Gates Industrial at Jefferies Conference: Strategic Growth Amid Challenges

Gates Industrial Corporation (NYSE:GTES) presented its strategic vision at the Jefferies Mining and Industrials Conference 2025 on Wednesday, 03 September 2025. The company, led by CEO Ivo Jerk, outlined plans for growth despite facing challenging market conditions. Key focuses include expanding EBITDA margins, leveraging engineering expertise, and targeting high-growth sectors like data centers and personal mobility. While agriculture and heavy-duty trucks face headwinds, Gates remains confident in its diversified market approach.

Key Takeaways

• Gates aims to expand EBITDA margins to 24% within 24 months.
• Personal mobility business is projected to grow at a 30% annual rate.
• The company targets $100-200 million in incremental revenue from data centers by 2028.
• Tariff impacts are managed through pricing strategies and operational efficiencies.
• Gates plans to reduce gross debt below $2 billion in the midterm.

Financial Results

• EBITDA Margin: Currently at 22-23%, with a target of 24% within 12-24 months.
• Personal Mobility: Achieved 20% growth in the first half of 2025; aims for $300 million revenue by 2028.
• Data Centers: Anticipates $100-200 million in revenue by 2028 from liquid cooling solutions.
• Debt Reduction: Plans to reduce gross debt below $2 billion and achieve a leverage ratio of 1.5x to 2x by 2026.
• Tariffs: Offset 80-90% of $50 million tariff headwind through pricing, with the remainder through operational activities.

Operational Updates

• Personal Mobility: Expects 30% CAGR, driven by partnerships with bike and scooter manufacturers.
• Data Centers: Secured a supply agreement with a major hyperscaler; preproduction of e-water pumps is underway.
• Footprint Optimization: Aligning factory locations with labor availability for improved efficiency.
• Supply Chain: Reengineered materials to enhance cost efficiency amid disruptions.

Future Outlook

• Market Opportunities: Targeting a $2-5 billion market for industrial chain-to-belt conversions by 2030.
• Margin Expansion: Continued focus on footprint and supply chain optimization to drive margins.
• M&A Strategy: Evaluating opportunities that align with aftermarket and OE revenue mix.
• Capital Allocation: Prioritizing debt reduction and share repurchases while exploring M&A.

Q&A Highlights

• CEO Ivo Jerk emphasized the company’s commitment to achieving 24% EBITDA margins and scaling the personal mobility business to $300 million by 2028.
• Gates is actively managing tariff impacts through strategic pricing and operational adjustments.
• The company is in early stages of producing e-water pumps for server racks, with full production expected in 2026.

For further details, please refer to the full transcript below.

Full transcript - Jefferies Mining and Industrials Conference 2025:

Steve Volkmann, Analyst, Jefferies: All right. There we go. The clock has started. All right. Hi, everybody.

I’m Steve Volkmann, with Jefferies. I cover, Gates amongst a number of other industrial companies. So very pleased to welcome Gates, to this session. We have Ivo Jerk, who is the CEO. We have, Head of Investor Relations, Rich Kwas, with us as well.

So we’re going to do this as a sort of fireside chat. We’d love to have whatever input or questions that you guys might have. So I’ll start off and do a little conversation here and then we’ll see if anyone wants to participate. That would be great. So Ivo, welcome.

Thanks for coming. So maybe the best way to start is just in case people aren’t familiar with Gates, sort of who are you, what do you do, and then we’ll dive into some of the trends.

Ivo Jerk, CEO, Gates Corporation: Sure. Great. Thank you very much, Steve. Appreciate being able to be here with you. Gates Corporation, we are a material science company.

We produce products that go into harsh and hazardous mission critical type applications for a pretty wide array of applications across the industrial spectrum. We are pretty diversified both from the end markets as well as geographies. In general, we generate a very attractive mix of margins, and we convert those margins into pretty durable and robust free cash flow. Our EBITDA margin is trafficking in the 22% to 23%, and we anticipate over the next twelve to twenty four months to deliver 24% adjusted EBITDA margins on the business that we support. Predominantly, our margin expansion, which has been reasonably robust, particularly over the last three years that have been pretty challenging from the end market demand volume based demand.

And it was driven primarily by a mix of footprint optimization initiatives as well as eightytwenty and a reasonably good amount of material cost reductions that we have been able to deliver. Those initiatives are longer term. We do not anticipate that when we get to 24 EBITDA adjusted EBITDA margins that those will seize, We have plenty of opportunity in our company to continue to evolve and expand margins through these three initiatives well into the future. We have a very strong competitive position. We have two segments in our business, Power Transmission and Fluid Power.

Both of these segments are of scale. And in both of these segments, in general, we are top three market participant in all geographies where we participate. We have a number of attractive growth initiatives that we will be discussing in here today with Steve that are primarily driven by industrial chain to belt conversion. We have a very strong presence in automotive replacement market that continues to do well, and we continue to see a number of opportunities to expand that. We have an nascent and early stage opportunity in the emerging liquid cooling of AI based data centers that we are starting to participate in as well as very attractive opportunity set in personal mobility where we are converting chain drives into Gates Carbon Drive solutions.

So our company is well positioned to not only deliver strong growth over the midterm, but also to generate very nice returns for our shareholders. Our balance sheet is in good shape, and we anticipate that we will have a strong optionality to deploy our surplus cash either into buybacks and further debt reductions or into an emerging M and A opportunities that we are starting to evaluate.

Steve Volkmann, Analyst, Jefferies: Great. So why don’t we dive in sort of to more recency? I guess this is webcast. So first, I’ll give you an opportunity to see whether you want to give us any updates relative to what you’ve seen in the last few weeks. I don’t know if tariffs might be a topic or end market or anything like that.

And if you don’t, we’ll move on.

Ivo Jerk, CEO, Gates Corporation: Yes, sure. Look, mean, I think that we have pretty well framed our Q3 and Q4. On our most recent earnings call, we haven’t really seen anything substantially different from what we have indicated on our call. Obviously, there are puts and takes. As the administration is deploying additional adjustments to their policy, they can result in some things being a little bit better, some things being a little bit worse.

The incremental tariffs really don’t have a meaningful impact on what we have represented. So we believe that we are reasonably well positioned to deliver on our guidance that we have offered on our call.

Steve Volkmann, Analyst, Jefferies: Okay. So second quarter, I think things were flattish and maybe down slightly organically. What end market trends are you sort of seeing in your businesses?

Ivo Jerk, CEO, Gates Corporation: Yes. So the end markets have been pretty challenged, I think, over the last three point five years or so. The industrial PMIs have not been very supportive. They’re a pretty good indicator of the underlying industrial activity. But we did see some incremental behavior in our end markets.

I think we’ve spoken at the beginning of the year that we anticipated the ag business to be reasonably challenged. I think that that’s playing itself out. As we have highlighted, I don’t think that that’s a surprise to anyone. We have anticipated that the heavy duty truck market in North America is going to be a little more constructive than I think it has developed. I think that some of the new policies that were deployed by the administration, like revocation of the most recent emission standards, has put a little bit incremental pressure on the truck makers.

And I certainly feel that that business has been a little bit more challenged than what we’ve anticipated. The rest of the world is doing actually reasonably well. Our automotive replacement market is doing quite well, not only because we have had the opportunity to gain market share, but also because the underlying market dynamics are rather positive. So that’s been behaving quite well. In the first half, we have seen, for the first time in probably two years, a very positive core growth in personal mobility.

We have grown roughly about 20% in the first half, and that business continues to do well. And we anticipate that second half is going to be more constructive than the first half. And we have highlighted that we anticipate that business to grow around 30% compound annually for the next couple of years. So we feel pretty well about that. And diversified industrials, I would say it’s pretty neutral at this point in time.

That’s after a couple of years of really challenging end market conditions. So we believe that, that market has troughed, and we anticipate that there may be some improvements as we go into 2026. That is kind of about what, you know, what we see.

Steve Volkmann, Analyst, Jefferies: We got an up update on August truck orders about an hour ago, and they were down 20%. So we’re we’re not doing Anyway, let’s talk about some more uplifting things. So maybe you started with it. Let’s talk about personal mobility. I think you were up 18% in the quarter.

Just talk about what’s driving that business, maybe size it for us. And then you talked about the opportunity on growth for the next couple of years.

Ivo Jerk, CEO, Gates Corporation: Sure. That business has been an interesting business because Gates has developed an alternative solution to what we have all grown up with, which is a chain drive on a bicycle. And we have developed a really elegant solution to replace the chain with a carbon drive that gives us the opportunity to offer a better solution than what chain represents on that device. There are a couple of things that are driving value creation and a business growth opportunity for our company. Number one, as electrification takes hold and more significant portion of that end market is getting electrified, that represents a good opportunity for us to drive penetration.

So we don’t necessarily see that we need to visualize end units growth in e bikes or bikes, we need to see just the penetration of e bikes. And that gives us a very strong opportunity to deliver a decent amount of growth rate for that business over the midterm. The business at the 2024 represented about circa $100,000,000 of revenue. We have committed to our shareholders that by 2028, we will scale the business up to about $300,000,000 We have a line of sight to deliver that volume growth over the next three years, predominantly driven by the design wins that we have won with bike and e bike manufacturers and e scooters and scooter manufacturers globally. And so we anticipate in the second half, we will deliver better growth than we did in the 2025.

And then from thereon, we are committing to about 30% compound annual growth rate for the next couple of years to that to get to the $300,000,000 target.

Steve Volkmann, Analyst, Jefferies: And is that margin accretive?

Ivo Jerk, CEO, Gates Corporation: It is actually very margin accretive, yes.

Steve Volkmann, Analyst, Jefferies: Okay. And when we’re done in 2028 with $300,000,000 of revenue, not that it will be done, but when we reach that waypoint, how much of that business will be sort of U. S, non U. S? Just give us a sense of the Yes. Global

Ivo Jerk, CEO, Gates Corporation: So that business has developed very strongly in Europe and was predominantly driven by the adoption of higher price point e bikes. Our sweet spot at that point in time was about 3,000 to €5,000 That gave us the opportunity to develop the technology, demonstrate the technology on a premium product and continue to evolve and innovate our product portfolio so now we can start penetrating a broader range of applications. I would say that we’re now starting to get to applications that have a price point of about $1,000 So there is a very significant opportunity to not only reach the $300,000,000 for us, but continue to expand well beyond that as we penetrate those more mainstream applications here as well as in Europe. But we also see a very significant emerging opportunity that we participate with in Asia, where personal mobility is still in a large way done on two wheelers. And as they try to evolve into more efficient two wheelers and they are starting to adapt e scooters and e motorcycles, that’s where we have an opportunity to drive growth and deliver pretty substantial amount of revenue from Asia, whereas today it’s predominantly Europe and North America.

Steve Volkmann, Analyst, Jefferies: And and why do I want a belt on my bike or e bike? My chain seems to work fine.

Ivo Jerk, CEO, Gates Corporation: Oh, it it does work fine as long as you don’t mind oiling your chain and tensioning and replacing your chain every few thousand miles and and getting getting that black stuff all over your pants as you’re driving. So if if that’s what you don’t mind, then it’s a fine solution. Our solution is much more elegant. You will never have to replace the chain. You never have to oil it.

It doesn’t rust. It is more smooth. I think that you will be quite pleased with an opportunity to drive or ride a two wheeler mobility device with a Gates Carbon

Steve Volkmann, Analyst, Jefferies: Mine also seems to come off a lot as well, but I was just teeing up the question. So let’s sort of stay with that topic, but let’s talk about Belted Chain opportunities outside of personal mobility and kind of more of the industrial space.

Ivo Jerk, CEO, Gates Corporation: Right. I think that to me, while the personal mobility opportunities are super exciting and they are very elegant and I think that they are frankly quite terrific, I do believe that we have a very large market opportunity over that longer term horizon in industrial applications. Industrial chain market is about $8,000,000,000 a year market TAM for our company. Again, it is a nontraditional competitor for us. We don’t manufacture chain drives at Gates Corporation.

We believe that we can offer a much more elegant solution for industrial applications, whereas our belt solution offers significant upside operational upside to our customers, lower energy consumption, significant reduction in maintenance cost, a noise pollution reduction and most importantly, energy reduction in consumption of energy as you operate that end unit. So it is a better solution. Today, it is a much more expensive solution than chain. We have had a significant engineering set of activities where we believe that we are now coming towards a technology breakthrough. We have discussed it on a number of occasions.

We have demonstrated the technology that gives us an opportunity to get to a chain cost proximity on these applications, and we believe that we needed to make that breakthrough to be able to drive penetration of stationary machine OEM applications. And so we now anticipate that over the next twelve twenty four months, we will be not only shipping these units out, we will have a capability to vertically integrate the manufacturing of these sprockets and have a differentiated opportunity to offer to the machinery OEMs. As a plug in, there is not just a benefit in operating assets that are transmitting mechanical power through belts rather than chains. We are also offering in our solution nearly 90% reduction of carbon footprint over the use of the life of that asset, which is rather significant. And while maybe the environmental factors have fallen a little bit away on the radar of companies, I think that the companies that continue to care about being good stewards of the environment, and this is a pretty substantial incremental benefit that you can receive by adapting this new technology.

Steve Volkmann, Analyst, Jefferies: So have you sized what you think that business could look like, like we did for the personal mobility side?

Ivo Jerk, CEO, Gates Corporation: Yes. Well, we certainly believe that business could be kind of $0.02 $5,000,000,000 by the end of the decade, which I don’t think is unreasonable, taking into account that there’s a pretty significant value proposition in here. And as we get, again, closer to the proximity of the cost of the chain drive, these opportunities are becoming much more meaningful and tenable for us to be able to deliver on.

Steve Volkmann, Analyst, Jefferies: Okay, great. So let’s shift to the bright shiny object in data centers and maybe start by just telling us what you’re working on there.

Ivo Jerk, CEO, Gates Corporation: Yes, sure. So data centers is a unique opportunity for our company. We have been developing specifically designed products for adoption in liquid cool data centers. All the products manufacture for applications in data centers are core products that we have a long history in manufacturing. We’ve just custom tailored design the products that we have historically manufactured for use in these applications.

The application is reasonably unique. It’s an application that is sitting right at the center of what we do. It’s a mission critical application where people care very much about having an ability to have a system that is leak proof in this case. It is essential. You don’t really want to have a water contamination in a in a data center.

So we have developed a fluid conveyance hoses that are specifically tailored for these applications. We have couplings and fittings, applications that connect the hoses to to the manifold and the racks. We have developed an electric pump that goes in this application that happens to be smallest in size, highest in cooling capacity pump available on the marketplace today. And we also offer a belted solution into high output industrial HVAC blower systems. So we’re pretty much capable of able to provide all key products from both of our product segments to the use in these data centers.

Most recently, we’ve spoken about and since our Q2 earnings call update, we have secured a supply agreement with a hyperscaler data center operator to support their data center applications. We will be supplying hose and coupling assembly for their use. We will be doing that through an Asian based ODM starting in 2026. We are presently in early preproduction of our e water pump for an application in server racks with a U. S.-based server manufacturer that we anticipate will be in full preproduction by Q4 and then in production in 2026, and that is being done through another Asian based ODM for this application.

We have a number of a significant number of designing activities that are occurring with other server manufacturers, other ODMs, critical infrastructure providers as well as EPCs that build the gray spaces. So we are pretty well positioned. We are very excited about some of the opportunities that lie in front of us, and we are being laser focused in being able to scale up our production capability and capacity in support of the demand.

Steve Volkmann, Analyst, Jefferies: And I think you’ve sized that addressable market potentially around 1,800,000,000.0 to $2,000,000,000 Just talk about that a little bit and what might change that or make it bigger? Yes. So

Ivo Jerk, CEO, Gates Corporation: when we size this market for the products that we manufacture, we have taken into account an industry estimate of about 30% of data centers that will be built between now and end of the decade being liquid cooled. I believe that assumption may prove to be conservative, taking into an account that basically vast majority of everything that we see is AI based data centers that are being that are coming out of the ground. So that could reasonably well upsize the market opportunity for us. We are certainly not forecasting any more than that at this point in time, and we’ll be very pleased if we can upsize that market opportunity. But if that market opportunity remains at about $1,800,000,000 we have estimated that by 2028, we would anticipate to deliver between 100,000,000 and $200,000,000 of incremental revenue for our company through this opportunity alone.

Steve Volkmann, Analyst, Jefferies: And do you need to add capacity to do that?

Ivo Jerk, CEO, Gates Corporation: We have a reasonably well positioned capacity for the fluid conveyance products that we manufacture. We are scaling up capability and capacity to build the fittings and couplings. And we are ramping up a couple of production lines in support of the water pumps that we anticipate to deliver to our customers.

Steve Volkmann, Analyst, Jefferies: And presumably, this will also be margin accretive or not It

Ivo Jerk, CEO, Gates Corporation: will also be margin accretive, yes.

Steve Volkmann, Analyst, Jefferies: Okay. Good. And then we were talking, I think, offline about whether this might have some applicability in other business areas, other end markets over time.

Ivo Jerk, CEO, Gates Corporation: Sure. I think that that’s a really good point, Steve. Look, we believe that our water pump technology today is amongst the most competitive solutions available in the marketplace if size is a differentiator. Many of the applications industrial many of the industrial applications do care about output in size. So we anticipate that as we scale this pump into data center applications, we should have opportunities to adopt this device across a broader set of industries.

And frankly, we have already demonstrated we have a capability to do that because the original technology was developed for hybrid electric application with an Asia based OEM. So we’ve not only scaled it up, but we have also been able to take it across different industrial set of applications now into the data centers, we are demonstrating that this is a very, very competitive technology.

Steve Volkmann, Analyst, Jefferies: Great. Okay. Why don’t we take a quick break? Anybody want to ask a question? Pregnant pause?

Okay. Why don’t we talk a little bit more about your margin expansion? I mean you’ve delivered three fifty basis points of margin expansion, I think, over the last few years. How have you done that? And how do you keep that going?

Ivo Jerk, CEO, Gates Corporation: Yes. It’s a great, great question. We have deployed a whole bunch of self help initiatives across the last several years. We’ve certainly anticipated that there will be a number of challenges in the industrial complex, and we felt that it was essential for us to continue to deliver strong financial returns. And the only way that we could have done that is by processing and prosecuting our business a little bit differently than we have done historically.

So we have deployed a number of different initiatives. We have taken a look across the landscape, and we certainly saw opportunities to improve the efficiency of our operational footprint, not necessarily because we wanted necessarily to reduce the number of factories. I mean there are benefits, there are underlying benefits when you do that. But for us, the biggest issue was that during every upcycle, we have struggled to be able to have access to the availability of labor in support of the order book that we have had. So we wanted to position our factories close to closer proximity where labor is more readily available.

And so that was kind of the first underlying pretext of what we have done. Well, as we are doing that, we’re also finding a significant amount of economic efficiencies that come with that benefit. Secondly, we felt that deploying eightytwenty around our portfolio would give us the opportunity to drive further margin expansion opportunities. And we’ve certainly seen pretty strong early returns from that program. Thirdly, we have had an opportunity to test our supply chain at the onset of the Ukraine Russia war where we have been significantly impacted by raw material shortages that were coming out of that region as both of those countries were very critical a supply of refined petrochemical byproducts to predominantly polymer industries.

And so as that capacity got extinguished, our supply chains got tested. We needed to reengineer the materials that we were using in our manufacturing. And as a material science based company, we’ve deployed our material scientists to go in and do just that. So within a couple of quarters, we have been able to not only reengineer the materials, but we’ve also realized that lots of the materials that we have been reengineering out were rather costly and gave us an opportunity not only to help ourselves with the supply chain, but also gain efficiencies in doing so. So as we came on the other side of that process, we have decided to harness the benefits that we were seeing and put ourselves on a trajectory to continue to drive further reduction in material cost.

And that has been a very good journey that has given us strong benefits over the last two years. We believe that we have two to three more years of that journey available. And so between footprint optimization and supply chain optimization and eightytwenty, we believe that we have a further opportunity to continue to drive that margin expansion. And frankly, we have done that during a rather negative end market backdrop with declining volumes being able to expand margins. So we’re quite pleased with what our team has done, and we believe that these opportunities remain.

And as the business starts to improve, as the underlying conditions, as PMIs improve, as the underlying market conditions improve and some of these end markets start to recover, that represents a rather meaningful opportunity for us to continue to not only increase our margins but get to super healthy incrementals as well.

Steve Volkmann, Analyst, Jefferies: And how should we think about incrementals over the next couple of years?

Ivo Jerk, CEO, Gates Corporation: Yes. So we’ve represented that we believe that our incrementals for the first twelve to eighteen months of volume recovery should be kind of 1,000 basis points better than our normalized incrementals, which are about 35% on incremental revenue. So kind of thinking about 45% plus or minus incrementals in the first twelve to eighteen months is very robust, very healthy margin expansion. And kind of post the twelve, eighteen months, we believe that we will normalize back at 35% or so incrementals. Okay.

Steve Volkmann, Analyst, Jefferies: Let’s talk just briefly about tariffs. I think you’ve said that it’s about a $50,000,000 headwind for you this year. Just talk about sort of how that comes to play.

Ivo Jerk, CEO, Gates Corporation: Yes. The $50,000,000 is annualized for us, and we will not see all of the 50,000,000 obviously, in 2020, 2025. Look, we have had a philosophy since the last ten years that I have been present in the company of in region, for region manufacturing. I mean in region, for region manufacturing is great. What you kind of underestimate sometimes is the supply chain complexities.

So while you may be manufacturing in North America, and for us, we have a very little exposure in importing products from China, as an example, is de minimis around the edges. The bigger issue is that you do supply on raw materials that you put inside of your processing of those materials. And in a way, you have been exposed to importing additive, importing some steel components, importing things like bolts and nuts that you don’t manufacture in The United States, you don’t quite realize how much tariff exposure you may have. But overall, on a scale of the company, I think that we were reasonably well positioned, again, 50,000,000 annualized. We will be offsetting the $50,000,000 tariff predominantly through pricing.

We anticipate that 80% to 90% of the tariff cost is going be offset through price on a dollar to dollar neutrality. And the final 10% will be offset through incremental operational activities that we have deployed.

Steve Volkmann, Analyst, Jefferies: And how do you think your manufacturing and cost footprint compares to your competitors?

Ivo Jerk, CEO, Gates Corporation: We are a reasonably well geographically diversified company. We have a strong we still have a strong presence in The United States. We have a very strong presence in North America. As I again, as I indicated, we are in Region 4 regions, so we really don’t import lots of finished goods products from other regions. So we are very well positioned.

I believe that, that also gives us an opportunity to potentially leverage that benefit from our presence in The United States. And possibly over the midterm, it should represent an opportunity to drive incremental growth.

Steve Volkmann, Analyst, Jefferies: Okay. Maybe final topic, sort of balance sheet, capital allocation. Your debt levels have come down. Maybe they need to come down slightly more. I don’t know how you feel about that.

But talk about where you think the balance sheet is and what type of optionality that gives you.

Ivo Jerk, CEO, Gates Corporation: Right. So our balance sheet, I think, is in a very good shape. We’ve exited the quarter with about 2.1x, 2.2x leverage. We anticipate that we will be below 2x leverage by the end of the year. That I think is a very reasonable level.

Most recently, about a month ago, we have paid down $100,000,000 of gross debt. We anticipate that over the midterm, over the pretty kind of next couple of years, we would like to get below $2,000,000,000 of gross debt. Our strong free cash flow generation capability and margin expansion gives us the opportunity to delever kind of in a natural way at half a turn or so a year. Our short term targets, so by 2026, we’ve committed to get to 1.5x to 2x. So we are a little bit ahead of that target.

So 1.5x leverage is it’s an area that would be good to traffic in. That gives us ton of optionality because, again, we kind of delever at half a turn a year. So that gives you a scale of the free cash flow surplus free cash flow that you are generating. So in short term, we will be deploying that cash flow in further debt paydowns and repos. I think that that’s the best use of cash for us to return the cash back to shareholders and stay focused on execution of our organic growth initiatives.

We are truly fortunate to have a very significant organic opportunity ahead of us. But we are also starting to think about potential incremental M and A that we can do. But I think that while we are building a strong pipeline, we have a strong pipeline of potential M and A opportunities, we do believe that buying back our stock is generating the biggest IRR on that cash deployed. So we’ll continue to do that at least over the short term.

Steve Volkmann, Analyst, Jefferies: And ultimately, when you do start to layer in some M and A, what types of things? Is it geography, product, process?

Ivo Jerk, CEO, Gates Corporation: Yes. Well, I think the first, start with we are a unique company. We are about 65% aftermarket and 35% OE applications. So whatever we do, we would want to ensure that, that mix of revenue stays consistent with what we do. We are interested in companies that have a very similar profile to what we have, mission critical, highly engineered products that need replacement.

And then I think that layering more broadly things that would advance your opportunities in different geographies would make sense. Building lots of factories in different geographies is complex, costly and it doesn’t always generate the returns that you want to. So that would be a reasonable assumption that it would make more sense to acquire something around your core portfolio.

Steve Volkmann, Analyst, Jefferies: All right. That is perfect. We are out of time. Thank you, everybody. Thank you all for listening.

Thank you, guys, for the discussion.

Ivo Jerk, CEO, Gates Corporation: Thank you.

Steve Volkmann, Analyst, Jefferies: Thanks, Steve.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.