Coats Group plc, a leading supplier of critical components to the apparel and footwear industries, announced its full-year results for 2025, highlighting continued market outperformance, strong margin progression, and significant free cash generation.
**Financial Highlights**
* **Revenue** $1,465 million, flat on an organic basis, outperforming core thread and footwear markets which declined low to mid-single digits.
* **Adjusted EBIT** $290 million, up 7% on a reported basis and 3% organically, with a margin of 19.8%.
* **Adjusted EPS:** 9.3 centsin line with expectations.
* **Free Cash Flow** Record $160 million, demonstrating strong cash generation capabilities.
* **Net Debt** $815 million, with proforma leverage of 2.2x, expected to reduce below 2x by end of 2026.
**Strategic Highlights**
* **Market Share Gains** Continued success in gaining share, outperforming core markets.
* **Portfolio Transformation**
* Exited non-core Americas Yarns business, improving margin by 100bps.
* Completed landmark acquisition of OrthoLite, accelerating footwear components strategy.
* **Adjacency Growth** Target adjacencies contributed 1% to revenue growth, with building momentum.
* **Organizational Simplification** Streamlined into two divisions (Apparel and Footwear) for reduced complexity and better alignment.
* **Sustainability Leadership** 43% growth in 100% recycled thread revenue to $554 million.
**Divisional Performance**
* **Apparel:** 1% revenue growthoutperforming marketwith 20.2% EBIT margin.
* **Footwear** 2% organic revenue decline due to cautious customer ordering, but market share gains and 23.9% EBIT margin.
* **Performance Materials** Returned to growth in H2, with 11.8% EBIT margin in Q4.
**Outlook and Upgraded Targets**
* **2026 Outlook** Expect organic growth despite market uncertainty, driven by share gains and adjacency growth. OrthoLite expected to significantly outperform footwear market.
* **Upgraded Medium-Term Targets**
* >5% revenue growth on average through the cycle.
* Operating margin range increased to 21-23%.
* Cumulative free cash flow of $1 billion in next five years.
* EPS CAGR of >10% post M&A or share buybacks.
**Key Takeaways**
Coats Group plc demonstrated resilience in a challenging market environment, achieving strong financial performance and strategic progress. The companys focus on market share gains, portfolio optimization, and sustainability positions it well for future growth. The upgraded medium-term targets reflect confidence in the companys ability to deliver consistent performance and value creation.
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Revenue ($m) | 1,465 | 1,433 | 2% |
| Adjusted EBIT ($m) | 290 | 272 | 7% |
| EBIT Margin (%) | 19.8 | 19.0 | 80bps |
| Basic EPS (cents) | 9.3 | 9.7 | (5%) |
| Net Debt ($m) | 815 | 449 | 82% |
| Free Cash Flow ($m) | 160 | 2 | 7,900% |
| Final Dividend per Share (cents) | 2.28 | 2.19 | 4% |