Coats Group (COA) H1 2026 earnings summary

Executive summary

• Achieved 1% organic revenue growth to $837m in H1 2026, outperforming markets that declined mid-single digit, with strong gains in Apparel and Footwear and a 19.8% EBIT margin.

• Maintained strong EBIT margin just below 20% despite significant investments in technology and growth.

• OrthoLite integration progressing well, with $40m in annual sales synergies identified and cost synergies on track.

• Apparel division gained substantial market share, especially in China and automotive threads; leadership in recycled thread.

• Footwear division showed momentum, with Q2 organic growth and market share gains; OrthoLite contributed to margin accretion.

Financial highlights

• Group revenue was $837m, up 1% organically at constant exchange rates year-over-year; EBIT was $166m, margin 19.8%.

• EPS was 4.4c, down from 4.7c due to higher interest and share placing timing.

• Free cash flow pre-dividends was $30m; net debt at $842m, leverage at 2.3x.

• Interim dividend increased by 5% to 1.05c per share.

• Return on capital employed: 22%.

Outlook and guidance

• Full-year and medium-term guidance unchanged; confident in H2 EBIT improvement and year-on-year earnings growth.

• H2 assumes modest market decline, with profit in line with expectations and strong free cash flow; $15m in H2 cost benefits expected, including OrthoLite synergies.

• FY 2026 capex guidance $40–$45m, including $5m for OrthoLite capacity expansion.

• On track to reduce leverage to 2x or below by year-end.

• Medium-term targets: >5% average annual revenue growth, EBIT margin 21–23%, EPS CAGR >10%.