Gates Industrial Corporation plc

Ladies and gentlemen, thank you for standing by. Welcome to the Gates Corporation fourth quarter and full year 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. And if you'd like to withdraw that question, again, press star one. I'd now like to turn the conference over to Rich Quast, VP of Investor Relations and Strategy. Rich, please go ahead.

Greetings, and thank you for joining us on our fourth quarter and full year 2025 earnings call. I'll briefly cover our non-GAAP and forward-looking language before passing the call over to our CEO, Ivo Jurek, who will be followed by Brooks Mallard, our CFO. Before the market opened today, we published our fourth quarter and full year 2025 results. A copy of the release is available on our website at investors.gates.com. Our call this morning is being webcast and is accompanied by a slide presentation. On this call, you'll refer to certain non-GAAP financial measures that we believe are useful in evaluating our performance. Reconciliations of historical non-GAAP financial measures are included in our earnings release and the slide presentation. each of which is available in the Investor Relations section of our website. Please refer now to slide two of the presentation, which provides a reminder that our remarks will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risk that could cause actual results to be materially different from those expressed in or implied by such forward-looking statements. These risks include, among others, matters that we have described in our most recent annual report on Form 10-K, And in other filings we make with the SEC, including our Q3 quarterly report on Form 10-Q that was filed in October 2025, we disclaim any obligation to update these forward-looking statements. We will be attending several conferences over the coming weeks and look forward to meeting with many of you. And before we start, please note that all comparisons are against the prior year period unless stated otherwise. Also, moving forward, please note we will be making changes to our geographic disclosures in our future presentations. We'll consolidate China and East Asia and India into an Asia-Pacific disclosure, and we will consolidate North America and South America into an Americas disclosure. This approach aligns with how we manage our in-region, for-region strategy. Now, I'll turn the call over to Ivo.

Thank you, Rich. Good morning, everyone, and thank you for joining us today. Let's begin on slide three of the presentation. Let me begin with a brief recap of the year. Gates delivered solid results in 2025. We've posted nearly 1% core growth and outperformed our end markets, many of which remain in contraction. Our secular growth drivers are accelerating with personal mobility business exceeding 25% core growth in 2025, and our data center business growing 4x compared to 2024. In addition, the Gates team delivered record-adjusted earnings metrics in 2025 during an uneven macro environment, producing both record-adjusted EBITDA dollars and record-adjusted EPS. Furthermore, we've made incremental improvements to our balance sheet bringing our net leverage ratio down to 1.85 times at year-end 2025. We returned capital to shareholders via share repurchases and were aggressive during the fourth quarter, repurchasing over $100 million of our shares at an attractive valuation. We believe our business is well positioned to accelerate core growth with our various DGIC top-line initiatives as well as to expand margins. In essence, we are exiting the down cycle with a structurally improved business while delivering near record adjusted EBITDA margin performance. We entered 2026 with cautious optimism about an industrial demand recovery. Our book to bill exiting 2025 was nicely above one time and order trends in January sustained a positive threshold. We are seeing improving industrial OEM demand activity and are positioned to support an uptake in demand. Our enterprise resource planning system transition has kicked off successfully, and we are operating our business in Europe a bit ahead of our expectations. Our other footprint optimization initiatives are also on track. Brooks will provide more color on these items and our 2026 guidance later in the presentation. On slide four, we show our record performance against key financial metrics for 2025. Adjusted EBITDA dollars grew to an all-time record, and we generated near-record adjusted EBITDA margins. Our adjusted EPS grew 9% to a record $1.52, which was the top end of our guidance in what we believe was a dropping demand landscape accompanied by uncertain trade policy. Our net leverage ratio decreased by almost 0.4 turns, and we finished below two times net leverage for the first time. We are proud of these accomplishments and believe the company is well positioned moving forward to capitalize on a potential industrial recovery. Please turn to slide five to review our full year EPS performance. Our adjusted EPS grew 13 cents on 9% year over year to $1.52. The bulk of the year-over-year growth in adjusted EPS came from operating performance, which contributed 10 cents year-over-year. We were pleased with the operating performance contribution, particularly considering the relatively soft demand backdrop in several of our end markets. On slide six, I'll review our fourth quarter results. The sales were $856 million, which represented core growth of nearly 1%. Total revenues grew slightly above 3% and benefited from favorable foreign currency translation. At the end market level, while mixed, we realized growth in our industrial markets led by the off-highway markets and personal mobility. A decrease in automotive OEM was a partial offset. At the channel level, OEM sales expanded approximately 4%, while aftermarket sales declined about 1%. Aftermarket did not increase as much as expected, as many of our distributors carefully managed their inventory into calendar year end. In addition, we faced a difficult comparison from prior year periods. We were pleased with the growth in OEM sales, which represented a nice step up from third quarter levels. Our adjusted EBITDA approximated $188 million in the fourth quarter, and our adjusted EBITDA margin measured 21.9%, up approximately 10 basis points compared to the prior year period. We managed SG&A spending well, which offset unsavorable mix and lower production output. Our adjusted earnings per share was 38 cents, an increase of approximately 7% year-over-year. Higher operating income contributed the year-over-year growth partially offset by other items. On slide seven, we'll cover our segment highlights. In power transmission segment, we generated revenues of $537 million in the quarter and flat core growth versus prior year period. Our personal mobility business grew 28% year over year, and our off-highway business expanded low single digits. At the channel level, our automotive OEM business decreased, but our industrial OEM sales grew solid double digits year over year. In the fluid power segment, our sales were $320 million in approximated 1% core growth. Our old highway markets grew low double digits, partially offset by declines in on-highway diversified industrial and energy. At the channel level, industrial aftermarket sales declined mid-single digits, partially offset by a mid-single digits increase in industrial OEM sales. Our automotive aftermarket increased high single digits compared to prior year period. I'll now pass the call over to Brooks for further comments on our results.