Gates Industrial (GTES) Jefferies Global Industrials Conference 2026 summary

Business performance and outlook

• Raised core growth guidance to 5.5% for Q3 and 6.5% for Q4, following a significant acceleration in order intake and organic growth, especially after overcoming ERP-related headwinds in Q1.

• Secular growth drivers include personal mobility, data center enterprise initiatives, and broad-based strength across core business segments.

• Agricultural segment is expected to recover in the second half of the year, with industry trends indicating a bottoming out and recovery into 2027.

• Built some backlog in Q2, reflecting strong end-market demand.

Strategic growth opportunities

• Personal mobility offers a decades-long market share opportunity by substituting chain drives with engineered belt drives, targeting a large two-wheeler market.

• Industrial chain drive market presents a $7 billion opportunity, with further details to be shared at the upcoming Capital Markets Day.

• Data center segment is rapidly expanding, with liquid cooling adoption increasing total addressable market from $1.5 billion to over $2 billion in 18 months.

• Data center revenue expected to reach $20–$30 million this year, with potential to exceed $100–$200 million by 2028.

Channel and aftermarket dynamics

• Over 70% of revenue comes through distribution channels, which have shown disciplined inventory management and are expected to restock as demand continues.

• Automotive aftermarket is a stable, durable business with strong market share in China, India, and Latin America, benefiting from an aging car park and non-discretionary, mission-critical products.

• Aftermarket growth since April 2025 has been driven more by unit growth than price, with a projected 2/3 unit and 1/3 price contribution through 2027.