Breville Group Limited · ASX:BRG
Breville — Investor Presentation (August 2022)
35 slides from Breville's investor presentation, Aug 23, 2022
Slide 1: Full Year Results – Year Ended 30 June 2022
23 August 2022 ASX Market Announcements Office Australian Securities Exchange 20 Bridge Street Sydney NSW 2000 Full Year Results Investor Presentation – Year Ended 30 June 2022 Attached is a copy of the Breville Group Limited Full Year Results Investor Presentation for the year ended 30 June 2022. T
Slide 2: Full Year FY22 Results
Breville Group Limited (BRG) Full Year FY22 Results Investor Presentation 23rd August 2022
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 and pay respects to the traditional custodians of the land and waters on which we work, the Gadigal People of the Eora Nation, and to their elders, past, present and emerging. We celebrate the continuing contribution of their food culture, and
Slide 5: Group Summary Result
Group Summary Result Solid Year in line with guidance AUDm FY22 FY21 % Chng Commentary Revenue 1,418.4 1,187.7 19.4% • Solid year of sales growth in a dynamic environment. Gross Profit 485.9 413.7 17.5% • Gross margin well managed with Gross margin (%) 34.3% 34.8% Global segment pricing power levera
Slide 6: Segment Results
Segment Results Revenue Gross Profit Gross Margin (%) AUDm FY22 FY21 % Chng FY22 FY21 % Chng FY22 FY21 Global Product 1,178.5 984.2 19.8% 428.7 362.9 18.2% 36.4% 36.9% % Change CC1 18.0% Distribution 239.9 203.5 17.9% 57.2 50.8 12.5% 23.8% 25.0% TOTAL 1,418.4 1,187.7 19.4% 485.9 413.7 17.5% 34.3% 34
Slide 7: 4-year-CAGR of 22.5% more than doubling size of business
Global Product Segment Revenue by Theatre 4-year-CAGR of 22.5% more than doubling size of business Global Product Revenue FY18-FY22 CAGR by Theatre FY22 Global Product Revenue by Theatre 1,179 EMEA APAC 22.5% 295 CAGR 984 APAC Americas 35.6% 24% Americas 257 764 51% CAGR 278 EMEA 170 19.8% 612 25% 2
Slide 8: Global Segment Revenue by Theatre
Global Segment Revenue by Theatre GLOBAL PRODUCT SEGMENT REVENUE AUDm FY22 FY21 % Chng % Chng CC* Americas 605.0 493.0 22.7% 19.4% EMEA 295.1 257.0 14.8% 15.1% APAC 278.4 234.2 18.9% 18.2% TOTAL 1,178.5 984.2 19.8% 18.0% Minor differences may arise due to rounding *CC – Constant Currency All Theatre
Slide 9: Sales gains reinvestment in Growth Drivers well managed
EBIT Bridge FY21 - FY22 Sales gains reinvestment in Growth Drivers well managed -8.3 A$m Gross Margin EBIT Increase -35.8 14.6% 80.5 -16.6 156.4 Increased investment in 136.4 Marketing, R&D, and Technology +20.0 Net sales growth of 19.4% Funds generation Funds invested FY21 Sales Growth GM% Mkting/R
Slide 10: Balance Sheet Normalising
Financial Position at 30 June Balance Sheet Normalising AUDm FY22 FY21 Commentary Inventory1 445.9 216.7 • Core working capital back in line with equilibrium. Trade and other receivables 194.2 119.3 • Supplemented by successful inventory pull Trade and other payables (292.3) (175.8) forward to parti
Slide 11: Key Take Outs from FY22
Key Take Outs from FY22 • Solid performance in dynamic times with consistent strategy and tactical nimbleness doubling the business in 4 years. • 19.4% sales growth in FY22 on prior year growth of 24.7%. • Strength in portfolio diversity - 2H strength in Americas partially offsetting 2H EMEA softnes
Slide 12: How to think about Breville inventory
• How to think about Breville inventory – Is $446m high or low? – Are inventory levels correlated to future gross margins? • 1H23 new products – Aboriginal culinary journey – Continuous new capability release – Additional 1H23 new products 11 11
Slide 13: Is $446M of Inventory High or Low?
Is $446M of Inventory High or Low? For June ‘22—neither—it’s a deliberate choice 1H22 1H23 Dec ’21 Inv $293M Dec ’22 Inv $ X M + 1H22 COGs $516M + 1H23 COGs $ Y M - Jun ’21 Inv $217M - Jun ’22 Inv $446M = Total Landed Jun-Dec $592M = Total Landed Jun-Dec $ Z M While we have de-risked the supply chai
Slide 14: High Season Build Cycle
High Season Build Cycle Illustrative Single Global Product SKU across ANZ, NA, and EU in 2018 Year End 1H Reporting Reporting Manufacturer producing and delivering units in Jul that won’t be sold in until Sep-Oct Units Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 Sell Out 2018 Theoretical Se
Slide 15: CY22 Purchase Pattern vs. CY18
CY22 Purchase Pattern vs. CY18 Illustrative Single Global Product SKU across ANZ, NA, and EU Year End 1H Reporting Reporting CY22 CY18 Logistics Delay & Covid Risk Period Units Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec • Illustrative example of what the purchase pattern would look like if we b
Slide 16: What is the Relationship Between Inventory Levels and Future Gross Margin?
What is the Relationship Between Inventory Levels and Future Gross Margin? There Isn’t What do a hammer, a Rolex, and a coffee machine have in common? All 3 are long-life-cycle, non- seasonal products with seasonal selling patterns. • When was the last time you bought a Rolex at a year-end, 50% off,
Slide 17: Inventory Take Aways
“Inventory” Take Aways • Each year we make a deliberate choice on the amount of product for the Holiday demand spike and the build pattern we will use to produce and land it. • For 1H23, we have intentionally chosen to get the Holiday inventory in our warehouse as quickly as we can to avoid the Chin
Slide 18: How to think about Breville inventory
• How to think about Breville inventory – Is $446m high or low? – Are inventory levels correlated to future gross margins? • 1H23 new products – Aboriginal culinary journey – Continuous new capability release – Additional 1H23 new products 17 17
Slide 19: Limited Release Series
Limited Release Series acj.breville.com All project profits being donated to charities to create opportunities for Indigenous Australians 18 18
Slide 20: Unique Partnership Model
Unique Partnership Model Margo Ngawa Neale Mat Trinca Head of Centre for Director, National Museum Indigenous Knowledge of Australia Yukultji (Nolia) Yalti Warlimpirrnga Lucy Napangati Napangati Tjapaltjarr Simpson Dr Terri Janke Alison Page Solicitor General, Terri Janke Founder, Associates, Expert
Slide 21: Alison Page and Margo Neale
Alison Page Founder, National Aboriginal Design Agency “An Aboriginal Culinary Journey is an ambitious initiative to tell stories of Country using products as canvas”. Margo Neale Senior Indigenous Curator, National Museum of Australia “It’s a really unique and benchmark-setting way of a really soci
Slide 22: Launch Cities FY23
Launch Cities FY23 • London: British Museum, Harrods, Australian High Commission • Berlin: Humboldt Forum, KaDeWe, Australian Embassy • Paris: Musee du Quai Branly, Australian Embassy • Brussels: Art Aborigène Galerie à Brussel, Australian Embassy • New York/Washington DC: Bloomingdales, Australian
Slide 23: How to think about inventory at Breville
• How to think about inventory at Breville – Is $446M high or low? – Are inventory levels correlated to future gross margins? • 1H23 New Products – Aboriginal Culinary Journey – Continuous New Capability Release – Additional 1H23 New Products 22 22
Slide 24: Review: The Joule Oven Air Fryer Pro by Breville
WEAR ED} Review: The Joule Oven Air Fryer Pro by Breville Breville’s new countertop air fryer oven can be controlled by a mobile app. Unlike with many other connected appliances, that’s a good thing. Joule
Slide 25: Solution Products Keep Getting Better
Solution Products Keep Getting Better Hardware Model Solution Model Features and capabilities frozen and locked at launch Guided Joule Voice Cooks Autopilot Activation Tips & Progress Food Tricks Monitoring Guides 24 24
Slide 26: Joule Oven Air Fryer Pro Content Ecosystem
Joule™ Oven Air Fryer Pro Content Ecosystem Launch: March 2022 End of December 2022 115 Recipes ~400 Recipes Chef Series Nik Sharma Claudette Zepeda Gregory Gourdet Eric Adjepong Carla Lalli Music Carolina Gelen Collectively 1.4M Instagram Followers 25 25
Slide 27: How to think about inventory at Breville
• How to think about inventory at Breville – Is $446m high or low? – Are inventory levels correlated to future gross margins? • 1H23 new products – Aboriginal culinary journey – Continuous new capability release – Additional 1H23 new products 26 26
Slide 28: Red Velvet Colour Range
Breville | Sage 92 co) o>) ee (a0) fag Sy = nS Oo © p=) OY = co) > te) o) 4 % BeBeen, sek 27
Slide 29: Barista Express Impress
Barista Express™ Impress Intelligent Dose Assisted Tamping Precision Measurement • Remembers the last dose • Precise 10kg of pressure • Measures and indicates • Central grinds loading for • Barista twist finish correct dose even tamping • Remembers and auto- corrects the next dose 28 28
Slide 30: Espresso Accessories
Espresso Accessories The Dosing Funnel The Puck SuckerTM Patent Pending 29 29
Slide 31: Breville Water
Breville Water • 3L capacity • Instant hot water (select temp and volume) • 3x faster filter flow rate • Filter lasts 3x longer The AquaStationTM The AquaStationTM Hot The Active360TM Filter 30 30
Slide 32: The Elusive Single Grinder
The Elusive Single Grinder Espresso Filter 4 5 6 7 13 14 15 16 17 18 40 Steps Sweet Spot Sweet Spot Espresso Filter 12 14 16 18 20 22 24 80 84 88 92 96 100 270 Steps Sweet Spot Sweet Spot 31 31
Slide 33: Baratza Encore ESP Particle Size
Baratza Encore ESP Espresso Filter 4 6 8 10 12 24 25 26 27 28 29 Sweet Spot Sweet Spot Particle Size Encore Classic Filter range Encore ESP Patent Pending Espresso range 1 Grind Setting 20 40 32 32
Slide 34: FY23 Landscape as of 23rd Aug
FY23 Landscape as of 23rd Aug Headwinds Tailwinds • Ukraine war, impact on Europe • NPD in core categories + Launch v2.0 • Strong USD (Distributors) • New geographies 1 year older • Macro Forces: inflation, central banks • Baratza/Lelit rollout increasing interest rates • Cost declines vs FY22 (logi
Slide 35: Full Year FY22 Results
Breville Group Limited (BRG) Full Year FY22 Results Investor Presentation 23rd August 2022