TWE - Treasury Wine Estates

[frugal.rock]

Interesting to see on the Idiot Box last night, that the Chinese Government is lifting the tariff on Australian wine.
Maybe the gut-rot they have been buying elsewhere is not sitting too well with the locals.
This news should make the wine industry happy.

Old news that it was going to happen, but good to hear it's now occurred.
While TWE did get a rise out of the rumour, I don't see a sell the news event.
Could be ripe for a further run up from here.
Daily then monthly chart.

 

[JohnDe]

Rumour of a split has increased.

Treasury Wine CEO Tim Ford said that bringing the function together with premium brands would unlock future opportunities for the strong consumer brands within the premium business.​

Treasury Wine has restructured one of its wine divisions​

Treasury Wine Estates has announced a restructure of its premium brands division that could be the first step in an eventual spin off, demerger or sale of the wine arm as the winemaker pours more focus into its luxury and higher priced wines, such as Penfolds.

The restructure, although minor in impact, will add more punch to the group’s premium brands division - whose portfolio of wines include many cheaper or commercial brands such as Wynns, 19 Crimes, Lindeman’s and Squealing Pig - and has also seen the departure of that division’s managing director.

The company said on Thursday it would integrate its global revenue growth function into its premium brands arm in a move to unlock growth opportunities for its priority premium brands, strengthen innovation, deepen engagement with consumers and customer partners and increase operating efficiencies within the premium business.

The global revenue growth pillar was established in 2023 and is responsible for driving enterprise-wide revenue opportunities, including growth plans for current and future global brands, enterprise-wide innovation development, and enhancing consumer understanding across Treasury Wine Estates.

The global revenue growth pillar employs around 30 people as well as housing a key creative team, and has specialised in dreaming up new innovative and growth ideas for Treasury Wine’s brands, and in particular those more affordable, cheaper wine labels.

Treasury Wine CEO Tim Ford said that bringing the function together with premium brands would unlock future opportunities for the strong consumer brands within the premium business.

“Integrating our global revenue growth capabilities within Treasury Premium Brands, will enhance our ability to strengthen these brands, foster cutting-edge innovation and deepen our engagement with consumers and customer partners.”

As a result of combining the two groups, Peter Neilson, divisional boss of premium brands will leave the company after 12 years with the business to pursue new career opportunities. He will be replaced by Angus Lilley, previously global chief revenue growth officer. These changes come into effect on July 1.

The changes will be viewed by many investors and analysts within the context of a strategic review currently underway at Treasury Wine which has as part of its brief to review the future structure of the premium brands arm. It has long been speculated Treasury Wine will look divest the arm.

Last week Mr Ford held an investor day at its Californian vineyards, and confirmed that work to assess the future operating model for Treasury Wine’s global portfolio of premium brands was continuing, and an update would be provided in August. This would be likely at the full-year results.

Treasury Wine, the makers of Penfolds, Wolf Blass and Pepperjack, also reconfirmed its earnings guidance despite cost of living pressures draining drinkers of their wine budgets. Mr Ford underlined the winemaker’s view that long-term trends for the wine industry would be driven by the continued growth in luxury and premium wine sales, consolidation of distributors and demographic changes as baby boomers make way for Gen Z and millennials.

This “premiumisation” of the wine market had helped reinforce the need for Treasury Wine Estates to push further into the higher priced end of the market – particularly the US which is the largest luxury wine market in the world – and the acquisition of DAOU Vineyards helped to give the Australian winemaker extra punch and presence there.

The wine CEO said Treasury Wine’s 2024 EBIT would be in the range of $223m to $228m, reflecting luxury portfolio growth, supported by increased availability, with premium portfolio revenue broadly in line with the previous corresponding period.

He said earnings from its recently acquired DAOU Vineyards of approximately US$24m were in line with expectations of being in the mid to high single-digit earnings per share accretion in fiscal 2025, which is the first full year of ownership.

Treasury Wine shares closed up 0.2 per cent on Thursday, at $11.96 each.

 

[divs4ever]

Rumour of a split has increased.

Treasury Wine CEO Tim Ford said that bringing the function together with premium brands would unlock future opportunities for the strong consumer brands within the premium business.​

cheers

will try to remember to keep track of the outcast ( that is where i normally make a profit )

 

[finicky]

Afternoon report comment from Market Matters:

• Treasury Wines (TWE) +2.73% rallied ahead of an investor day tomorrow, they should articulate their strategy to ramp up again in China

 

[finicky]

Market Matters afternoon report:

Treasury Wines (TWE) $12.35

TWE +2%: Solid result for TWE, pretty much inline with expectations with their US business outperforming. Revenue $2.81 billion, +13% y/y, vs estimate of $2.78 billion Earnings per share of $0.523 vs. consensus of $0.52 Ebits $658.1 million, +13% y/y, compared to consensus of $659.9 million Margins solid at 24% in line with expectations Penfolds earnings of $421.3 million, up +16% y/y Final dividend per share $0.19 vs. $0.17 y/y TWE guidance for FY25 of Ebits $780 million to $810 million was solid, however, consensus was already at $806m, hence no positive SP catalyst.

TWE​ MM remains long & bullish TWE

Treasury Wines (TWE) 15/08/2024​

 

[rcw1]

Good morning published today (22/10/24) via New Corp media outlets (Journalist - Valerina Changarathil)

The volume and value of Australian wine exports to China have surged after the removal of import duties in late March, according to a new Wine Australia export report, but it’s too early to celebrate.
In the 12 months ended September, overall Australian wine exports increased by 34 per cent in value to $2.39bn and by 7 per cent in volume to 643 million litres. The value of shipments to mainland China increased by $604m to $612m, while volume increased by 58 million litres to 59 million litres.
“These are the highest levels of shipments by both volume and value since the 12 months ended August 2021, and the growth was driven by the re-entry of Australian wine exports to mainland China…,” the report states.
Of the 927 businesses exporting Australian wine to mainland China during the 12 months ended September 2024, the top ten exporters by value contributed 68 per cent of the total value and 38 per cent of total volume.
“While the export figures to mainland China are very positive, the impact on total export value is much larger than volume due to the premium price point of most wine entering the market,” said Peter Bailey, Wine Australia’s manager of market insights.
“It’s important to note that shipments in these first six months are likely to be characteristic of re-stocking Australian wine after a long absence,” he cautioned. “Export levels are not equivalent to retail figures, and it will take time before it is evident how Chinese consumers are reacting to having Australian wine back in market.”

Kind regards
rcw1

 

[JohnDe]

I hope this ends well. First TWE use Penfolds to set up high quality Chinese wine production, ensuring part ownership and increased sales.

GM Holden did the same thing with Daewoo, which worked well for Holden for several years. Until Daewoo went bankrupt, leaving Holden in a bad place. Holden had invested in an engine plant that could not survive without sales to Daewoo, and Holden needed Daewoo's small cars to re-badge as holdens. Holden had no choice but to buy Daewoo.

Is TWE buying a Chinese winery to expand, or because the Chinese company is bankrupt? Either way, let's hope Penfolds and TWE management are ready and willing to go all the way and produce a magnificent Australian icon in China.

Penfolds buys Chinese winery for nearly $30 million​

Treasury Wine Estates hopes to create a Chinese home for Penfolds in the heart of the nation’s premier wine region following a multi-million winery purchase.

Treasury Wine Estates has acquired Chinese winery Stone & Moon. Photo: Duzui.

The parent company of South Australian wine icon Penfolds has acquired a 43-hectare luxury vineyard and modern winery in the Ningxia region for $27.5 million.

ASX-listed Treasury Wine Estates said its 75 per cent acquisition of Ningxia Stone & Moon Winery Co. Ltd was consistent with the company’s strategy of investing in luxury vineyard and production assets.

The Ningxia wine region is in the central northern part of China and is characterised by its arid climate which has been compared to that of southern Australia. It has become famous globally for its wine and is recognised as China’s first wine appellation.

The first wine grapes in the region were only planted in the 1980s, but Ningxia is now home to more than 200 active wineries.

Stone & Moon sits in the Qingtongxia production area of Ningxia and was founded in 2017. It specialises in Syrah, Viognier, Cabernet Sauvignon, Chardonnay and other varietals.

 

[JohnDe]

More wine discounts coming.

Treasury Wine has warned of lower earnings due to a drop in cheap wine sales

Treasury Wine Estates has warned its underperforming commercial wines will continue to be a burden on profitability and cut its annual earnings guidance as drinkers shun cheap wine.

Profitability for its commercial wines dropped by almost 50 per cent in the first half, reflecting weak demand for wine at lower price points.

The winemaker, whose portfolio of wines spans luxury Penfolds Grange to cheap and cheerful Squealing Pig, is focusing its expansion on the luxury wine market in the US, where it has picked up wineries and labels. While price hikes for its Penfolds range has helped bring in extra sales revenue to counter the sliding performance of its collection of cheaper wines.

However, for now the pain will be felt in its earnings performance due to the size of its commercial division with Treasury Wine on Thursday warning it expected earnings for fiscal 2025 to be around $780m, which is at the lower end of the previously guided range of $780m to $810m.

Treasury Wine has targeted Penfolds and its American operations, both anchored in luxury wine, as the “clear drivers” of its future growth agenda with the reopening of the China market also buttressing luxury wine sales – taking some of the pain away from the weaker performance elsewhere in the company.

On Thursday Treasury Wine posted a strong uplift in its interim profit and dividend, driven by rising sales for its flagship luxury wine Penfolds, price hikes for Penfolds, and the recently acquired DAOU wine business in the US, countering continuing weakness in its portfolio of cheaper, commercial wines.

The company reported a 19.6 per cent increase in half-year revenue to $1.57bn as net profit rose nearly 33 per cent to $220.9m. Pre-tax earnings were up 35 per cent to $391.4m. The interim dividend was hiked to 20c per share, up from 17c, and is payable on April 2.

Net sales revenue per case improved 16.1 per cent, reflecting ongoing premiumisation of Treasury Wine’s portfolio mix towards luxury wine and price increases across Penfolds Bin and Icon portfolio.

Its luxury focused Penfolds division reported a near 34 per cent increase in earnings to $250.2m on margin of nearly 45 per cent, up 3.2 points, helped by the re-entering into the China market after the crippling tariffs on Australian wine were removed. The division’s performance was led but the re-establishment of the Australian-made Penfolds wine getting back into China, where there has been strong demand from customers, the company said.

Additionally, the positive depletions momentum for Penfolds continued in a number of other key Asian markets, including Hong Kong, Thailand and Malaysia. Outside of Asia, sales were impacted by the partial reallocation of the Penfolds Bin and Icon portfolio to support the rebuilding of distribution in China, with continued growth across the broader portfolio supporting the delivery of modest sales declines in Europe, Australia and New Zealand.

Treasury Americas reported a 66.9 per cent increase in earnings to $155.3m as sales increased 41 per cent driven by the acquisition of DAOU. Excluding DAOU, sales for the Treasury Americas luxury portfolio declined 8.5 per cent, reflecting below plan performance in US trade, direct sales to consumers and lower sales as discounting was reined in.

Its cheap, commercial wines division, Treasury Premium Brands, reported a 49.9 per cent decrease in earnings to $22.9m. The result was driven by continued commercial and premium sales declines, reflecting softness in consumer demand for wine at lower price points, underperformance relative to the category.

“Our interim 2025 performance highlights the benefit to the quality of earnings and key metrics from our multiyear transformation to a luxury-led business, with this segment of the market continuing to be healthy in our key trading regions,” said Treasury Wine chief executive Tim Ford.

“We are extremely pleased to have successfully re-established the Penfolds Australian country of origin portfolio in China, with positive consumer and customer sentiment and key performance signals very clear.

“Our team has absolute clarity on our portfolio and execution priorities, with Penfolds and the Treasury Americas Luxury businesses the clear drivers of our future growth, with our global premium business playing a critical role to power and support this growth agenda.”

 

[Sean K]

More wine discounts coming.

I wouldn't mind trying this. Might be a bit controversial for the purists out there.

Might not be discounted though.

Penfolds unveils Grange La Chapelle

Penfolds has released a new wine in partnership with French producer Hermitage La Chapelle.

winecompanion.com.au

 

[rcw1]

Good morning
SP 12 month low today ): @ $9.99 (05/03/25) - ex dividend day today

Interestingly, it has been widely published that Treasury Wine Estates abandoned their sale of Wolf Blass, Lindeman’s, Blossom Hill and sparkling wine brand Yellowglen, because they couldn't find a buyer !!!!

As previous posts highlighted profits were not good for the low cost wines.

According to an article published in the AFR on 13/02/25 @ 5.57pm the success of Penfolds, and other luxury wine brands acquired by Treasury, powered the company to $220.9 million profit for the first half of the financial year, up 32.5 per cent on the same time 12 months ago.

The company lifted its interim dividend by 17.6 per cent to 20¢ per share.

Earnings at Penfolds rose 33.9 per cent to $250.2 million in that period, while those at its mid-tier and commercial wine division, which runs the lower-cost brands along with the Squealing Pig and Pepperjack, fell 50 per cent to $22.9 million compared to the first half of the last financial year.

weekly

Not holding

Kind regards
rcw1

 

[JohnDe]

Good morning
SP 12 month low today ): @ $9.99 (05/03/25) - ex dividend day today
View attachment 194713

Interestingly, it has been widely published that Treasury Wine Estates abandoned their sale of Wolf Blass, Lindeman’s, Blossom Hill and sparkling wine brand Yellowglen, because they couldn't find a buyer !!!!

As previous posts highlighted profits were not good for the low cost wines.

According to an article published in the AFR on 13/02/25 @ 5.57pm the success of Penfolds, and other luxury wine brands acquired by Treasury, powered the company to $220.9 million profit for the first half of the financial year, up 32.5 per cent on the same time 12 months ago.

The company lifted its interim dividend by 17.6 per cent to 20¢ per share.

Earnings at Penfolds rose 33.9 per cent to $250.2 million in that period, while those at its mid-tier and commercial wine division, which runs the lower-cost brands along with the Squealing Pig and Pepperjack, fell 50 per cent to $22.9 million compared to the first half of the last financial year.

weekly
View attachment 194712
Not holding

Kind regards
rcw1

I just received an order from them today, $165 for a dozen

 

[finicky]

Market Matters:
Treasury Wines (TWE) -5.41% fell on a Citi downgrade, moving to neutral from buy, but it read more like a sell call…

Not Held
Not Buying

 

[divs4ever]

well TWE would ( again ) be a likely victim in a tariff/duty war against China ( the US or EU )

i would want a steeper discount to buy in

 

[EquityEspresso]

The company saying minimal impact from the tariffs, Citi Downgrades to a Neutral rating with a $10.50 price target

 

[divs4ever]

The company saying minimal impact from the tariffs, Citi Downgrades to a Neutral rating with a $10.50 price target

is holding up better than i expected currently

 

[rcw1]

Good evening
Chart update

Daily

One minute

Not holding

Kind regards
rcw1

Good morning
SP 12 month low today ): @ $9.99 (05/03/25) - ex dividend day today
View attachment 194713

Interestingly, it has been widely published that Treasury Wine Estates abandoned their sale of Wolf Blass, Lindeman’s, Blossom Hill and sparkling wine brand Yellowglen, because they couldn't find a buyer !!!!

As previous posts highlighted profits were not good for the low cost wines.

According to an article published in the AFR on 13/02/25 @ 5.57pm the success of Penfolds, and other luxury wine brands acquired by Treasury, powered the company to $220.9 million profit for the first half of the financial year, up 32.5 per cent on the same time 12 months ago.

The company lifted its interim dividend by 17.6 per cent to 20¢ per share.

Earnings at Penfolds rose 33.9 per cent to $250.2 million in that period, while those at its mid-tier and commercial wine division, which runs the lower-cost brands along with the Squealing Pig and Pepperjack, fell 50 per cent to $22.9 million compared to the first half of the last financial year.

weekly
View attachment 194712
Not holding

Kind regards
rcw1

 

[finicky]

Conclusion of a long piece on TWE by Market Matters this morning

Market Matters | Leading Australian Stock Market Views And Advice

Get the latest Australian stock market views from top investors with real money in the markets. ASX investment advice and share recommendations. Find out more.

marketmatters.com.au

Not Held
No plan to buy

"With TWE set for a transition period the stocks likely to drift lower until some meaningful news renews buyer interest, but this can bring opportunity. The change in management has already led to a couple of broker downgrades but they could be late to the party with the stocks already trading on a “bargain basement” valuation compared to recent years, plus the ~4.7% part-franked yield helps patient investors. At this stage, we believe TWE is “looking for a low,” but there is currently no catalyst to change the trend. However, if/when it tests the psychological $8 area, it will attract our attention with plenty of bad news baked into the share price.

We see upside in TWE when the market at least diversifies away from the “Certainty Trade”.
MM sees deep-seated value in TWE below $8"

 

[JohnDe]

The shares are too unstable but the wine prices are excellent, when a member of their wine club and they send out offers to try and increase the sales figures.

A few weeks ago I scored great prices on the 2016 Henri Shiraz and Bin 311 Chardonnay. Dan Murphy’s couldn’t match the price.

 

[JohnDe]

The shock decision by a top US wine distributor to exit the Californian wine market completely has left Treasury Wine Estates scrambling for a new partner, with the Penfolds maker also warning on earnings due to the rocky economy.​

I had a conversation about vineyards today with an elderly customer that I've known for 35 years. He's a sign writer, retired for the past 20 years, his son has owned a vineyard for two decades and his 5 children have grown up on it. Last month he had to borrow a large sum of money from his retired parents to keep the power on and the banks away. His last power bill was $22,000, and the last sale of his award-winning grapes was at below cost. Wine sales are down, causing wineries to order less grapes.

Treasury Wine loses major Californian distributor and warns on profit

Treasury Wine Estates, the maker of Penfolds, Pepperjack and Lindeman’s, has suffered a major setback in its grand ambitions to forge a thriving premium wine business in the US after its key distributor in California – which generates one quarter of its North American sales – decided to pull out of the Golden State.
It leaves it scrambling for a new distributor in California, with the shuttered distributor responsible for 25 per cent of Treasury Wine’s sales for its Americas division and 10 per cent of total group sales.

Hurting the winemaker too in the US, where over the last few years it has spent more than $2bn to buy up premium Californian wineries, is weaker consumer demand driven by economic uncertainty which has forced Treasury Wine to warn of lower than expected earnings for fiscal 2025.

Treasury Wine Estates is scrambling for a new wine distributor in the key US state of California: Picture: Carla Gottgens/Bloomberg

Treasury Wine on Tuesday warned it now expects 2025 earnings to be approximately $770m, with the variance to the previously provided outlook of ‘approximately $780m’ driven by lower than expected premium wine portfolio shipments in the US. The company cited economic uncertainty and weaker consumer demand, which had recently impacted wine category performance at price points below $US15 a bottle.

It comes as Treasury Wine is now also forced to find a new route to market into California.

The shock and sudden decision by Republic National Distributing Company to pull out of California completely has surprised the US wine industry. It leaves Treasury Wine without a distributor in one of the biggest wine drinking states in the US and will be a major headache for incoming Treasury Wine chief executive Sam Fischer when he joins the winemaker later this year.

Treasury Wine said the loss of its Californian wine distributor and also warned of an impact to earnings.

“Treasury Wine Estates has been advised by Republic National Distributing Company, one of its US distributors, that it will cease operations in California, effective 2 September 2025,” the company said in an ASX statement.

“TWE has begun evaluating alternative distribution arrangements for its portfolio in California to determine an appropriate path forward.

“As the leading luxury wine supplier in the US market, TWE is confident that its history working with an extensive network of US distributors, combined with its proven experience in effectively managing distributor changes, which it has done a number of times in the ordinary course through recent years, positions the company strongly to transition to a new route to market in California in the near-term.”

The US market has a unique wine distribution model that is made up of tiers and where in most states the winemaker cannot directly sell to a wine store or retailer but must instead sell to a distributor or middleman.

RNDC’s September closure of its California operations is not expected to impact Treasury Wine’s earnings in 2025 however analysts have raised concerns about possible impact to 2026 earnings.

Treasury Wine’s relationship with RNDC spans 25 US states, including California. The closure of RNDC’s California operations is not expected to impact the remainder of its business, and RNDC has reiterated its commitment to investing behind and driving Treasury Wine’s portfolio in the remaining 24 states, the company said.

Treasury Wine under outgoing chief executive Tim Ford has invested heavily in California to transform the business into a winemaker that is a leading player in the premium US wine market.

Treasury Wine Estates CEO Tim Ford.

Mr Ford agreed to spend $1.6bn in 2023 to purchase Californian luxury wine group Daou Vineyards and another US winemaker, Frank Family Vineyards, for $434m in 2021 as he led a charge into California and the US premium wine market.

 

[Dona Ferentes]

TWE has been below $8 this month; now lifting to $8.30.

discounting is rampant, the younger generations aren't into red wine that much

.