Gates(US:GTES)2025-06-25 15:33Company Overview & Strategy - The company aims for a core revenue growth of 3-5% through the cycle, targeting twice the rate of industrial production in the mid-term[11] - The company expects to achieve an Adjusted EBITDA margin of 24.5% by 2026 through various enterprise initiatives[11] - In 2024, the company's revenue was $3.4 billion, with an Adjusted EBITDA of $761 million and Free Cash Flow of $273 million[16] Segment Breakdown - Power Transmission accounted for $2.1 billion (62%) of sales in 2024, while Fluid Power accounted for $1.3 billion (38%) of sales[21, 30] - In Power Transmission, 34% of sales are First Fit and 66% are Replacement[23] - In Fluid Power, 30% of sales are First Fit and 70% are Replacement[32] Financial Targets & Capital Allocation - The company is targeting approximately 100% Free Cash Flow conversion during the 2024-2026 period[89] - Since mid-2020, the company has executed approximately $1.2 billion in share repurchases and debt paydown[91] - The company's Net Leverage Ratio was 2.2x as of the end of 2024[91, 96] - The company targets Net Leverage between 10x to 20x by 2026[94] - The company projects Adjusted EPS to be between $1.90 and $2.30 by 2026[110]