By Claire Reilly
SYDNEY, NSW: Breville has proven to be a real wizz in the kitchen with today’s announcement of a 40.5 per cent boost in net profits for the 2010-2011 financial year.
In a report released to the Australian Securities Exchange, Breville Group announced that net profits after tax grew to $31.7 million for the year, while group sales revenue was steady at $393.6 million.
“Group underlying EBITDA [earnings before interest, tax, depreciation and amortisation] increased by 16.3 per cent to $58.2 million, reaffirming the Group’s core strategy of building the Breville brand globally by leveraging its products and capabilities across multiple geographies,” the report read.
While group sales revenue was down 3.5 per cent in Australia, 2.5 per cent in New Zealand and 4.2 per cent in North America, Breville’s international distributors reported a 40.1 per cent increase in sales revenue for the year. According to the report, “the Group continues to focus on broadening its distributor network, especially across the important Asia-Pacific region”.
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Breville cited difficulties in the Australian retail market as a factor that contributed to the weaker revenue results at home.
“Retail conditions were more difficult in the second half of the year, characterised by reduced consumer spending,” the report read. “Deflationary pressures were also evident as the market reacted to the higher AUD/USD exchange rate.
“In a competitive market, consumers responded positively to a strong pipeline of new product launches, supported by targeted marketing programs throughout the year.”
“The Group’s multi-brand strategy continues to demonstrate its relevance in the Australian market," the report added. "With a clear and differentiated positioning across the portfolio of brands, Breville Group has maintained its market leadership position in the core kitchen appliance category.”
Australian underlying EBITDA decreased by 10.5 per cent, but this was offset by an increase in International underlying EBITDA of 36.3 per cent.
“Despite a solid first half result, consumer spending in the second half of the year was weaker, impacting overall demand,” read the report.
“Breville focused on maintaining its position at upper end premium price points in the kitchen appliance category, whilst Kambrook performed solidly in a very competitive segment of the market. The business continued its investment in brand marketing despite more difficult trading conditions.”
The overall results from the Breville Group indicate that the brand is strengthening in the international market, following on from key appointments overseas including the appointment of Damian Court as president of Breville USA.
Upon joining the US team, following a stint as marketing manager for Sunbeam, Court said the opportunity would bring great growth to Breville's international offering.
“As a result of a lot of hard work in the USA, Breville is a strong business in the States and has further opportunities for significant expansion in the market," said Court. "It is also an honour to be representing an Australian brand, in a market outside Australia."