Breville Group Limited · ASX:BRG
Breville — Investor Presentation (February 2023)
27 slides from Breville's investor presentation, Feb 14, 2023
Slide 1: Breville Group Limited – Half Year Ended 31 December 2022
14 February 2023 ASX Market Announcements Office Australian Securities Exchange 20 Bridge Street Sydney NSW 2000 Breville Group Limited – Half Year Ended 31 December 2022 Investor Presentation Attached is a copy of the Breville Group Limited Investor Presentation for the Half Year Ended 31 December
Slide 2: Breville Group Limited (BRG) Half Year Results FY23
Breville Group Limited (BRG) HALF YEAR RESULTS FY23 Investor Presentation 14th February 2023 Master Every Moment
Slide 3: Disclaimer
Disclaimer To the extent this Presentation contains any forward-looking statements, such statements are not guarantees of future performance and involve known and unknown risks and uncertainties and other factors, many of which are beyond the control of Breville, its Directors and management, and in
Slide 4: Acknowledgement of Country
Acknowledgement of Country We would like to acknowledge the traditional custodians on whose land we meet today. We would like to pay respect to their Elders: past and present; and further extend that respect to all Aboriginal and Torres Straight Islanders present here today. We celebrate the continu
Slide 5: Group Summary Result
Group Summary Result AUDm 1H23 1H22 % Chng Commentary Revenue 888.0 878.7 1.1% • Sustained EBIT growth against dynamic backdrop Gross Profit 311.3 300.0 3.8% • Another record sales half with revenue Gross margin (%) 35.1% 34.1% growing 1.1% and relative Theatre performances in line with expectation
Slide 6: Segment Results
Segment Results Revenue Gross Profit Gross Margin (%) AUDm 1H23 1H22 % Chng 1H23 1H22 % Chng 1H23 1H22 Global Product 770.5 733.9 5.0% 284.8 266.6 6.8% 37.0% 36.3% % Change CC1 0.7% Distribution 117.5 144.7 (18.8)% 26.4 33.4 (20.7)% 22.5% 23.0% TOTAL 888.0 878.7 1.1% 311.3 300.0 3.8% 35.1% 34.1% Min
Slide 7: Global Product Segment by Theatre
Global Product Segment by Theatre GLOBAL PRODUCT SEGMENT REVENUE AUDm 1H23 1H22 % Chng % Chng CC* Americas 450.7 370.1 21.8% 11.9% APAC 163.2 162.7 0.3% 0.4% EMEA 156.6 201.1 (22.2)% (19.6)% TOTAL 770.5 733.9 5.0% 0.7% Minor differences may arise due to rounding *CC – Constant Currency Commentary Am
Slide 8: Global Product Segment Revenue - Constant Currency
Global Product Segment Revenue - Constant Currency 6 Year CAGR Global Product Segment 1% +18% Revenue in constant currency A$m 729 734 EMEA 31% 664 162 +27% APAC 590 201 Trend line Americas 144 163 +15% 16% 424 163 353 93 133 324 60 271 51 89 38 81 75 69 409 +16% 366 312 212 242 198 164 1H 17 1H 18
Slide 9: Gross Profit Strengthened 1H22 – 1H23
Gross Profit Strengthened 1H22 – 1H23 35.1% A$m 311.3 34.1% 300.0 3.2 -16.2 38.6 -6.2 -5.9 -4.8 2.6 1H22 GM$ Sales FOB Freight Forex Promo mix Price 1H23 GM$ Commentary • Gross margin well managed against complex backdrop with GM% improving 100bps year-on-year • Continued input inflation in FOB and
Slide 10: EBIT Growth 1H22 – 1H23
EBIT Growth 1H22 – 1H23 A$m 13.6% EBIT % 12.8% -0.3 -2.4 121.1 8.1 EBIT 112.5 3.2 +8.6 Increase 7.6% 1H22 EBIT Sales Growth GM% Marketing/R&D/ Other Overhead 1H23 EBIT Technology Commentary • Well managed half with Opex contained to sustain EBIT growth • Marketing and IT projects adjusted to align w
Slide 11: Financial Position at 31 December
Financial Position at 31 December Commentary AUDm Dec 22 Dec 21 • December ‘22 inventory within plan range Inventory 465.2 293.3 o Core increase +$66m driven by increase in weeks cover (to mitigate Receivables 388.8 375.4 supply chain risk), unit cost increases, and lower EMEA sell-in o NPD drives +
Slide 12: Key Points 1H23
Key Points 1H23 • Another record sales performance and well controlled result with sustained EBIT growth against volatile backdrop • Strong performance from NPD and DTC channel globally, as well as new countries, support medium-term growth trajectory • Oven and coffee growth benefitting from quality
Slide 13: Product Launch v2.0
• Product Launch v2.0 • Breville as “Virtual IP/Information Management Company” • 1H23 Reflections, 2H23 Considerations and FY23 Outlook 12
Slide 14: Launch v1.0 vs. v2.0
Launch v1.0 vs. v2.0 Barista ProTM Barista ExpressTM Impress A$1,099 A$1,199 Launch v1.0 Launch v2.0 13
Slide 15: Time to Full Distribution
Time to Full Distribution • Launch v2.0 process was 3 months faster to total distribution • Equally important, the “retailer rollout” process of v1.0 meant there was no “launch date” for the country, limiting the ability of GTM and local retailers to get behind the product at the same time • For v2.
Slide 16: Sell-Out Shows the Impact: Single Country
Sell-Out Shows the Impact: Single Country Launch week anchored, 4-week trailing average Holiday Period Barista Express Impress Barista Pro 2 Yr Run Rate Barista Pro 1 Yr Run Rate Wk1 Wk3 Wk5 Wk7 Wk9 Wk11 Wk13 Wk15 Wk17 Wk19 Wk21 Wk23 Wk25 Wk27 Wk29 Wk31 Wk33 Wk35 Wk37 Wk39 Wk41 Wk43 Wk45 Wk47 Wk49 W
Slide 17: Sell-Out Shows the Impact: Aggregate BRG View
Sell-Out Shows the Impact: Aggregate BRG View Launch week anchored, 4-week trailing average CA EU US 8.5x UK NZ CA EU AU UK AU NZ US Wk1 Wk2 Wk3 Wk4 Wk5 Wk6 Wk7 Wk8 Wk9 Wk10 Wk11 Wk12 Wk13 Wk14 Wk15 Wk16 Wk17 Wk18 Wk19 Wk20 Wk21 Wk22 Wk23 Wk24 Wk25 Wk26 Wk27 Wk28 Wk29 Wk30 Wk31 Wk32 Wk33 Wk34 Wk35 W
Slide 18: Sell-Out Shows the Impact: Aggregate BRG View
Sell-Out Shows the Impact: Aggregate BRG View Calendar week anchored, 4-week trailing average Wk35 4.5x CA 2.4x EU US UK UK CA EU AU NZ US NZ AU Barista Pro Barista Impress • Anchoring the analysis to the calendar week will ensure the comparison is not affected by seasonality impacts, though the Bar
Slide 19: Breville as Virtual IP/Information Management Company
• Product Launch v2.0 • Breville as “Virtual IP/Information Management Company” • 1H23 Reflections, 2H23 Considerations and FY23 Outlook 18
Slide 20: Breville in Abstraction
Breville in Abstraction Virtual Intellectual Global Small Property & Domestic Appliance Information Company Management Company BRG 19
Slide 21: BRG is a Virtual IP Company
BRG is a “Virtual” IP Company* Information management / alignment ~ 2,300 Retailers/Distributors* ~ 1,800 Products Manufacturers* Dom. Carriers Carriers Centre* Financial 3PLs ~ 100 ~ 30 ~ 10 ~ 15 ~ 15 Svs Results IP creation, BRG GTM & management 3rd Parties • We are an asset light company that (i)
Slide 22: Advantages of Virtualisation
Advantages of Virtualisation 1. Speed – Because we are not constrained by physical assets, we are able to move quickly, whether that be entering a new country or assimilating an acquisition 2. Agility – in a dynamic environment, we can more quickly realign the value chain to capture opportunities an
Slide 23: 1H23 Reflections, 2H23 Considerations and FY23 Outlook
• Product Launch v2.0 • Breville as “Virtual IP/Information Management Company” • 1H23 Reflections, 2H23 Considerations and FY23 Outlook 22
Slide 24: 1H23 Reflections
1H23 Reflections Looks like we’re back “on model”: Theatres behaved as expected on relative basis; Predictability consumer sell-out pattern normal (e.g., 1H19); and supply chain more predictable, enabling us to transition back to inventory flow model, releasing working capital. Acceleration levers o
Slide 25: 2H23 Considerations
2H23 Considerations • Some of our manufacturers are managing through COVID outbreaks. Our inventory insurance policy has shielded us from any material impacts. • With the exception of the COVID outbreak in China, which we expect to be a temporary disruption, the supply chain is behaving more predict
Slide 26: FY23 Outlook
FY23 Outlook We expect EBIT for the full year of between $165M - $172M (5-10% growth) assuming: • No significant change in economic conditions in the Group’s major trading markets; • No material supply chain interruptions; and, • Taking into account our expected 2H investment levels into marketing,
Slide 27: Breville Group Limited (BRG)
Breville Group Limited (BRG) HALF YEAR RESULTS FY23 Investor Presentation 14th February 2023 Master Every Moment
Breville Group — Investor Presentation (February 2023) on 6ix