The following is a summary of the Gates Industrial Corporation Plc (GTES) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Gates Industrial Corporation reported Q1 revenue of $863 million, down 3.6% on a core basis.

• Adjusted EBITDA was $196 million at a margin of 22.7%, an expansion of 330 basis points, due to key initiatives and an increased mix of replacement sales.

• Operating income grew over 30%, leading to an adjusted EPS of $0.31.

• Due to a $100 million reduction in term loan balance, the net leverage ratio fell to 2.4x from 2.7x, compared to Q1 of the previous year.

• The company repurchased $50 million worth of shares during Q1, demonstrating a more robust balance sheet.

Business Progress:

• The company experienced improved order activity as the month of March advanced.

• It raised its full-year adjusted EBITDA guidance due to Q1 performance.

• Despite ongoing industrial challenges, Gates Industrial expressed optimism about expanding its business through data centers over the next 3-4 years.

• The company anticipates recovery in personal mobility in the second half of the year and is planning strategic pricing to offset inflationary pressures.

• Gates Industrial is pursuing footprint optimization with multiple ongoing projects, expecting significant benefits to materialize by late 2025 or early 2026.

• The company's Q1 performance was boosted by longer cycle projects in oil and gas and mining, projected to materialize during 2024.

More details: Gates Industrial IR

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