Australia and New Zealand are stand out markets.

An improvement of over 20 per cent from the Australian and New Zealand division of Breville has been the standout result following the release of the company’s half year results yesterday.
Revenue from the Australia and New Zealand division grew by over 20 per cent to $63.3 million for the six months to 31 December.

According to Breville CEO Jim Clayton, the “solid increase was driven primarily by new product releases in the beverage category” and “existing products also continued to perform well”.

“The Group has again delivered an improved result, led by the continued strong performance of the Global Product segment. I am pleased with the progress we are making on our strategic transformation, with our key measurements of success on track.”

Breville GM Australia and New Zealand, Mark O’Kelly, told Appliance Retailer, that the 20 per cent increase in revenues was “a pleasing overall result in a difficult trading environment”.

“The Breville brand is continuing to grow which is a good health check for us at this time in the current market conditions,” O’Kelly said.

“Coffee has been a key category, especially our new Creatista Nespresso machine (pictured above) and Luxe kettles/toasters, however it is important to note that a number of other categories also performed well.

“As we approach Mother’s Day, we have a number of new product launches and expect the performance of our key categories across the broad to be maintained.

“We value the important relationship we have with our retail partners and the significant support they provide the Breville brand and the business overall,” O’Kelly said.

Shortening product development cycles

In the half year announcement, the company outlined how it was changing the way it introduced products to the market as part of the company’s Group Strategic Transformation.
“Shortening product development cycles and bringing forward new product releases, followed by their global launch, are important ingredients for pulling the ‘product’ lever in the transformation program. The product team has successfully compressed the development cycle for two products, and they are applying the process learning to other projects in the innovation pipeline.”

Change to Breville reporting structure

Breville changed its reporting structure in late January and separated the ‘Distribution Segment’ from the ‘Global Product segment of the business.

In the half-year statement, the company explained that “the change more accurately reflects the way the company is being managed”.

“The Global segment includes the sale of Breville designed and developed products that are sold globally, either directly or through third parties, and may be branded Breville, Sage or carry a third party brand.

“The ‘Distribution’ segment includes products designed and developed by a third party. These products may be distributed pursuant to a license or distribution agreement or they are sourced directly from manufacturers. These products may be branded Breville, Kambrook, or they may be under a third party brand (e.g. Nespresso or Philips). As of the reporting date, the Distribution segment operates only in the Australia and New Zealand region.”

Highlights from the report for the six month period to 31 December 2016 included:

  • Overall revenue increasing by 2.4% to $339.2 million, up from $331.2 million a year earlier
  • Improved Group EBIT margin of 14.5 per cent – up from 13.9 per cent a year earlier, reflecting a greater proportion of higher margin products from the company’s Global segment
  • The Distribution segment of the business was impacted by lower revenues from discount retailers
  • Revenue for the Global segment grew by 8 per cent to $264 million with EBIT growing 12 per cent
  • Revenue for the Distribution segment dropped by 13.7 per cent to $74.3 million with EBIT falling by 36 per cent
  • North America sales increased by five per cent to $159.4 million
  • Australia and New Zealand sales grew by 20.1 per cent to $63.3 million
  • Rest of the World sales grew by 3.7 per cent to $42.2 million