Treasury Wine Estates outlines operational restructure
Treasury Wine Estates has outlined an operational restructure, which will see it adopt a portfolio-led operating model, which will commence in the next financial year.
The company will now have three divisions: Penfolds, which will be led by the current Managing Director of Asia, Tom King; Treasury Premium Brands led by Managing Director ANZ Peter Neilson and Treasury Americas, which the current Managing Director of Americas Ben Dollard will lead.
In outlining the new structure during TWE’s half-year results presentation, CEO Tim Ford said: “Supporting the three portfolio led divisions will be Treasury Business Solutions to be led by Matt young within his remit as CFO, which will be responsible for the delivery of and the continued centralisation of business functions and processes that are common and repeated across the three portfolio divisions: the next evolution of our Global Business Services model we announced a couple of years back.
“Supply Operations, led by Kerrin Petty will be responsible for the growing, sourcing, production and delivery of all our portfolio in all geographies except for the US, which will fall under the responsibility of Treasury Americas, and Ben.
“A streamlined corporate centre, and smaller corporate centre will be responsible for group strategy, culture, capital management and allocation, governance, IT, and stakeholder management.
“We will be transitioning to reporting our business performance, under the new portfolio division from F22 onwards, and we will now progress of pace internally to complete the detailed design and commence the implementation.
“Each of these portfolio divisions, has unique strategic, geographic and consumer characteristics, in addition to distinct growth opportunities, the benefits of which will be enhanced through the focus and accountability that this divisional model will bring.
“We remain absolutely convinced that it will achieve significant benefits by having a standalone and separate focus, while remaining an integral part of Treasury Wine Estates.”
Highlighting the focus for each division, Ford added: “Tom and his team will focus on driving future growth by building the consumer base globally, developing new sales channels in key geographies and by driving the new US and French country of origin portfolios.
“For Treasury Premium Brands, which is primarily comprised of Australian and New Zealand source brands, across all price points and sold in the Australian, New Zealand, EMEA and Asia regions predominantly, the focus for Peter and his team will be to drive top line momentum and a step change profitability, implement our fit for purpose capital base and unleash the potential of a diverse and iconic portfolio of brands through innovation, away from the shadow and competing needs of the Penfolds portfolio.
“We believe the ability to unlock the full potential globally of brands such as Wynns, Pepperjack, Squealing Pig, Seppelt, Wolf Blass and St Huberts The Stag to name a few, must be enhanced with this separation.
“And for Treasury Americas, which stands alone as a primarily US-sourced portfolio of brands sold almost exclusively in the Americas region, Ben and his team will remain focused on finalising the brand portfolio and asset optimisation program that is underway.
“Accelerating the very strong momentum currently behind the premium-focus brand portfolio and finding opportunities to feel key portfolio gaps. But most importantly, staying the course on our previously outlined strategy for this business, which is into a second year of execution now.
“Very importantly the centralised supply chain structure in Australia, New Zealand, and the Treasury Business Solutions divisions will act as a key service provider to these three portfolio divisions. They will leverage the significant opportunities of TWE’s global scale, supply asset base, and our continued drive for best in class process and service efficiency.
“Finally this new operating model, we believe, will only enhance what the existing key elements of the long-term Treasury Wine Estates business case are. Being the attractive category fundamentals across our key markets, the best portfolio of premium wine brands, winning route to market models that are unrivalled in the global wine industry, an unparalleled asset base in key sourcing geographies and a strong and flexible capital structure that will support the continued investment to drive future growth.”
The move to the new corporate structure also means that plans for the de-merger of Penfolds and creating a new ASX-listed company have been put on hold.