Coats Group Plc · LSE:COA
Coats — Merger or Acquisition (July 2025)
21 slides from Coats's merger presentation, July 2025
Slide 1: Acquisition of Ortholite
ACQUISITION OF ORTHOLITE THE MARKET LEADER IN INSOLE TECHNOLOGY INVESTOR PRESENTATION July 2025
Slide 2: Ortholite at a Glance
ORTHOLITE AT A GLANCE GLOBAL LEADER OF INSOLE OPEN-CELL FOAM TECHNOLOGY FOR LEADING BRANDS Key operating highlights Key financial highlights Founded in 400+ 14 241 278 258 Global production facilities 217 Insole Formulations 176 1997 26% 26% 28% 20% 24% HQ in Amherst, Massachusetts c.550 310+ 2020A
Slide 3: Transaction Highlights
TRANSACTION HIGHLIGHTS ACCELERATING FOOTWEAR GROWTH STRATEGY THROUGH $770M COMBINATION WITH MARKET LEADER IN INSOLE TECHNOLOGY Key highlights Exceptional Opportunity Growth Accelerator Strong Strategic Fit Improves Portfolio Quality Funding Proposition Creating a market-leading Aligned coverage of H
Slide 4: Strategic Rationale
STRATEGIC RATIONALE COMBINING MARKET LEADING PLATFORMS TO CREATE A HIGH GROWTH MARKET LEADER Coats Footwear Strategic rationale Creating a ‘Super #1 #1 Greater scale, deep brand intimacy; 1 Tier 2’ in the Global #1 in threads Global #1 open-cell enhanced innovation and footwear segment foam insoles
Slide 5: Creating a Super Tier 2 Supplier
CREATING A SUPER TIER 2 SUPPLIER EXCEPTIONAL OPPORTUNITY TO COMBINE COMPLEMENTARY BUSINESSES Proforma revenue mix by category The component specialist Upper 1% ▪ Combining 2 premium suppliers ▪ Leaders in 3 product categories Heel Counter 23% ▪ Sustainability & compliance credentials Thread ▪ Accele
Slide 6: Highly Complementary Businesses
HIGHLY COMPLEMENTARY BUSINESSES ALIGNED COMMERCIAL AND OPERATIONAL GLOBAL FOOTPRINTS, WITH COMMON APPROACH TO EXECUTION Deepening relationships with global footwear brands Similar, strategically located global footprints Portland, OR USA Albacete Amherst, MA Spain USA Dongguan City, Ranipet China In
Slide 7: Significant Value Creation
SIGNIFICANT VALUE CREATION $20M IDENTIFIED COST SYNERGIES, ALONGSIDE ENHANCED GROWTH OPPORTUNITIES Sources of cost synergies Sources of growth synergies Initial $20m annual full benefit cost synergies by FY28 for c.$35m one-off cost Additional upside potential Operational Footprint optimisation Inno
Slide 8: Compelling Financial Rationale
COMPELLING FINANCIAL RATIONALE ATTRACTIVE TRANSACTION RETURNS, ALONGSIDE ACCELERATED DELIVERY OF GROUP FINANCIAL GOALS Initial Post synergy Accelerating Coats’ existing medium term targets4 ✓ Valuation 10.0x LTM EV/EBITDA1 < 8.0x LTM EV/EBITDA1,2 Revenue CAGR > 5% EPS accretion Low Single Digit in F
Slide 9: A Proven Formula for Successful M&A
A PROVEN FORMULA FOR SUCCESSFUL M&A STRONG TRACK RECORD OF DELIVERY BY AN EXPERIENCED TEAM Texon and Rhenoflex acquisitions: extracting maximum value Experienced team with significant M&A credentials Acquisition case… …versus delivery of: David Paja Chief Executive Officer Hannah Nichols 30+ years o
Slide 10: H1 Performance and Outlook
H1 PERFORMANCE! AND OUTLOOK ; . z " ‘ 5 nf \ ae a , a .—- ed ‘ a 4 a, a
Slide 11: Highlights
HIGHLIGHTS GAINING SHARE IN SLOWER MARKETS, MARGIN EXPANSION AND STRONGLY IMPROVING FREE CASHFLOW GENERATION CER revenue up 2%1, good growth in January-April, followed by increased market uncertainty Continued outperformance – market share gains in Apparel & Footwear Increased Group adjusted EBIT ma
Slide 12: Key Financial Highlights
KEY FINANCIAL HIGHLIGHTS 2% CER 19.8% EBIT margin1 7% CER revenue growth1 in line with EBIT growth1 medium-term target Improving free $430m net debt 4% EPS growth1 cash flow2 1.4x leverage3 $54m © Coats Source: Coats H1 25 Results. 3 Net debt excludes leases 12 1 Income statement figures exclude dis
Slide 13: Key Financial Metrics
KEY FINANCIAL METRICS ACCELERATED MARGIN AND FCF GROWTH H1 2025 H1 20241 Reported change H1 2024 CER CER2 Revenue ($ million) Apparel 381 376 2% 369 3% Footwear 199 198 1% 198 1% Performance Materials 125 131 (4%) 128 (2%) Group 705 704 0% 695 2% Adj. EBIT ($ million) Apparel 78 72 9% 70 11% Footwea
Slide 14: Full Year Outlook Remains Unchanged
FULL YEAR OUTLOOK REMAINS UNCHANGED 1 Outlook remains in line with current market expectations 2 Balanced weighting between first and second half trading Continued market share gains in Apparel and Footwear and recovery momentum in Performance 3 Materials give us confidence 4 We remain mindful of th
Slide 15: Transaction Structure and Key Details
TRANSACTION STRUCTURE AND KEY DETAILS Key details • Non pre-emptive placing of up to 19.99% of issued share capital • Offer to US QIBs under Rule 144A 1 Accelerate Placing • RetailBook offer of up to GBP equivalent of €8m • Pricing to be determined at the end of the bookbuild • Equity raise is not c
Slide 16: Appendices
APPENDICES
Slide 17: Sustainability: A Key Commercial Differentiator
SUSTAINABILITY: A KEY COMMERCIAL DIFFERENTIATOR AT THE HEART OF OUR BUSINESS © Coats 1 Baseline restated to reflect 2023 divestments. 4 Excluding small amounts of controlled landfill disposal for materials such as asbestos or medical waste in geographies 2 Baseline restated from 25% to reflect recla
Slide 18: Disclaimer (1/4)
DISCLAIMER (1/4) INVESTOR PRESENTATION DISCLAIMER THIS PRESENTATION, ITS CONTENTS AND ANY INFORMATION PROVIDED IN THIS PRESENTATION ARE STRICTLY CONFIDENTIAL AND ARE FOR INFORMATION PURPOSES ONLY AND MUST NOT BE RELIED UPON FOR ANY PURPOSE. THIS PRESENTATION IS NOT FOR RELEASE, PUBLICATION OR DISTRI
Slide 19: Disclaimer (2/4)
DISCLAIMER (2/4) None of the Company, BNP PARIBAS ("BNPP"), or Peel Hunt LLP (“Peel Hunt”) nor any of such person’s respective directors, officers, employees, agents, affiliates or advisors is under any obligation to update or keep current the information contained in the Presentation to which it re
Slide 20: Disclaimer (3/4)
DISCLAIMER (3/4) This Presentation may contain certain forward-looking statements, forecasts, estimates, projections and opinions ("Forward Statements"), which are based on current assumptions and estimates by the management of Coats. These Forward Statements include all matters that are not histori
Slide 21: Disclaimer (4/4)
DISCLAIMER (4/4) Save as set out above, this Presentation is only addressed to and directed at persons (a) in member states of the European Economic Area ("EEA") who are “qualified investors” within the meaning of Article 2(e) of the Prospectus Regulation (Regulation (EU) 2017/1129), as amended ("Qu