Gates Industrial Corporation plc

Gates Industrial Corporation plc is benefiting from improving demand across both of its segments, with the Europe ERP-related shipping and distribution disruptions easing during the second quarter of 2026. In that quarter, the Power Transmission segment's core sales increased 5.3% year over year, while the Fluid Power segment was driven by double-digit revenue growth in industrial OEM and high-teens expansion in commercial on-highway. The company's data center business more than doubled year over year, and in May 2026 Gates announced the acquisition of Timken's industrial belt business, expected to close in the third quarter of 2026. Adjusted gross margin expanded 50 basis points year over year to 41.8%, and the Power Transmission segment's adjusted EBITDA margin increased 60 basis points to 22.9%. However, core sales in South America declined 10.6% year over year on a weak agricultural market, and cost of sales rose 6.1% while SG&A expenses increased 8.4%.

The Timken Company has closed its previously announced deal to sell its belts business assets to Gates Industrial Corporation Ltd., a divestiture aimed at sharpening the company's focus on advanced motion technology. Timken inked the agreement with Gates on April 29, 2026, and expects the sale to lift its Industrial Motion segment's adjusted EBITDA margins, be accretive to earnings in 2027, and help fund its capital allocation priorities. The company targets an Industrial Motion segment adjusted EBITDA margin of 25-27% of sales in 2028, up from the 19% reported in 2025, alongside adjusted earnings per share of $8.50 for 2028, which would mark 55% growth over 2025. In the second quarter of 2026, Industrial Motion sales rose 14.6% year over year to $453.9 million and segment adjusted EBITDA climbed to $105.6 million from $72.6 million, expanding the margin to 23.3% from 18.3%. Timken reported quarterly adjusted earnings of $1.83 per share, up 28.9% year over year and ahead of the Zacks Consensus Estimate of $1.63, while consolidated sales rose 7.5% to $1.26 billion, beating the $1.23 billion consensus estimate.

Gates Industrial Corporation raised its full-year 2026 adjusted earnings per share guidance to a range of $1.62 to $1.70 and signaled an adjusted EBITDA margin of at least 23.5% in the second half. The company also increased its core sales growth outlook to 2.5% to 4.5% and its adjusted EBITDA forecast to $800 million to $830 million. Second-quarter sales reached a record $942 million, with core growth of 4.9%, while adjusted EBITDA was $211 million, representing a 22.5% margin. CEO Ivo Jurek cited an early-stage industrial recovery and a more than doubling of the data center business, with high-value project launches expected to boost second-half results. For the third quarter, total revenue is projected between $880 million and $920 million, with core revenue up about 5.5% at the midpoint.

Gates Industrial Corporation shareholders have overwhelmingly approved the company's plan to change its place of incorporation from England and Wales to Bermuda. At a series of shareholder meetings held on June 25, 2026, approximately 99.6% of votes cast were in favor of each proposal related to the redomiciliation. Chief Executive Officer Ivo Jurek stated that the move enhances capital and strategic flexibility while sustaining strong corporate governance and reducing administrative complexity and cost. The company will now proceed with legal and regulatory procedures, including seeking UK court approval, and expects the effective date to be July 20, 2026, though this remains subject to change.

Gates Industrial Corporation is expanding its Belt Drive product portfolio with three new sprocket families—CRUISE, CRUISE PLUS, and COMMUTE—to bring belt drive technology to a wider range of bicycle OEM applications and price points. CRUISE offers a cost-efficient entry point for entry-level and value-oriented bicycles, while CRUISE PLUS provides enhanced durability and broader compatibility for everyday use including mid-range eBikes, and COMMUTE is engineered for urban eBike performance supporting mid-motor systems up to 75 Nm. The new overmolded, high-performance thermoplastic sprockets are part of a tiered performance belt portfolio that gives OEM partners a scalable path to specify belt drive systems across more segments still served by chain-based drivetrains. Gates supports OEMs from initial specification through integration and production, and the expanded portfolio is now available globally.