Page 2 - Breville Group Limited; Annual general meeting; Celebrating the 40th Anniversary
Breville Group Limited Annual report 2014 Contents: Chairman’s review 1 CEO’s review 3 Strategy and brands 5 Financial report 11 Shareholder information 86 Company information 88 Annual general meeting Wednesday 12 November 2014 at 10amBuilding 1, Port Air Industrial Estate 1A Hale Street, Botany NS...
Page 3 - Chairman’s review; Non-executive chairman; “A balanced result for the year demonstrating the value of; Reported EBIT
1 Breville Group Limited annual report 2014 Chairman’s review During the 2014 financial year, the Breville Group delivered a result which largely filled the gap of the previously foreshadowed decrease in Keurig commission income created by the ending of the majority of the Keurig distribution arrang...
Page 4 - the; Boss; easy to use high velocity superblender
2 Breville Group Limited annual report 2014 the Boss ™ easy to use high velocity superblender One touch functions. Minimum intervention. Total control.
Page 5 - CEO’s review; Financial summary
3 Breville Group Limited annual report 2014 CEO’s review The Breville Group is committed to its core “Food Thinking” strategy by continuing to invest in product development and innovation, with regular new flagship product launches and the expansion of its geographic reach. The year’s trading perfor...
Page 6 - continued; Interim chief executive officer; Oracle; the Dual BoilerTM with automatic
CEO’s review continued We have also taken the initiative to invest in efficiency and cost improvement projects to better support our growing global business. The Group’s core strategy of delivering sustainable growth through product innovation, brand management and distribution capabilities and leve...
Page 7 - Strategy and brands; Australia and New Zealand; Breville - Thought for FoodTM
5 Breville Group Limited annual report 2014 Strategy and brands Breville Group’s core strategy is the design and development of the world’s best kitchen appliances together with the effective marketing of their performance benefits globally. The Breville brand makes up the majority of the Group’s re...
Page 10 - Crispy Crust; 2” stone baked pizza oven
8 Breville Group Limited annual report 2014 Strategy and brands continued Innovation and product development The Group’s growth is based on investment in product development with a focus on design and innovation. Breville has deepened its understanding of food, and how consumers interact with it, ap...
Page 11 - Ethical sourcing
9 Breville Group Limited annual report 2014 Corey Costelloe, the head chef of Neil Perry’s Rockpool Bar & Grill in Sydney, was the most recent speaker, making time to visit Breville’s global head office in Sydney in June 2014. Toby Smith from Toby’s Estate, Dietician Susie Burrell, and Food Writ...
Page 12 - Accolades
10 Breville Group Limited annual report 2014 Australian Design Award 2014 BES980 The Oracle Espresso 2013 BSG1974 the Original ‘74 2012 BDC600 You Brew Drip Coffee Machine 2011 BFP800 Food Processor 2010 BGR820 Smart Grill 2007 BES400 Espresso Machine 2006 BJE200 Juice Fountain 2005 800CP Citrus Pre...
Page 14 - Directors’ report; Board of directors
12 Breville Group Limited annual report 2014 Directors’ report The board of directors of Breville Group Limited (company) has pleasure in submitting its report in respect of the group for the year ended 30 June 2014. Board of directors The names and details of the company’s directors in office durin...
Page 15 - Samuel Weiss; John Schmoll; Company secretaries; Mervyn Cohen; Reporting currency and rounding; Company overview
13 Breville Group Limited annual report 2014 Samuel Weiss Non-executive director AB, Harvard University; MS, Columbia Business School; FAICD Mr Weiss has had a long corporate career in the United States, Europe and Australia with leading consumer brand companies such as Nike, Gateway Computers and S...
Page 16 - Principal activities; Strategic initiatives; Group operating results; Segment results; Operating and financial review
14 Breville Group Limited annual report 2014 Directors’ report continued Principal activities During the year, the principal activities of the Group were the innovation, development, marketing and distribution of small electrical appliances. In Australia and New Zealand, the Group trades under its c...
Page 17 - Advertising and marketing expenses
15 Breville Group Limited annual report 2014 ANZ Overall, the ANZ business performed well and gained market share throughout the year in a retail market environment where consumers remained cautious with their spending.Revenues of $261.6m were 8.6% higher than the prior corresponding year. Despite i...
Page 18 - Capital expenditure; Risk management
16 Breville Group Limited annual report 2014 Directors’ report continued Capital expenditure The Group continues to invest in efficiency and cost improvement projects to support a larger and more geographically diverse business. In the second half of the 2014 financial year, the Australian distribut...
Page 19 - Directors’ interests; Details of key management personnel
17 Breville Group Limited annual report 2014 Directors’ interests As at the date of this report, the interests of the directors in the shares or other instruments of Breville Group Limited were: Ordinary shares S. Fisher 50,288 T. Antonie - S. Herman 8,000 D. Howell 100,000 S. Klein 117,189 L. Myers...
Page 20 - Compensation structure
18 Breville Group Limited annual report 2014 Compensation structure In accordance with best practice corporate governance, the structure of non-executive director and executive compensation is separate and distinct. Non-executive director compensation Objective The board seeks to set compensation at...
Page 23 - Variable compensation – long term incentive (LTI)
21 Breville Group Limited annual report 2014 Remuneration report (audited) continued Variable compensation – long term incentive (LTI) continued Relationship of rewards to performance The table below shows the details of LTI plans for which compensation has been included in the remuneration tables o...
Page 24 - Group performance; Employment contracts
22 Breville Group Limited annual report 2014 Remuneration report (audited) continued Group performance The table below shows the performance of the group over the past five years. Year ended 30 June 2010 30 June 2011 30 June 2012 30 June 2013 30 June 2014 Underlying basic earnings per share (cents) ...
Page 25 - Remuneration of key management personnel
23 Breville Group Limited annual report 2014 Remuneration report (audited) continued Remuneration of key management personnel Table 1: Remuneration for the year ended 30 June 2014 Short-term employee benefits Post-em- ployment benefits Long- term employee benefits Share- based payment Total Salary &...
Page 29 - Performance rights
27 Breville Group Limited annual report 2014 Performance rights Table 6: Performance rights granted The terms and conditions of each grant of performance rights affecting remuneration of key management personnel in this financial year or future reporting years are as follows: Grant date * First exer...
Page 31 - Unissued shares
29 Breville Group Limited annual report 2014 Directors’ meetings The number of meetings of directors (including meetings of committees of directors) held during the year and the number of meetings attended by each director was as follows: Full board Audit & risk (A&RC) People and performance...
Page 32 - Auditor’s declaration of independence
30 Breville Group Limited annual report 2014 Auditor’s declaration of independence Attached is a copy of the auditor’s declaration provided under section 307C of the Corporations Act 2001 in relation to the audit for the year ended 30 June 2014. This auditor’s declaration forms part of this director...
Page 33 - Corporate governance statement
31 Breville Group Limited annual report 2014 Principle 1: Lay solid foundations for management and oversight Role of the board and management The board guides and monitors the business and affairs of the company on behalf of the shareholders, by whom it is elected and to whom it is accountable. The ...
Page 34 - Principle 1: Lay solid foundations for
32 Breville Group Limited annual report 2014 Diversity policy objectives The objectives set by the board in accordance with the diversity policy and progress towards achieving them are:• Representation of women trained in recruitment and selection panels: Progress was made in Australia during the ye...
Page 35 - Principle 2: Structure the board to
33 Breville Group Limited annual report 2014 Principle 2: Structure the board to add value Board composition The company’s constitution states that there must be a minimum of three directors and contains detailed provisions concerning the tenure of directors. The board currently comprises seven non-...
Page 36 - Principle 4: Safeguard integrity in
34 Breville Group Limited annual report 2014 Principle 4: Safeguard integrity in financial reporting Audit and risk committee The board has an audit and risk committee (A&RC), which operates under a charter approved by the board. It is the board’s responsibility to ensure that an effective inter...
Page 37 - Principle 7: Recognise and manage risk
35 Breville Group Limited annual report 2014 Principle 7: Recognise and manage risk The company is committed to the identification, monitoring and management of risks associated with its business activities including financial, operational, compliance, ethical conduct, brand and product quality risk...
Page 38 - Income statement
36 Breville Group Limited annual report 2014 Income statement for the year ended 30 June 2014 Note 30 June 2014 $’000 30 June 2013 $’000 Revenue 2(a) 541,615 486,547 Cost of sales 2(b) (365,421) (308,405) Gross profit 176,194 178,142 Other income 2(c) 1,386 967 Employee benefits expenses 2(f) (48,02...
Page 39 - Statement of comprehensive income
37 Breville Group Limited annual report 2014 Statement of comprehensive income for the year ended 30 June 2014 Note 30 June 2014 $’000 30 June 2013 $’000 Net profit after income tax for the year 48,765 49,732 Other comprehensive (loss)/income Items that may be reclassified to profit or loss Foreign ...
Page 40 - Statement of financial position
38 Breville Group Limited annual report 2014 Statement of financial position as at 30 June 2014 Note 30 June 2014 $’000 30 June 2013 $’000 Current assets Cash and cash equivalents 6 70,885 68,130 Trade and other receivables 7 78,442 90,770 Inventories 8 94,274 83,751 Other financial assets 9 7 2,110...
Page 41 - Statement of changes in equity
39 Breville Group Limited annual report 2014 Statement of changes in equity for the year ended 30 June 2014 Note Issued capital $’000 Reserves $’000 Retained earnings $’000 Total equity $’000 At 1 July 2012 138,760 (14,783) 53,435 177,412 Foreign currency translation reserve 20(a) - 5,279 - 5,279 Ca...
Page 42 - Cash flow statement
40 Breville Group Limited annual report 2014 Cash flow statement for the year ended 30 June 2014 Note 30 June 2014 $’000 30 June 2013 $’000 Cash flows from operating activities Receipts from customers 592,001 633,869 Payments to suppliers and employees (514,005) (574,924) Payment for surrender of le...
Page 43 - Notes to the financial statements; Note 1. Summary of significant accounting policies
41 Breville Group Limited annual report 2014 Notes to the financial statements for the year ended 30 June 2014 Note 1. Summary of significant accounting policies Breville Group Limited is a for profit company limited by shares incorporated in Australia. Breville Group Limited shares are quoted on th...
Page 48 - (p) Investments and other financial assets
46 Breville Group Limited annual report 2014 Note 1. Summary of significant accounting policies continued Notes to the financial statements for the year ended 30 June 2014 (o) Impairment of non-financial assets other than goodwill Intangible assets that have an indefinite useful life are not subject...
Page 53 - Note 2. Revenue and expenses; (d) Depreciation and amortisation expense
51 Breville Group Limited annual report 2014 Note 30 June 2014 $’000 30 June 2013 $’000 Note 2. Revenue and expenses (a) Revenue Sale of goods 539,922 469,476 Commission income 1,693 17,071 Total revenue 541,615 486,547 (b) Cost of sales Costs of inventories recognised as an expense (includes write-...
Page 55 - Deferred income tax
53 Breville Group Limited annual report 2014 Statement of financial position Income statement 30 June 2014 $’000 30 June 2013 $’000 30 June 2014 $’000 30 June 2013 $’000 Note 3. Income tax continued Deferred income tax Deferred income tax at 30 June relates to the following: Deferred tax liabilities...
Page 56 - Tax consolidation; Note 4. Earnings per share
54 Breville Group Limited annual report 2014 Notes to the financial statements for the year ended 30 June 2014 Note 3. Income tax continued Tax consolidation Breville Group Limited and its 100% owned Australian resident subsidiaries (excluding the Breville Group Performance Share Plan Trust) have fo...
Page 58 - Note 6. Cash and cash equivalents
56 Breville Group Limited annual report 2014 Notes to the financial statements for the year ended 30 June 2014 Note 30 June 2014 $’000 30 June 2013 $’000 Note 6. Cash and cash equivalents Cash at bank and on hand (a) 70,885 68,130 Notes: (a) Cash at bank earns interest at floating rates based on dai...
Page 59 - Note 7. Trade and other receivables; Current
57 Breville Group Limited annual report 2014 Note 30 June 2014 $’000 30 June 2013 $’000 Note 7. Trade and other receivables Current Trade receivables (a) 78,085 88,865 Allowance for uncollectible receivables (192) (291) Trade receivables, net 77,893 88,574 Other receivables (b) 549 2,196 Total curre...
Page 60 - Note 9. Other financial assets; Note 10. Other assets
58 Breville Group Limited annual report 2014 Notes to the financial statements for the year ended 30 June 2014 Note 30 June 2014 $’000 30 June 2013 $’000 Note 8. Inventories Finished goods (at lower of cost and net realisable value) (a) 77,652 68,036 Stock in transit (at cost) 16,622 15,715 Total in...
Page 61 - Note 12. Intangible assets – other
59 Breville Group Limited annual report 2014 Note 30 June 2014 $’000 30 June 2013 $’000 Note 12. Intangible assets – other Development costs (a) 13,543 12,840 Computer software (b) 5,215 3,020 Brand names (c) 31,575 31,803 Total intangible assets - other 50,333 47,663 Notes: Development costs are in...
Page 62 - Note 13. Intangible assets – goodwill
60 Breville Group Limited annual report 2014 Note 30 June 2014 $’000 30 June 2013 $’000 Note 12. Intangible assets – other continued (b) Computer software continued (i) Reconciliation of the carrying amount Carrying amount at the beginning of year 3,020 305 Additions 2,303 2,943 Amortisation 2(d) (1...
Page 64 - Note 15. Trade and other payables; Terms and conditions
62 Breville Group Limited annual report 2014 Notes to the financial statements for the year ended 30 June 2014 Note 30 June 2014 $’000 30 June 2013 $’000 Note 15. Trade and other payables Current Trade payables – unsecured (a) 78,437 77,909 Employee benefits 28 3,356 4,357 Total current trade and ot...
Page 65 - Financing facilities available; Seasonal facility
63 Breville Group Limited annual report 2014 Note 30 June 2014 $’000 30 June 2013 $’000 Note 16. Borrowings continued Financing facilities available At reporting date, the following financial facilities have been negotiated and were available to the group:Facilities used at the reporting date (a) 26...
Page 67 - Note 18. Other financial liabilities
65 Breville Group Limited annual report 2014 Note 17. Provisions continued Employee benefits – long service The provision for employee benefits represents the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is ...
Page 69 - Note 19. Issued capital
67 Breville Group Limited annual report 2014 Note 30 June 2014 $’000 30 June 2013 $’000 Note 19. Issued capital Ordinary shares – authorised, issued and fully paid (a) 140,050 140,050 Ordinary shares – held by the Breville Group Performance Share Plan Trust (b) - (1,682) Total contributed equity 140...
Page 70 - Nature and purpose of reserves
68 Breville Group Limited annual report 2014 Note 30 June 2014 $’000 30 June 2013 $’000 Note 20. Reserves Foreign currency translation reserve (a) (9,638) (9,022) Employee equity benefits reserve (b) (948) 377 Cash flow hedge reserve (c) (1,352) 1,480 Total reserves (11,938) (7,165) (a) Movement in ...
Page 71 - Note 21. Retained earnings; Revenue
69 Breville Group Limited annual report 2014 Note 30 June 2014 $’000 30 June 2013 $’000 Note 21. Retained earnings Balance at beginning of the year 69,993 53,435 Net profit for the year attributable to members of Breville Group Limited 48,765 49,732 Dividends 5(a) (33,824) (33,174) Balance at end of...
Page 72 - Note 22. Operating segments
70 Breville Group Limited annual report 2014 Notes to the financial statements for the year ended 30 June 2014 Note 22. Operating segments continued Year ended 30 June 2013 ANZ Distribution $’000 North America Distribution $’000 Rest of World $’000 Other $’000 Total $’000 Revenue Sale of goods 240,9...
Page 73 - Note 23. Financial risk management objectives and policies; Interest rate risk
71 Breville Group Limited annual report 2014 Note 23. Financial risk management objectives and policies The group’s principal financial instruments, other than derivatives, comprises cash advances, bank overdrafts, cash at bank and short-term deposits.The main purpose of these financial instruments ...
Page 74 - Foreign currency risk; Capital management
72 Breville Group Limited annual report 2014 Notes to the financial statements for the year ended 30 June 2014 Note 23. Financial risk management objectives and policies continued Foreign currency risk The group undertakes certain transactions denominated in foreign currently and is exposed to forei...
Page 75 - Credit risk
73 Breville Group Limited annual report 2014 Note 23. Financial risk management objectives and policies continued Credit risk Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. The credit risk on financial assets, excluding investments, of the...
Page 76 - Note 24. Commitments and contingencies; Operating lease commitments – group as lessee; Operating lease commitments receivable – group as lessor; Contingencies
74 Breville Group Limited annual report 2014 Note 24. Commitments and contingencies Operating lease commitments – group as lessee Operating leases are entered into mainly as a means of acquiring access to commercial property and storage facilities and the use of minor items of plant and equipment. R...
Page 77 - Note 25. Related party disclosure; (a) Entities subject to class order relief
75 Breville Group Limited annual report 2014 Note 25. Related party disclosure The consolidated financial statements include the financial statements of Breville Group Limited and the subsidiaries listed in the following table. Equity interest Legal entity Country of incorporation Note 30 June 2014 ...
Page 79 - Note 26. Parent entity information; Results of the parent entity
77 Breville Group Limited annual report 2014 Note 30 June 2014 $’000 30 June 2013 $’000 Note 25. Related party disclosure continued (ii) Consolidated income statement for class order closed group Profit from ordinary activities before income tax expense 65,791 60,130 Income tax expense relating to o...
Page 82 - Note 28. Employee benefits
80 Breville Group Limited annual report 2014 Notes to the financial statements for the year ended 30 June 2014 Note 27. Share-based payment plans continued The average remaining contractual life for the performance rights outstanding at 30 June 2014 is between 1 and 3 years (2013: 1 and 3 years). Th...
Page 83 - Note 29. Key management personnel; Note 30. Auditor’s remuneration; Note 31. Significant events after year end
81 Breville Group Limited annual report 2014 Note 30 June 2014 $’000 30 June 2013 $’000 Note 29. Key management personnel Compensation by category: key management personnel Short-term 2,793 3,237 Post employment (i) 143 119 Other long-term 20 39 Share-based payment 370 618 Total 3,326 4,013 (i) This...
Page 84 - Directors’ declaration
82 Breville Group Limited annual report 2014 In accordance with a resolution of the directors of Breville Group Limited, I state that:1. In the opinion of the directors: (a) the financial report and the additional disclosures included in the directors’ report designated as audited, of the consolidat...
Page 85 - Independent audit report
83 Breville Group Limited annual report 2014 Independent audit report Independent auditor’s report to the members of Breville Group Limited Report on the fi nancial report We have audited the accompanying fi nancial report of Breville Group Limited (the “Company”), which comprises the consolidated s...
Page 86 - Opinion; Report on the remuneration report
84 Breville Group Limited annual report 2014 Independent audit report continued Opinion In our opinion:a. the fi nancial report of Breville Group Limited is in accordance with the Corporations Act 2001 , including:i giving a true and fair view of the consolidated entity’s fi nancial position as at 3...
Page 87 - Auditor’s independence declaration
85 Breville Group Limited annual report 2014 Auditor’s independence declaration Auditor’s Independence Declaration to the Directors of Breville Group Limited In relation to our audit of the fi nancial report of Breville Group Limited for the year ended 30 June 2014, to the best of my knowledge and b...
Page 88 - Shareholder information; Substantial shareholders as at 8 September 2014; Distribution of shareholdings as at 8 September 2014
86 Breville Group Limited annual report 2014 Shareholder information Substantial shareholders as at 8 September 2014 The following information is extracted from the company’s register of substantial shareholder notices: Name Number of ordinary shares % of issued ordinary shares S. Lew Custodians Pty...
Page 89 - Twenty largest shareholders as at 8 September 2014
87 Breville Group Limited annual report 2014 Twenty largest shareholders as at 8 September 2014 Name Shares % IC Premier Investments Limited 35,552,910 27.33% HSBC Custody Nominees (Australia) Limited 20,386,836 15.67% J P Morgan Nominees Australia Limited 15,407,736 11.84% BNP Paribas Noms Pty Ltd ...
Page 90 - Company information
88 Breville Group Limited annual report 2014 Company information Directors Steven Fisher Non-executive chairman Tim Antonie Non-executive director - appointed 18 December 2013, effective 19 December 2013 Sally Herman Non-executive director Dean Howell Non-executive director Steven Klein Non-executiv...
Page 92 - Quick Touch; Intuitive microwave with smart
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