TIDMCOA
RNS Number : 6443Z
Coats Group PLC
17 May 2023
17 May 2023
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
January 2023 to 30 April 2023 ('the period').
-- Market conditions and Group trading in the period were in line with our expectations
-- Constant currency revenue decline of 7%, with organic CER
revenues down 20%, against a very strong prior year comparator
-- Operating profit margins were resilient, supported by
strategic projects and tight cost control
-- Full year expectations unchanged
1(st) January to 30(th) April 2023
vs same period in 2022
Reported CER Organic CER
----------------- ----- -------------
Apparel -27% -22% -22%
----------------- ----- -------------
Footwear 58% 62% -23%
----------------- ----- -------------
Performance Materials -16% -13% -13%
----------------- ----- -------------
Total -12% -7% -20%
----------------- ----- -------------
All following references are on an CER basis unless
specified.
The organic revenue decline of 20% in the period, against a very
strong prior year comparator, reflects the continuation of the
widespread industry destocking in Apparel and Footwear, together
with previously disclosed customer contract in-sourcing in
Performance Materials. This was in part offset by the annualised
contribution from the prior year acquisitions in Footwear, with
overall revenue declining by 7%.
As expected, Apparel revenues declined by 22% in the period
reflecting a continuation of trends seen in Q4 2022, with
destocking by customers adjusting to more subdued consumer demand
and excess inventory levels.
Footwear revenue decreased by 23% organically, with similar
destocking drivers to those seen in the Apparel markets. Reported
divisional revenue increased by 58% year-on-year in the period,
including the first time contribution from the acquisitions of
Texon and Rhenoflex. The integration of both businesses is
progressing to plan, with the realisation of synergy and efficiency
benefits increasing, in line with expectations.
Revenue in Performance Materials reduced by 13% in the period.
This was largely the result of the customer insourcing of a
significant PPE contract in H2 2022.
Our strategic projects remain on-track and are delivering
significant operational and financial benefits. These actions,
alongside dynamic pricing, have supported operating margins at the
beginning of 2023 and will continue to do so. Cash generation
continues to be positive and a focus for the Group.
Outlook
With trading in the period in line with expectations we continue
to anticipate full year 2023 performance consistent with the
Board's expectations, with a second-half weighting, underpinned by
the contribution from acquisitions, associated synergies and
strategic projects .
With a significantly strengthened commercial and operational
platform, the Group remains very well-positioned in its markets, as
the global partner of choice for winning brands and with a clear
leadership position in innovation and sustainability. Consequently,
we remain excited about the growth and margin opportunities across
the Group over the medium term, with improved cash generation
providing an additional catalyst to our strategic ambitions.
The Group will release its interim results on 1 August 2023.
Enquiry details
C hris Dyett / Victoria Coats Group +44 (0)797 497
Investors Huxster plc 4690
Richard Mountain / +44 (0)20 3727
Media Nick 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. Revenue in 2022 was $1.6 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
workforce of 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 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.
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END
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