Gates Industrial Corporation Plc · NYSE:GTES
Gates Industrial — Q3 2025 Earnings Presentation
23 slides from Gates Industrial's earnings presentation, Oct 29, 2025
Slide 1: Q3 2025 Earnings Presentation
Q3 2025 OCTOBER 29, 2025 EARNINGS PRESENTATION
Slide 2: Legal Disclaimers
LEGAL DISCLAIMERS 2 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This presentation contains, and management may make on our call today, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 19
Slide 3: Q3 2025 Key Highlights & Metrics
Q3 2025 KEY HIGHLIGHTS & METRICS 3 ▪ Delivered ~2% core growth in an uneven environment • Replacement channel grew, supported by MSD growth in Automotive Replacement • Off-Highway grew, offset by On-Highway weakness; Personal Mobility increased 20+% YoY ▪ 90 bps expansion in adjusted EBITDA margin –
Slide 4: Underlying 2025 Market Growth Expectations
UNDERLYING 2025 MARKET GROWTH EXPECTATIONS 4 2025 Underlying Global End Market Growth Expectations 2024 % ’25F ’25F ’25F ’25F of Sales (Feb) (April) (July) (Oct) ▪ PMIs remain in the longest contractionary period in history Automotive Replacement 36% ▪ Tariff uncertainty weighing on timing of broade
Slide 5: Q3 2025 – Financial Performance
Q3 2025 – FINANCIAL PERFORMANCE 5 $856M 1.7% Core Sales Growth YoY ▪ ▪ Outperformed the underlying end markets Replacement channels grew LSD Net Sales ▪ Growth verticals additive to performance $196M 22.9% Adjusted EBITDA margin ▪ ▪ Record Q3 adjusted EBITDA margin performance 90 bps adjusted EBITDA
Slide 6: Q3 2025 – Segment Results
Q3 2025 – SEGMENT RESULTS 6 PERFORMANCE HIGHLIGHTS POWER TRANSMISSION NET SALES $533M ▪ Growth across most Industrial end markets ▪ Strong double-digit growth in Personal Mobility 2.3% Core YoY ▪ Replacement channels grew low single-digits YoY, ADJUSTED EBITDA $122M slightly offset by declines in Au
Slide 7: Q3 2025 – Regional Core Revenue Performance
Q3 2025 – REGIONAL CORE REVENUE PERFORMANCE 7 Total Gates Greater China 10% +1.7% 11% EA&I North 48% America REVENUE 26% EMEA 5% +0.1% +2.6% +6.4% South North EMEA America Greater America China ▪ NA growth in AR balanced by weaker Ag, On-Highway and Diversified Industrial (3.9%) South +5.3% ▪ EMEA a
Slide 8: Q3 2025 Adjusted EPS Walk
Q3 2025 ADJUSTED EPS WALK 8 $0.02 $0.39 $0.02 $0.02 $0.33 Q3 2024 Adj. EPS Operating Performance Lower Tax Rate Other Q3 2025 Adj. EPS 18% YOY ADJUSTED EPS GROWTH SUPPORTED BY SOLID UNDERLYING OPERATING EXECUTION AND PRUDENT CAPITAL ALLOCATION © 2025 Gates Corporation. All rights reserved.
Slide 9: Q3 2025 – Capital Efficiency & Cash Flow
Q3 2025 – CAPITAL EFFICIENCY & CASH FLOW 9 $73M Free Cash Flow Solid Free Cash Flow generation ▪ ▪ 73% free cash flow conversion for quarter Higher restructuring outflows YoY 2.0x Net Leverage Improved YoY and sequentially ▪ ▪ Repaid $100 million of gross debt On target to achieve <2x by year end 21
Slide 10: 2025 Guidance
2025 GUIDANCE 10 PRIOR 2025 CURRENT 2025 B/W (Midpoint) CORE REVENUE GROWTH 0.5% to 2.5% 0.5% to 1.5% (0.5%) ADJUSTED EBITDA $765M – $795M $770M – $790M No Change ADJUSTED EPS $1.44 – $1.52 $1.48 – $1.52 +$0.02 CAPITAL EXPENDITURES ~$120M ~$120M No Change FREE CASH FLOW CONVERSION 90%+ 80-90% (5%) D
Slide 11: 2026 Restructuring and Initiatives Update
2026 RESTRUCTURING AND INITIATIVES UPDATE 11 ▪ Executing on footprint optimization, restructuring and ERP system implementation in EMEA ▪ Costs and inefficiencies anticipated to impact profitability in 1H 2026 • Anticipate (100 bps) to (200 bps) YoY impact on adjusted EBITDA margin in Q1 2026 • Esti
Slide 12: Adjusted EBITDA Margin Mid-Term Target Update
ADJUSTED EBITDA MARGIN MID-TERM TARGET UPDATE 12 COMPONENTS & TIMING CONSIDERATIONS ▪ Operating Leverage: ~100 bps ~24% • No margin contribution from volume; negative since 2023 Footprint • More than overcame volume headwind through enterprise initiatives Optimization • Anticipate moderate volume re
Slide 13: Summary Thoughts
SUMMARY THOUGHTS 13 ▪ Delivering results; industrial markets beginning to firm • Record Q3 adjusted EBITDA margin performance • On pace to deliver adjusted EBITDA margin expansion and solid earnings growth in 2025 • Momentum continues to build in Mobility and Data Center; anticipate more favorable i
Slide 14: © 2025 Gates Corporation. All rights reserved.
14 © 2025 Gates Corporation. All rights reserved.
Slide 15: Q3 2025 Adjusted EPS – Summary Walk
Q3 2025 ADJUSTED EPS – SUMMARY WALK 15 Q3 2024 $0.33 OPERATING PERFORMANCE 0.02 Core growth and Adjusted EBITDA margin expansion vs prior year period INCOME TAX EXPENSE 0.02 Lower effective tax rate OTHER 0.02 Lower share count, lower interest expense, favorable other income Q3 2025 $0.39 © 2025 Gat
Slide 16: Reconciliations – Core Sales Growth
RECONCILIATIONS – CORE SALES GROWTH 16 ( U SD in million s ) Power Transmission Fluid Power Q3 2025 Reconciliation of Core Sales Growth Net sales for the quarter ended September 27, 2025 $ 533.3 $ 322.4 $ 855.7 Impact on net sales of movements in currency rates (8.3) (2.9) (11.2) Core sales for the
Slide 17: Reconciliations – Adjusted EBITDA & Net Leverage
RECONCILIATIONS – ADJUSTED EBITDA & NET LEVERAGE 17 (USD in millions) Q3 2025 Q3 2024 YTD 2025 YTD 2024 LTM Q3 2025 LTM Q3 2024 LTM Q2 2025 Reconciliation to Adjusted EBITDA Net Income from Continuing Operations $ 88.7 $ 55.2 $ 220.7 $ 179.3 $ 261.9 $ 248.5 $ 228.4 Adjusted for: Income tax expense 6
Slide 18: Reconciliations – Adj. EBITDA & Net Leverage (Cont.)
RECONCILIATIONS – ADJ. EBITDA & NET LEVERAGE (CONT.) 18 (1) Other (income) expenses excludes foreign currency transaction losses and insurance recoveries of $9.9 million, $7.8 million and $1.1 million during the three, nine and twelve months ended September 27, 2025, respectively, and foreign curren
Slide 19: Reconciliations – Segment Adjusted EBITDA
RECONCILIATIONS – SEGMENT ADJUSTED EBITDA 19 (USD in millions) Change Change Q3 2025 Q3 2024 YTD Q3 2025 YTD Q3 2024 Reconciliation to Segment Adjusted EBITDA Margin Power Transmission Net Sales $ 533.3 $ 513.4 $ 19.9 $ 1,610.6 $ 1,588.1 $ 22.5 Power Transmission Adjusted EBITDA $ 122.1 $ 113.0 $ 9.
Slide 20: Reconciliations – Adjusted Net Income
RECONCILIATIONS – ADJUSTED NET INCOME 20 (USD in millions, except share numbers and per share amounts) Q3 2025 Q3 2024 YTD 2025 YTD 2024 LTM Q3 2025 LTM Q3 2024 Reconciliation to Adjusted Net Income Net Income Attributable to Shareholders $ 81.6 $ 47.6 $ 200.1 $ 158.3 $ 236.7 $ 221.2 Adjusted for: L
Slide 21: Reconciliations – Adjusted Net Income (Cont.)
RECONCILIATIONS – ADJUSTED NET INCOME (CONT.) 21 (1) In July 2022, Gates suspended our operations in Russia. In September 2024, we deconsolidated the Russian subsidiary upon loss of control and recognized a deconsolidation loss. (2) Transaction-related expenses relate primarily to advisory fees and
Slide 22: Reconciliations – Free Cash Flow & Free Cash Flow Conversion
RECONCILIATIONS – FREE CASH FLOW & FREE CASH FLOW 22 CONVERSION ( U SD in million s ) Q3 2025 Q3 2024 YTD Q3 2025 YTD Q3 2024 LTM Q3 2025 LTM Q3 2024 Reconciliation of Free Cash Flow Net Cash Provided By Operating Activities $ 98.0 $ 115.9 $ 208.3 $ 188.7 $ 399.2 $ 378.0 Capital Expenditures (1) (24
Slide 23: Reconciliations – Return on Invested Capital (ROIC)
RECONCILIATIONS – RETURN ON INVESTED CAPITAL (ROIC) 23 (USD in millions) LTM Q3 2025 LTM Q3 2024 LTM Q2 2025 Return On Invested Capital (ROIC) LTM Adjusted EBITDA $ 763.1 $ 766.1 $ 749.8 LTM Total depreciation and amortization (213.2) (217.8) (213.3) LTM Amortization of intangible assets arising fro