Coats 2017 revenue up 4% to $1,510 million

27 Feb '18

3 min read

Courtesy: Coats

Coats, the world’s leading industrial thread manufacturer and a major player in the Americas textile crafts market, has recorded revenue growth of 4 per cent to $1,510 million. The increase was driven by apparel and footwear (up 5 per cent) and performance materials (up 12 per cent), with some offset due to a weak performance in North America Crafts.

The company's adjusted operating profit up 11 per cent to $174 million (reported $167 million, up 9 per cent). For the reported period, the group operating margin climbed 11.5 per cent. The company's adjusted EPS rose 30 per cent (reported EPS went up 35 per cent).

"Coats delivered a strong performance in 2017. Momentum in industrial continued throughout the year in key apparel and footwear markets, where we continued to take share, and we saw double-digit growth in hi-tech end-uses in performance materials. This was partly offset by North America Crafts where market conditions remained weak. In an environment of rising input costs, we were able to grow our operating margins, through realising price increases, productivity and procurement gains, as well as tight control of our cost base. Following this strong performance in 2017 we have announced a full year dividend per share of 1.44 cents, which represents a 15 per cent year-on-year increase," said Rajiv Sharma, group chief executive, Coats.

The company reported adjusted free cash flow growth of 12 per cent to $87 million for 2017 ending December 31, 2017. This includes a $10 million year-on-year increase in capital spending, predominantly in H2, as anticipated. The full year dividend per share increased 15 per cent.

‘Through our continued strong financial delivery and investment in growth initiatives we have built a solid base for the future. However, the markets in which we operate are constantly changing. Our customers require an increased emphasis on speed, quality, value, innovation and corporate responsibility. To accelerate our transition from the industrial to the digital age, we launched the connecting for growth transformation programme, which will support our next phase of growth. We expect this programme to deliver increased productivity, with targeted net annualised operating cost savings of $15 million by 2020," Sharma said.

‘To further support our strategy delivery, we completed the performance materials acquisition of Patrick Yarn Mill, which extends our existing competencies and innovation capabilities. As with our previous acquisitions of Gotex, Fast React and GSD, we look forward to leveraging Coats’ unrivalled geographic footprint, breadth of global customer relationships and strong corporate brand to support Patrick Yarn Mill’s expansion," he added.

"We enter 2018 in a strong position, with continued momentum in our apparel and footwear and hi-tech performance materials businesses. Whilst market conditions in our North American Crafts business are expected to remain challenging, our new management team has commenced implementation of a refocused strategy. We expect 2018 adjusted operating profits to benefit from the incremental full year contribution from the Patrick Yarn Mill acquisition, and the anticipated first year benefits from the Connecting for Growth programme. As such, 2018 adjusted operating profits are expected to be slightly ahead of previous management expectations. We will also continue to focus on cash flow generation in order to allow us to continue to reinvest in both organic and inorganic growth opportunities," Sharma concluded. (RR)

Fibre2Fashion News Desk – India

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