REG - Coats Group PLC - Trading Statement

CoatsAnnouncement

22/05/2024 07:00

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RNS Number : 3565P  Coats Group PLC  22 May 2024

22 May 2024

Coats Group plc

 

Trading Update

 

Return to revenue growth

Trading in line with expectations

 

Coats Group plc ('Coats', the 'Company' or the 'Group'), the world's leading
industrial thread and global footwear component manufacturer, today
announces a trading update for the period 1 January to 30 April 2024 (the
'period') ahead of its Annual General Meeting to be held later today.

 

                        1(st) January to 30(th) April 2024 revenues vs same period in 2023
                        CER(1)                               Reported
 Apparel                14%                                  11%
 Footwear               6%                                   6%
 Performance Materials  -5%                                  -9%
 Group                  7%                                   4%

 

 

All following references are at CER unless specified.

 

The Group traded as expected during the period, with good organic revenue
growth of 7% against a weak prior year comparator.

 

The improving trend was driven by Apparel, where revenue was 14% higher as
customer inventories and buying patterns returned to more normalised levels.
As previously highlighted, destocking commenced later in Footwear, creating a
lag effect in the recovery relative to Apparel. Notwithstanding this lag,
Footwear also returned to growth in the period, with revenue 6% higher
year-on-year, as demand from several major brand customers picked up as their
inventories also normalised.

 

Performance Materials trading in the period was in line with our expectations.
Whilst the business continues to be impacted by US customer phasing issues,
the division is on an improving trend, with revenue down 5% year-on-year in
the period (17% lower in FY 23).

 

Our global market leadership in 100% recycled thread products has continued to
strengthen during the period with strong growth. In addition, we can confirm
that the Science Based Targets initiative (SBTi) has validated Coats' near and
long-term science-based emissions reduction targets, including verification of
the Group's net-zero target for 2050.

 

 Our strategic projects continue to deliver significant operational and
financial benefits and we remain on track to achieve overall savings of $70
million by the end of 2024. These savings, along with our focus on controlling
our costs, have resulted in Group adjusted EBIT margin being at least in line
with our 2024 goal of c.17%.

 

Cash generation remained good through the period.

 

Outlook

 

The Group continues to make good progress and the Board's full year
expectations are unchanged. This is underpinned by evidence of the expected
recovery in Apparel and Footwear, an improving recent trend in Performance
Materials and the continued benefits from our strategic projects albeit a
level of uncertainty in our markets remains.

 

Over the medium term, we remain confident in the Group's ability to deliver
strong profit growth and cash generation, owing to our scale, global
footprint, innovation, strong digital platform and technical support
capabilities, alongside continued investment in sustainability and innovation.

 

The Group will release its interim results on 1 August 2024.

 

 Enquiries
 Investors   Chris Dyett         Coats Group     +44 (0)797 497 4690
 Media       Richard Mountain /  FTI Consulting  +44 (0)20 3727 1374

             Nick Hasell

 

 

1.      Constant exchange rate (CER) figures are 2023 results restated at
2024 exchange rates.

 

 

 

About Coats Group plc

Coats is a world leader in thread manufacturing and structural components for
apparel and footwear, as well as an innovative pioneer in performance
materials. These critical solutions are used to create a wide range of
products, including ones that provide safety and protection for people, data
and the environment. Headquartered in the UK, Coats is a FTSE250 company and a
FTSE4Good Index constituent. Revenue in 2023 was $1.4 billion.

 

Trusted by the world's leading companies to deliver crucial, innovative, and
sustainable solutions, Coats provides value-adding products including apparel,
accessory and footwear threads, structural footwear components, fabrics, yarns
and software applications. Customer partners include companies from the
apparel, footwear, automotive, telecoms, personal protection, and outdoor
goods industries.

 

With a proud heritage dating back more than 250 years and spirit of evolution
to constantly stay ahead of changing market needs, Coats has operations across
some 50 countries with a permanent workforce of more than 15,000, serving its
customers worldwide.

 

Coats connects talent, textiles, and technology, to make a better and more
sustainable world. Worldwide, there are four dedicated Coats Innovation Hubs,
where experts collaborate with partners to create the materials and products
of tomorrow. It participates in the UN Global Compact and is committed to
Science Based sustainability targets for 2030 and beyond, with an aspiration
of achieving net-zero by 2050. Coats is also committed to achieving its goals
in Diversity, Equity & Inclusion, workplace health & safety, employee
& community wellbeing, and supplier social performance. To find out more
about Coats visit www.coats.com (http://www.coats.com) .

 

Cautionary statement

Certain statements in this full year report are forward-looking. Although the
Group believes that the expectations reflected in these forward-looking
statements are reasonable, we can give no assurance that these expectations
will prove to have been correct. Because these statements contain risks and
uncertainties, actual results may differ materially from those expressed or
implied by these forward-looking statements. We undertake no obligation to
update any forward-looking statements, whether as a result of new information,
future events or otherwise.

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