Continued market outperformance, strong margin progression and significant free cash generation

Strategic Highlights

• Continued success in gaining share, outperforming core thread and footwear end markets, which we estimate were down low to mid-single digits compared to our flat organic revenue
• Significant action taken to enhance returns and growth potential of Group through portfolio transition:
  • Exit from non-core Americas Yarns business, improving Group margin +100bps
  • Landmark acquisition of OrthoLite completed at end of October 2025, accelerating our strategy to create a leading Tier 2 supplier in footwear components, and underpinning Group growth
• Target adjacencies contributed one percentage point to Group revenue growth, in line with our guidance, with building momentum
• Group streamlined into two divisions (Apparel and Footwear) reducing internal complexity and more closely aligned to underlying textile engineering and polymer technologies
• Further reinforcement of market leadership in 100% recycled threads with CER revenue growing 43% to $554m

Financial Highlights

• Robust performance with Group revenue flat on an organic basis:
  • Strong performance in Apparel with 1% revenue growth, significantly outperforming market declines
  • Market share growth and further margin improvement in Footwear, amidst a more challenging backdrop than Apparel
  • Performance Materials back to growth in H2, alongside strong operational and margin improvement, with Q4 margin run rate of 11.8% close to divisional medium-term target range
  • OrthoLite delivered full year profit in line with our expectations, with good revenue growth above the market and strong levels of cash generation
• Group operating margin increased by 80bps to 19.8% (180bps including Americas Yarns in prior year comparator), reflecting pricing and cost discipline with all divisions improving margins
• Adjusted basic EPS 9.3 cents in line with expectations (2024: 9.7 cents). Increased EBIT offset by higher interest charges related to the 2024 pension buy in payment and the timing of share placing in July 2025
• Record cash generation with free cash flow⁶ of $160m (2024: $2m) reflective of future potential
• Net debt at $815m with proforma leverage of 2.2x⁴ as expected following OrthoLite acquisition. We continue to expect leverage to reduce to below 2x by end of 2026
• Proposed final dividend of 2.28 cents, bringing total dividend to 3.28 cents, up 5%, reflecting a good financial performance in a challenging market

Outlook for 2026

• We expect to grow organically, even under conditions of market uncertainty, through the powerful combination of continued share gains and adjacency growth
• OrthoLite expected to significantly outperform underlying footwear market based on technology penetration tailwinds and new business wins
• Expect further modest organic margin improvement as well as full year contribution from OrthoLite, including synergies
• Another strong year of free cash flow generation
• We are mindful of the potential impact on demand and supply chains as a result of the conflict in the Middle East, which we are assessing, however it is too early to provide an update

Upgraded medium term targets

• Following the structural evolution in the portfolio in 2025, we see an enhanced opportunity for the Group in the medium term, reflected in updated financial targets:
  • >5% revenue growth on average through the cycle, outperforming our markets by 200+bps (unchanged)
  • Operating margin range increased to 21-23% (previously 19-21%)
  • Cumulative free cash flow of c.$1bn in next five years (previously $750m), providing significant capital allocation flexibility
  • EPS CAGR of >10% post M&A or share buy backs (unchanged)

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

“2025 was a transformational year for Coats. We achieved record profit and cash generation, reshaped the portfolio for accelerated growth and reorganised the Group for simplicity. As a result, we have upgraded our medium-term financial targets, including c.$1bn of free cash, and look at 2026 with confidence.”

Notes:

1. 1. Represented to reflect the results of the Americas Yarns business as a discontinued operation (see note 1)
2. 2. 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 2024 results restated at 2025 exchange rates. Organic figures are results on a CER basis and excluding contributions from the OrthoLite and Viz Reflectives acquisitions.
3. 3. Reported metrics refer to values contained in the IFRS column of the primary financial statements in either the current or comparative period
4. 4. 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
5. 5. 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
6. 6. Free cash flow after interest, tax, minority interests and exceptionals, before dividend distribution and M&A

Conference Call

Coats Management has presented its full-year results in a webcast held at 9:00 am GMT today (Thursday, 5 March 2026). The webcast can be accessed via https://www.investis-live.com/coats/6978ce26e2c20d000f4b513a/yutudd

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 $1.5 billion in revenue and employed c.19,000 people worldwide – all united by a spirit of innovation, quality and service. Learn more at www.coats.com or follow us on LinkedIn.

Cautionary statement

Certain statements in this full year 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