Breville Group Limited · ASX:BRG
Breville — Macquarie Australia Conference 2017
23 slides from Breville's conference presentation, May 2, 2017
Slide 1: Macquarie Australia Conference 2017
For personal use only Macquarie Australia Conference 2017 Jim Clayton – Chief Executive Officer 2 May 2017
Slide 2: For personal use only
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 Breville is the kitchen appliance brand that delivers innovation based on consumer insights, empowering people to do things more impressively or easily than they’d ever thought possible. 4
Slide 5: Global Australian Company
For personal use only Global Australian Company 1H17: Over 70% 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 * 1H17 1H17 • Revenue growth 12.9% constant currency • Revenue decline of (13.7%) • EBIT margin of 17.3% • EBIT margin o
Slide 7: Product Awards
Product Awards 1984 – 2016 2017 70 International 15 Awards and counting: For personal use only Design Awards • 8 Red Dots including our 1st “Best of the Best” • 6 Australian Design Marks • 1 SCA Best New Consumer Product, Global Specialty Coffee + 7,000 x 5 star Red Dot Best New Product Best of the
Slide 8: Breville's North Star (Southern Cross)
Breville’s North Star (Southern Cross) Vision For personal use only “Make every food moment an occasion” Mission “To make the process a pleasure and the end result perfect” Principles 1. “Define the perfect result” and what it takes to achieve it 2.“Innovate to Simplify” make it easy to achieve perf
Slide 9: Case Study: Drip Coffee
For personal use only Case Study: Drip Coffee Traditional steam driven drip filter coffee architecture fundamentally flawed—does not hold temperature during the cycle … burns coffee at end of cycle 9
Slide 10: The Breville Precision Brewer
For personal use only The Breville Precision Brewer By bringing espresso machine architecture to drip filter coffee, Breville is able to hold the optimal temperature and optimize the flow rate throughout the entire drip cycle, providing consumers with the precision required to enjoy craft coffee at
Slide 11: For personal use only
For personal use only • Breville Overview • Acceleration Program • Investment Case for Breville • Questions 11
Slide 12: 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 12
Slide 13: Growth Acceleration Framework
For personal use only Growth Acceleration Framework More Larger Product Market Scalable, Acceleration Platform Growth-oriented Business Model 13
Slide 14: Accelerating New Product Introduction
For personal use only Accelerating New Product Introduction More Product Development Product Investment Process Acquisitions Strategy Level Innovation • Shortening • Prioritization • Making progress • Minimal to date, development matrix each year, heading though plenty of cycle: Creatista, • Incorpo
Slide 15: Development Process Innovation
Development Process Innovation Historical Process New Process For personal use only Quality Quality Time Resources Time Resources • Fix Quality and Resources (2), letting Time float • Fix Quality and Time, letting Resources float • More challenging projects took more time • Opportunity to accelerate
Slide 16: Growing the Addressable Market
For personal use only Growing the Addressable Market Larger Market GTM Channel Geographic Category Effectiveness Expansion Expansion Expansion • Migrating from • Maintaining • Evaluating where • Capsule Coffee - “releasing” to premium position appropriate (65 Creatista “launching” new • Minor expans
Slide 17: Improving our Go-to-Market (GTM) Effectiveness
Improving our Go-to-Market (GTM) Effectiveness Migrating from “Release” to “Launch” Incorporating Europe into GTM “Release” For personal use only • Sales regions own GTM (different execution) • Put it on the shelf, see what works, and chase it • Slow revenue ramp of successful product “Launch” • Inc
Slide 18: 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 • Flipped from • Forward-managing • Consolidation • System-wide decentralized to product flow warehouse replatforming to cent
Slide 19: Migrating to a Growth-Oriented Business Model
For personal use only Migrating to a Growth-Oriented Business Model FY16 Target Bus. Model Net Sales 100.0% Net Sales 100.0% Marketing / 8.4% Marketing / ≈12.0% R&D% R&D% EBIT% 12.8% EBIT% ≈12.0-13.0% Early in the transition. FY17 expect marketing/R&D to be 9.0% – 9.5% of net sales. Will continue th
Slide 20: For personal use only
For personal use only • Breville Overview • Acceleration Program • Investment Case for Breville • Questions 20
Slide 21: Acceleration Program Scorecard
Financial Statement Acceleration Program Scorecard Key metrics to measure success June 16 Dec 16 June 17 Dec 17 June 18 For personal use only Inventory Cost structure re-allocation Growth rate acceleration 1H17 • Inventory: reduced inventory as a percentage of cost of sales* from 33.9% to 26.3% (vs.
Slide 22: 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 23: Q&A
23 For personal use only Q&A