Company Overview

Breville Group Limited is an Australian premium small appliances company, best known for its Breville and Sage brands.
The company focuses on design-led innovation, strong branding, and global distribution rather than low-cost manufacturing.

Core Products & Competitive Position

Breville’s core products include espresso machines, coffee makers, blenders, toasters, and other kitchen appliances.
Its competitive edge lies in premium design, user experience, and brand positioning, allowing it to command higher price points.

Core Assets, Technology & Life Cycle

Key assets include brand equity, product design capabilities, and a global distribution network, rather than heavy manufacturing infrastructure.
The company operates in a mature but still growing phase, driven by continuous product innovation.

Markets & Customers

Breville’s major markets are the United States, Europe (under the Sage brand), and Australia.
Its target customers are mid-to-high income consumers willing to pay for quality, performance, and design.

Business Model / Revenue Model & Profit Drivers

Breville designs products in-house while outsourcing manufacturing, mainly to Asia.
Revenue is generated through product sales, with profitability supported by premium pricing and strong brand positioning.

Growth Projects

Growth is driven by expansion in the US and European markets, new product development, and deeper penetration in the coffee category.
Further upside comes from entering adjacent appliance categories and strengthening direct-to-consumer (DTC) channels.

Financials

Revenue Growth & Earnings Trend

Breville’s revenue increased from $576.6m in 2016 to $1.70bn in 2025, reflecting a strong expansion phase led by global demand and premium product positioning.
This implies an average annual growth rate of roughly 13%, with a post-COVID slowdown in 2023–2024 followed by a re-acceleration in 2025, while margins remain supported by pricing power and brand strength.

Inventory Build-Up & Working Capital Pressure

Inventory remains elevated at $426m in 2025, well above pre-2021 levels, indicating ongoing working capital intensity

Strengthening Balance Sheet

Breville has significantly reduced total debt from $281m in 2023 to $119m in 2025, while total equity increased to nearly $974m. This reflects improving balance sheet quality

Asset-Light Business Structure

Despite strong revenue growth, Breville’s fixed assets remain relatively modest, with Property, Plant & Equipment at only $148m in 2025.

Goodwill Expansion Reflects Brand & Acquisition Strategy

Goodwill increased materially from $175m in 2021 to $348m in 2025, suggesting acquisitions and continued investment in brand-related intangible value.

Strong Cash Conversion Recovery

Operating cash flow rebounded strongly from negative $42m in 2022 to $303m in 2024, before remaining solid at $172m in 2025.

Rising Investment in Growth & Infrastructure

Capital expenditure increased steadily to $45m in 2025, while the company also continued investing through acquisitions and other strategic initiatives.

Free Cash Flow Closely Tracks Earnings

Breville’s depreciation and amortisation expense is now broadly in line with capital expenditure, suggesting the business does not require excessive reinvestment to sustain operations.
As a result, over the long term, free cash flow generation has the potential to closely track reported earnings, which is an attractive characteristic for a consumer brand business with an asset-light structure.

Important recent Announcements

The company increased its interim dividend to 19 cents per share fully franked, up from 18 cents in the prior corresponding period, signalling management confidence in underlying cash generation and earnings resilience.

Recent investor presentations also noted that US tariff impacts and supply chain costs pressured gross margins, even as revenue growth remained strong.

Last Report overview 1H26

Revenue Growth

1H26 revenue increased to A$1.10bn from A$998m in 1H25, representing 10.1% YoY growth

Gross Margin Pressure from Tariffs

Gross margin declined from 36.7% in 1H25 to 35.4% in 1H26, mainly due to US tariff impacts. However, management stated the tariff-related margin impact was contained to around 130bps through pricing and manufacturing diversification initiatives.

Stable Profitability Despite Investment

EBIT increased only slightly from A$144.8m to A$145.8m, while EBIT margin declined from 14.5% to 13.3% as the company increased spending on expansion, marketing and production diversification.

Net Profit & EPS

NPAT increased marginally from A$97.5m to A$98.2m, while basic EPS rose from 67.8 cents to 68.0 cents.

Stronger Balance Sheet

Shareholders’ equity increased from A$972.8m in Dec-24 to A$1.05bn in Dec-25, while net debt improved from A$55.1m to A$43.6m.
Despite heavy investment and tariff pressures, the company strengthened its balance sheet rather than stretching it.

Manufacturing Diversification Investment

PPE increased from A$70.1m to A$103.5m, mainly driven by manufacturing diversification tooling and Best Buy store-in-store investments.

Continued Product Development Investment

Development costs and software assets increased from A$94.8m to A$110.5m, reflecting ongoing investment in new product development (NPD).

AI, Beanz & Ecosystem Expansion

Breville’s AI strategy is currently focused more on internal productivity and customer service rather than embedding AI directly into consumer products.
However, the fast-growing Beanz coffee ecosystem could become strategically important over time, as subscriptions, customer data and connected coffee experiences may eventually support more personalised and AI-enabled services. Beanz subscriptions grew 97% YoY in CY25, while new customers increased 89% YoY.

Fundamental view and valuation

Dividend & Fundamentals

Breville trades on a relatively high P/E ratio of 30.6x, reflecting market expectations for continued premium brand growth and resilient earnings quality.
The company reported approximately A$1.69bn in revenue, A$136m in net profit, and EPS of A$0.93, while maintaining solid cash generation with a 5.0% free cash flow yield.
Although the dividend yield remains modest at 1.36%, the dividend is 100% franked, which improves its attractiveness for Australian income-focused investors.

Financial Forecasts

Breville is expected to continue delivering revenue growth close to 10% annually, supported by global expansion, premium coffee demand, new products, and ecosystem growth initiatives.
Under this scenario, annual revenue could comfortably exceed A$2bn within the next few years. EPS is also expected to rise from around A$1.00 in the coming year toward approximately A$1.50 over the medium term, supported by operating leverage and continued brand strength.

Valuation

Breville appears deserving of a relatively premium valuation multiple given its strong global brand, double-digit long-term revenue growth profile, high returns on capital, healthy balance sheet, and asset-light business model. The company also benefits from strong positioning in the premium coffee category and growing ecosystem opportunities through Beanz.

A forward P/E ratio of around 32x–35x appears reasonable for the stock. This is above the broader market average, but justified by the company’s durable growth profile, pricing power, and strong cash generation characteristics.

Assuming forward EPS of approximately A$1.00, this implies a fair value range of roughly A$32–35 per share.

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Technical View

BRG is trading near the lower end of a multi-year consolidation range, with key support around A$25–26 and major resistance near A$34–35. The recent rebound from support suggests long-term buyers remain active at these levels.

From a trading perspective, the current zone may offer an attractive medium-term accumulation area with risk controlled below the A$25 support region. A sustained breakout above the descending trendline and the low-A$30s would likely strengthen the bullish outlook materially.

Technical analysis of Breville Group Limited (ASX: BRG)

Source: TradingView

FAQs about Breville Group Limited (ASX: BRG)

1. What is the main growth driver for BRG?

The company’s strongest growth driver is its premium coffee ecosystem, supported by global expansion, new product launches, and growing direct-to-consumer channels such as Beanz.

2. Why does BRG trade at a relatively high P/E ratio?

Investors are assigning a premium valuation due to the company’s strong brand positioning, consistent revenue growth, healthy balance sheet, and long-term global growth opportunities.

3. What are the main risks for BRG?

Key risks include weaker consumer spending, margin pressure from tariffs or supply chains, and slower-than-expected growth in international markets.

4. Is BRG more of a growth stock or a dividend stock?

BRG is primarily viewed as a growth-oriented consumer brand company, although it also pays a fully franked dividend with stable cash flow support.