Gates Industrial (NYSE:GTES) 2026 Conference Summary Company Overview - **Company**: Gates Industrial Corporation - **Ticker**: NYSE:GTES - **Conference Date**: February 18, 2026 Key Industry Insights - **Market Performance**: Four out of seven major markets are experiencing growth, with personal mobility and data centers being significant drivers [1][4] - **Growth Forecast**: The company anticipates organic growth of 1%-4% for 2026, despite a more positive outlook compared to previous years [2][4] - **Industrial OEM Trends**: There is a noted improvement in order trends from industrial OEMs, particularly in commercial construction and agricultural equipment [4][11] Financial Performance - **EBITDA Margin Guidance**: The company expects to exit 2026 with an adjusted EBITDA margin of approximately 24%, with a target of 24.5% for 2027 [27][28] - **Cash Flow**: Forecasting over 90% free cash flow conversion in 2026, supported by significant investments in CapEx and restructuring [136][139] - **Leverage**: Ended 2025 with a net leverage ratio of 1.85, the lowest since going public, providing flexibility for capital allocation [139] Growth Drivers - **Personal Mobility**: This segment is projected to grow from approximately $140 million to $300 million by 2028, with a compound annual growth rate of 20%-30% [22][69] - **Data Centers**: Anticipated revenue growth in the data center segment, with a target of $100 million-$200 million by 2028, driven by liquid cooling adoption [97][98] - **Automotive Aftermarket**: The aging car fleet is expected to support continued growth in this segment, with the company aiming to outperform GDP growth [108][111] Regional Performance - **Europe**: Strong growth in personal mobility (75% growth rate) and recovery in industrial businesses, particularly in agriculture and commercial construction [56][60] - **China**: The company has gained significant market share in the automotive aftermarket, with a diversified portfolio contributing to strong performance [62] Strategic Initiatives - **ERP Implementation**: The transition to a new ERP system in Europe is expected to improve operational efficiency, despite initial drag on margins [63][65] - **Cost Optimization Programs**: Initiatives aimed at material cost savings and footprint optimization are expected to contribute positively to margins in the coming years [35][36] Market Outlook - **Industrial Production**: The company is closely monitoring PMI indicators, with expectations of improvement in diversified industrial markets [118][121] - **Auto OEM Participation**: The company plans to maintain selective participation in the auto OEM segment while focusing on industrial growth [126][132] Conclusion - **Long-term Vision**: The company expresses optimism about future growth opportunities, driven by innovation and adaptation of core technologies across various applications [144][155]