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Impressive growth in Asia delivers strong results for TWE

Published:  14 February, 2019

Treasury Wine Estates (TWE) delivered its strongest organic growth to date as it released its interim results for the six months ending December 31.

Net sales jumped 16% to AU$1,507.7 million, while earnings before interest, tax, SGARA and material items (EBITS) were AU$338.3 million, up 19% on the same period last year.

Net profit after tax was up 17% to AU$219.2 million. Earnings per share rose 19% to 30.5 cents. TWE declared an 18 cents per share interim dividend, up 20% on last year. It also reinstated its Dividend Reinvestment Plan for Australian resident shareholders for the 2019 interim dividend.

“I am very proud to see the foundation established in the previous years continuing to deliver sustainable growth, as shown by yet another strong set of financial results for the Group,” said TWE chief executive officer, Michael Clarke. “Like in previous years, we’ve delivered on expectations while continuing to implement significant changes to the business and investing for future growth.”

Its performance was particularly strong in Asia, where “increased availability of Luxury and Masstige wine” and TWE’s “competitively advantaged business model, brand portfolio and outstanding sales execution” realised EBITS growth of 31% to AU$153.1 million and an EBITS margin of 38.9%.

In the US EBITS grew 12% to AU$112.1 million and an EBITS margin of 18.5%. Net sales grew 20%.

In Europe EBITS grew 10% to AU$26.3 million and an EBITS margin of 15.0%. Net sales grew 10%. And in Australia & New Zealand EBITS grew 13% to AU$77.4 million and an EBITS margin of 23.2%.

TWE said though “current macro-economic uncertainty has created challenges for some global consumer companies, the strength of the Company’s routes-to-market, particularly in key markets like China and the US, has provided TWE with a significant competitive advantage, and supported the delivery of another strong result. Through these optimised business models, and the underlying strength of its people and brands, TWE is well placed to capitalise on its current momentum and deliver sustainable growth through 2H19 and beyond.”

Clarke added the results “demonstrate not only the strength of our premiumisation strategy and global balance, but in particular they highlight the strength of our competitively advantaged regional business models. We are confident we have the brands, the people and the business models in place to maintain the momentum of this half and continue delivering sustainable growth for shareholders.”