Gates Industrial Corporation plc reported a net sales figure of $3,408.2 million for the fiscal year ending December 28, 2024, reflecting a 4.5% decrease from the previous year's $3,570.2 million. The decline in revenue was attributed to lower sales volumes across both the Power Transmission and Fluid Power segments, which saw decreases of 3.8% and 5.7%, respectively. Despite the drop in sales, the company maintained a gross profit of $1,358.5 million, nearly unchanged from $1,358.9 million in the prior year. Operating income from continuing operations increased to $478.7 million, up from $462.6 million, aided by a reduction in selling, general, and administrative expenses.
The company experienced significant changes in its operational landscape, particularly with the deconsolidation of its Russian subsidiary, which resulted in a loss of $12.7 million. This move followed the suspension of operations in Russia in July 2022 due to geopolitical tensions. Additionally, Gates launched several new products, including the Micro-V® platform for engine accessory drive systems and the G-Force Workhorse CVT belt, aimed at enhancing its product offerings in the automotive and personal mobility markets.
Gates' customer base remains diverse, with approximately 68% of net sales generated from replacement channels, which are less susceptible to economic fluctuations compared to original equipment manufacturer (OEM) sales. The company reported a total employee headcount of approximately 14,100, with a significant portion engaged in production roles. The workforce composition reflects ongoing efforts to enhance diversity, with 25% of employees being female and 40% of executive officers also female.
Looking ahead, Gates anticipates a potential recovery in industrial demand in 2025, supported by its strategic initiatives and a favorable mix of replacement channel sales. The company aims to leverage its strong liquidity position, with cash balances of $682 million and total committed borrowing headroom of $471.8 million, to navigate market challenges and capitalize on growth opportunities. Management remains focused on improving profitability through operational efficiencies and product innovation, despite the ongoing uncertainties in global markets.
About Gates Industrial Corp plc
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