Road to recovery: Coats achieved adj. EBITA of $34m in 1H20 despite making a modest loss in 2Q. While the risk of a global CV19 second wave remains, the sequential improvement in recent months is encouraging. We now estimate 2H20E adj. EBITA of $56m, which includes the September-November ‘high-season’. This is down from $96m in 2H19. We believe this is achievable provided we do not experience another global CV19 lockdown. Our new FY21E adj. EBITA estimate is $176m, down $32m or 16%. Forecast adjustments post 1H: We take a more cautious view on EBIT margin expansion, especially in FY21E, reducing our previous positive mix improvement driven by Performance Material (see Figure 6). This is due to key end markets, such as Automotive and PPE, taking longer to make commercial gains given the CV19 disruption. Albeit we note that 1H20 saw the delivery of volume composite parts to a European Automotive OEM. Higher tax rate guidance is the key new element (c.41%, up from 30%). Along with the relatively fixed nature of minority interest payments, these drive down our EPS forecasts with FY20E nearly halving to 1.1c and FY21E by 21% to 5.9c. Recent FX movements could reduce the headwinds in 2H20. Long-term investment case intact: The key elements of our original investment case remain very much intact, we review these on page 7. Slower balance sheet delevering: Management were quick to cut costs and preserve cash. The net debt-to EBITDA leverage ratio at 1H20 was higher than we expected due to working capital; on our new FY20E estimates, the ratio has risen to 1.9x. RoCE fell y-o-y in 1H, but even so remained at a healthy 28%. New CFO: As Simon Boddie retires from the company, we welcome the lengthy transition period as the role is taken on by new CFO Jackie Callaway.