Reminder – Bremworth’s 1H24 Results and Investor Update

MARKET RELEASE

7 March 2024


Reminder - Bremworth’s 1H24 Results and Investor Update

Bremworth Limited (NZX: BRW) is today hosting a Half Year Results and Investor Update webinar, for the
six months ended 31 December 2023.

The webinar will be at 10:30 am.

To register for the webinar, please click the link:
https://us02web.zoom.us/meeting/register/tZMscOitrDwqG9YRoZdnqQf9V-FAgnI6PIDG

This will be presented by George Adams (Chair) and Greg Smith (Chief Executive Officer). The
presentation will be followed by a Q&A session.

A copy of the Investor Presentation is attached.



ENDS




For further information please contact:
Greg Smith Mark Devlin
Chief Executive Officer Impact PR
gregsmith@bremworth.co.nz Mark@impactpr.co.nz
+64 21 711 622 +64 21 509 060

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Our vision is to become a
global leader in designing and
creating desirable, sustainable,
safe and high-performing
natural interiors

1H24 operating environment
Performance drivers
•Napier plant offline due to severe damage post
Cyclone Gabrielle
•Severe capacity constraints, with supply
unable to meet demand
•Priority focus on implementing new hybrid
supply chain model; now in its final stages
Challenging macro-economic conditions
•Soft consumer spending due to macro-
economic conditions. i.eHigh inflation and
high interest rates
•Brands across most categories discounting to
stimulate sales
•Increased building costs combined with
increased interest rates has cooled new build
market

Supply chain update
•Napier was a key part of Bremworth’s
operations and supply chain, providing 75% of
total yarn to the Auckland carpet plant and
100% of dyed fibre to the Whanganui yarn
plant
•Made unique yarns that are hard to recreate
which meant it’s been challenging to find
alternative spinners
•We’ve built a new international hybrid supply
chain which has the capability to deliver quality
and capacity to deliver growth
•This includes investment in our Whanganui
plant to increase its production volumes and
we’re taking a staged approach in relation to
the reinstatement of the Napier plant
•Our new hybrid supply chain will protect the
business against future supply chain disruption
and minimise ongoing yarn supply constraints

Insurance update
•Priority is to continue to work with our insurers
concerning reinstatement at Napier under our
material damage and business interruption
policies
•Progress payments to date total $45.5m
•Stage 1 of the rebuild, involving reopening of
our dyehouse is complete
•The staged approach to reinstatement will
provide security of supply & complement our
international supply chain
•Loss of sales, margin losses and ongoing fixed
costs incurred during the indemnity period will
form the basis of our business interruption
insurance

Board-led strategic review
Objectives
•What decisions must be taken to ensure a
sustainable, profitable business model?
•Once insurance is settled, what are the
investment choices that should be
considered?
Opportunities
•Several opportunities across our core markets
for management to execute in FY25
•Opportunities are expected to drive volume
and margin growth , while reducing costs to
enhance profitability
•Benefits are expected to be realisedfrom FY25
onwards

Right size, right people
•Implementing a new go to market strategy for
Australia which reduced our fixed cost to
service this market and aims to deliver better
outcomes
•Exited external warehouse lease and
consolidated warehousing into Auckland
tufting site to reduce costs and improve
efficiencies
•Appointed new talent in key leadership
positions -CFO & COO
•Trained over 63 leaders through our Te Ara
Rangatira training and development
programme designed to achieve high
performance
•Voluntary redundancy for Napier team is
complete

Parnell, Auckland

Bremworth experience store
•Opened in November 2023 at Residium
(formerly known as The Home Ideas Centre)
•Trial Omnichannel Strategy to grow the rug
business
•Immersive space to get inspired and be
creative, plus learn and interact with the
Bremworth brand
•Secured exclusivity in soft flooring category in
this key strategic location
•Centre has 80 lifestyle brands and attracts
over 50,000 visitors annually
•Will also support the sale of carpet –
connecting customers with selected retail
partners

1H24 Financial Snapshot
$ millions
Revenue
Net Loss Before Tax –GAAP
Net Loss Before Tax –Normalised *
Cash and bank
1H24
39.0
-1.6
-2.2
30.8
1H23
47.2
-0.6
-0.6
10.4
•1H24 revenue down $8.2M, with all of that coming
from the carpet business
•Pre taxresults down from -$0.6M to -$1.6M,
attributable largely to reduced volume from
carpet business helped by reduced expenses and
increased interest income
•Insurance proceeds, net of insurance-related
spends and restructuring costs, accounted for the
$0.6M difference between GAAP and normalised
results
•Significant uplift in cash position on a year ago
* Normalised is a non-GAAP measure that provides what the Directors believe to be a more meaningful view of the
underlying financial performance of the Group. A reconciliation between GAAP and normalised earnings together with
further commentary on the disclosure of non-GAAP financial information are set out at pages 27 to 29 of the half year
report.

•Carpet revenue down $9.2M/24%, with business unable
to meet demand while establishingnew yarn supply
chain following Cyclone Gabrielle
•Rug revenue was up $0.2M/30% albeit from a small
base
•Elco Direct wool revenue also up -by $0.8M –on the
back of increased volume and improved selling prices,
with Elco anticipated to further grow revenue in 2H24
•The newhybrid supply model will allow Bremworth to
mitigate ongoing yarn supply constraints and enable us
to rebuild volume and inventory to meet demand
Revenue

•NLBT impacted by inability to meet carpet
demand
•Strong focus on administration costs and
distribution costs, with distribution costs
down $2.2M
•Administration costs would have been
approximately $1.0M less after excluding
litigation costs and costs relating to Board-
led strategic review
Financial performance

•Cash and bank of $30.8M as at31 Dec 2023 -
significantly up on $10.4M a year ago due to
insurance progress payments received
•Reduction in cash and bank since 30 Jun 2023
of $8.5M, with $4.4M related to insurance and
the cyclone, $2.0M to capex and rest to
operations
•Strong financial position to support post-
cyclone return to improved financial
performance
Cash position bolstered
by insurance receipts

Immediate priorities
Finalise insurance and future of Napier Plant
Completion of strategy review and execution of
early opportunities
Build stock levels to meet demand and grow
revenue
Release new products to market
Embed new go-to-market model for Australia

Disclaimer
•This presentation has been prepared by Bremworth Limited (“BRW”).
The information in this presentation is of a general nature only. It is not a
complete description of BRW.
•This presentation is not a recommendation or offer of financial products
for subscription, purchase or sale, or an invitation or solicitation for such
offers.
•This presentation is not intended as investment, financial or other advice
and must not be relied on by any prospective investor. It does not take
into account any particular prospective investor’s objectives, financial
situation, circumstances or needs, and does not purport to contain all
the information that a prospective investor may require. Any person who
is considering an investment in BRW securities should obtain
independent professional advice prior to making an investment
decision, and should make any investment decision having regard to
that person’s own objectives, financial situation, circumstances and
needs.
•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 business
strategy of BRW. Information about the future, by its nature, involves
inherent risks and uncertainties. Accordingly, nothing in this presentation
is a promise or representation as to the future or a promise or
representation that a transaction or outcome referred to in this
presentation will proceed or occur on the basis described in this
presentation. Statements or assumptions in this presentation as to future
matters may prove to be incorrect.
•A number of financial measures are used in this presentation and should
not be considered in isolation from, or as a substitute for, the information
provided in BRW’s financial statements available at
https://bremworth.co.nz.
•BRW and its related companies and their respective directors, employees
and representatives make no representation or warranty of any nature
(including as to accuracy or completeness) in respect of this presentation
and will have no liability (including for negligence) for any errors in or
omissions from, or for any loss (whether foreseeable or not) arising in
connection with the use of or reliance on, information in this presentation.
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