Breville has delivered an impressive 25.4% increase in group revenue to $552 million for the half year to 31 December 2019, with the Australia and New Zealand division recording an 11% jump in revenue to $82.3 million.
Net profit after tax (NPAT) for the group was $49.7 million – up 14.1% from the previous corresponding period and earnings before interest and tax (EBIT) increased 17.1% to $73 million.
All regions and categories – beverages, cooking and food preparation – posted double-digit growth supported by new product development, including the global rollout of the Barista Pro, the Bluicer, Smart Oven Air Fryer and in North America, Wave microwaves.
In ANZ, Breville has launched 21 new products in the last three years, driving over 30% of the Breville-branded revenue in distribution.
In the half year period, Breville rebranded Cli-Mate to Breville Air, with the launch of nine purification products, including air purifiers, humidifiers and dehumidifiers. There was also ongoing Nespresso sales growth including the Vertuo line in the reported period.
Breville Australia and New Zealand general manager, Mark O’Kelly told Appliance Retailer, he is very pleased with the results with both Australia and New Zealand markets performing well.
“The new product pipeline continues to be strong for Breville and Kambrook brands going into 2020 and we look forward to continued growth with all our retail partners,” he said.
Breville Barista Pro coffee machine
But Europe was the stand-out performer for the group with a 63% increase in revenue for the period, allowing it to become the second largest geographic region in the global product segment ahead of ANZ. The growth was driven by strong performance in the UK and mainland Europe, boosted by geographic expansion into Benelux, Switzerland and Spain.
Breville group CEO, Jim Clayton said the first half of FY20 was a solid half for the group, continuing the trends seen over last few reporting periods. “We had good growth across all regions and categories and continued to deliver double-digit EBIT growth. Successful European expansion continued, diversifying our global footprint and adding growth and resilience to the portfolio.”
Breville expects continued growth in the second half of FY20, with momentum in Europe and a more certain tariff backdrop in the USA. The distribution segment is expected to slow from its 1H20 rate.
No impact from Coronavirus
The company also provided an update regarding the impact of the Coronavirus.
Firstly, Breville does not have any manufacturing partners, or parts suppliers, located in the Hubei Province. As at 13 February 2020, manufacturers were coming back online having implemented the safety processes as defined by the Chinese government. In addition, each year Breville systemically buy forward a few weeks beyond Chinese New Year (CNY) as a hedge against a slower ramp-up post-holiday.
Secondly, for unrelated reasons, Breville is holding finished goods inventory above normal equilibrium levels: the Brexit insurance policy, Europe running unconstrained and the US tail driven by price increases.
Thirdly, as a sales market, China is immaterial to the group and is recorded in the Rest of the World (ROW) segment.