Coats Group (COA) Investor Presentation summary

Business highlights

• Achieved 2% CER revenue growth, with strong performance in Apparel & Footwear and increased market share despite market uncertainty.

• Group adjusted EBIT margin rose to 19.8%, within the 19-21% medium-term target range.

• Completed exit from North American Yarns business, focusing on higher-margin segments.

• Revenue from 100% recycled thread products surged 73% to $269m, reinforcing sustainability leadership.

• Organic adjacency sales grew 30% year-on-year, supporting revenue acceleration.

OrthoLite acquisition

• Entered a definitive agreement to acquire OrthoLite Holdings LLC for $770m enterprise value.

• OrthoLite is a global leader in open-cell foam insole technology, with c.36% market share and 550 brand partners.

• Acquisition creates a 'Super Tier 2' supplier, combining leadership in threads and insoles for critical footwear components.

• OrthoLite brings 14 global production facilities and a complementary footprint to existing operations.

• Transaction funded by 20% equity placing and debt, with net leverage expected below 2x by end of 2026.

Strategic rationale and synergy

• Combination enhances scale, innovation, and sustainability, with strong alignment on growth enablers.

• Identified $20m in joint cost synergies by FY28, with additional revenue synergy potential.

• Proforma footwear revenue expected to reach c.$700m, with margin accretion and EPS accretive from first full year.

• Enhanced customer intimacy and cross-selling opportunities with global brands.

• Strong track record of M&A integration and margin enhancement from previous acquisitions.