Third-Quarter 2025 Financial Summary
Third-quarter net sales of $855.7 million, up 3.0% compared to the prior-year period, including core sales growth of 1.7%.
Net income attributable to shareholders of $81.6 million, or $0.31 per diluted share.
Adjusted Net Income per diluted share of $0.39.
Net income from continuing operations of $88.7 million, or a margin of 10.4%, an increase of 370 basis points.
Adjusted EBITDA of $195.8 million, or a margin of 22.9%, an increase of 90 basis points.
Raising 2025 adjusted EPS guidance at the midpoint.
New $300 million share repurchase authorization announced.
Ivo Jurek, Gates Industrial's Chief Executive Officer, commented, "Our team helped deliver improved sales and core growth in the third quarter supported by solid growth in Automotive Replacement and strong growth in Personal Mobility. Replacement channel revenues expanded low-single digits. We delivered double-digit EPS growth year-over-year and our adjusted EBITDA margin increased 90 basis points. Our balance sheet continued to improve as we paid down $100 million of gross debt during the quarter."
Jurek continued, "We have raised our adjusted EPS guidance towards the high-end of the prior range. We are executing our footprint optimization initiatives and anticipate to reduce our structural cost position over the first half of next year. We are seeing solid revenue generation opportunities with our secular growth initiatives and are optimistic about our business prospects in the mid-term."
Power Transmission Segment Results
Three months ended
(USD in millions)
September 27,
2025
September 28,
2024
% Change
% Core Change
Net sales
$533.3
$513.4
3.9 %
2.3 %
Adjusted EBITDA
$122.1
$113.0
8.1 %
Adjusted EBITDA margin
22.9 %
22.0 %
90 bps
Nine months ended
(USD in millions)
September 27,
2025
September 28,
2024
% Change
% Core Change
Net sales
$1,610.6
$1,588.1
1.4 %
1.6 %
Adjusted EBITDA
$361.6
$355.8
1.6 %
Adjusted EBITDA margin
22.5 %
22.4 %
10 bps
Fluid Power Segment Results
Three months ended
(USD in millions)
September 27,
2025
September 28,
2024
% Change
% Core Change
Net sales
$322.4
$317.3
1.6 %
0.7 %
Adjusted EBITDA
$73.7
$69.5
6.0 %
Adjusted EBITDA margin
22.9 %
21.9 %
100 bps
Nine months ended
(USD in millions)
September 27,
2025
September 28,
2024
% Change
% Core Change
Net sales
$976.4
$990.7
(1.4 %)
(0.6 %)
Adjusted EBITDA
$220.7
$224.5
(1.7 %)
Adjusted EBITDA margin
22.6 %
22.7 %
(10 bps)
Share Repurchase Authorization Announced
The Company also announced that its Board of Directors has authorized a share repurchase program of up to $300 million of the Company's ordinary shares. This authorization is valid through December 2026. This authorization replaced the existing authorization that was set to expire in December 2025. The timing and actual number of shares repurchased will depend on a variety of factors, including price, available liquidity, general business and market conditions, tax considerations, and alternative investment opportunities. Under the share repurchase program, repurchases can be made from time to time using a variety of methods, including but not limited to open market purchases and private negotiated transactions, all in compliance with the rules and regulations of the Securities and Exchanges Commission ("SEC") and other applicable legal requirements.
The repurchase program does not obligate the Company to acquire any specific dollar amount or number of ordinary shares, and the repurchase program may be suspended or discontinued at any time at the Company's discretion.
2025 Guidance
The Company is adjusting its full year guidance for 2025. Specifically, the company anticipates the following:
Core sales growth in the range of +0.5% to +1.5% year-over-year
Adjusted EBITDA of $770 million to $790 million
Adjusted Earnings Per Share of $1.48 to $1.52
Capital Expenditures of approximately $120 million
Free Cash Flow conversion of 80-90%
Share-based metrics in the Company's guidance do not include the effect of any potential share repurchases.
Because GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort, we have not provided reconciliations for forward-looking non-GAAP measures, including expected Core Sales Growth, Adjusted EBITDA, Adjusted Earnings per Share and Free Cash Flow conversion for 2025. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.
Conference Call and Webcast
Gates Industrial Corporation plc will host a conference call today at 11:30 a.m. Eastern Time to discuss the Company's financial results. The live webcast of the conference call and accompanying presentation materials can be accessed through Gates Industrial's website at investors.gates.com. For those unable to access the webcast, the conference call can be accessed by dialing (888) 414-4601 (domestic) or +1 (646) 960-0313 (international) and requesting the Gates Industrial Corporation Third-Quarter 2025 Earnings Conference Call or providing the Conference ID of 5772067. An audio replay of the conference call can be accessed by dialing (800) 770-2030 (domestic) or +1 (647) 362-9199 (international), and providing the passcode 5772067, or by accessing Gates Industrial's website at investors.gates.com.
About Gates Industrial Corporation plc
Gates is a global manufacturer of innovative, highly engineered power transmission and fluid power solutions. Gates offers a broad portfolio of products to diverse replacement channel customers, and to original equipment manufacturers ("OEM") as specified components. Gates participates in many sectors of the industrial and consumer markets. Our products play essential roles in a diverse range of applications across a wide variety of end markets ranging from harsh and hazardous industries such as agriculture, construction, manufacturing and energy, to everyday consumer applications such as printers, power washers, automatic doors and vacuum cleaners and virtually every form of transportation. Our products are sold in more than 130 countries across our four commercial regions: the Americas; Europe, Middle East & Africa; Greater China; and East Asia & India.
Forward-Looking Statements
This press release contains 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 1934, as amended. In some cases, you can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "could," "seeks," "predicts," "intends," "trends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. These statements include, but are not limited to, statements related to expectations regarding the performance of the Company's business (including our ability to reduce our structural cost position) and financial results, statements regarding our revenue generation opportunities, statements regarding our growth initiatives, statements regarding our share repurchase authorization, and statements regarding our outlook for 2025. Such forward-looking statements are subject to various risks and uncertainties, including, among others, U.S. government policies, actions or legislation (including the imposition of tariffs), economic, political and other risks associated with international operations, risks inherent to the manufacturing industry, macroeconomic factors beyond the Company's control (including material and logistics availability, inflation, supply chain and labor challenges and end-market recovery), risks related to catastrophic events, continued operation of our manufacturing facilities, including as a result of cybersecurity attacks, our ability to forecast and meet demand and market acceptance of new products. Additional factors that could cause the Company's results to differ materially from those described in the forward-looking statements can be found under the section entitled "Risk Factors" of the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2024, as supplemented by the risks and uncertainties set forth in the Company's Quarterly Report on Form 10-Q for the quarter ended March 29, 2025 and as such factors may be further updated from time to time in the Company's periodic filings with the SEC, which are accessible on the SEC's website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in the Company's filings with the SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
Gates Industrial Corporation plc
Condensed Consolidated Statements of Operations
(Unaudited)
Three months ended
Nine months ended
(USD in millions, except per share amounts)
September 27,
2025
September 28,
2024
September 27,
2025
September 28,
2024
Net sales
$ 855.7
$ 830.7
$ 2,587.0
$ 2,578.8
Cost of sales
514.1
494.9
1,540.6
1,555.6
Gross profit
341.6
335.8
1,046.4
1,023.2
Selling, general and administrative expenses
219.2
217.2
666.6
653.5
Transaction-related expenses
0.1
0.5
0.5
2.1
Asset impairments
0.4
—
1.2
—
Restructuring expenses
6.5
2.2
21.1
5.0
Other operating expenses
—
—
—
0.1
Operating income from continuing operations
115.4
115.9
357.0
362.5
Interest expense
34.9
35.1
93.3
121.7
Loss on deconsolidation of Russian subsidiary
—
12.8
—
12.8
Other income
(14.3)
(1.2)
(5.1)
(12.1)
Income from continuing operations before taxes
94.8
69.2
268.8
240.1
Income tax expense
6.1
14.0
48.1
60.8
Net income from continuing operations
88.7
55.2
220.7
179.3
Loss on disposal of discontinued operations
0.1
0.1
0.7
0.5
Net income
88.6
55.1
220.0
178.8
Less: non-controlling interests
7.0
7.5
19.9
20.5
Net income attributable to shareholders
$ 81.6
$ 47.6
$ 200.1
$ 158.3
Earnings per share
