REG - Coats Group PLC - Trading Statement

CoatsAnnouncement

23/11/2022 07:00

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RNS Number : 2772H  Coats Group PLC  23 November 2022

 23 November 2022

Coats Group plc

 

Trading update

Trading in line with full year 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 July 2022 to 31 October 2022 ('the period').

 

·    Strong organic revenue growth of 6% year-on-year, as the Group's
performance normalised, as anticipated, after the very strong result in the
first half

·    Year-to-date revenue growth was 14%, a run-rate above the expected
long term trend

·    Pricing and productivity actions continue to offset inflationary
pressures

·    Trading in line with full year expectations

 

                        1 July to 31 October 2022 revenue vs same period in 2021       Year to date revenue growth
                        Organic              CER                  Reported             Organic
 Group                  6%                   18%                  9%                   14%
 A&F                    3%                   20%                  11%                  14%
 Performance Materials  15%                  15%                  6%                   16%

 

All following references are on an organic CER basis.

 

The growth rate of 6% year-on-year reflects the strong prior year comparator
and moderated compared to H1 due to an industry-wide softening in demand,
mainly in Apparel, towards the end of the period.

 

Apparel and Footwear revenue increased 3% year-on-year in the period and 14%
year-to-date. Apparel experienced some destocking by customers, as a result of
the macroeconomic environment. Footwear continued to see positive end market
sentiment across the US, Europe and Asia. The acquisitions of Texon and
Rhenoflex are performing in line with our expectations.

 

Revenue in Performance Materials increased 15% with all segments continuing to
perform well.

 

Our pricing actions and self-help efficiency programmes continue to offset the
significant inflationary pressures in the supply chain. In addition, our
strategic projects remain on-track, and are delivering significant operational
and financial benefits.

 

Balance sheet

 

The Group maintains a strong and liquid balance sheet with proforma leverage
currently around 1.5 times, following the recent Footwear acquisitions.  This
remains within the Group's targeted leverage range of between 1 - 2 times.

 

Outlook

 

The Group is proactively responding to macroeconomic uncertainty with a
well-defined and tested playbook that focuses on cost and cash actions.
Consequently the Group anticipates that its performance for the full year 2022
will be in line with  expectations, despite greater foreign exchange
headwinds than were expected at the half year (a 3-4% full year adjusted
operating profit headwind has increased to c.5% based on latest rates). The
Group continues to expect to make good progress during 2023 underpinned by the
full year contribution of acquisitions, associated synergies, and strategic
projects.

 

 

The Group will release its full year 2022 results on 2 March 2023.

 

Appendix:

 

                        1 January to 31 October 2022 revenue vs same period in 2021
                        Organic               CER                   Reported
 Group                  14%                   19%                   12%
 A&F                    14%                   20%                   14%
 Performance Materials  16%                   16%                   8%

 

 

 

 Enquiry details
 Investors         Chris Dyett                     Coats Group plc  +44 (0)79 7497 4690
 Media             Richard Mountain / Nick Hasell  FTI Consulting   +44 (0)20 3727 1374

 

 

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. Revenues in 2021 were $1.8bn.

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 workforce of over 17,000, serving its customers
worldwide.

Coats connects talent, textiles, and technology, to make a better and more
sustainable world. Worldwide, there are three 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 a goal 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
(https://nam11.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.coats.com%2F&data=05%7C01%7C%7Ccd229b4320494a6828bc08dacca972ea%7C048ff72770274cd0b672f075b0bdb973%7C0%7C0%7C638047325388047557%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=qp8Bd5Nk8%2BFHRxL%2FYHmJ2J0daExhH3jqmJJ3q3zndSA%3D&reserved=0)
.

 

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