Asia booming for Treasury Wine
By James Atkinson
Treasury Wine Estates (TWE) reported earnings growth of 40.6 per cent for the Asian region in its 2011-12 financial results, which the company said demonstrates the region's ongoing importance to its future operations.
TWE said it increased advertising and promotional investment in Asia by 45 per cent over the year, and its plan is to increase investment in fiscal 2013 in order to position its brands for long-term sustainable growth.
"Asia continues to be an exciting growth engine for our business, contributing approximately 20 per cent to TWE’s earnings in fiscal 2012," the company said.
CEO David Dearie said TWE is making significant progress against the priorities it set last year, with net sales revenue per case increasing 1.6 per cent and the company also reducing its cost of doing business.
He said Treasury's reported EBITS of $210.2 million represented growth of 7.7 per cent on a reported currency basis, and 18.6 per cent on a constant currency basis, expanding its EBITS margin by 2.3 percentage points.
"Overall, a solid performance," Dearie said.
In Australia and New Zealand, TWE said its constant currency EBITS growth of 12 per cent for the region was "outstanding", achieved against a tough retail environment.
"An overall reduction in net sales revenue per case was partially driven by the reduced availability of premium wines caused by vintage variability and internally allocating more of these wines to Asia," it said.
"Contributing to this excellent result is an overall reduction in the cost of doing business and price increases across several brands."