Breville Group Limited · ASX:BRG
Breville — Macquarie Investor Conference 2023
32 slides from Breville's conference presentation, May 2, 2023
Slide 1: Macquarie Investor Conference 2023 - Presentation
2 May 2023 ASX Market Announcements Office, For personal use only Australian Securities Exchange, 20 Bridge Street, Sydney NSW 2000 MACQUARIE INVESTOR CONFERENCE 2023 - PRESENTATION Attached is a copy of the Breville Group Limited’s presentation at the Macquarie Investor Conference 2023, to be held
Slide 2: Macquarie Investor Conference Presentation
Breville Group Limited (BRG) Macquarie Investor For personal use only Conference Presentation 3rd May 2023 Master Every Moment
Slide 3: Disclaimer
Disclaimer To the extent this Presentation contains any forward-looking statements, such statements are not For personal use only 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
Slide 4: Acknowledgement of Country
For personal use only 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
Slide 5: In Search of Alpha
For personal use only In Search of alpha (ά) • Presentation Context • Phase 1 (FY16-FY18 …) • Phase 2 (FY19 - • Phase 3 (FY24 – • Closing Commentary 4
Slide 6: Investor Focused Presentation
Investor Focused Presentation • Presentation is intentionally tuned to what I believe a long- term investor should consider when contemplating going in For personal use only or out of Breville. • I’m going to focus on the transformation phases the company has been through, and the one it is beginnin
Slide 7: In Search of Alpha
For personal use only In Search of alpha (ά) • Presentation Context • Phase 1 (FY16-FY18 …) • Phase 2 (FY19 - • Phase 3 (FY24 – • Closing Commentary 6
Slide 8: Phase 1: Starting Point (2015)
Phase 1: Starting Point (2015) Independently United States Australia UK Canada New Zealand Managed by Country Marketing For personal use only • • IT • Back Office • Supply Chain/Ops • Customer Service China BRG Global Shared Service • R&D • Brand Management • Consolidation / Reporting • Countries we
Slide 9: Phase 1: Replatform & Realign
Phase 1: Replatform & Realign Centralised, Global Functions • R&D • Marketing • Finance/Legal/HR • Supply Chain/Operations • Customer Support • Technology Services Service For personal use only • Single, global technology platform Single, global supply chain United States Australia UK Canada New Zea
Slide 10: Phase 1: Transform Business Model
For personal use only Phase 1: Transform Business Model Image from Macquarie Investor Conference Presentation, May 2017 To be a long-term sustainable innovation-driven product company, Breville needed to evolve its business model to invest a materially higher percentage of its Opex into marketing an
Slide 11: Phase 1 Investor Alpha: Total Shareholder Return
Phase 1 Investor alpha (ά) • Holding Company • Single Company • 5 Countries • 5 Sales Regions • 8% NS on engine Total Shareholder Return • 10.5% NS on engine January 2016 – June 2018* 210 For personal use only 190 91% Total shareholder return (rebased to 100) 170 53% 150 51% 42% 130 110 90 70 May-16
Slide 12: In Search of Alpha
For personal use only In Search of alpha (ά) • Presentation Context • Phase 1 (FY16-FY18 …) • Phase 2 (FY19 - • Phase 3 (FY24 – • Closing Commentary 11
Slide 13: Phase 2: Addressing the Addressable Market
Phase 2: Addressing the Addressable Market July 13, 2020 For personal use only ~70% revenue potential unaddressed United States Australia UK Canada New Zealand Single, global technology platform Phase 1: Increasing Investment into R&D, Marketing and Tech Services 12
Slide 14: Phase 2: Addressing the Addressable Market
For personal use only Phase 2: Addressing the Addressable Market Western Europe & Nordics South Korea Mexico (15 incremental countries) United States Australia UK Canada New Zealand Phase 1: Increasing Investment into R&D, Marketing and Tech Services In Phase 2, we have entered 17 countries with a d
Slide 15: Phase 1 + Phase 2 Combined: Reinforcing Loop of Innovation-Driven Growth
Phase 1 + Phase 2 Combined: Reinforcing Loop of Innovation-Driven Growth Marketing Increase Investment For personal use only & Tech Accelerate Revenue Services Inorganic R&D R Increase Investment Increase Revenue Geography Increase Geographic Footprint Accelerate Revenue Marketing & R&D Efficiency 1
Slide 16: Phase 2 Investor Period-to-Date Alpha
Phase 2 Investor Period-to-Date Alpha (ά) 22 Sales Regions “Global” Company • • Single Platform • • 5 Sales 350 Regions Total Shareholder Return • 12%+ NS on engine • 10.5% NS on engine July 2018 – April 28, 2023* • 3 Acquisitions For personal use only 300 Total shareholder return (rebased to 100) 2
Slide 17: In Search of Alpha
For personal use only In Search of alpha (ά) • Presentation Context • Phase 1 (FY16-FY18 …) • Phase 2 (FY19 - • Phase 3 (FY24 – • Closing Commentary 16
Slide 18: Phase 3: Forward Integrating into Solutions
Phase 3: Forward Integrating into Solutions Phase 3 • Forward integrating into a For personal use only Solutions Company • Geographic expansion Phase 2 • Optimising Marketing • Restructuring and replatforming into a “global” company Phase 1 • Accelerated investment into R&D, Marketing and Tech Servi
Slide 19: Executing Two Solution Plays: Coffee and Cooking
For personal use only Executing Two Solution Plays Coffee Cooking 18
Slide 20: What You Get vs. What You Want
What You Get vs. What You Want What You Get What You Want For personal use only Frustration and Failure Do we sell products, or do we sell problems? 19
Slide 21: Unfortunately, It's Not Simply a Hardware Problem
Unfortunately, It’s Not Simply a Hardware Problem Local, “farm to Service platform table”, perishable for training new product with wide customers range of flavour For personal use only profiles (like wine) Machine capable Espresso tools for of delivering café- dialing in a shot quality coffee Getti
Slide 22: This Solution Arch Is Not For the Faint of Heart
This Solution Arch Is Not For the Faint of Heart Smartphone Case Study Executed The Transition Failed To Execute The Transition For personal use only New Breville Board Members Tim Baxter • Samsung, CEO North America • Sony America, SVP Strategic Marketing Tuula Rytila • Microsoft, Corp VP Digital S
Slide 23: BRG's Café Quality Coffee at Home Solution is Live
For personal use only BRG’s Café Quality Coffee at Home Solution is Live Breville.com Retail Partners BRG has cleared the toughest/riskiest phase of this transition. Our solutions are live, meaning we have successfully woven divergent capabilities into the company. 22
Slide 24: Beanz.com: Solving the Coffee Problem
Beanz.com: Solving the “Coffee” Problem UK For personal use only 21 Roasters 71 Coffees US 47 Roasters 192 Coffees AU 18 Roasters 67 Coffees Beanz is a single, localised ecosystem platform running in multiple countries. 23
Slide 25: Coffee Solution is not Hardware Dependent
For personal use only Coffee Solution is not Hardware Dependent No matter which machine a consumer chooses, they still need the same incremental components to make café quality coffee at home: beans, accessories, and training. 24
Slide 26: With New Products, Solution Extends the Value
With New Products, “Solution” Extends the Value Barista Barista Express® TouchTM Impress Impress For personal use only Non-Solution Market: Launch Process v2.0 Solution Market: Launch Process v2.5 • Launch in all retailers, all doors at the • Launch in all retailers, all doors at the same time same
Slide 27: Snapshot of Phase Progression & Runway
Snapshot of Phase Progression & Runway • Core “global” structure and platform is complete. Now it’s about Phase 1 increasing efficiency and effectiveness of global execution. • Continued investment into R&D, Marketing, and Technology Services For personal use only drive acceleration. • Productisatio
Slide 28: Why Does this Matter?
Why Does this Matter? • Companies that successfully deliver solutions that consumers value outperform For personal use only • It ultimately changes the basis of competition in the category • A manufacturer or competitor can copy hardware, but copying a solution is infinitely more difficult • Ultimat
Slide 29: In Search of Alpha
For personal use only In Search of alpha (ά) • Presentation Context • Phase 1 (FY16-FY18 …) • Phase 2 (FY19 - • Phase 3 (FY24 – • Closing Commentary 28
Slide 30: 2H23 New Products
For personal use only 2H23 New Products Barista Touch Impress (v2.0) Vertuo Creatista (v2.0) Joule Turbo (v1.0) … We also make great products. 29
Slide 31: FY23 Outlook: Maintaining Guidance
FY23 Outlook: Maintaining Guidance We reiterate and maintain our previous guidance For personal use only for the fiscal year. We expect EBIT for the full year of between $165M - $172M (5-10% growth). 30
Slide 32: Macquarie Investor Conference Presentation
Breville Group Limited (BRG) Macquarie Investor For personal use only Conference Presentation 3rd May 2023 Master Every Moment