Breville Group Limited · ASX:BRG
Breville — H1 FY2018 Earnings Presentation
17 slides from Breville's earnings presentation, Feb 15, 2018
Slide 1: Half Year Ended 31 December 2017 Investor Presentation (ASX cover letter)
1 15 February 2018 For personal use only M Manager, Compa any Announcem ments, A Australian Securrities Exchange Limited, L 2 20 Bridge Street, S Sydney NSW 20 000 H d 31 December 2017 Half Year Ended In nvestor Presen ntation A Attached is a cop py of the Breville e Group Limited Investor Presen nt
Slide 2: Half Year Results FY18 Investor Presentation
Breville Group Limited For personal use only HALF YEAR RESULTS FY18 INVESTOR PRESENTATION February 2018
Slide 3: Group Summary Result
Group Summary Result Key points For personal use only AUDm 1H18 1H17 % Chng Revenue 385.4 339.2 13.6% Group revenue 13.6% higher, driven by global segment growth EBITDA 61.5 54.2 13.4% EBIT growth trend continues, increasing 12.3% (1H17: 6.7% increase) EBIT 55.2 49.1 12.3% EBIT margin steady a
Slide 4: Segment Results
Segment Results REVENUE EBIT EBIT MARGIN (%) For personal use only AUDm 1H18 1H17 % Chng 1H18 1H17 % Chng 1H18 1H17 Global Product 313.2 264.8 18.3% 46.8 45.9 2.1% 15.0% 17.3% % Change CC* 20.5% Distribution 72.2 74.3 (2.8%) 8.4 3.3 156.5% 11.6% 4.4% TOTAL 385.4 339.2 13.6% 55.2 49.1 12.3% 14.3% 14.
Slide 5: Segment Results cont'd
Segment Results cont’d GLOBAL PRODUCT SEGMENT REVENUE For personal use only AUDm 1H18 1H17 % Chng $A % Chng *CC North America 191.2 159.4 20.0% 22.7% Australia and 68.7 63.3 8.5% 9.3% New Zealand (ANZ) Rest of World 53.3 42.1 26.4% 29.5% TOTAL 313.2 264.8 18.3% 20.5% Minor differences may arise due
Slide 6: Financial Position at December
Financial Position at 31 December For personal use only Key points AUDm 1H18 1H17 • Inventory: Flat to FY17 of $116.6m (post North Inventory 116.3 91.8 America Nespresso load in and change in inventory purchase pattern) Receivables 171.3 158.4 • Receivables: Q2 sales driving increase Trade and other
Slide 7: USA Tax Changes
USA Tax Changes • The impact of the US federal corporate tax rate reduction to 21%, effective 1 January 2018, For personal use only resulted in the use of a blended US federal corporate tax rate in the current half year • Tax expense in the half year was adversely impacted by a $1.6m one-off reducti
Slide 8: Distribution Turnaround Progressing
Distribution Turnaround Progressing For personal use only AUDm 1H17 2H17 FY17 1H18 % Change Revenue 74.3 61.9 136.2 72.2 (2.8%) EBIT 3.3 3.3 6.6 8.4 156.5% • Distribution Segment now a positive contributor to the acceleration agenda • Delivered more EBIT in 1H18 than entire year for FY17 • 1H EBIT m
Slide 9: Offshore Development Centre
Offshore Development Centre [Product] For personal use only Global Product Development Process Offshore Development Global Product Innovation Centre, Sydney Centre, China • Product brief Innovation Acceleration Traditional Process • Quality Assurance Range Extension Process 1 Designer, 1 Engineer Ac
Slide 10: Expanding Creatista Range
Expanding Creatista® Range [Product] For personal use only Creatista® Uno Creatista® Plus Creatista® Launching the newest member of the Creatista® product family in the 2H18 – 1H19 9
Slide 11: Retailer Investment Continues
Retailer Investment Continues [Market] For personal use only Bloomingdales Best Buy Recent build out in Los Angeles End cap displays expanding to 440 Doors 10
Slide 12: Content Engine Turning
Content Engine Turning [Market] For personal use only Barista Touch Precision Brewer Sous Chef – Peel & Dice Smart Oven Air 3.0 million views 2.4 million views 240 thousand views 7.2 million views 11
Slide 13: Sage Expanding in Europe
Sage Expanding in Europe [Market] For personal use only • Sage launching in Germany and Austria 2H18 • 2nd European Direct Market • Launching European Sage products (same products for Sage distribution partners) • Largest coffee market in Europe • Team on the ground, channels aligned, products on th
Slide 14: Scalability Improving
Scalability Improving [Platform] • Continuing to add expertise to the team: For personal use only Organisation – Global Logistics: Cisco / Belkin – Global Quality: Siemens/Bosch – General Counsel: IBM / Novell – GM Germany: Electrolux MD for Germany/Austria (AEG) – GM New Zealand: Sony • S&OP proces
Slide 15: Acceleration Program Performance
Acceleration Program Performance For personal use only AUDm Dec 17 Jun 17 Inventory Inventory as % of cost of sales* 27.5% 28.9% (excluding Nespresso North America, Aquaport, and Nestlé® Dolce Gusto®)** BRG Inventory as % of cost of sales* 30.7% 32.0% * Cost of sales on a trailing twelve month basis
Slide 16: 2H18 Considerations
2H18 Considerations For personal use only Global Segment Regional Performance • North America and UK cycled strong new products in the 1H18 without prior year comparatives. Both will begin comping against prior year performance in 2H18 • ROW will lose Germany/Austria distribution revenue (prior year
Slide 17: Outlook
Outlook • The Board and management are encouraged by the first half performance as well as the For personal use only progress of the acceleration program • Assuming no significant change in economic conditions in the Group’s major trading markets, we expect the EBIT growth rate for the full year of