Gates Industrial Reports Second-Quarter 2025 Results
DENVER, July 30, 2025 /PRNewswire/ -- Gates Industrial Corporation plc (NYSE:GTES), a leading global provider of application-specific fluid power and power transmission solutions, today reported results for the second quarter ended June 28, 2025.
Second-Quarter 2025 Financial Summary
Second-quarter net sales of $883.7 million, down 0.2% compared to the prior-year period, including core sales decline of 0.6%.
Net income attributable to shareholders of $56.5 million, or $0.22 per diluted share.
Adjusted Net Income per diluted share of $0.39.
Net income from continuing operations of $63.4 million, or a margin of 7.2%.
Adjusted EBITDA of $199.2 million, or a margin of 22.5%.
Raising 2025 full-year guidance.
Ivo Jurek, Gates Industrial's Chief Executive Officer, commented, "In the second quarter, our team delivered solid results. The Replacement channels generated positive core sales growth and our Mobility business increased double-digits. Also, we realized growth in Agriculture for the first time since the fourth quarter of 2022. Our gross margin expanded and our balance sheet continued to improve."
Jurek continued, "We have raised our guidance for full year 2025 Adjusted EBITDA and Adjusted EPS. Our team is focused on driving operating improvements and higher cash flow generation while our investments in key growth initiatives are yielding results. I am more optimistic about our secular top-line growth potential over the mid-term."
Power Transmission Segment Results
Three months ended
(USD in millions)
June 28, 2025
June 29, 2024
% Change
% Core Change
Net sales
$550.1
$541.9
1.5 %
0.6 %
Adjusted EBITDA
$122.8
$123.8
(0.8 %)
Adjusted EBITDA margin
22.3 %
22.8 %
(50 bps)
For the six months ended
(USD in millions)
June 28, 2025
June 29, 2024
% Change
% Core Change
Net sales
$1,077.3
$1,074.7
0.2 %
1.3 %
Adjusted EBITDA
$239.5
$242.8
(1.4 %)
Adjusted EBITDA margin
22.2 %
22.6 %
(40 bps)
Fluid Power Segment Results
Three months ended
(USD in millions)
June 28, 2025
June 29, 2024
% Change
% Core Change
Net sales
$333.6
$343.6
(2.9 %)
(2.5 %)
Adjusted EBITDA
$76.4
$78.4
(2.6 %)
Adjusted EBITDA margin
22.9 %
22.8 %
10 bps
For the six months ended
(USD in millions)
June 28, 2025
June 29, 2024
% Change
% Core Change
Net sales
$654.0
$673.4
(2.9 %)
(1.2 %)
Adjusted EBITDA
$147.0
$155.0
(5.2 %)
Adjusted EBITDA margin
22.5 %
23.0 %
(50 bps)
2025 Guidance
The Company is raising its full year guidance for 2025. Specifically, the company anticipates the following:
Core sales growth in the range of +0.5% to +2.5% year-over-year
Adjusted EBITDA of $765 million to $795 million
Adjusted Earnings Per Share of $1.44 to $1.52
Capital Expenditures of approximately $120 million
Free Cash Flow conversion exceeding 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 Second-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 drive operating improvements and higher cash flow) and financial results, statements regarding our investments in key growth initiatives, 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
Six months ended
(USD in millions, except per share amounts)
June 28, 2025
June 29, 2024
June 28,2025
June 29,2024
Net sales
$ 883.7
$ 885.5
$ 1,731.3
$ 1,748.1
Cost of sales
523.5
528.1
1,026.5
1,060.7
Gross profit
360.2
357.4
704.8
687.4
Selling, general and administrative expenses
231.2
221.2
447.4
436.3
Transaction-related expenses
—
1.2
0.4
1.6
Asset impairments
0.2
—
0.8
—
Restructuring expenses
13.0
1.6
14.6
2.8
Other operating expenses
—
0.1
—
0.1
Operating income from continuing operations
115.8
133.3
241.6
246.6
Interest expense
28.8
49.1
58.4
86.6
Other expenses (income)
6.8
(6.0)
9.2
(10.9)
Income from continuing operations before taxes
80.2
90.2
174.0
170.9
Income tax expense
16.8
12.3
42.0
46.8
Net income from continuing operations
63.4
77.9
132.0
124.1
Loss on disposal of discontinued operations
0.3
0.3
0.6
0.4
Net income
63.1
77.6
131.4
123.7
Less: non-controlling interests
6.6
6.9
12.9
13.0
Net income attributable to shareholders
$ 56.5
$ 70.7
$ 118.5
$ 110.7
Earnings per share
Basic
Earnings per share from continuing operations
$ 0.22
$ 0.27
$ 0.46
