Breville Group Limited · ASX:BRG
Breville — Macquarie Australia Conference 2018
28 slides from Breville's conference presentation, May 1, 2018
Slide 1: Macquarie Australia Conference 2018
For personal use only Macquarie Australia Conference 2018 Jim Clayton – Chief Executive Officer 1 May 2018
Slide 2: Agenda
For personal use only • Breville Overview • Acceleration Program • Investment Case for Breville • Questions 2
Slide 3: Our Heritage
3 For personal use only Our Heritage
Slide 4: The Breville Business
For personal use only The Breville Business Based on deep consumer insight, Breville innovates to empower people to easily create and share perfect food results. 4
Slide 5: Global Company Headquartered in Australia
For personal use only Global Company Headquartered in Australia ≈75% of EBIT Outside of ANZ 5
Slide 6: Two Business Segments
Two Business Segments Global Product Segment Distribution Segment Breville Designed and Developed 3rd Party Designed and Developed For personal use only Beverage Food Prep Cooking 1H18 1H18 • Revenue growth 20.5% constant currency • Revenue decline of (2.8%) • EBIT margin of 15.0% • EBIT margin of 1
Slide 7: Product Awards
Product Awards 1984 – 2017 2018 85 International 9 Awards and counting: For personal use only Design Awards Barista Touch Precision Brewer Kitchen Wizz Peel & Dice + Juice Fountain Cold XL Creatista Uno 7,000 x 5 star consumer reviews 7
Slide 8: Breville's North Star (Southern Cross)
For personal use only Breville’s North Star (Southern Cross) Vision Help our customers make every food moment a perfect occasion Mission Make the process a pleasure and the end result perfect Design Principles 1. Define the perfect result. Then personalise it. 2. Innovate to simplify. Better. Faster
Slide 9: Agenda
For personal use only • Breville Overview • Acceleration Program • Investment Case for Breville • Questions 9
Slide 10: Align the Value Chain To Accelerate
Align the Value Chain To Accelerate From … For personal use only Manufacturing Partners Channel Partners Breville To … Pre & Post Purchase Support Manufacturing Channel Breville Partners Partners Supply Chain Alignment and Visibility Go-To-Market Alignment 10
Slide 11: Growth Acceleration Framework
For personal use only Growth Acceleration Framework More Larger Product Market Acceleration Program Trajectory EBIT Scalable, Acceleration Platform Historical Trajectory Growth-oriented Business Model Time 11
Slide 12: Accelerating New Product Introduction
For personal use only Accelerating New Product Introduction More Product Development Product Investment Process Acquisitions Strategy Level Innovation • Shorten development • Prioritisation • Making progress • Minimal to date, cycles matrix each year, heading though plenty of • Offshore • Common des
Slide 13: Evolving Development Process
For personal use only Evolving Development Process Global Product Development Process Offshore Development Global Product Innovation Centre, Sydney Centre, China • Product brief Innovation Range Extension Traditional Process • Quality Assurance Acceleration Process Acceleration 1 Designer, 1 Enginee
Slide 14: FY15 Beverage Category: Coffee
FY15 Beverage Category: “Coffee” Best For personal use only Better Good 14
Slide 15: FY18 Coffee – Best, Best, Best
FY18 “Coffee” – Best, Best, Best Drip Coffee Automatic Espresso Manual Espresso Capsule Espresso For personal use only 15
Slide 16: Common Design Language
For personal use only Common Design Language 16
Slide 17: Growing the Addressable Market
For personal use only Growing the Addressable Market Larger Market GTM Channel Geographic Category Effectiveness Expansion Expansion Expansion • “Launching” new • Maintaining • Expanding direct • Capsule Coffee - products premium position go-to-market Creatista • Investing to support • Minor expansi
Slide 18: Expanding Geographically
For personal use only Expanding Geographically Germany Austria 18
Slide 19: Improving In-Store Execution
For personal use only Improving In-Store Execution MediaMarkt, Dusseldorf Bloomingdales, Los Angeles Best Buy, USA David Jones, Sydney 19
Slide 20: Launching Products (Oracle Touch)
“Launching” Products (Oracle Touch) Social / Digital Retail Influencer / Media For personal use only Breville’s Newest Espresso Machine is Like a Personal Barista The Easiest Way to Make the Best-Tasting Espresso Over 15 million impressions at Home “Its latest coup Video / YouTube is in the automati
Slide 21: Upgrading Digital Experience
Upgrading Digital Experience Visual Differences consumers asked, so we delivered For personal use only • Compare functionality to summarise difference between the products • Filter option to help consumers find a product that fits their exact need • Product DNA which summarises the product benefits
Slide 22: Building a Platform Capable of Supporting Acceleration
Building a Platform Capable of Supporting Acceleration Scalable, For personal use only Acceleration Platform Sales & Global Structure Operations Supply Chain Systems Planning • Centralised org • Forward-managing • Consolidation • System-wide model product flow across warehouse replatforming to • Glo
Slide 23: Global Supply Chain Infrastructure
Global Supply Chain Infrastructure China For personal use only North America Europe • 8 warehouse locations • 1 consolidation warehouse ANZ 23
Slide 24: Migrating to a Growth-Oriented Business Model
Migrating to a Growth-Oriented Business Model FY16 Target Bus. Model For personal use only Net Sales 100.0% Net Sales 100.0% Marketing / 8.5% Marketing / ≈12.0% R&D% R&D% EBIT% 12.8% EBIT% ≈12.0-13.0% Continuing to make progress toward target business model: FY16 FY17 FY18 8.5% 9.5% ≈10.5% But, not
Slide 25: Agenda
For personal use only • Breville Overview • Acceleration Program • Investment Case for Breville • Questions 25
Slide 26: Diversified Growth Portfolio
Diversified Growth Portfolio “Sell in” to Commercialise For personal use only “Sell Out” Existing Geographic Innovations Expansion Breakthrough Innovation Acquisitions • Breville does not suffer for growth opportunities e • Each path has a different mix of product and execution risk • Timing profile
Slide 27: Breville Investment Case
Breville Investment Case • Historical track record of successful innovation-driven products For personal use only • Premium positioning in the SDA Market (more defensible) • Global exposure beyond ANZ • Significant market size in front of Breville (room to grow) • Debt-free balance sheet providing d
Slide 28: Q&A
28 For personal use only Q&A