Overall TWE have probably outperformed market expectations, driven by good volumes and maintaining a large portion of the China market, despite margins being impacted.
- EBITS down 23% to $284m yoy (pre Covid essentially), but up 70% from 2H20 (during Covid) showing the worst has happened.
- Revenue down only 8% from yoy, EPS down 24% to 24.3c (around 5% annualised earnings yield), DPS down to 15c (around 3% annualised dividend yield)
- Margins declined 3.8% to 20.1%, which is quite substantial – increased competition and looking for markets to move volume, so not surprised, but perhaps more than expected. Driven ROCE down 4.1ppts to 9.5%.
- On a regional level, Asia EBITS down only 28% as found alternative markets for wine headed to China, but margins down 4.9ppts to 38.2%. Americas EBITS down 15% to $83.1m, ANZ EBITS down 12% to $75.3m; EMEA EBITS down 22% to $25m
- China: Export volumes were down much more than value, highlighting that the impact of China’s trade barriers on Penfolds/TWE would be less than previously expected. Results showed this, with China’s EBITS inreasin 103% from 2H20, though still down from 1H21.
- Balance sheet strengthening, with net debt down $403m to $1030m. Inventory reduced, aiding cash flows. No other major changes, with previous emphasis on undervalued assets remaining in place.
- Cash flows are up, driven by reduced inventories, lower CAPEX, less taxes. This enabled debt to be repaid and dividends to continue albeit lower.
- Strategy of premiumisation and separating Penfolds continues, with divestments of non-core brands in US estimated at $300m (good for multiple expansion, not good for total earnings).
- Outlook remains weak into 2H21, though main query is how long will margins remain compressed for? Can’t see improvement until 1H22 at the earliest.
@Bwatson I don't believe that the PE ratios are too high. Arguably for a luxury brand, they are actually quite low when compared with Louis Vuitton / Moet Hennesy around 60; Remy Cointreau around 95; Estee Lauder around 110; etc. Even Diageo which is similar to TWE (alcoholic beverages, mixing premium and basics) is at 62. So if the value of Penfolds (intangible assets, branding names and licenses) is $952m, then splitting that off would make it at least $2bn when conservatively comparing it with it's global peers.
If you would like to see more of my analysis on TWE, I share it on Tw'tter (at)DownunderValue
- Forums
- ASX - By Stock
- TWE
- Ann: 2021 Interim Results Investor and Analyst Presentation
Ann: 2021 Interim Results Investor and Analyst Presentation, page-12
- There are more pages in this discussion • 1 more message in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add TWE (ASX) to my watchlist
(20min delay)
|
|||||
Last
$12.07 |
Change
0.000(0.00%) |
Mkt cap ! $9.793B |
Open | High | Low | Value | Volume |
$12.04 | $12.07 | $11.88 | $29.16M | 2.424M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 2183 | $12.06 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$12.07 | 13862 | 3 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 600 | 12.010 |
1 | 820 | 12.000 |
1 | 3364 | 11.980 |
1 | 1000 | 11.950 |
1 | 200 | 11.880 |
Price($) | Vol. | No. |
---|---|---|
12.080 | 344 | 1 |
12.100 | 2221 | 2 |
12.130 | 5000 | 1 |
12.150 | 2874 | 3 |
12.170 | 3137 | 2 |
Last trade - 16.10pm 07/06/2024 (20 minute delay) ? |
|
|||||
Last
$12.06 |
  |
Change
0.000 ( 0.11 %) |
|||
Open | High | Low | Volume | ||
$12.02 | $12.07 | $11.88 | 397673 | ||
Last updated 15.59pm 07/06/2024 ? |
Featured News
TWE (ASX) Chart |