Annual Meeting Speeches and Presentation

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Bremworth Limited 26 November 2024 Annual Meeting Speeches – Chair and CEO
Slide 5 - Board
Joining me today are your Directors. I’ll ask them each to raise their hand when I introduce
them.
Firstly, Dianne Williams ... then John Rae ... Paul Izzard ... and Katherine Turner. And
there is, of course, also Grant Biel, co-founder of the Bremworth carpet business and
Director Emeritus.
Your Directors bring a diversity of skills, experience and thinking to the table, and ensure
core competencies are met across critical areas for our company. Also joining us today are
our CEO, Greg Smith, new CFO Mandy Tomkins-Dancey and the other members of Greg’s
executive leadership team. A number of our advisers including our auditors are also
present. I’d like to thank all the professional firms who have provided valuable advice to
Bremworth over the last year.

Slide 6 - Chair’s Presentation
I’d now like to move on to my presentation for today.
As you know, FY24 was a very challenging year for Bremworth. The team worked tirelessly
to rebuild our supply chain and ensure the future viability of our business post Cyclone
Gabrielle. Despite that, we acknowledge, at least from the outside, it was a standstill year for
shareholders. Your patience and continued support are deeply appreciated by management
and the board.
We did make substantial progress last year, establishing a strong foundation for future
growth. Our focus has been on several key priorities:

Slide 7 - Settling our insurance claim
21 months on, it is obvious, this is a complex and resource intensive process. The claim has
two parts. Material damage which covers plant, buildings and stock; and Business
interruption, which takes into account costs and lost margins due to Cyclone Gabrielle’s
impact on trading. These are both large claims. It makes sense that management is
thorough in the work required to ensure Bremworth is left in the best possible position at the
completion of the claim. This means we receive a settlement that fairly reflects the full value
of the reinstatement of the Napier plant. It also means recognition of the large impact on the
Bremworth business as a result of the extraordinary costs that have been incurred to ensure
business continuity and fair reimbursement for lost margin.

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Slide 8 - Napier
The inability to access Napier's yarn capacity since the floods has severely impacted our
ability to meet demand and supply the market, let alone grow. Management and the board
look forward to the settlement of the insurance claim in the coming months giving Bremworth
control over the reinstatement of the Napier plant and to allow it to re-build the business to
pre-cyclone capability. In the meantime, we have taken a staged approach to the
reinstatement of our Napier plant. To date, this has been focused on the key stages of
dyeing, spinning and finishing of yarns that are specific to Bremworth's exacting quality
standards, and this will continue throughout 2025.

Slide 9 - Expanding our hybrid supply chain capability
I will recap some of the key messages in the annual report, with a focus on our existing and
new capacity. The new supply chain is crucial to building resilience should another similar
catastrophic weather event arise again, while also delivering scale to the business and
ultimately creating opportunities to grow Bremworth far beyond the size of the business
today.
Sourcing yarns that meet our quality expectations has been difficult. I’m happy to say we
now have five external yarn supply partners, one in New Zealand, the rest overseas, that
meet our requirements. However, our Napier and Whanganui plants will together continue to
form the cornerstone of our new supply chain - supported by our external yarn supply
partners - to give us the ability to grow capacity. Whanganui will continue to spin our very
popular felted yarns which are unique to Bremworth combining beautiful textures and colour
with superior performance.
With consistent yarn supply now available, the Papatoetoe tufting operation is improving
performance and still has capacity to support growth. This improved supply chain is already
benefiting our customers, who are now receiving products we were previously unable to
deliver.

Slide 10 – Positioned for FY25 growth
I’d now like to take you through the work we have been doing to position the company for
growth.

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Slide 11 - Positioning the company and the team for growth
Management has worked to reduce costs, improve margins and enhance systems for
efficiency. This work essentially re-aligns our cost structure with the size of the business
while also positioning us for growth. Management will continue to look for further gains in
margins as the business begins to scale up this year. This will include the size of the range,
yarn efficiency, supply chain optimisation and designing margin into products at the
development stage. We expect a material margin improvement over the next 3 years that will
drive increased cash flow and profit.
We have invested in our people and our systems over the last 12 months to ensure that we
are ready to capitalise on the growth opportunities ahead. This includes a new capability that
recognises the skill and focus required of the brand to be sustainably profitable.

Slide 12 - Our markets
The New Zealand business was able to maintain some momentum during the supply
disruptions of last year however, Australia was hit hardest. Greg will share with you
management's plan to recover our position and grow. Suffice to say growth in Australia is a
key focus for the team. The board expects double-digit growth vs last year in New Zealand
and Australia in FY25. The board is also excited by early progress being made in other
geographies, with the United States being of particular interest due to the sheer size of the
market and the interest we have received from distributors and retailers in our premium
products.

Slide 13 - Enhancing Bremworth's reputation
We are committed to building a company that is important to our customers, desired by end
consumers and admired by the market, that delivers shareholder returns consistently.

Slide 14 - Conclusion
Whilst we’ve made good progress year to date, I want to acknowledge that management's
admirable aspirations for growth have been put under pressure by the current economic
climate and the loss of confidence our customers expressed in our ability to supply post
Cyclone Gabrielle. As you will no doubt have heard from across a wide range of companies
during reporting season, the market for consumer durables is particularly depressed and
while we are seeing a recovery in volumes, the uplift is slower than anticipated. Greg will
provide more detail in his presentation.

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In summary, we have laid the groundwork for a successful future. We are well-positioned for
growth in FY25 and beyond and anticipate a return to dividends from operations by FY26.
Thank you for your ongoing support. We are excited about Bremworth’s future and look
forward to delivering value for our shareholders, staff, channel partners and consumers.
I will now handover to Greg.

Slide 15 – CEO’s presentations
Good afternoon, everyone, and thank you for joining us for Bremworth's Annual Shareholders
Meeting. I'm Greg Smith, and over the next 10 minutes I will share our FY24 results, the
strategic direction for the current FY25 fiscal year and some insights into our YTD
performance.

Slide 16 - FY24 Results
Results In FY24 were impacted by supply constraints following Cyclone Gabrielle that forced
our Napier Plant offline.
As a result, our operating revenue fell 10% or $9.4m to $80.3m, and gross margins dropped
3.3 percentage points.
Net profit after tax was $4.6m. This was boosted by Cyclone Gabrielle related insurance
income that totalled $26.5m. This takes the total insurance proceeds since Cyclone Gabrielle
to $62m.
Carpet and rugs revenue dropped by 20% to $57.1 million.
Elco Direct, our wool buying business grew by 28% or $5 million in revenue. This was due to
growing share and increased demand while keeping costs low. The Elco Direct business offers
10-year contracts to growers who supply wool to our exacting standards. These contracts
support growers and have attracted new farms. We are proud of the farmers who work so hard
to provide the best strong wool in the world and I would like to congratulate the entire Elco
team for a great year.

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While we’ve been up against some head winds, as George mentioned, in FY24 we have laid
solid foundational blocks for sustainable profitability for our carpet business.
We have started on the staged reinstatement of our Napier plant to deliver on the quality and
product differentiation that we are known for. We have embedded our new hybrid supply chain
to enable growth and reset our baseline cost structure. Importantly we strategically invested
in our brand, customer experience, R and D, technology and our inventory which is well
positioned to provide for growth opportunities over the balance of FY25. We have also
implemented new product distribution tactics, and realigned and restructured our people lineup
(including my senior leadership team) to ensure that we have the right capacity, expertise and
agility in place to optimise the opportunities before us.

Slide 17 - FY25: A Year of Growth
With the foundational blocks now embedded, FY25 has one central theme.
To accelerate growth.
Our new hybrid supply chain anchored by our Napier and Whanganui plants and supported
by our external yarn supply partners can reliably deliver quality products to our customers fast,
which in turn bolsters confidence in Bremworth with our channel partners and their sales
teams.
There is still work to be done to fine tune our supply chain and optimise our inventory position
to strike the balance between stock on hand vs sales demand, while improving margins
through scale and strong relationships with suppliers.
We are focused on growing market share across New Zealand and Australia.
As George mentioned, NZ has been stronger despite the last 12 months of disruption reflecting
the brand’s strength in our home market. I would like to thank our retailers who have supported
us through that period.

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The Australian market was hit the hardest by stock shortages. As a market, we are acutely
aware it should be much bigger and represent a far greater share of our total volumes and
revenue. Now that our supply chain is back up and running to enable growth, we are excited
about the potential of the Australian business.
This financial year, we have expanded the number of stores in Australia offering our entry
level products, by 225. This makes our products more accessible to a wider audience and we
are confident this will help us grow share.

Slide 18 – FY25 Focus areas
Our brand
Bremworth is New Zealand's most trusted carpet brand. We will continue to raise awareness
of the performance benefits of wool to consumers. This includes elevating Bremworth wool
flooring as a genuine architectural surface that enhances the indoor environment with natural
benefits that synthetic cannot match. This in turn increases Bremworth’s value perception with
consumers.

Slide 19 - Supply chain
Over the last 12 months, we have spoken a lot about our supply chain focus, the staged
reinstatement of our Napier plant and restoring the business to pre-cyclone capability. It can't
be overstated how important this is and how much value it will add to Bremworth over the long
term. The diversification we now have is a strength. This year the benefit will be tangibly
realised through building confidence in new and existing channel partners, delivering high
quality beautiful products that perform, reliably, every time. Shareholders should expect supply
chain efficiencies along with a number of other initiatives to improve margins over the next 3
years.

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Slide 20 - New products
Due to Cyclone Gabrielle, we were forced to delete many of our products, leaving key gaps in
our consumer offering. This year we have launched 4 new, innovative ranges in the first
quarter. This grows our range by 20%. They have been well received by retailers, designers
and consumers. These ranges demonstrate our focus and commitment to innovation, using
unique yarns, to make soft flooring more exciting and attracting more people to the brand.

Slide 21 - Distribution
We are expanding our presence through wider distribution with key retailers in both markets.
This means we are getting our products in front of more consumers which will drive growth in
both countries.
Lastly, now that capacity constraints are overcome on most ranges, we are currently re-
entering the commercial channel and are building new product offerings to support that. This
channel has previously driven large volumes at lower margins. Our new hybrid supply chain
gives us the opportunity to win these projects with improved margins as we scale our own and
our yarn partners capacity and efficiency.

Slide 22 - Other Focus Areas for FY25
Beyond what I have already mentioned we also remain committed to:
● Direct-to-Consumer (D2C) Rugs: Our rug business has capitalised on the growing
trend of wooden flooring, catering to consumers seeking to blend hard and soft textures
in their homes. This segment experienced good growth last year and we continue to
experience a strong increase in orders year-to-date. This rug business has a wide
potential audience, due to emerging trends in flooring, pricing, consumption and home
ownership. It also makes for a more frequent purchase. We remain confident the rug
business will become a more meaningful contributor in the coming years.

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Slide 23
● Experience Stores: Our flagship brand experience store here in Parnell, Auckland
has provided invaluable insights into consumer preferences for soft flooring. This store
effectively positions Bremworth wool carpet as a premium flooring option, elevating its
design credentials and appeal in the market. In addition to showcasing rugs, the store
generates valuable leads for our channel partners and serves as a platform for
architects and designers to showcase wool flooring to their clients.
It’s also worthwhile acknowledging the store was awarded Gold for retail design at the
New Zealand Retail Interiors Association RED Awards last month and a Gold Pin at
the Design Institute of New Zealand (DINZ) Best Design Awards.

Slide 24
● Technology - We recently announced that Caio Diehl is joining us in early December.
This newly-created Chief of Technology role demonstrates that we are committed to
investing in tools to support efficiency and insights in all parts of Bremworth.
Technology will be utilised to support cost reduction, reduce complexity, improve
productivity and ultimately identify opportunities quicker.

Slide 25
● Elco Direct
Our Elco business remains a key strategic pillar. It provides another revenue stream
to our carpet and rug business while giving Bremworth supply security and continuity,
margin stability and quality assurance. Land use is changing, and some growers are
getting out of sheep breeds that require shearing due to economic factors. Elco’s low
cost, direct to farm business model enables us to offer superior returns to growers
which helps give them confidence to stay in the game. We expect market share to
continue to grow in the year ahead.

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Slide 26 - FY25 trading update
After 4 months we can report in the carpet business an unaudited 2% improvement in revenue
vs FY24. This improvement is important, as it demonstrates that with supply aligned to
demand we can grow. With monetary policy easing in New Zealand, we anticipate more
demand and growth to continue in the second half of the financial year.
As anticipated, we have delivered double digit growth in sales volumes in Australia.
Margins across newly created ranges are also pleasing. Margin is a key design input as we
launch new products.
We will provide a further, detailed trading update at the half year.
The balance of FY25 is an exciting time for Bremworth. Our focus on key markets, innovative
product development, customer centricity and fine tuning our supply chain will drive our
success. In addition to this, we are also in the process of securing our entry into a new
geography which we're approaching with cautious optimism.
Management is confident in the future revenue and profitable growth of Bremworth and in our
ability to deliver value to our shareholders.
Thank you.

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Agenda
01Board Introduction
02Chair’s Presentation
03CEO’s Presentation
04 Shareholder Questions & Discussion
05Resolutions
06Other Business and Close
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3

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4

John Rae
Independent Director
Dianne Williams
Independent Director
Grant Biel
Director Emeritus
Katherine Turner
Independent Director
Paul Izzard
Independent Director
George Adams
Independent Chairman
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6

Insurance
•Claim is a complex and resource intensive
process and has two parts:
•Material damage which covers plant, buildings
and stock
•Business interruption, which includes costs
and lost margins due to Cyclone Gabrielle
•We need to be thorough in the work required to
ensure Bremworth is left in the best possible
position
•Means a settlement that fairly reflects the full
value of the reinstatement of the Napier plant
•Also means recognition of the large impact on
the Bremworth business
7

Napier
•Inability to access Napier’s yarn capacity since the floods has
severely impacted our supply
•Settlement of insurance claim will give us control over the
reinstatement of our Napier plant and allow us to re-build to pre-
cyclone capability
•In the meantime, our staged approach to re-instatement has
focused on the yarns specific to our exacting quality standards
•This will continue throughout 2025
8

Hybrid supply chain
•Crucial to building resilience should another
similar event arise
•Also deliver scale to the business to allow
growth beyond the size of the business today
•Five external yarn partners (one in NZ, the rest
overseas) that meet our requirements
•Napier and Whanganui plants will together
continue to form the cornerstone of our new
supply chain
•Whanganui will continue to supply the very
popular and unique felted yarns
•With consistent yarn supply, supply chain has
improved and is already benefitting our
customers
9

10

Positioning company and team for growth
•Management has worked to reduce costs, improve margins and
enhance systems for efficiency
•This essentially re-aligns our cost structure with the size of the
business while also positioning us for growth
•Management will continue to look for further gains in margins as the
business begins to scale up this year
•Expecting a material margin improvement over the next 3 years that
will drive increased cash flow and profit
11

Markets
•New Zealand business was able to maintain some momentum
during the supply disruptions of last year
•However, Australia was hit hardest
•Growth in Australia is a key focus for the team.
•Board expects double-digit growth vs last year in New Zealand and
Australia in FY25 and is also excited by early progress being made
in other geographies
12

Enhancing Bremworth’s reputation
•We are committed to building a company that is important to our
customers, desired by end consumers and admired by the market,
that delivers shareholder returns consistently
13

Conclusion
•We’ve made good progress year to date
•However, I want to acknowledge that management's admirable
aspirations for growth have been put under pressure by the current
economic climate and the loss of confidence our customers
expressed in our ability to supply post Cyclone Gabrielle
•While we are seeing a recovery in volumes, the uplift is slower than
anticipated
•In summary, we have laid the groundwork for a successful future
•We are well-positioned for growth in FY25 and beyond and
anticipate a return to dividends from operations by FY26
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*Gross of Government grants $0.5m (FY23 $0.4m)
16

FY25: A Year of Growth
•New hybrid supply chain can reliably deliver
quality products to our customers fast and will
bolster confidence in Bremworth
•Work being done to strike the balance
between stock on hand vs sales demand
•... and to improve margins through scale and
supplier relationships
•Focused on growing market share across NZ
and Australia
•Australia should represent a far greater share
of total volumes and revenue
•Have expanded the number of stores in
Australia, making our products more
accessible and help us grow share
17

Our brand
•New Zealand’s most trusted carpet brand
•Will continue to raise awareness of wool's performance benefits
•Will elevate Bremworth wool flooring as an architectural surface
•Leading to increased value perception of Bremworth with consumers
18

Supply chain
•Will add value to Bremworth over the long term
•Diversification we now have in our supply chain is a strength
•We will build confidence in new and existing channel partners by
delivering high quality products that perform, reliably, every time
•And supply chain efficiencies will improve margins over the next 3
years
19

New products
•Cyclone Gabrielle forced us to delete many
products
•This year we launched 4 new, innovative
ranges in Q1 –growing our range by 20%
•New ranges demonstrate our commitment to
innovation to make soft flooring more
exciting for our customers
20

Distribution
•Expanding our presence through wider distribution with key retailers in
both markets
•Means getting our products in front of more consumers
•Re-entering the commercial channel, which has previously driven
large volumes at lower margins
•Hybrid supply chain provides opportunity to win these projects with
improved margins
21

Direct-to-Consumer (D2C) Rugs
•Capitalised on the growing trend of hard
flooring
•Catering to consumers seeking to blend
hard and soft textures at home
•Segment experienced good growth last
year and we continue to experience strong
increase in orders YTD
•Confident rug business will become a
more meaningful contributor in the coming
years
22

Experience Stores
•Flagship brand experience store in Parnell
provides invaluable insights into consumer
preferences
•Positions Bremworth wool carpet as a
premium flooring option
•Elevates its design credentials and appeal in
the market
•Generates valuable leads for our channel
partners
•Platform for architects and designers to
showcase wool flooring to their clients
•Was awarded Gold for retail design at NZ
Retail Interiors Association RED Awards and a
Gold Pin at the Design Institute of NZ (DINZ)
Best Design Awards
23

Technology
•CaioDiehljoins us in early December as Chief Technology Officer
•This newly created role demonstrates our commitment to investing in
tools to support efficiency and insights in all parts of Bremworth
•Technology will be utilised to support cost reduction, reduce
complexity, improve productivity and ultimately identify opportunities
quicker
24

Elco Direct
•Remains a key strategic pillar
•Provides another revenue stream while
giving Bremworth supply security and
continuity, margin stability and quality
assurance
•Its low cost, direct-to-farm business model
enables us to offer superior returns to
growers
•Expect market share to continue to grow
in year ahead
25

FY25 trading update
•After four months, 2% improvement in
carpet revenue on FY24
•With supply aligned to demand and
easing monetary policy in NZ,
anticipating growth to continue in 2H25
•Have delivered double digit growth in
sales volumes in Australia
•Margins of new ranges pleasing, with
margin now a key design input in new
products
•Balance of FY25 exciting
•Focus on key markets, innovative product
development, customer centricity and fine
tuning of supply chain will drive success
26

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28

Resolution 1
Re-election of George Adams:
That George Adams, who retires and who is eligible for re-election,
be re-elected as a director of the Company.
29

Resolution 2
Auditor’s remuneration:
That the directors be authorised to fix the remuneration of the auditor.
30

Proxies and postal votes
The Company has received approximately 15.7 million proxy and postal votes representing approx. 22% of total
shares, with approx. 92% of those in favour of each of these two resolutions.
ForAgainstProxy
discretion
Re-election of George Adams14,464,44730,3961,165,160
Auditor’s remuneration14,479,90220,2631,159,404
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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/pages/investor-centre
•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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