Treasury Wine has thirst for earnings

TREASURY Wine Estates is hoping to plug the massive profit gap left in its business from the loss of the Chinese market last year following the imposition of 200 per centplus tariffs on the Australian wine sector, and is forecasting a return to high single-digit earnings growth.

The winemaker is also promising greater benefits from a review of its global supply chain and has set out its earnings targets for its key operations across its flagship premium brand Penfolds, commercial wines and its North American business.

Treasury Wine is also targeting net zero emissions by 2030 under an accelerated sustainability program.

In an investor day held on Thursday, the maker of wines such as Penfolds, Wolf Blass and Lindeman’s said it expected fiscal 2021 pre-tax earnings to be in the range of $495m to $515m, ahead of current market consensus expectations

That would represent growth of 33 per cent in the second half compared to the prior corresponding period at the midpoint of the guidance range.

The investor day also fleshed out expansion plans for the iconic Penfolds range, including a release of French grown Penfolds wines in 2023, following on from a recent release of Penfolds wines grown and made in California.

Treasury Wine said over the long-term it was targeting the delivery of sustainable topline growth and high singledigit average earnings growth.

Its long-term financial objectives also include the continued premiumisation of its sales mix and expansion of its group earnings margin.

Earlier this year Treasury Wine unveiled a structural separation, creating new divisions around Penfolds, commercial wines as well as its operations in North America.