Gates Industrial Corporation Reports First-Quarter 2025 Results

Gates Industrial Corporation plc, a global leader in application-specific fluid power and power transmission solutions, has released its financial results for the first quarter of 2025. The company reported a slight decline in net sales but showed resilience in core revenue growth and maintained its full-year guidance.

Financial Highlights

For the first quarter ended March 29, 2025, Gates Industrial reported net sales of $847.6 million, a decrease of 1.7% compared to the same period last year. However, core revenue grew by 1.4%. The company achieved a net income attributable to shareholders of $62.0 million, translating to $0.24 per diluted share. Adjusted net income per diluted share stood at $0.36. The adjusted EBITDA was $187.3 million, representing a margin of 22.1%.

Business and Operational Highlights

The Power Transmission segment saw net sales of $527.2 million, a slight decline of 1.1% year-over-year, but core sales grew by 2.1%. Adjusted EBITDA for this segment was $116.7 million, with a margin of 22.1%. The Fluid Power segment reported net sales of $320.4 million, down 2.9% from the previous year, with a marginal core sales growth of 0.1%. Adjusted EBITDA for this segment was $70.6 million, with a margin of 22.0%.

Strategic Initiatives and Corporate Developments

Gates Industrial reiterated its full-year guidance for 2025, expecting core sales growth in the range of (0.5%) to +3.5% year-over-year. The company anticipates adjusted EBITDA between $735 million and $795 million, adjusted earnings per share of $1.36 to $1.52, and capital expenditures of approximately $120 million. Free cash flow conversion is expected to exceed 90%.

Management's Perspective

Ivo Jurek, CEO of Gates Industrial, expressed confidence in the company's competitive position despite the uncertain business environment. He highlighted the company's strong growth in the Auto Replacement and Personal Mobility end markets and the year-over-year increase in gross margin. Jurek emphasized the advantages of the company's manufacturing footprint and its efforts to broaden the product portfolio and expand presence in growth markets.

Future Outlook

Looking ahead, Gates Industrial maintains a positive outlook for 2025, with expectations of core sales growth and strong adjusted EBITDA. The company plans to continue its strategic initiatives to enhance its market position and deliver differentiated service levels to customers.

SEC Filing: Gates Industrial Corp plc [ GTES ] - 8-K - Apr. 30, 2025