That 2.2% decline in net sales revenue for Treasury Wine Estates came as the Australian wine producer jacked up prices 12.7%.  Net profit after tax fell 3.3%.

With reported net falling, TWE emphasized EBITS rose 16.6%.  But of course interest and taxes are real expenses that must be paid, whereas certain marketing or personnel expense do not have to be paid.

Treasury Americas reported a 14.0% increase in EBITS and an EBITS margin of 24.8% (up 5.6ppts).
Strong performance of key Luxury brands including Frank Family Vineyards and Beaulieu Vineyard, the continued growth of Matua and favorable foreign exchange rates were partly offset by shipment declines for 19 Crimes and
Sterling Vineyards, in addition to constrained Luxury portfolio availability from the lower yielding 2020 Californian vintage, TWE said.

Improved portfolio mix, successful implementation of price increases on key brands and improved COGS and CODB supported EBITS margin growth. On a constant currency basis, NSR and EBITS declined 18.4% and  0.3% respectively.

Tim Ford, CEO, said:

“In F23, we have once again delivered margin accretive earnings growth while continuing to navigate the tightening economic environment across a number of our key markets. At the same time, we made significant progress in strengthening our operating models for the future.

The Penfolds result was the standout, with strong top-line Luxury growth reflecting the unparalleled strength of this exceptional brand and outstanding execution by the team.

Treasury Americas Luxury portfolio execution was a highlight, with price increases and growth in distribution achieved despite significant volume availability constraints, setting a strong platform for future growth.

And Treasury Premium Brands made significant headway towards its new operating model, right-sizing the cost base for the future while enhancing both operational and strategic flexibility, and we will continue to assess additional optimisation initiatives.”

“We enter Fiscal 24 with confidence that the execution of our premiumization strategy will continue to deliver our long-term growth ambitions through the cycle. We are a much stronger business today and are well placed to succeed in the current macro-environment where consumer demand for Luxury wine is strong and Premium wine remains resilient, Ford said.