Understanding Coats
Coats at a glance
Understanding Coats
- ShopCoats
We are the global market leader in apparel threads, structural components and threads for footwear, and innovative pioneers in performance materials.
We are manufacturers of sustainability-led innovative products, and trusted partner to leading brands across all three segments and multiple industries.
A FTSE250 company and a FTSE4Good Index constituent, Coats takes part in the UN Global Compact and is committed to Science Based sustainability targets for 2030 and beyond.
| 50+ Countries | 17,000 Employees |
| 34,000 Customers globally | >250 Years of textiles experience |
| Revenue by division | Revenue by region |
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- Highlights
- Transforming the business
Accelerating profitable sales growth
- Group organic growth of 10%; Apparel & Footwear 9%, Performance Materials 13%
- Thread market share gains up over 100bps to 24%
- Recycled product revenues up 37% to $127m
- 17 new innovative products brought to market
- Adjusted operating margin up 120bps to 14.8%
- Price/mix and self-help offset inflationary pressures of $118m
- Strong free cash flow of $114m, pro forma leverage after acquisitions of 1.4x
- Adjusted earnings per share increased 14% to 8.2c and dividend per share by 15%, full year dividend 2.43c
- Acquisition of Rhenoflex and Texon creates global market leader in footwear components
- Significant momentum in strategic projects to optimise the portfolio and footprint, and improve the overall cost base efficiency. As a result, we now expect to achieve an added $20m in Operating Profit in 2024, up to $70m
- Divested our Brazil and Argentina business, exited from Russia and direct operations in South Africa. Rationalised plants in Hungary and the USA and sold our units in Mauritius and Madagascar
- Sustainability ambitions upgraded in line with our net zero commitments. Substantially delivered on 2022 goals. New 2030 targets announced
- Positive progress in relation to de-risking of UK pension scheme; £350m buy-in completed. On/off contribution trigger agreed with Pension Trustees
Apparel
Coats is the global market leader in supplying premium sewing thread to the apparel industry, and is estimated to be over twice the size of the nearest thread competitor. The global thread market is estimated to be c.$3.4bn and whilst thread alone is 1-2% of the cost of a typical garment, it is a critical component in the manufacturing process and for the quality and performance of the finished product. We are one of the few global players of a key supply chain component in the $1.4tn global apparel industry which is projected to grow at low single digits in the medium term. We also manufacture selected zip and trim products, and our fashion tech business supplies software solutions for speed, productivity and transparency in customers’ operations. Whilst economic volatility, inflation and supply chain disruption impacted our industry in 2022, we expect industry growth rates to continue to demonstrate resilience in the medium term. In Apparel we are growing faster than the market because of our excellent reputation for quality, our value proposition, our global footprint and our strong sustainability agenda.
Footwear
Coats is the global market leader in supplying highly engineered structural components and performance thread to the footwear industry. We estimate the structural components addressable markets to be $0.6bn in which, through our recent acquisitions of Texon and Rhenoflex, we enjoy a market leading share of over 20% in a fragmented market. The global footwear threads market is c.$0.6bn, where we also have a long-established leading position.
Our acquisitions have opened new markets, particularly in footwear insoles, and in lifestyle and luxury structural components. In aggregate, the global footwear markets we serve are expected to grow 7-8% over the medium term. These markets are driven by sustainable innovation, reliability and reputation, and we are well positioned to take advantage of future growth in this industry.
Performance Materials
We are global experts in the design and supply of highly engineered performance threads, yarns and lightweight composites used in a range of industries including thermal and cut-protective wear, telecom and oil & gas infrastructure, automotive and feminine hygiene products. We estimate the total addressable market that we could realistically supply in the near term to be c.$3.0bn, giving us an estimated market share of around 15%. We aim to deliver mid- to high-single digit organic growth in the medium-term in Performance Materials as a whole. Specifically, Composites and Personal Protection affords better growth opportunities where we expect to grow revenues at a higher rate compared to Performance Thread where growth is likely to be in the mid-single digit range.
Chair’s statement
David Gosnell
Chair
“I am proud of what we have achieved — our innovation, our investment in our talented people, our bold strategic ambitions… everything that will help us to deliver value for all our stakeholders.”
Download full statement
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