The following is a summary of the Treasury Wine Estates Limited (TSRYY) Q2 2024 Earnings Call Transcript:
Financial Performance:
Treasury Wine Estates reported a decrease in EBITs by 6% to $289.8 million and a decline in net sales revenue by 2.3% primarily due to struggles in Treasury Americas and Premium brands portfolio.
The cost of goods sold per case surged by 13.4% due to a shift towards Luxury and premium wine.
Net profit after tax fell by 5.9%, and EPS also declined by 7.5%, influenced by an increased number of shares following the DAOU acquisition.
The company returned capital to shareholders with an interim dividend of $0.17 per share and aims to stay within the 55%-70% payout ratio for the entire fiscal year.
Despite these challenges, the company remains optimistic about its second-half performance, forecasting mid to high single digit organic EBITs growth, excluding DAOU contributions.
Business Progress:
During the quarter, the company maintained momentum in its luxury wine portfolio, with an increase in global luxury sales offsetting a decline in premium commercial revenue.
The business made significant advancements in strategy, including the launch of CWT 521 in China and introducing a new Champagne in collaboration with Champagne Thiénot to strengthen its global presence.
Key strategic priorities in Americas include the integration of DAOU, focusing on luxury growth, and planning for a more evenly split distribution of Penfolds business throughout the year.
Management is strategically examining potential growth opportunities for DAOU outside California and the international business expansion from a small base.
The firm also communicated future plans to expand its operation by investing in low- and no-alcohol wine production technology in Australia and broadening winery operations in France.
Treasury Wine Estates is optimistic about the future, expecting improved COGS and EBITS in H2.
The company stays committed to its growth strategy, including the drive in Luxury leadership in the United States through the DAOU acquisition, assessing the future operation model for its global portfolio of premium brands, and implementing the Penfolds growth strategy.
More details: TREASURY WINE ESTATES LTD SPON ADR EACH REPR 1 ORD SHS IR
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