AUS: Asia boosts Treasury Wine Estates' FY
- FY net profits come in at AUD90m (US$93.9m)
- Net sales fall by 5.6% to AUD1.64m
- Operating profit (EBIT) increases by 21.8% to AUD186.8m (US$194.8m)
- Asia volumes rise by 20.6%
Treasury Wine Estates has enjoyed first-half growth in Asia
Treasury Wine Estates (TWE) has posted strong full-year sales and profit growth driven by increases in high-margin Asian market.
In its first year since de-merging from the Foster's Group, operating profits (EBIT) rose by 21.8% to AUD186.8m (US$194.8m) in the 12 months to June 30, the Australian wine group announced today (17 August). Net sales climbed by 5.6% to AUD1.64m.
Net profits for the full-year came in at AUD90m, but TWE did not offer prior year comparisons, due to the demerger situation.
Total volumes fell by 4.4% to 31.7m 9L cases, largely reflecting the exit from unprofitable volume in the UK, the group said. Excluding the UK, volumes were marginally up.
In the Americas, TWE's largest market, volumes dropped by 1.7%.
However, in Asia, which accounts for just 3.5% of volumes but 20% of EBIT, volumes jumped by 20.6% and EBITS by 40.6%.
TWE said growth was driven by a 45% rise in brand investment and an expanded distribution footprint. China and Hong Kong saw volumes rise by 31%.
“Treasury Wine Estates is making significant progress against the priorities we set last year, and I’m pleased with our fiscal 2012 results,” CEO David Dearie said.
“Constant currency EBITS growth of 40.6% for the Asian region demonstrates its ongoing importance to TWE.”
Dearie said the Wolf Blass brand had performed well in Asia, with 21% volumes growth thanks to new packaging and marketing initiatives. However, the brand slumped in the UK, with volumes down 29%.
Next year will prove difficult for the wine maker, the group's CEO said, and the company expects earnings growth to be below the pace of the past two years.
“We face three key challenges in fiscal 2013,” Dearie said.
“First, we have less premium wines available to meet consumer demand and the quality wines we have crafted are at a higher cost. Secondly, we expect to incur costs from higher IT operating expenses and amortisation as we build our own, fit-for-purpose IT system. Thirdly, in the US we are working with our distributor partners to reduce inventory levels.”
Dearie said he has high hopes for the quality of TWE's 2012 Australian wines after "almost ideal growing conditions".
Shares in TWE closed the day slightly up at AUD4.580.
To read the company's official H1 statement, click here.
The final part of Euromonitor's preview of the year ahead for the global drinks industry sees senior alcoholic drinks analysts Spiros Malandrakis and Jeremy Cunnington turn the spotlight on the wine c...
The penultimate part of just-drinks' review of 2012 looks at a tumultuous year for the wine category....
- Is A-B InBev/SABMiller 'Mega-Merger' Off?
- Comment - 'Craft' and the Danger of 'Romance Copy'
- Sustainability: What Craft Teaches Multi-Nationals
- Pernod takes positives from China Cognac bounce
- Ethiopia competition to remain "intense" - Diageo
- Bacardi bags a Bourbon with Angel's Envy buy
- SPI Group 'disappointed' over Stolichnaya ruling
- Anheuser-Busch InBev lines up new chairman
- Bacardi Brown-Forman here to stay
- Carlsberg takes on Stella Artois in new campaign
- Global rum insights - market forecasts, product innovation and consumer trends research
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends research
- ALDI 2015: Radically transforming Anglo Saxon grocery markets
- Champagne: Less Than Bubbly
- Beer Market Insights Africa 2014