Olly Wehring

Focus - Treasury Wine Estates' FY Performance by Region

By | 22 August 2013

Treasury Wine Estates released its full-year results earlier today

Treasury Wine Estates released its full-year results earlier today

Earlier today (22 August), Treasury Wine Estates released its results for the 12 months to the end of June. Here, just-drinks takes a closer look at the group's performance by region:

Americas

Net sales in the Americas were flat in the year, coming in at AUD704m (US$635.7m), with shipments dipping by 1.6% to 15.4m nine-litre cases. EBITS (Earnings before interest, tax, SGARA and material items) fell by 15.4% to AUD66.8m. The slide in operating profits from the region came on the back of the lower shipments, and increased COGS from the 2011 vintages in Australia and California.

Europe, Middle East and Africa (EMEA)

Net sales slipped slightly in EMEA, by 1.8% to AUD148.5m, as volumes fell by 3.1% to 6.7m cases. Operating profits, however, leapt by 180.7% to AUD16m thanks, said TWE, to "improved in-market execution and continued focus on cost management". The volume performance was split between a poor first half, when the company conducted its "planned exit from unprofitable sales", and a 7.3% volume rise in H2.

Asia

Rising consumer demand for the 2013 Penfolds release drove a 20.8% jump in volumes for the year in Asia, with net sales also leaping, by 27.5% to AUD135.4m. Operating profits were up by a third - 32.3% - to AUD54.5m. Also contributing to the strong numbers were expanded distribution and investment in new sales channels in China.

Australia and New Zealand (ANZ)

Net sales from ANZ were up by 4.7% to AUD600.8m with volumes increasing by 6.5% to 8.6m cases. Operating profits rose slightly, by 1% to AUD110.1m, thanks in part to the reallocation of brand-building investment from marketing and promotion to point-of-purchase trade support. Volumes in New Zealand dipped in the year after TWE exited from "unprofitable price points".

Expert analysis

Treasury Wine Estates Ltd in Wine (World)

Treasury Wine Estates became an independent company following the demerger of Foster’s Group’s wine and beer unit in 2011. Due to challenging conditions in the company’s key markets in North America, Western Europe and Australasia, it has restructured its business, switched its focus from volume to value generation, and is committed to further expansion to fast-growing markets, particularly in Asia Pacific. This profile examines how the company can enhance its growth prospects going forward.

Sectors: Company results, Wine

Companies: Treasury Wine Estates

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