20 August Manager, Company Announcements, Australian Securities Exchange Limited, Level 4, 20 Bridge Street, Sydney NSW 2000

Transcription

1 20 August 2014 Manager, Company Announcements, Australian Securities Exchange Limited, Level 4, 20 Bridge Street, Sydney NSW 2000 Year Ended 30 June 2014 Investor Presentation Attached is a copy of the Breville Group Limited Investor Presentation for the Year Ended 30 June Yours faithfully Sasha Kitto Company Secretary Breville Group Limited Telephone: (02)

2 Breville Group Limited YEAR END RESULTS FY14 INVESTOR PRESENTATION

3 Strategic Initiatives Core strategy Food Thinking creating simple moments of brilliance Deliver sustainable growth through product innovation, brand management and distribution capabilities across multiple geographies The Group has: Continued to invest in product development and launched a number of flagship products in FY14 Entered into the portioned coffee market in Australia and New Zealand in partnership with Nespresso Completed a pleasing first year of trading in the UK following the May 2013 launch of the new company owned brand, Sage, in that market Increased its marketing and business development resources driving growth in the Rest of World segment Created global marketing collateral and campaigns with Heston Blumenthal, the Group s global brand ambassador 2

4 Group Summary Result AUDm FY14 FY13 % Chng Sale of goods % Keurig commission income (90.1%) Revenue % EBITDA (1.2%) EBIT (1.6%) NPAT (1.9%) Basic EPS (cents) (1.9%) Key points New product launches drive revenue growth Substantial decrease Keurig commission income Soft North America trading in 2H more than offset by Rest of World revenue growth FY14 NPAT approximates FY13 Dividend increased Strong balance sheet growth enabler ROE % 24.7% Dividend per share (cents) % Interim Final Net cash ($m) Gearing ratio (%) Nil Nil Minor differences may arise due to rounding 1 ROE is calculated based on NPAT for the 12 months ended 30 June 2014 (FY13: 12 months ended 30 June 2013) divided by shareholders equity at 30 June 3

5 Financial Position at 30 June AUDm FY14 FY13 Inventory Receivables Trade and other payables (81.8) (82.3) Working Capital Fixed assets Intangibles Other (liabilities)/assets (net) (6.7) (10.4) NET ASSETS EMPLOYED (Cash) (net) (47.0) (43.4) Shareholders equity CAPITAL EMPLOYED Minor differences may arise due to rounding Key points Reduction in working capital Inventories: net increase - North American 2H fall in juicer sales, wider range of new products Receivables: net decrease - lower North America revenue vs. pcp, high Keurig commission receivable in pcp Efficiency and cost improvement capital expenditure projects: expected total spend est. $11.0m (approx. one third incurred prior to 30 June 2014) leased offices (Sydney based Australian business and corporate head office ) Group-wide ERP system Strong cash position Cash generated from operating activities $51.2m (FY13: $37.0m) Gearing remained nil Strong balance sheet 4

6 EPS and Dividend cents per share EPS and DPS FY09 FY10 FY11 FY12 FY13 FY14 Earnings per share (reported) - basic Dividends per share 5 5 year compound annual growth EPS of 32.8% DPS of 37.5%

7 EBIT Reported EBIT 80,000 70,000 $000's 60,000 50,000 40,000 30,000 20,000 10,000 - FY09 FY10 FY11FY12 FY13 FY14 5 year compound annual growth of 24.6% 6

8 Operating Segments Australia and New Zealand (ANZ) Breville brand premium kitchen segment Kambrook brand broader range including irons, vacuums, heating and cooling Philips^ brand personal and garment care North America Breville brand - premium kitchen channels and own online retail platform Rest of World Sage^^ brand (UK) premium kitchen channels and own online retail platform Europe (excluding UK) non-breville branded 3rd party strategic partners supplied from Hong Kong Africa, Middle East, Asia and South America Breville branded 3rd party distributors supplied from Hong Kong ^ Philips products are distributed under a Distribution Agreement ^^ Sage commenced trading in May 2013, trading results for FY13 included in Other segment 7

9 Segment Results REVENUE EBIT AUDm FY14 FY13 % Chng FY14 FY13 % Chng Australia and New Zealand (ANZ) % (9.1%) North America % (20.5%) Rest of World % % Other (4.7) (9.3) TOTAL % (1.6%) Minor differences may arise due to rounding Key points Strong new product growth across the Group ANZ: Strong consumer acceptance of new products. Increased revenues partially offset margin reduction from stronger USD North America: Decrease in Keurig commission income, overall increase in Breville product sales Rest of World: Higher revenues equally derived from the UK and rest of world distribution business EBIT primarily impacted by the decrease in Keurig commission income 8

10 Australia and New Zealand (ANZ) 1H 2H FY AUDm 1H14 1H13 % Chng 2H14 2H13 % Chng FY14 FY13 % Chng Revenue % % % EBITDA (4.9%) (13.4%) (8.2%) EBIT (5.0%) (15.7%) (9.1%) EBIT % 11.1% 12.9% 7.5% 9.5% 9.5% 11.3% Minor differences may arise due to rounding Key points Market share gains in a market where consumers remained cautious with spending Strong consumer acceptance of new products launched across all brands the Oracle TM espresso, the Quick Touch TM microwave, Kambrook Blitz2Go TM personal blender, Breville co-branded Nespresso range Strengthening USD (especially in second half) and competitive market place - adverse impact on EBIT margins Benefit of selective price increases and cost efficiency program expected in FY15 9

11 AUDm 1H14 1H13 North America 1H 2H FY % Chng 2H14 2H13 % Chng FY14 FY13 % Chng Sale of goods % (8.4%) % Commission income (89.8%) (90.8%) (90.1%) Revenue % (12.9%) % EBITDA (11.9%) (39.8%) (20.9%) EBIT (11.9%) (39.1%) (20.5%) EBIT % 17.5% 23.1% 10.5% 15.0% 15.0% 19.7% Minor differences may arise due to rounding Key points Revenue end of majority Keurig distribution arrangement June 2013 commission income FY14 - $1.7m vs. FY13 - $17.1m Breville full year revenue growth of 13.2% (1H +29.9%, 2H -8.4%) second half impacted by timing of retailer purchasing between the halves second half juicing category decline shift to blending strong sales growth in other core categories EBIT impacted primarily by Keurig decrease Higher warranty expenses certain SKU s being phased out Juicing category continues to re-set to find its new base level Products launched 2H14 with limited distribution - revenue from these products should build in FY15 PolyScience culinary division acquisition 10

12 PolyScience Culinary Sous Vide Professional Immersion Circulators Vacuum Sealer Chamber and Professional Vacuum Sealers The Smoking GunTM Complementary Products Acquisition of the culinary division of PolyScience the leaders in temperature control solutions. Temperature control is the key to culinary success. Used by the world s top Chef s. Our goal is to make the products more affordable and accessible to the world s best home cooks. 11

13 Rest of World 1H 2H FY AUDm 1H14 1H13 % Chng 2H14 2H13 % Chng FY14 FY13 % Chng Revenue % % % EBITDA % % % EBIT % % % EBIT % 26.1% 34.5% 24.7% 27.9% 25.3% 30.7% Minor differences may arise due to rounding Key points Increased revenues derived equally from UK and rest of world distribution business Strong orders from European strategic partners UK business delivered positive earnings result in first full year UK EBIT margin lower than Hong Kong based world distribution business New distributor agreement in Brazil with Tramontina 12

14 Flagship Product Launches the Oracle the Dual Boiler with automatic grinding, tamping and milk texturing the Boss Easy to use high velocity superblender The world s first automatic manual coffee machine. True café quality, without a barista. Pulverises virtually any combination of ingredients to increase absorption and create a noticeably smoother mouthfeel. Approximate Launch Dates ANZ October 2013 January 2014 April 2014 N/America April 2014 January 2014 October 2014 Rest of World July 2014 July 2014 October

15 Outlook Group s focus on its Food Thinking strategy and commitment to investment in product development and marketing will continue. Expected that broader business conditions will remain globally challenging and increasingly competitive into FY15. The Group s strategy includes a number of specific initiatives that will assist in addressing these challenges: Acceleration of an organisation-wide cost efficiency strategic review Acquisition of the culinary division of PolyScience Continue to grow the Rest of World segment including the launch in Brazil with Tramontina A strong pipeline of new products in FY15 and beyond Continue to collaborate with Group ambassador Heston Blumenthal 14