In the recently completed financial year, Treasury Wine Estates recorded a total profit after tax of $98.9 million, down 61.1% on last year, following its recently announced $290 million non-cash impairment of its Commercial brands.
According to CEO Tim Ford, “our fiscal 2024 performance reflects the excellent momentum we continue to build behind our Luxury brand portfolios in Penfolds and Treasury Americas, which now represent over 75% of Group EBITS.
“These two outstanding Luxury wine platforms have very clear strategic direction and execution priorities, and we have great confidence in both as strong drivers of long-term growth for Treasury Wine Estates.”
To help develop this focus on its Luxury brands portfolios, TWE has announced that it will combine Treasury Premium Brands and Treasury Americas under a unified Global Premium division by the start of July next year.
“In relation to our Premium brands, we are focused on improving the performance of this global portfolio to deliver greater value to TWE overall, with implementing key changes to enable the evolution to the new Global Premium division a key focus through F25,” said Ford.
TWE’s renewed focus on its premium and luxury brands was recently highlighted by its announced divestment of Wolf Blass, Yellowglen, Lindeman’s, and Blossom Hill by recognising a non-cash impairment charge of $290 million. According to a Fact Book provided to investors this morning, the decision to offload these brands has been made in light of trends in the global wine category, which forecast Commercial Brands to decline at a by 1.5% up until 2028, whilst Premium Brands will increase by 1.4% and Luxury Brands at 3.2%.
“Within the Luxury price point, the largest markets include priority TWE growth markets the United States, Asia, the United Kingdom, and Australia. Collectively, these priority markets represent 80% of the global Luxury wine market,” said TWE in its Fact Book.
“Looking forward, strong growth trends are expected across many Luxury wine markets led particularly by Asia and the United States. TWE’s portfolio structure and global presence provides a platform from which to harness these trends with 49% of revenue generated from the Luxury price point.”
The Financial Year 2024 results also reveal the reestablishment of Penfolds into China has been on track, “with global demand for the Penfolds Bin & Icon portfolio expected to exceed availability in the near term.” To combat this, TWE recently announced that it will be increasing the price of Penfolds globally: “by leveraging our unique Penfolds brand status to drive ongoing demand, we remain steadfast on our clear ambition to be the number one luxury wine brand in the market,” said Ford.
//
TWE to strengthen premium focus, announces structural and staff changes
