TIDMCOA
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 Year to date
same period in 2021 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
Coats Group +44 (0)79 7497
Investors Chris Dyett plc 4690
Richard Mountain / Nick +44 (0)20 3727
Media Hasell FTI Consulting 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 .
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