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Treasury Wine Sees Revenue Jump 13% In First Half

February 14, 2019

Treasury Wine Estates (TWE) has revealed a strong set of numbers for its fiscal first half ended in December. Overall, the company posted a 13% revenue rise at constant currency to A$1.5 billion ($1.1b), while EBITS leapt 18% to A$338 million ($240m).

Led by robust gains for brands like 19 Crimes and Matua, Treasury’s Americas unit saw sales climb 12.5% at constant currency to A$605 million ($429m). According to Impact Databank, 19 Crimes soared 51% to 1.6 million cases in the U.S. in calendar 2018, while Matua grew by 24% to 525,000 cases. Across the portfolio, TWE’s luxury and masstige ($10-$20 a 750-ml.) depletions grew by 5% in the Americas in the first half, as the company continues to premiumize its range.

Treasury’s EBITS growth in the Americas region trailed the rest of the company’s global business, increasing 2.3% to A$112 million ($79m), as higher costs—some of them owing to Treasury’s shakeup of its U.S. route to market last year—ate into profits. The route-to-market moves, which saw Treasury take control of 25% of its U.S. distribution, included a shift to a partial self-distribution model in California and Washington and a hybrid model in Florida, where TWE is now directly managing relationships with its large retail partners in collaboration with Breakthru Beverage.

While TWE acknowledged some short-term costs associated with the distribution moves—including investments in its sales team—it noted that its approach is already paying off in California and Florida, with per-case revenue and EBITS growing in both states since the changes. For its full fiscal year, TWE is expecting global EBITS growth of about 25%, as costs from the U.S. transition dissipate.

Late last month, TWE named Tim Ford as its new COO, replacing Robert Foye, who departed “due to a breach of TWE’s internal policies unrelated to the company’s trading performance.” In the Americas, the business is now led by company veteran Victoria Snyder, who took over as president of the regional operating unit from Foye last summer.—Daniel Marsteller

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