Special Meeting Speeches and Presentations

CAVALIER SPECIAL MEETING OF SHAREHOLDERS
17 September 2020

CHAIR’S PRESENTATION
Cavalier Bremworth heritage
Cavalier Bremworth is one of the most respected flooring brands in the market and is recognised as
a champion for quality New Zealand wool carpets. On top of that, over the past fifty years we have
built up significant knowledge about the potential and performance of many different fibres from
diverse sources for use in flooring.
In response to consumer demand, synthetic carpets were introduced in the last decade. However,
wool carpet was and remains the optimum offering for our customers. Not only is it the best fibre
for design, innovation and performance in flooring, it’s also natural, biodegradable, renewable and
healthier.
A changing world: evolving trends
The world is changing with consumer trends and tastes continually evolving – and in response, we
need to change too. Evolving trends and changes in consumer behaviour are seeing us move back to
natural and environmentally sustainable materials that we are strongly positioned to respond to,
and to benefit from.
In the last few decades, more flooring choices have become available, and we have seen a move to
hard flooring (including wooden) and to synthetic carpets, made from plastic fibres, which have
been heavily marketed to consumers by large global manufacturers.
While we adapted to those trends by manufacturing our own synthetic carpet ranges, using
recyclable materials where possible, we strongly believe that wool is the best option for quality
flooring – it’s better for people’s health, the planet and our business.
The long-term dangers of plastics
Today, the long-term dangers posed by plastics are becoming clear.
It’s a global problem and manufacturers need to be part of the solution.
The flooring industry is significantly contributing to plastic production and it’s obvious to us that
change is needed.
As a company, we cannot ignore that we are currently contributing to the plastic problem by
manufacturing and selling synthetic carpets. While we consider recycling to be a positive step
towards repurposing plastic that already exists, stopping it at source is the best solution.
Our time is now
We are strongly positioned to benefit from these trends and we believe the time is right for us to
change.

It makes sense for us to transform and transition out of synthetic carpet to wool and natural
materials, knowing that, in the process, we are committing to improving the wellbeing of our
customers and the environment without compromising on design and performance attributes that
our customers care about.
Our vision
Our vision is to become a global leader in designing and creating desirable, sustainable, safe and high
performing interior products.
And while this transformation will take time and investment, we believe we have the infrastructure,
capability and expertise to effectively manage the change.
Assuming you vote in favour of the resolution today, Cavalier will, for the first time in many years, be
debt free and armed with a plan and capital to build a new, sustainable business we can all be proud
of.
Thank you.

CEO’S PRESENTATION
Our place in the world
We are about to undergo a significant change to the business as we transition to a purpose led
natural fibres business model.
This change is necessary for the company’s long-term future and a successful transformation will not
happen without investment.
We will be:
• Transitioning out of synthetic carpets and focusing on all-wool and natural materials.
• Repositioning our brand and offer to better meet the needs of conscious consumers.
• Continuing to focus on doing what’s right – for people and the planet.
Seeking out partnerships and investment with other like-minded brands and products; and
• Delivering better returns on investment for our shareholders as a result.

Cavalier has been historically slow to react to changes in consumer behaviour but we intend to be in
front of the pack this time and be a leader in the natural fibre space, something we are good at and
a direction we believe the world is headed.
Stop selling synthetics
Towards the end of last year, we stopped ordering synthetic plastic yarns and are currently
transitioning out of synthetic stocks – since we announced the move away from synthetics in July
this year the sell down of synthetic stock has been faster than we anticipated. This means a
significant amount of cash has also been realised to assist with our transition.

Building on our heritage
Cavalier Bremworth has a long-standing history of producing world leading wool carpets. It’s what
we’re known for. Premium quality carpet made from New Zealand wool, right here in New Zealand.
And this is where our focus will remain, creating and marketing valuable, natural interior products
that are both sustainable and desirable, here and around the world.
Our growth strategy
To reach our goals over the next few years we need to grow woollen carpet sales progressively in
what has been a shrinking soft flooring market. We plan to do this by investing in four main areas:
• Grow the wool flooring market - we will be leading a movement to inspire consumers, to
promote the true worth of wool and natural fibres and to reignite and grow consumer
demand for natural and sustainable products. Changing consumer behaviour and telling the
wool story is important for growth.
• Grow our share of the market - we will be positioning Cavalier Bremworth as the first choice
for these consumers. We will refreshing our brand look and feel and investing considerably
more into marketing (something we have underinvested in in recent years).
• Expand our presence- we will be expanding our presence – more retailers, new ranges and
products with different price points, more investment into our online presence, reaching out
to new consumer groups and utilising the voices of influencers and opinion leaders to
support our brand. We will have more than 300 stores in New Zealand and Australia that
will now have access to Cavalier Bremwoth products.
• Innovation and future thinking - while woollen carpets and flooring will remain our focal
point in the short to medium term, we will also look at other opportunities to leverage our
strengths and capabilities and expand our market. We will use science and innovation to
create new product categories and will partner with experts and other like-minded
organisations.
Reaction has been positive
We announced our strategic intentions last month and the feedback we have received has been
overwhelmingly positive. This has been very exciting and it’s not just us....in New Zealand and
around the world, there is a groundswell of support for natural fibres and materials.
In New Zealand alone in the last few months, we have seen a new vision and action plan launched by
the Government-supported Wool Industry Action Group; significant media coverage on the
opportunities for wool; extensive social media commentary backing both Cavalier’s transition to all
wool and natural fibres as well as support for wool in general; and support for the industry from the
Government via the Sustainable Food & Fibres Future fund.
I am convinced this is the right direction for the company!
We need to invest in the future and change will be costly – all the funds generated from the sale of
the Auckland site will be required to make the change successful.
Our goals and ambitions
Over the next ten years, our vision is to become a purpose-led global leader in designing and
creating desirable, sustainable, safe and high performing interior products. We have set ourselves a
number of near and medium term goals to guide us on our journey.

Our financial journey
Five-year modelling of Cavalier’s future financial performance and the investment needed to bring
about the transformation has been undertaken by management and external advisers.
In summary:
• Total sales revenue for FY20 and FY21 will reduce as Cavalier exits its non-wool carpet
business and as a consequence of COVID-19;
• Investment costs, including restructuring of our operations, will be incurred as we adjust our
manufacturing and sales base to reflect the new sales focus;
• Marketing spend and people costs will increase significantly as we invest in a number of
initiatives to enhance our market presence and ensure our strategy is successfully
communicated, understood and implemented – because we will not grow if we do not
invest;
• As our strategy bears fruit and sales of higher margin, higher value woollen carpets replace
and eclipse the previous synthetic carpet sales, this will be reflected in Cavalier’s financial
performance, with growing revenues expected from FY23 and FY24 onwards as we build
woollen carpet sales and as the economy recovers from COVID-19;
• The full benefits from the transformation are expected from FY25 onwards.
Trading update
One thing we didn’t count on, when we started defining our new strategy, was that the world would
be hit by a pandemic. However, we believe our new positioning and business model will benefit us in
this new normal.
Since emerging from lockdown in New Zealand and the restrictions in Australia in May, we have seen
stronger sales volumes than what we had been expecting. Partly, this has been led by pent up
demand seeing consumers spending money on their homes in lieu of other discretionary spends (for
example, overseas travel), as well as sales of synthetic carpets, as retailers have been stocking up
ahead of our transition away from these fibres.
New Zealand, in particular, has been performing better than anticipated in the new financial year
from 1 July. For the financial year to date, Cavalier’s total carpet volumes in New Zealand, including
the sell down of synthetics, are up over 7% on the same period last year. Sales revenue is up over
10% due to a better mix of product sold.
During the same period, wool volumes on their own are up 7.5% on last year and sales revenue is up
21% - again highlighting the higher price points associated with wool carpets.
In Australia, while volumes are down about 13%, the associated sales revenue is only down by 6%. In
part, this softer performance is a result of the renewed COVID restrictions in Victoria and NSW,
where nearly 60% of our active retailers are based; as well as the need to rebuild woollen carpet
stocks in Australia following the shutdown of manufacturing in New Zealand.
Over 80% of our sales in Australia are wool. We have started strongly in September and are
expecting a lift in this market as COVID restrictions are relaxed.
Our net debt has also decreased significantly, from $17.7m in December to only $7.2m at the end of
August. This is a major decrease and highlights the stronger than expected trading and faster than
expected sell down of remaining synthetic stocks.

The outlook for the economy remains uncertain but all indications are that there will be a downturn
in the near term as a result of COVID-19.
We believe the work we are doing to reposition Cavalier will allow us to navigate this environment
and build on the consumer trends we are seeing in the marketplace to deliver value for our
shareholders.
Thank you.
ENDS

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17 September 2020
CAVALIER
SPECIAL MEETING
OF SHAREHOLDERS
1

MEETING AGENDA
PRESENTATIONS
Address from the Chair, George Adams
Address from the Chief Executive Officer,
Paul Alston
SHAREHOLDER DISCUSSION
VOTING ON THE RESOLUTION
Approval of the sale and leaseback of the
Auckland Property
CLOSE OF THE SPECIAL MEETING
Special Meeting September 20202
Chairman, George Adams
CEO, Paul Alston
Director, Grant Biel
Director, John Rae
Director, Alan Clarke
Director, Dianne Williams

50+ YEARS OF
HERITAGE AND
EXPERTISE
50+ YEARS OF HERITAGE
AND EXPERTISE.
Cavalier Bremworthis one of the most respected New
Zealand brands. Over decades, we have built a reputation
as a champion for quality New Zealand wool carpets.
For the last 50+ years, we’ve been on a journey of
exploration and have built up significant knowledge about
the potential and performance of many different fibres
from diverse sources for use in flooring.
We are considered world leaders in the design and
manufacturer of woollencarpets, particularly high
quality, felted carpets and woollenyarn.
We believe wool carpet is the optimum offer for
customers. Not only is it the best fibrefor design,
innovation and performance on the floor, it’s also 100%
natural, biodegradable and renewable.
Special Meeting September 20203

CONSUMER TASTES AND
TRENDS CONTINUE TO
EVOLVE.
Consumers are starting to reject plastic, particularly
single-use plastics, in favour of multi-use or more
sustainable alternatives.
Consumers are becoming more aware that plastic
comes in many forms, including synthetic carpet,
upholstery, curtains, clothing and more.
For many years, wool carpet was the preferred and
only option for flooring. However, in the last few
decades, more flooring choices have become available,
particularly hard flooring and synthetic carpets made
from plastic.
While Cavalier adapted, we believe wool remains the
best option for quality flooring.
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THE WORLD IS
CHANGING AND SO
ARE WE.

*by weight
THE LONG-TERM DANGERS
POSED BY PLASTICS ARE
BECOMING CLEAR.
Plastic is a global problem and manufacturers need to be
part of the solution.
The impact plastics have on human health is not yet fully
understood, but early studies suggest that microplastics
entering the body are a potential threat to human health.
The average kiwi home with synthetic carpet is similar to
having 22,000 plastic bags on the floor*.
The flooring industry is significantly contributing to
plastic production and it’s obvious to us that change is
needed.
Whilst recycling is a positive step towards repurposing
plastic that already exists, stopping it at source has to be
the best solution.
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5

OUR TIME IS NOW
Special Meeting September 20206

OUR VISION
To become a global leader in
designing and creating
desirable, sustainable, safe
and high performing natural
interior solutions.
Special Meeting September 20207
WHAT DEFINES US
We believe that by embracing
nature we can make a genuine
difference to the wellbeing of
people and the planet, without
compromising the design and
performance attributes our
customers care about.

CREATING A BETTER PLACE IN
THE WORLD.
•Transitioning out of synthetic carpets and
focusing on all-wool and natural materials.
•Repositioning our brand and offer to better
meet the needs of conscious consumers.
•Continuing to focus on doing what’s right –
for people and the planet.
•Seeking out partnerships and investment
with other like-minded brands and products.
•Delivering better returns on investment for
our shareholders as a result.
8

TRANSITIONING OUT OF
SYNTHETICS.
We are evolving to better meet the needs of
a changing world and changing consumer
behaviour.
We have stopped ordering synthetic plastic
yarn and are transitioning out of synthetic
fibre products. This means we will
significantly reduce our contribution to the
worldwide plastic problem.
The selldownhas been faster than
anticipated, releasing a significant amount
of cash to support our transformation.
Special Meeting September 20209

BUILDING ON OUR HERITAGE
Cavalier Bremworthhas a long-standing history
of producing world leading wool carpets.
It’s what we’re known for. Premium quality
carpet made from New Zealand wool, right here
in New Zealand.
And this is where our focus will remain, creating
and marketing valuable, natural interior
products that are both sustainable and desirable,
here and around the world. It’s good for our
business and it’s good for you.
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10

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11
OUR GROWTH
STRATEGY
THESE FOUR PATHWAYS WILL DRIVE OUR GROWTH:
GROW THE WOOL FLOORING
MARKET
GROW OUR SHARE OF THE
MARKET
EXPAND OUR PRESENCE
INNOVATION AND FUTURE
THINKING

A GROUNDSWELL OF POSITIVITY
Special Meeting September 202012

OUR GOALS AND AMBITIONS
Special Meeting September 202013
NEAR TERM
THE NEXT 12 MONTHS
MEDIUM TERM
12 TO 36 MONTHS
Continue to expand our retailernetwork.
Buildon our marketing programme.
Continue to measure and drive our
sustainability goals
Deliver a programme thatencourages
retailers to promote and sell Cavalier
Bremworthwoolcarpets.
Expand our reach with key influencers.
Launchanexciting,highimpactand creative advertising and marketing
campaign.
Introduce new products to the lifestyle rangemakingwool carpets
accessibleformoreconsumers.
Welcomenewretailerstoourdistribution network, particularly in
Australia.
Transitiontoanall-woolandnaturalfibres business model and cease
manufacturing synthetic carpets by the end of 2020.
Audit environmental impact and set clear, measurable sustainability
goals.
Streamlineouroperationsaroundournew business model, and drive
efficiencies.
Access funding to strengthen our capital structureandfacilitateour
transformation toanall-woolandnaturalfibresbusiness.

OUR FINANCIAL JOURNEY
Special Meeting September 202014
FY21 to FY23: Investment into
resetting the business,
commencing the new strategy and
navigating the economic recovery
post-COVID.
FY23: Return to profitablegrowth.
FY25: Full benefits of
transformation strategy being
realised, withincreasing value and
profitability.
•FY20/21 total sales revenue will reduce as Cavalier
exits its non-wool carpet business and with impact
of COVID-19.
•Investment costs, including restructuring of
operations, will be incurred as manufacturing and
sales base is adjusted to reflect the new sales focus.
•Increase in marketing spend and people costs, with
investment in a number of initiatives to enhance
Cavalier’s market presence and strategy execution;
•Growing revenues expected from FY23 and FY24
onwards, as strategy bears fruit and sales of higher
margin, higher value woollen carpets replace and
eclipse the previous synthetic carpet sales, and as
the economy recovers from COVID-19;
•FY25 onwards: Full benefits from the transformation
are expected.

TRADING UPDATE
RECOVERY BEING DRIVEN BY:
•Pent up demand after lockdown
•People spending on renovations and new homes
in lieu of other discretionary spend
•Retailers stocking up on synthetic carpets ahead
of Cavalier’s transition away from these fibres
•Increasing sales of wool and higher value
products.
OUTLOOK
Outlook for the economy remains uncertain but all
indications are that there will be a downturn in the
near term as a result of COVID-19.
We believe the work we are doing to reposition
Cavalier will allow us to navigate this environment
and build on the trends we are seeing in the
marketplace to deliver value for our shareholders.
Special Meeting September 202015
APRIL 2020
•Material impact from lockdown in NZ and restrictions in Australia
•Revenue dropped to almost zero, with some online sales
MAY/JUNE 2020
•Emergence from lockdown, with retail sales recommencing
•Good recovery, particularly strong in New Zealand which was
ahead of prior year. Australia in line with prior year.
•Better mix of products being sold in both countries.
JULY/AUGUST 2020
•Continued strong performance in NZ, with some impact from
Auckland restrictions.
•Softer performance in Australia due to restrictions in Victoria and
NSW, however, better mix of higher margin carpets being sold.
Net debt reduced to approx. $7m as at end August 2020, down from
$17.7m at end December 2019.

BUSINESS OF
THE MEETING
Special Meeting September 202016

AUCKLAND PROPERTY
SALE
Agreement with KinleithLand & Infrastructure Limited
for the sale and leaseback of Cavalier’s Auckland
Property for $24.6 million (net proceeds of $24.0
million).
Proceeds will be used to provide:
•additional liquidity and funding during the current
uncertain and difficult operating environment;
•a sound financial footing to better capitalise on the
expected eventual recovery in the carpet market;
•and the financial resources to undertake our
strategic transformation to its all-wool and natural
materials business model.

VOTING
To consider and, if thought fit, to pass the following ordinary
resolution (which requires the approval of a simple majority of
the votes of those shareholders entitled to vote and voting on the
resolution):
That the sale and leaseback of the Auckland Property, details of
which are set out in the Explanatory Statement, so as to enable
the Company to execute its transformation to the all-wool and
natural materials business model, while also providing it with the
additional liquidity and funding, be approved.
Special Meeting September 202018
Recommendation of the Board
The Board unanimously recommends the resolution
to shareholders for approval and encourages all
shareholders to vote in favour of the resolution.

PROXIES AND POSTAL VOTES
Special Meeting September 202019
FORAGAINSTPROXY DISCRETION
30,104,098
95.26%
195,451
0.62%
1,302,438
4.12%
The Company has received 211 proxy and postal votes representing approx. 46% of total shares, with 95.26% of
those in favour of the resolution.
That the sale and leaseback of the Auckland Property, details of which are set out in the Explanatory Statement,
so as to enable the Company to execute its transformation to the all-wool and natural materials business model,
while also providing it with the additional liquidity and funding, be approved.

CLOSE OF THE
MEETING
Special Meeting September 202020

This presentation has been prepared by Cavalier Corporation Limited (“CAV”). The information in this presentation is of a general nature only.
It is not a complete description of CAV.
This presentation is not a recommendation or offer of financial products for subscription, purchase or sale, or an invitation or solicitation
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Past performance information contained in this presentation should not be relied upon (and is not) an indication of future performance. This
presentation may also contain forward looking statements with respect to the financial condition, results of operations and business, and
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presentation is a promise or representation as to the future or a promise or representation that a transaction or outcome referred to in this
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matters may prove to be incorrect.
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information provided in CAV’s financial statements available at www.cavcorp.co.nz.
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