Gates Industrial Corporation Ltd. Jefferies Global Industrials Conference 2026

Thank you, Steve. I do not think that we have any meaningful update to what we have discussed on our second quarter earnings call. Our business continues to evolve meaningfully in line with our updated guidance. As a reminder for all, we have taken our guidance up by 100 basis points across board in revenue generation. So 5.5% core growth guidance for midpoint of Q3 and 6.5% core growth target for organic growth in Q4.

Yeah. We have seen a very nice acceleration that frankly occurred in Q4 of last year. We went into Q1 with a well broadcasted ERP implementation that has occurred on our European business in February that has resulted in about 300 basis points core headwind in Q2 due to the ERP implementation.

Q1, sorry. Sorry, Q1, which by the way, went flawlessly.

It was executed well and as we exited Q1, we have begun to fully recover on the revenue targets that we have set up. While we had a small cost headwind in Q2 associated with the ERP, we have already delivered very nice core growth acceleration in Q2, and that acceleration order intake that resulted about 8%-9% organic core growth in terms of orders in Q2. The two or three secular drivers that we have in our business, personal mobility, which, as we have highlighted, has been growing in the mid-20s to about 30% compound annually. That continues to drive about a point of incremental growth for our business, accelerating revenue generation in our exposure in data centers with our data center enterprise initiative, and frankly, reasonably broad-based strength across our core business.

While there are still some businesses that yet need to inflect, we have highlighted that while ag has stopped generating negative deceleration, and we anticipate in the second half of this year, ag is going to start recovering. We certainly are seeing those trends, and I think the most recent announcement by major ag manufacturer would indicate that we have seen the bottom, and we should start seeing a recovery into 2027. While there are some puts and takes, in general, there is a broad strength. We have built a little bit of backlog in Q2, which generally speaking, as a short cycle book and ship business, we do not necessarily like to see, but that is just an indication of a reasonably strong end market demand environment.

Yeah. The personal mobility business, it's actually quite an interesting opportunity for us. In a nutshell, it is an opportunity where we are substituting a chain drive with a Gates engineered belt drive. It is much cleaner, much more efficient, much more elegant solution. From our vantage point, it is an opportunity where we are converting or competing against a non-traditional competitor. It is a story of penetration, and while we don't necessarily require the end market units to grow, for reference, there's about 180 million two-wheelers that get manufactured every year. It is a very broad-based, very large market opportunity. We have been very focused on paying attention to engineering a solution that is cost appropriate, that will get us to a much closer cost proximity of the chain drive in those two-wheeler applications.

With all the other benefits that I have highlighted that we deliver to the end user, we believe that we have a decades-long opportunity to take market share away from chain and continue to deliver a premium growth over the midterm in that business for us.

Yeah, absolutely. I think that what we have done in personal mobility is actually taking a very difficult set of applications that are very sensitive to certain market dynamics in terms of price versus benefit. And we have demonstrated that we can deliver a solution that is efficient and that we can start delivering broad market adaption of those solutions. If you think about another market opportunity for us, it's an industrial chain drive. There is about a $7 billion market opportunity that we view where the industrial chain resides today. And we have been working towards development of solutions that would be broadly adaptable for these industrial-type applications.

And we have announced recently that we'll have a CMD or Capital Markets Day on November 19, and we will be providing a pretty fulsome update on how we view that market, how we view that opportunity to continue to evolve for us. And while over the last three or so years, we have developed a very nice base of business, we believe that that's another opportunity similar to what we are seeing with the personal mobility that we can realize, again, nicely incremental, secular, supplemental organic growth over the midterm.