Treasury Wine Estates is celebrating an organic net sales revenue rise in Australia of 3.1%, led by gains across its premium Australian wine brands and within the on-premise channel.
Australia and New Zealand reported 15% EBITS growth to $156.5million, driven by growth across the masstige and lower luxury portfolios, improving performance in the on-premise channel and an ongoing focus on managing costs.
Angus McPherson, Managing Director, ANZ & Europe, said: “In many respects ANZ is a gold standard region with strong collaborative relationships with our retail partners combined with the growing portfolio of luxury and masstige brands that we are actively investing behind is combining to deliver excellent results.”
TWE also noted that its 25% market share target in Australia had been maintained.
“TWE’s size allows us to have that strategic advantage when we are dealing with our customers and I think across the board we have good strategic relationships,” McPherson said.
Increased demand for luxury wine in both Australia and overseas pushed global net profit for TWE up by 16% to $419.5 million.
“We are seeing positive growth momentum in a number of our brands, five brands in particular are showing strong growth including Squealing Pig, 19 Crimes, Seppelt, The Stag, and TGallant, all propositions that it continue to drive our growth across luxury and masstige categories,” McPherson said.
“TWE is outperforming the market in the $10 to $15 segments and all price segments above $20.
“19 Crimes continues to enjoy spectacular growth, up 135% in volume this year as we continue to drive distribution in Australia.
“Squealing Pig is continue to deliver double-digit earnings growth and is the number one in Australia.
“Our wine-in-can portfolio continues to dominate with TWE retaining the top four cans and leading the category with over 50% value share.
TWE announces major Aussie expansion plans
TWE revealed it will increase wine production in Australia via an $180million investment in its South Australian production facilities.
“This project is a significant investment that will support the continued growth of our Australian luxury portfolio will increase winemaking capacity by a third, drive production efficiency and increase wine storage facilities by approximately 15%,” said CFO Matthew Young.
McPherson added: “We’re going to build the most state-of-the-art premium winemaking facility in Australia and potentially one of the best in the world.”
The expenditure across FY20 and FY21 at its Bilyara winery site will focus on expanding its luxury winemaking infrastructure.
“The investment includes an additional production line, processing infrastructure and the construction of additional barrel storage facilities, increasing production and storage capacity,” the company added.
Bilyara Packaging Centre is the company’s largest bottling operation in Australia, employing 250 people.
It currently operates four bottling lines, packaging 216 million bottles per year, which are exported to more than 100 countries.
TWE acquires first French vineyard
TWE has also confirmed the acquisition of French production and vineyard assets in the Bordeaux region of France, with CEO Michael Clarke revealing it is just the first acquisition but “will not be the last”.
“Today, we’re announcing the acquisition of French production and vineyard assets in the Bordeaux region, which will allow us to expand our French country of origin portfolio, centered on Penfolds, Beaulieu Vineyards and Maison de Grand Esprit brands,” he said. “This investment will allow us to step change our sourcing strategy for fruit in France.”