Treasury Wines reported 1H25 EBITS of $391 million, growth of 35%.  Penfolds price realisation and performance relative to 1H20 are positive signs for future EBITS growth. The Americas is more challenged, but the segment’s earnings growth is likely to be largely driven by the DAOU brand over the next two years. Treasury’s decision not to divest its commercial brands may be financially logical but does raise the question about the potential to realise value in Penfolds if the valuation remains depressed.

Treasury Wines reported FY24 EBITS of $658 million with organic growth of only 4% adjusted for acquisitions and currency. The result showed the importance of the DAOU acquisition to earnings and its increasing focus on the luxury wine segment. Earnings growth in FY25e will half come from the growth of DAOU and a further quarter from Penfolds price rises. The underlying business is likely to have limited growth outside these factors given pressure on wine demand under $15 per bottle.