Treasury Wine Estates : Appendix 4D - 2016 Interim Results 18 February 2016

f36c6c59-c291-4d7d-874e-7963f08f8910.pdf Appendix 4D Treasury Wine Estates Limited For the half year ended 31 December 2015 ABN 24 004 373 862

1. Results for announcement to the market

   
   

   Key information	Half year ended 31 December 2015 $m	Half year ended 31 December 2014 $m	% Change increase / (decrease)	Amount increase / (decrease) $m
   Revenue from ordinary activities	1,138.0	935.7	22 %	202.3
   Net profit attributable to members of Treasury Wine Estates Limited	60.6	42.6	42 %	18.0
   Earnings before interest, tax, SGARA and material items	146.8	85.2	72 %	61.6

   
   

   Earnings per share	Half year ended 31 December 2015 Cents per share	Half year ended 31 December 2014 Cents per share
   Basic earnings per share Basic earnings per share, adjusted to exclude SGARA and material items	8.8 14.0	6.4 7.6

   
   

2. Dividends

   
   

   The Directors declared an interim dividend of 8 cents per share in respect of the half year ended 31 December 2015 on 18 February 2016. Accordingly this dividend is not provided for in the balance sheet as at 31 December 2015. The record date for determining an entitlement to receipt of the interim dividend is 5pm, 9 March 2016 and the dividend is expected to be paid on 8 April 2016.

   
   

   
   

   Dividends (distributions)	Cents per share	Franking %
   Interim dividend - half year ended 31 December 2015 (determined subsequent to balance date)1 Final dividend - year ended 30 June 2015 Interim dividend - half year ended 31 December 2014	8.0 cents 8.0 cents 6.0 cents	unfranked unfranked unfranked

   1 Non-resident withholding tax is payable on the unfranked component of this dividend as the conduit foreign income component for the period is declared to be nil.

   
   

   The Dividend Reinvestment Plan (DRP) continues to be suspended with respect to the interim dividend for the financial year 2016.

3. Financial statements

   
   

   Please refer to pages 1 through 22 of this report wherein the following are provided:

   
   

   • Directors' report;

   • Auditor's independence declaration;

   • Consolidated statement of profit or loss and other comprehensive income for the half year ended 31 December 2015;

   • Consolidated statement of financial position as at 31 December 2015;

   • Consolidated statement of changes in equity for the half year ended 31 December 2015;

   • Consolidated statement of cash flows for the half year ended 31 December 2015;

   • Notes to the consolidated financial statements;

   • Director's Declaration; and

   • Independent auditor's review report for the half year ended 31 December 2015.

     
     

4. Net tangible assets

   
   

   Net tangible asset backing per ordinary share Net tangible asset backing per ordinary share	Half year ended 31 December 2015 $	Half year ended 31 December 2014 $
   	3.79	3.39

   
   

   
   

5. Associates and joint ventures

   
   

   Investments in Associates and Joint Ventures	Half year	Year
   	ended	ended
   	31 December	30 June
   	2015	2015
   	$m	$m
   Investments accounted for using the equity method	2.3	2.3
   Investments in associates and joint venture partnerships are accounted for in the consolidated financial statements using the equity method of accounting. The Group holds a 50% investment in Fiddlesticks LLC, a company incorporated in the United States of America. The percentage ownership at 31 December 2015 is consistent with the prior period.

   
   

6. Further information

Additional Appendix 4D disclosure requirements can be found in the notes to our half-year financial report, the half-year Directors' Report and the ASX announcement lodged with this document.

Further information can be obtained from:

Media:

Roger Sharp

Tel: +61 3 8533 3786

Mob: +61 458 883 599

Investors:

Jane Betts

Tel: + 61 3 8533 3493

Mob: +61 437 965 620

Treasury Wine Estates Limited

Directors' report For the half year ended 31 December 2015

The Directors present their report on the consolidated entity ("the Group") comprising Treasury Wine Estates Limited ("the Company") and the entities it controlled at the end of, or during, the half year ended 31 December 2015.

DIRECTORS

The members of the Board of Directors of Treasury Wine Estates Limited who held office during the half year are noted below and as at the date of this report are as follows:

Paul Rayner (Chairman) Michael Clarke (CEO) Warwick Every-Burns Lyndsey Cattermole Peter Hearl

Garry Hounsell Ed Chan Michael Cheek

PRINCIPAL ACTIVITIES

The principal activities of the Group during the period involved the production, marketing and sale of wine.

OPERATING AND FINANCIAL REVIEW

Financial information in the Operating and Financial Review is based on the reviewed financial statements. Non-IFRS measures have not been subject to audit or review. The non-IFRS measures are used internally by management to assess the performance of our business and make decisions on the allocation of our resources.

A full review of operations of the Group during the half year is contained in the Australian Stock Exchange announcement dated 18 February 2016.

Throughout this review, constant currency assumes current and prior period earnings of foreign operations are translated and cross border transactions are transacted at current year exchange rates.

For the six months ended 31 December 2015, total volume was 15.8 million cases, up 0.7 million cases or 5 percent on the prior corresponding period ("PCP"). Net sales revenue increased 22 percent on a reported basis to $1,079.4 million (or 11 percent on a constant currency basis).

Net sales revenue per case on a constant currency basis is $68.38, an increase of $3.92 on the PCP.

Cost of goods sold (COGS) increased 15 percent (or 7 percent on a constant currency basis). COGS per case on a constant currency basis is $46.48, an increase of $1.03 on the PCP.

Treasury Wine Estates Limited

Directors' report For the half year ended 31 December 2015 (continued)

Cost of doing business (gross profit less earnings before interest, tax, material items and SGARA) increased to $257.5 million up 10 percent on a constant currency basis, driven by continued investment in marketing across all regions.

Cost of doing business margin is consistent with the PCP at 24 percent on a constant currency basis (December 2014: 24 percent).

EBITS before material items of $146.8 million is up 72 percent on a reported basis. On a constant currency basis, EBITS increased 37 percent.

The movement in SGARA (Australian Accounting Standard AASB 141) was $14.8m in the first half of fiscal 2016, with a favourable SGARA result in Australia and New Zealand ($3.4m) and an unfavourable SGARA result in the U.S.A. ($18.2m).

Net profit after tax attributable to members of Treasury Wine Estates Limited for the six months ending 31 December 2015 was $60.6 million, and reported EPS was 8.8 cents per share.

EVENTS SUBSEQUENT TO REPORTING DATE

The following events have occurred subsequent to 31 December 2015:

1. On 1 January 2016, the Company acquired all of the ordinary shares of Diageo Chateau

   & Estates ("DC&E"), a Company incorporated in the United States of America. This included the acquisition of related assets in the United Kingdom. The cash consideration of $798.1 million was funded by a combination of cash resources generated from the issue of shares during the period and utilising the Group's debt facilities.

   
   

   DC&E is a leader in the US Luxury and Masstige wine market, being the owner of a collection of iconic wine brands based in Napa, California. Additionally, DC&E has a strong market presence in the Commercial wine market in the United Kingdom.

   
   

2. The Board declared an interim dividend of 8 cents per share on 18 February 2016.

SHARES

The movement in share capital from 30 June 2015 is set out below:

Number of shares (million)
Balance at 30 June 2015 Issue of shares during the period Balance at 31 December 2015	651.3 86.8
	738.1

DIVIDENDS

A final dividend in respect of the year ended 30 June 2015 of $52.1 million (representing a dividend of 8 cents per ordinary share) was paid in October 2015. This dividend was unfranked.