Gates Industrial (GTES) Investor presentation summary

Strategic overview and growth outlook

• Anticipates outpacing industrial production growth 2x in the mid-term, leveraging secular trends, materials science, and geographic expansion.

• Multiple enterprise initiatives, including material cost reduction and footprint optimization, are expected to drive margin expansion through 2027.

• Balanced capital allocation strategy focuses on debt reduction, share repurchases, and selective M&A.

• Positioned as a resilient, mission-critical solutions provider with organic growth opportunities in attractive markets.

Financial performance and profitability

• 2025 revenue reached $3.4B with $770M in adjusted EBITDA and $364M in free cash flow.

• Adjusted EBITDA margin for 2025 was 22.4%, with a return on invested capital (ROIC) of 23.4%.

• Free cash flow conversion averaged 92.5% over 2023–2025, targeting 90%+ for 2026.

• Net debt/adjusted EBITDA improved to 1.9x by year-end 2025, with ongoing deleveraging expected.

Segment highlights and market positioning

• Power Transmission segment generated $2.1B (62% of sales), holding #1 global market position in a $40B TAM.

• Fluid Power segment delivered $1.3B (38% of sales), ranking top-3 globally in a $30B TAM.

• Aftermarket channels dominate both segments, with 66% in Power Transmission and 72% in Fluid Power.

• Significant growth opportunities identified in personal mobility, data center liquid cooling, and geographic expansion.