Shareholder Newsletter

Welcome to our first
Shareholder newsletter
Shareholder
Newsletter

ISSUE 1 | JUNE 2019
Paul Alston, Chief Executive Officer
We have over 3,000 shareholders and often receive requests
for more information about what we do and our progress.
This Newsletter is designed to share some of our stories
with you and keep you informed. We welcome feedback and
suggestions on what you would like to see included in future
editions. While this first edition is available in print format,
all future editions will be digital only. We encourage you to
receive Cavalier’s shareholder communications by email –
details are on the back of this newsletter.
Focused on Wool
We believe that designing and creating beautiful New Zealand
wool carpets is the future for our company... and the
customer benefits are numerous. Quite apart from the fact
that it feels nicer to walk on, wool is 100% natural, keeps
you warmer in the winter and cooler in the summer and it’s
naturally stain, soil and fire resistant. Health is one of the
many benefits of wool that people often don’t think of when
considering carpet options. Wool helps suck up moisture in
a home, naturally deters the growth of mould and dust mites,
and traps allergens and pollutants from the air which can
cause asthma and other respiratory conditions.
New Zealand was built on the back of the sheep farming
industry but flock numbers are falling and low wool prices
are proving a disincentive for many farmers. Cavalier plays
an important role in the supply chain and we are working
closely with industry groups to identify ways to map out a
stronger future for our wool industry. We believe that if our
wool carpet sales grow, then everyone will benefit, from the
farmer who supplies the wool through to our shareholders
who invest in our company.
Wool carpets are our focus and we are putting our money
where our mouth is. We are putting more resource into
new product development, creating innovative carpet styles,
colours and textures for our customers. We are investing
in display stands which suitably promote our beautiful
carpets and are proving very successful in retail stores.
We are looking at opportunities to build our product range,
our distribution networks and our global presence, with some
very real prospects being investigated. And we are taking our
New Zealand wool story to the world, working closely with
our distributors to have our beautiful carpets included in their
collections. Recent visits to other markets have been positive
with a number of existing customers showing interest in a
wider range of our carpets.
However, we have not forgotten that there is still customer
demand for quality synthetic carpets. Providing consumers
with choice is important and we will shortly be launching a
new quality synthetic loop carpet, something we know our
customers have been asking for.
Continued on next page >
Paul Alston
Chief Executive Officer
Alan Clarke
Chairman

Appearing in
unexpectedly,
fashionable places
Part of our World of Difference strategy is to align with
quality fashion associations and partnerships to give our
brand style credentials and inspirational visual metaphors.
Which leads us to Melbourne Fashion Festival and iD
Dunedin – two high profile fashion events we participated
in recently.
Architects and interior designers are valuable specifiers
and purchasers and we are looking to build awareness of
Cavalier’s offer with this incredibly important group. At
the Virgin Australia Melbourne Fashion Festival, we invited
a group of interior designers to a “World of Difference”
experience at the Grand Showcase Runway which featured
Australia’s well known and globally recognised designer,
Carla Zampatti. This was a wonderful way to network and
promote our carpets, in a design-led environment.
Meanwhile in New Zealand, we sponsored iD Dunedin
Fashion Week’s wool category for the second year. The
award recognises the designer who has made the most
innovative use of the wonderful natural fibre, wool.
It’s this shared belief in the virtues of wool as a naturally
renewable fibre, that prompted us to support the
longstanding event and inspire the next generation of
emerging designers to choose nature’s finest fibre for
designing the most innovative collections.
This year’s Cavalier Bremworth Wool Award winner,
Dayun Lee from South Korea, featured a finely tailored wool
collection with a strong 1940s military-inspired aesthetic.
CEO's Update (continued)
Dayun Lee’s finely
tailored wool collection
was the winner of
iD Dunedin Fashion
Week’s wool category
As we noted at the beginning of the year and highlighted
again recently, trading conditions are tough, particularly
in Australia; we have also seen slowing demand in the
New Zealand market in recent months. Economic reports
note that New Zealand manufacturers are struggling in
Australia’s current environment and softer carpet sales
are being seen by many distributors, particularly of lower
quality synthetic carpets. Hard flooring continues to grow
at the expense of soft flooring and Cavalier is countering
this with the introduction of our rug offer in the last year.
Pleasingly, demand for our top end wool and felted
carpets continues to grow; while volumes are small, these
high quality, higher margin carpets provide a significant
contribution to group profits.
Cost management and efficient operation become ever
more important in challenging times. We are investing in
those areas which will deliver value for our business – new
product development, customer relationship activity, sales
and marketing support and a new IT system. Our new
customer-focussed structure in Australia also provides
further efficiencies and allows for a more flexible and
agile approach to better meet the specific needs of this
important market.
While the short term market conditions are challenging,
we remain positive about the potential for Cavalier over
the longer term. I hope you enjoy reading the stories in this
newsletter and look forward to providing our next update
in August when we release our FY19 results.
A word from
the Chair
Alan Clarke, Chair
There is a great deal happening at Cavalier as we continue
to strengthen our focus on high quality woollen carpets,
made with the wool from New Zealand sheep and with the
expertise of our New Zealand design and production teams.
Tough trading conditions have continued but we are
working hard to capitalise on Cavalier’s reputation for
quality wool carpets and rugs and have identified some
exciting future opportunities for our company, which we
hope to update you on in the coming months.
Having the right team in place to oversee and execute our
strategy is important and we were pleased that director,
George Adams, has accepted the role of Deputy Chair.
He is passionate about health and safety and chairs our
Health & Safety Committee. We have also established a
new customer-focussed organisational structure in
Australia and appointed Rochelle Flint to the new role
of GM Marketing and International Operations.
We are working hard to ensure a prosperous future for
Cavalier. On behalf of the Board, thank you to all our
shareholders for your support and to everyone in the
Cavalier family for your passion and the energy you
bring to your role every day.
“ Wool’s structure
makes it strong, soft
and versatile. Our
people are passionate
about crafting it into
beautiful and unique
carpet and rugs, just
like Dayun has fine-
tuned her tailoring
ability with wool to
present her collection
at Dunedin iD.”
Rochelle Flint, Cavalier’s GM Marketing
and International Operations.
Adding ‘za-zoom’ in-store
across Australasia
Cavalier provides multiple ways for potential customers to view our
carpets, from our website and social media through to free samples
sent to their home. However, our research shows that most customers
will make their final flooring decision in-store, where they are able to
compare numerous different brands and products.
Cavalier has networks of valuable retailers throughout both New Zealand
and Australia. To ensure our high-quality carpets are displayed as they
deserve, in the best way possible, we continue to invest heavily in our
World of Difference in-store experience displays.
We now have numerous ‘mini’ World of Difference stands nationwide in
New Zealand and an increasing brand presence with our larger World of
Difference displays in a growing number of premium retail outlets. The
rollout is continuing in Australia as well, as we continue to support our
distribution networks on both sides of the Tasman.
32 CAVALIER CORPORATION SHAREHOLDER NEWSLETTER

Woollen yarn
vs felted wool
carpets
Demand for felted carpets is increasing
and Cavalier is a global leader in this area.
But what is felted carpet and how does it
differ from standard wool carpet?
Cavalier sources all its wool from
New Zealand sheep and dyes, spins and
felts the yarn into beautiful carpets and
rugs in its New Zealand factories.
Woollen yarn is a tried and tested material
for producing carpet that performs in any
installation. It can be used in either loop
or cut pile carpet styles and can be more
economically produced, with a wider range
of processing equipment available.
Felting is all about locking the woollen fibres
together - yarn is produced, assembled,
twisted and felted, often in ground-breaking
fashion. The result is a strong, chunkier
textured carpet with intricate designs, that
exhibits the highest levels of performance
while still retaining its natural softness and
appeal. Cavalier is a global leader in felted
yarn technology and continues to lead the
way in creating exclusive felted yarns with
a unique look and feel.
Felted wool carpet
Woollen yarn carpet
Redefining the
flooring experience
with Cavalier
Bremworth rugs
Hard flooring has become a design choice for many
homes so it was only logical for Cavalier to design its
woollen carpets into beautiful rugs. Rugs not only
provide warmth and comfort in your home, they are
also great at reducing noise and of course can create
a real style statement.
There is a colour and style for everyone, from Cavalier’s
beautiful wool ranges to its plushest synthetics.
The beauty with Cavalier Bremworth rugs is that you can
choose any of our carpets to be made into a rug of any
shape, it’s up to you! Plus, we will soon be launching more
binding options allowing you more customisation to suit
your home and style.
LEARNING
ABOUT OUR
BUSINESS
54 CAVALIER CORPORATION SHAREHOLDER NEWSLETTER

Reducing our
footprint
Consumers have never been so environmentally
conscious and we are seeing growing awareness
of the damage that micro-plastics and synthetic
products are having on our environment.
People are starting to make positive steps towards
real change and we believe the evolution in favour
of natural, renewable, biodegradable fibres and
more responsible synthetic products will be
imminent across all industries.
Mystery Creek Fieldays
Fieldays is the Southern Hemisphere’s largest agricultural event with 1,059 exhibitors
displaying their wares in 2019. Held in the Waikato over four days, more than 130,000
visitors attend the event, keen to check out everything from tractors to irrigation systems...
and even new carpet for the home. This year, Cavalier showcased its beautiful carpets and
rugs at its stand in the Town & Country marquee, with special deals on offer.
After the rush towards synthetic carpets in
the last 10 to 15 years, people are now realising
the benefits that wool offers and we are seeing
consumers turning back to beautiful woollen
carpet for colour, innovative style, performance
and its natural benefits.
Sustainability is important to Cavalier, as is
consumer choice, and as well as our wool carpets,
we also work with innovative synthetic fibre
producers to create our sustainable synthetic
fibre carpets and rugs.
An example of this is the use of Aquafil’s Econyl
synthetic fibre in our Siren carpet. The Econyl
fibre is made from 100% recycled synthetics
including fishing nets recovered from oceans
around the world, fabric scraps from mills and
carpet fibre designated for landfill. We are
currently the only carpet manufacturer using the
technology in Australasia, which is also widely
used by fashion clothing brands.
Late last year, Aquafil opened a ‘take back’ carpet
recycling plant in America. Particular carpets
can be recycled, with Aquafil reusing the fibre
component and the rest of the carpet going into
other things such as roading in the local American
market. In the US alone, 13 million tonnes of
textile waste ends up in landfills, and carpeting
accounts for 2% of all landfill material.
We have been watching Aquafil’s initiative closely
and are investigating how we can also be involved
in introducing better alternatives in New Zealand
for large scale wool and synthetic end of life
carpet recycling.
New Zealand’s Most
Trusted Carpet Brand
For the sixth year in a row, Cavalier Bremworth received top
honors in the Reader’s Digest Most Trusted Brands awards.
What customers said about Cavalier Bremworth in the
Readers Digest consumer survey:
“ Hard wearing carpet, especially the
100% wool.”
“ I automatically associate it with a
reputable brand that has been around
for a while.”
“ Premium brand, good product.”
Siren carpet
76 CAVALIER CORPORATION SHAREHOLDER NEWSLETTER

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Cavalier Corporation Limited
T: +64 9 277 6000
E: Investor@cavbrem.co.nz
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30 June
End of FY19 financial year
By end-August
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By end-September
FY19 Annual Report available
29 October
Annual Meeting of shareholders
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