19, the Asia segment reported Earnings Before Interest, Tax and SGARA (EBITS) of $294m (41%), where SGARA is defined as self-generating and regenerating assets. The Americas segment reported $219m (30%), while ANZ and Europe reported $157m (22%) and $51m (7%) respectively.
Most recent result – FY19: Group EBITS increased 25% on the prior corresponding period (pcp) to $663m. This was driven by ‘premiumisation’, where customers consumed higher value products. Net Sales Revenue (NSR) per case increased 14% on the pcp to A$79.77 (Figure 7). Volume also contributed to the result, increasing 2.7% to 35.5m 9Le (9 litre equivalent) cases. In particular, the Asia segment EBITS grew 43% on the pcp (49% on a constant currency basis) driven by increased availability of luxury and masstige wine. Asia NSR per case increased 28% (up 27% constant currency) to $161 and volume increased 7% to 4.6m 9Le cases. Underlying NPAT increased 15% on the pcp to $434m. A $0.20 dividend was declared, bringing total dividends in FY19 to $0.38, up from $0.32 in the pcp.
Company outlook: TWE affirmed its 15-20% reported EBITS growth for FY20, driven by growth in all markets and ongoing premiumisation.
Important dates: Ex-dividend date was 4 September 2019. Investor day is scheduled for 24-25 September 2019. Payment date is 4 October 2019. AGM is scheduled for 16 October 2019.
Submit your email address below to download the full PDF Snapshot.