Treasury Wine Estates, the Australian-based producer, reports net sales revenue grew 1.4% to 1.284 billion (Australian) in the first half of 2023 and net profit after tax soared 72.5% to $188l2 million, of 26.1 cents a share.
Treasury Wine said global wine consumer trends were broadly consistent. Luxury wine continued strong growth in all of the company's key markets. "Consumption and market trends for entry-level Premium wine in the US and the UK, and Commercial wine globally, were softer in 2Q23 relative to expectations, contributing to volume declines for Treasury Americas and Treasury Premium Brands," the company said.
Net sales revenue for Treasury Americas increased 4.1% driven by favorable foreign exchange rates and supported by the performance of key Luxury
portfolio brands including Frank Family Vineyards and Beaulieu Vineyard, in addition to continued growth for Matua and innovation within 19 Crimes. The successful delivery of price increases across key Luxury and Premium brands further supported NSR growth, the company said. Partly offsetting were Premium portfolio volume declines, where consumption trends for entry-level Premium wine impacted the performance of the 19 Crimes Australian-sourced portfolio, with increased retail programming, innovation and brand activation activity planned for 2H23. On a constant currency basis, NSR declined 4.3% and EBITS increased 14.9%.
Treasury Premium Brands reported a 15.4% increase in EBITS to $45.0m and an EBITS margin of 11.6% (up 2.2 ppts). NSR declined 7%, reflecting unfavorable foreign exchange rates and Commercial portfolio volume declines in the UK and Australia. Premium and Luxury NSR was broadly in line with the prior year. Margin expansion was supported by price increases implemented across a number of portfolio brands, more than offsetting the inflationary impact of supply chain costs.