First Impression: Treasury Wine Estate (TWE) 1H17

Volume Up 18.7% to 18.7m 9L cases: Aus and NZ: NSR up 1.5% to $322.8m, EBITS up 13.2% to $53.1m. Americas : NSR up 25.6% to $566.3m and EBITS up 75.4% to $90.7m. Europe: NSR up 22.4% to $187.5m and EBITS up 34.3% to $23.1m. Asia: NSR up 38.7% to $218.1m, EBITS up 75.6% to $79m. | Operating cash flow up 22% to $233m in pcp. | Outlook: “The outlook for TWE remains positive, with the Company continuing to deliver against its strategy of transitioning from an agricultural to a brand-led, high performance organisation. Absent significant fluctuations in foreign exchange rates, TWE expects 2H17 EBITS to be broadly in line with 1H17. Beyond F17, TWE is on track to deliver total, run-rate cash synergies recognised from the acquisition of Diageo Wine of US$35m by F20 as well as at least $100m of run-rate COGS savings by F20 driven by the Company’s Supply Chain Optimisation initiative.” | Today’s share price reaction: Down 3.5% to $11.47 (10.29 am).