Coats Group plc: history, ownership, mission, how it works & makes money

A Brief History of Coats Group plc

Coats Group plc, a leading industrial thread and consumer textile crafts company, has a rich history that dates back to 1755. Founded in Paisley, Scotland, by the Coats brothers, it initially operated as a small cotton mill.

In the late 19th century, Coats expanded significantly, driven by the popularity of sewing and textile crafts. By 1900, Coats had become the world's largest manufacturer of sewing thread, with a product range that included cotton and silk threads.

In 1950, Coats merged with another prominent textile company, the J&P Coats, further solidifying its position in the market. The company continued to grow through various acquisitions throughout the 20th century, enhancing its global footprint.

Coats Group plc was officially listed on the London Stock Exchange in 1999, marking a significant milestone in its corporate history. Following the floatation, it focused on restructuring and divesting non-core businesses to streamline operations.

By 2016, Coats established itself as a prominent player in the industrial textiles market, specializing in innovative solutions for various industries, including automotive, apparel, and home furnishings. The company generated revenues of **£1.16 billion** in 2020, demonstrating its resilience in a challenging market.

In recent years, Coats has invested heavily in sustainability initiatives. In 2021, the company achieved a 14% reduction in carbon emissions per unit of production and aims to reach **net-zero** emissions by **2030**.

Coats Group plc's success is attributed not only to its expansive product offerings but also to its commitment to innovation and sustainability. The company's ability to adapt to changing markets has been key in maintaining its competitive edge.

As of October 2023, Coats Group's initiatives include expanding its digital offerings and enhancing operational efficiency. The company anticipates further revenue growth, with estimates suggesting an increase to **£1.35 billion** in **2023**. This reflects a steady upward trend in demand for its products across global markets.

In addition to its financial performance, Coats Group plc is recognized for its corporate social responsibility efforts, with investments in community development projects and educational initiatives in regions where it operates.

A Who Owns Coats Group plc

Coats Group plc, a leading industrial thread and consumer textile company, is publicly traded on the London Stock Exchange under the ticker symbol "COA". The ownership structure of Coats Group reflects a mix of institutional and retail investors.

As of the most recent fiscal year, Coats Group reported a market capitalization of approximately £1.55 billion. The company's revenue for the year 2022 stood at £1.3 billion, marking a 12% year-over-year increase.

The top institutional shareholders include notable investment firms such as:

• BlackRock, Inc. - Holds approximately 5.07% of the total shares.
• Fidelity Investments - Accounts for around 4.95% of ownership.
• J.P. Morgan Asset Management - Owns about 3.88%.

Furthermore, significant insider ownership has been reported. The executive directors, including the CEO and CFO, possess a combined 1.5% of shares, demonstrating alignment with shareholder interests.

Coats Group has faced shifts in its ownership pattern over recent years, driven by strategic acquisitions and divestitures. In 2021, the company completed the acquisition of A&E Gütermann, enhancing its market share in the industrial thread sector.

The company adheres to a transparent governance structure, regularly updating their shareholder communications, with the last Annual General Meeting held on May 12, 2023, which saw active participation from institutional investors.

In a recent analyst report, Coats Group's stock has been rated with a consensus target price of £1.20, indicating a potential upside of approximately 20% from current levels as of October 2023.

Coats Group plc Mission Statement

Coats Group plc, a leading industrial thread manufacturer and a global leader in the development of innovative specialty threads and yarns, aims to deliver sustainable value through its commitment to quality and innovation. The company’s mission statement focuses on meeting customer needs while ensuring environmental and social responsibility.

Coats Group aims to be the world’s leading industrial thread and consumer textile crafts company. Their mission includes a commitment to quality, customer service, and sustainability, which is reflected in the company’s operational practices and product offerings.

Key Aspects of the Mission Statement

• Quality: Coats Group emphasizes superior product quality, ensuring that their threads and yarns meet rigorous industry standards.
• Innovation: The company invests heavily in research and development, focusing on technological advancements and sustainable practices.
• Sustainability: Coats Group is committed to minimizing environmental impact through responsible sourcing and production techniques.
• Customer Focus: The mission revolves around understanding and fulfilling the unique needs of their global customer base.

Financial Overview

As of the fiscal year ending December 31, 2022, Coats Group reported the following financial figures:

Environmental and Social Responsibility

Coats Group is dedicated to environmental stewardship and has set various targets, including:

• Reducing Carbon Footprint: Aiming for a 50% reduction in greenhouse gas emissions by 2030.
• Sustainable Sourcing: Ensuring that 100% of their cotton is sourced sustainably by 2025.
• Employee Engagement: Focusing on diversity and inclusivity, with a target of achieving 30% female representation in leadership roles by 2025.

Market Position

Coats Group operates in several sectors, providing products for the apparel, automotive, and home textiles industries. The company's key market segments include:

Coats Group's mission statement thus encapsulates its strategic direction—prioritizing quality, innovation, sustainability, and customer-centricity—while its robust financial performance underscores the effectiveness of these commitments in achieving market leadership within its industry.

How Coats Group plc Works

Coats Group plc operates as a leading industrial thread manufacturer, providing a wide range of products including threads, zips, and other supply chain solutions. The company serves diverse sectors such as apparel, automotive, and home textiles.

In 2022, Coats Group reported revenue of approximately $1.5 billion, showcasing an increase from previous years, driven by recovery in the apparel market and strategic acquisitions. The operating profit for the same year was around $231 million, reflecting a margin of approximately 15.4%.

Product Segments

• Threads: Coats is the world's largest manufacturer of industrial threads, producing over 70,000 tons annually across various markets.
• Zips: The company also specializes in zippers and fastening solutions, catering to both fashion and functional segments.
• Specialty Products: This includes coatings, sewing, and embroidery supplies, which have seen growing demand.

Geographical Reach

Coats Group has an extensive global footprint, with over 50 manufacturing facilities across 30 countries. Key regions include:

• Asia: Over 45% of revenue is derived from the Asia-Pacific region, primarily driven by the growing apparel market.
• Europe: Accounts for approximately 30% of total revenue.
• Americas: Contributes around 25% to the revenue stream.

Recent Financial Performance

In the first half of 2023, Coats reported revenue growth of 12% year-on-year, amounting to $780 million. This growth was attributed to strong demand recovery post-pandemic and improved supply chain efficiencies.

Cost Structure

Coats Group maintains a variable cost structure that allows flexibility in responding to market changes. Key components of their cost structure include:

• Raw Materials: Represents approximately 45% of total costs.
• Labor: Accounts for about 30% of operational costs.
• Logistics: Roughly 15% of total expenses.
• Other Overheads: Comprising the remaining 10%.

Investment and Expansion

The company has been actively investing in technological advancements and capacity expansions. In 2023, Coats announced plans to invest $50 million in a new manufacturing facility in Vietnam, expected to be operational by mid-2024, aiming to cater to the increasing demand in the Asia-Pacific region.

Table: Financial Overview of Coats Group plc

Coats Group's business model emphasizes sustainability and innovation, with ongoing projects aimed at reducing environmental impact through the development of eco-friendly materials and sustainable manufacturing practices.

As of the latest reports, the company has set ambitious targets for sustainability, aiming for a reduction of carbon emissions by 30% by 2030, aligning with global environmental goals.

How Coats Group plc Makes Money

Coats Group plc is a leading global supplier of industrial thread and consumer textiles. The company generates revenue through multiple segments, primarily involving the manufacturing and distribution of threads, zips, and related products. In 2022, Coats reported a revenue of approximately £1.51 billion, showing a growth of 14% compared to the previous year.

Revenue Streams

• Industrial Division: This segment is the largest contributor to Coats' revenue, accounting for around 69% of total sales. Key products include sewing threads, yarns, and technical textiles used in various industries such as automotive, apparel, and home textiles.
• Craft Division: Coats offers a wide range of products for the craft and DIY market, including knitting yarns and craft threads. This division contributed about 21% to the total revenue in 2022.
• Fashion & Apparel: This includes a specific line of products tailored for fashion applications, accounting for approximately 10% of the overall sales.

Geographic Performance

Geographically, Coats Group shows a balanced distribution of revenue. In 2022, the breakdown was as follows:

Profitability Metrics

Coats Group's profitability metrics are noteworthy. In 2022, the company achieved an EBITDA of approximately £265 million, resulting in an EBITDA margin of around 17.5%. The net income for the year was reported at £120 million, representing a net profit margin of about 8%.

Cost Management

Coats Group has emphasized efficiency in cost management, with operating costs rising by only 7% year-on-year, despite increased raw material prices impacting margins. The company focuses on maintaining strong supply chain agreements and operational efficiencies to mitigate these impacts.

Market Trends and Future Outlook

The global thread market is projected to grow at a CAGR (Compound Annual Growth Rate) of approximately 5.1% from 2023 to 2028. Coats is strategically positioned to capitalize on this trend through innovation in sustainable materials and expanded offerings in technical textiles.

In 2023, Coats announced plans to invest £50 million in capacity expansion to meet increasing demand, particularly in the automotive sector, which is undergoing significant growth in electric vehicle production.

Investment in Sustainability

Coats Group has committed to sustainability, with approximately 30% of its product range now made from sustainable or recycled materials. This initiative not only aligns with global sustainability goals but also caters to increasing consumer demand for eco-friendly products.

Overall, Coats Group's diverse product offerings, strategic geographic positioning, and focus on sustainability continue to drive its revenue and profitability in the competitive textile industry.