Coats
Understanding Coats
Investment case
Our investment case supports and sustains our market leadership and delivers cash generative and consistent growth to our shareholders.
There are six elements to our investment case – each element is a strength in itself but together they combine to set us apart from our competitors, giving us a solid platform from which we can innovate, grow and deliver consistently strong shareholder returns.
Throughout 2020 we continued to review each element of our investment case and looked to align these more closely to the future core operations of our key business segments and the ongoing integration of recent acquisitions.
Global market leader in Apparel & Footwear (A&F)
A strong and defendable core business representing some 71% of Group sales.
- Global leader in A&F thread market, consistently increasing market share in a stable market (pre/post-Covid)
- Leading the response to meet changing industry needs – speed, personalisation, innovation, cost, quality, responsibility and sustainability
Leading player in Performance Materials market
Ability to build scale through technology, innovation and acquisition. Representing some 29% of Group sales.
- Global presence in multiple but focused end use sectors; building scale both organically and inorganically
- Performance Materials offer products that guarantee performance and safety, and solve industry problems through applying our vast textile expertise
- Innovation in developing or acquiring new competencies and technologies – such as carbon and glass composites
Track record of delivering continuous improvements and operational excellence
Focused improvement programmes and experienced management to deliver margin and other financial improvements.
Ensuring the Group is ‘fit for purpose’ and agile in the modern high-paced world.
- Productivity gains and procurement initiatives
- Investing in energy / waste reduction to improve operational efficiencies
- General cost and cash discipline around the organisation, in order to mitigate the impacts of Covid and safely navigate
Track record of delivering free cash flow
Strong cash flow generation and high Return on Capital Employed (ROCE).
- Balancing key cash demands of organic investment, pension schemes and shareholder returns
Value-adding acquisitions
Ability to build scale in the strategic focus areas which are currently fragmented competitively.
- Continuing to identify strategic acquisitions, including valueadding bolt-on acquisitions principally in the areas of highly engineered Performance Materials and software solutions for the Apparel & Footwear industry.
