TWE’s Luxury Surge: $770m Earnings, China Expansion, and CEO Shift

Strong Financial Performance Amid Industry Challenges

Treasury Wine Estates Limited (ASX – TWE) has delivered a compelling fiscal 2025 performance, with revenue climbing 6.5% to nearly $3 billion and net profit attributable to shareholders soaring to $436.9 million. This surge was largely driven by the company’s luxury wine portfolio, notably Penfolds and DAOU Vineyards, which propelled earnings before interest, tax, SGARA, and material items (EBITS) up 17% to $770.3 million. The EBITS margin also improved by 2.2 percentage points to 26.2%, underscoring disciplined cost management and premiumisation strategies.

Strategic Expansion in China and Portfolio Evolution

In a significant move reinforcing its commitment to the Chinese market, TWE acquired a 75% stake in Ningxia Stone & Moon Winery Co. Ltd. This acquisition provides TWE with a scalable production base in the Ningxia region, complementing its existing sourcing arrangements and supporting the growth of its Penfolds China country of origin portfolio. The company’s luxury portfolio now accounts for 85% of total Group EBITS, reflecting a successful transformation over the past five years that includes strategic acquisitions and investments in world-class vineyards and wineries across Australia, the US, France, Italy, and China.

New Operating Model and Leadership Transition

Effective 1 July 2025, TWE implemented a new divisional operating model that sharpens focus on its luxury and premium brands. The luxury divisions, Penfolds and Treasury Americas, are tasked with driving consistent top and bottom-line growth, while the newly formed Treasury Collective division consolidates premium brand portfolios to deliver stability. Complementing this structural evolution, TWE announced a CEO transition with Sam Fischer set to take the helm from 27 October 2025. Fischer brings over 30 years of global experience in alcohol beverages and luxury brands, poised to accelerate TWE’s luxury-led growth strategy.

Capital Management and Shareholder Returns

TWE’s balance sheet remains robust with net debt to EBITDAS improving to 1.9x, comfortably within its target range. The company declared a final dividend of 20 cents per share, 70% franked, bringing the full-year dividend to 40 cents per share, an 11.1% increase over the prior period. Reflecting confidence in the company’s valuation and future prospects, the Board approved an on-market share buyback program of up to $200 million to be executed progressively through FY26.

Sustainability and Innovation Drive Future Growth

TWE continues to lead in sustainability, achieving 100% renewable electricity across global operations and launching a $15 million investment in no- and low-alcohol wine production with a world-first flavour-locking process at its Barossa Valley facility. The company’s sustainability agenda also includes climate adaptation initiatives, such as developing mildew-resistant grapevines in partnership with CSIRO, and maintaining sustainability certification for 98.4% of eligible winery and vineyard sites globally. These efforts align with TWE’s purpose of Boldly Cultivating value for its brands, people, and communities.