Good strategic progress in H1 with ongoing market outperformance and full year outlook unchanged

Strategic Highlights

• Continued significant outperformance with share gains against markets we estimate were down mid-single digit in aggregate
• Strengthened market leadership in 100% recycled thread generating $297m of revenue
• Target market adjacencies continue to enhance growth profile, contributing 1% to Group revenue growth
• 2025 organisational change to two divisions and talent investment in Footwear delivering benefits, positioning the division for accelerated growth
• OrthoLite sales synergies expected to deliver at least $40m of annual incremental revenue by 2030, not included in acquisition case
• OrthoLite integration progressing well. On track to deliver $5m cost synergies in 2026 and at least $20m annualised by 2028

Financial Highlights

• Group revenue of $837m, 1% up on an organic CER basis with:
  • Apparel delivering 1% organic growth, driven by portfolio-wide share gains and strong growth in China domestic and automotive thread markets
  • Footwear delivering flat organic revenue, with significant acceleration in Q2 despite soft market, and strong growth from composite tapes for energy markets
  • OrthoLite revenue lower year-on-year against very strong prior year comparator with temporary capacity challenges in Indonesia being resolved
• Group adjusted EBIT margin maintained at 19.8% with OrthoLite accretion, cost and procurement discipline enabling continued investment in growth initiatives
• Adjusted basic earnings per share 4.4c (H1 2025: 4.7c)
• Free cash flow⁴ of $30m (H1 2025: $38m), leverage⁵ on track to 2.0x or below at end of 2026 given normal seasonal H2 cash generation weighting
• Interim dividend of 1.05 cents per share, an increase of 5%, highlighting Board confidence in the Group’s medium-term prospects

Full year and medium-term outlook

• Full year expectations unchanged
• Assumes modest market declines in H2, despite low inventory levels
• Group will continue to outperform market and deliver growth through share gains, secured pricing, target adjacencies and new product launches
• Incremental cost actions will deliver c.$15m benefits in H2, including OrthoLite cost synergies
• Expect good year-on-year earnings growth in full year
• Expect strong free cash flow for full year, in line with c.$1bn cumulative target over next five years
• Continued investments in innovation and capabilities set up the Group for accelerated growth in medium-term, supported by ongoing market outperformance

Commenting on the results David Paja, Group Chief Executive, said:

“We are pleased with our first-half outperformance relative to the market and confident in our second half outlook, despite the prolonged period of industry de-stocking. We continue to prove the resilience of our business model by maintaining margins and generating good free cash flow during periods of adverse market conditions.

Our increased focus on operational excellence and product innovation is delivering significant share gains and accelerating our growth in adjacencies, increasing the Group’s structural growth potential. We remain very excited by the enhanced capabilities and deeper customer relationships that OrthoLite has brought to the Group and we see substantial incremental value creation potential from sales synergies. Against this backdrop, we reaffirm our confidence to deliver FY results in line with market expectations.”

Notes:

1. 1. Adjusted measures are non-statutory measures (Alternative Performance Measures). These are reconciled to the nearest corresponding statutory measure in note 14. Constant Exchange Rate (CER) metrics are 2025 results restated at 2026 exchange rates. Organic figures are results on a CER basis and excluding contributions from the OrthoLite and Viz Reflectives acquisitions.
2. 2. Reported metrics refer to values contained in the IFRS column of the primary financial statements in either the current or comparative period.
3. 3. EBIT (Earnings before interest and tax) relates to Operating Profit as shown on the face of the P/L. Reconciliation between the Adjusted EBIT and Reported EBIT is disclosed in the Financial Review section
4. 4. Free cash flow after interest, tax, minority interests and exceptionals, before dividend distribution and M&A
5. 5. Leverage calculated on a frozen GAAP basis and therefore excludes the impact of IFRS 16 on both adjusted EBITDA and net debt. See note 14b for details

Conference Call

Coats Management will present its half year results in a webcast at 10.00am BST today (Tuesday, 28 July 2026). The webcast can be accessed via https://www.investis-live.com/coats/6a4cd1729f22d3000ee43800/yijtfd.

About Coats Group plc

Coats is a world-leading Tier 2 manufacturer and trusted partner for the apparel and footwear industries. We deliver essential materials, components, and software solutions that help our customers grow, compete and win.

With over 250 years of industry expertise, we’re shaping the future of the apparel and footwear supply chain through insight-led innovation, impactful sustainability practices, and digital technologies that unlock better product quality, efficiency and performance.

Headquartered in the UK, Coats is a FTSE 250 company and a constituent of the FTSE4Good Index. In 2025, we generated $1.5bn in revenue and employed c.19,000 people worldwide – all united by a spirit of innovation, quality and service. Learn more at Coats.com or follow us on LinkedIn.

Cautionary statement

Certain statements in this interim 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.

ENDS