Breville sales for the six months to 31 December 2021 in the APAC region including Australia and New Zealand grew by 22% to $162.7 million, as price increases for some products are passed on to local retailers.
This impressive first half result follows a 48.7% improvement in sales in the corresponding period a year ago.
“I am very pleased with the excellent Breville group results for the 1st half of FY22,” Breville president – APAC, Mark O’Kelly, told Appliance Retailer.
“I am also incredibly proud of our team’s performance across the APAC theatre. They have worked extremely well, together with our retail partners to overcome the numerous supply challenges in order to deliver such impressive sell out results. We have also continued to increase our investment in R&D/Marketing/Tech Services that will unlock future growth drivers for FY23 and beyond.”
According to Breville Group CFO, Martin Nicholas, the overall turnover has doubled in size in just three years.
“The business continues to move from strength to strength, underpinned by strong consumer demand across all regions and categories. Revenue grew 23.6% notwithstanding some ongoing logistical challenges. Margin and selected price rises restrained promotional spend largely offsetting the inflationary pressures.
“First half 2022 was a positive but operationally challenging period, sales grew strongly, gross margins were well controlled, supply chain challenges were managed and our investment continued into the growth drivers of the business – a very solid start to the year,” Nicholas said.
Despite major interruptions to the Breville supply chain in the US with delays resulting in products not being unloaded at the ports in Los Angeles causing up to 51% of the company’s inventory to be classified as ‘goods in transit’ – the Australian market remains largely unaffected by out of stock products – particularly when compared to other brands in the local market.
“If we look to the second half of 2022 and beyond, we are likely to need to take additional price rises where appropriate to further protect our margins,” Nicholas said.
Following other companies in the appliance category, Breville undertook a price rise on a majority of its products on 1 February. Following other local appliance suppliers and distributors the higher cost of goods have been passed on following increases including labour, substrate as well as the cost of Covid implementation procedures during the manufacturing process – and this is before increased costs from containers and shipping as well as interruptions to the supply-chain process.
During the presentation to shareholders, one new product was highlighted – the Breville Joule Oven Air Fryer Pro. This product has no local release date and will be launched into overseas markets over the next six months before being manufactured in a 240-volt version for the Australian market.
Breville CEO Jim Clayton was glowing about the product’s features and benefits as well as the feedback they have received from recent consumer testing.
“Our Dual Oven Air Fryer Pro… will launch in the second half of this year. With this offering we are arcing from product to solution. In this solution we took our IP and talent and embedded it inside our market leading oven. We have been beta testing the oven in customers’ homes for the last few months. When making a rotisserie chicken, one participant said – ‘I would buy this oven just for that chicken’. This is exactly the point. With this solution, we are transitioning from selling world class countertop ovens to selling rotisserie chicken in your kitchen – the outcome customers actually want,” he said.
Also launched within the last few weeks is a customer experience centre in the UK where the Breville products are branded as Sage.
“To complete our customer experience platform, we recently launched Sage Studios in the UK as our pilot location,” Clayton told investors.
“Sage Studios bridges the gap between the physical and the digital. When a customer is shopping our website or looking for information, they can start a live video stream with one of our product experts. The customer and the product expert can jointly explore the website and all of our digital content to help the customer find what they need. Sage Studios will also serve as a masterclass training location – this gives us a highly scalable platform for engaging directly with our customers.”
Appliance Retailer understands there are no plans to introduce Breville experience centres into Australia at this stage until the performance of the UK deployment is assessed and analysed.