Gates(US:GTES)2026-02-18 21:32Gates 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]