NYSE$GTES
Gates Industrial Corporation plc · Q2 2021 earnings
Q2 2021 earnings · · Investor relations
Briefing
Gates Industrial's financial performance significantly improved, marked by substantial revenue growth and margin expansion.
Gates Industrial reported a strong second quarter with net sales up 58.7% and core revenue growth of 51.0%. Net income attributable to shareholders was $96.9 million, or $0.33 per diluted share. Adjusted EBITDA increased by 159.6% to $216.0 million, with a margin of 23.6%. The company raised its full-year 2021 guidance.
- Net sales increased by 58.7%, driven by a 51.0% core revenue growth.
- Net income attributable to shareholders reached $96.9 million, or $0.33 per diluted share.
- Adjusted EBITDA surged by 159.6% to $216.0 million, with a margin expansion of 920 basis points.
- Full-year 2021 guidance was raised, reflecting confidence in continued performance.
Headline financials
Revenue & EPS history
Gates Industrial · Revenue · Quarterly
$915M
Revenue by segment
Gates Industrial · $936M total across 2 segments · Q2 2023
- Power Transmission$574M+5.7%61.3%
- Fluid Power$362M-0.4%38.7%
Forward guidance
The company is increasing its full-year 2021 outlook. Core revenue growth is now expected to be in the range of 20.0% to 22.0% compared to the previous range of 18.0% to 21.0%. Adjusted EBITDA margin is now expected to be in the range of 22.2% to 22.8% compared to the previous range of 22.0% to 22.8%. The company continues to expect total capital expenditures in the range of $90 million to $110 million and Free Cash Flow Conversion to be greater than 80% of Adjusted Net Income.
Tailwinds
- Core revenue growth is now expected to be in the range of 20.0% to 22.0%.
- Adjusted EBITDA margin is now expected to be in the range of 22.2% to 22.8%.
- Total capital expenditures are expected to be in the range of $90 million to $110 million.
- Free Cash Flow Conversion to be greater than 80% of Adjusted Net Income.
- Business continues to recover broadly across both product segments.
Headwinds
- Operating environment in the quarter was quite challenging.
- Navigated raw material and labor shortages.
- Limited freight availability.
- Significant inflation throughout the supply chain expected to continue for the balance of the year.
- Complexities and the significant increase in production volumes.
Historical earnings impact
How earnings announcements have historically affected this stock's price.
Avg. return before/after earnings
Based on 20 quarterly earnings reports · overlaid with Q2 2021
-0.2%
Avg return
Earnings day
-0.7%
Avg return
5 days after
-0.1%
Avg return
30 days after
46%
16 / 35 earnings
Positive
+15.5%
Q2 2018
Best reaction
-19.3%
Q2 2019
Worst reaction
| Quarter | Report date | Reaction (Day 0) | +5 days | +30 days |
|---|---|---|---|---|
| Q1 2026 | -1.2% | +2.5% | +1.2% | |
| Q4 2025 | +3.8% | +3.1% | -14.2% | |
| Q3 2025 | -12.8% | -14.3% | -11.9% | |
| Q1 2025 | +5.2% | +11.2% | +17.6% | |
| Q4 2024 | +11.8% | +7.8% | -4.5% | |
| Q3 2024 | +6.0% | +7.5% | +21.4% | |
| Q2 2024 | +0.1% | -8.9% | +2.4% | |
| Q1 2024 | -6.6% | -6.5% | -1.1% | |
| Q4 2023 | -4.4% | -3.7% | +22.4% | |
| Q3 2023 | +1.3% | +1.1% | +13.2% | |
| Q2 2023 | -4.1% | -11.9% | -7.0% | |
| Q1 2023 | +3.8% | +1.5% | -8.3% | |
| Q4 2022 | +5.6% | +6.9% | +2.6% | |
| Q3 2022 | +2.3% | +1.6% | +5.9% | |
| Q2 2022 | -3.4% | -1.5% | -13.1% | |
| Q1 2022 | -0.9% | -7.8% | -2.6% | |
| Q4 2021 | +0.0% | -2.3% | +2.0% | |
| Q3 2021 | -6.4% | -5.4% | -10.1% | |
| Q2 2021 | -4.1% | -10.3% | -10.7% | |
| Q1 2021 | -0.6% | +1.6% | +3.4% | |
| Q3 2020 | +0.7% | +2.0% | +8.4% | |
| Q2 2020 | +8.6% | +8.1% | +4.0% | |
| Q1 2020 | +1.9% | +10.5% | +34.2% | |
| Q4 2019 | +7.7% | +1.3% | -22.6% | |
| Q3 2019 | +8.0% | +8.1% | +6.2% | |
| Q2 2019 | -19.3% | -19.1% | -2.8% | |
| Q1 2019 | -16.0% | -17.4% | -30.0% | |
| Q4 2016 | -1.5% | -0.2% | -3.3% | |
| Q4 2018 | +6.7% | +5.0% | +1.3% | |
| Q3 2017 | -7.1% | +0.3% | -4.7% | |
| Q3 2018 | -0.4% | -4.9% | -2.1% | |
| Q2 2018 | +15.5% | +15.6% | +17.1% | |
| Q1 2017 | -2.3% | -1.6% | -3.6% | |
| Q1 2018 | -3.4% | -3.5% | -4.4% | |
| Q4 2017 | -0.6% | +0.6% | -10.0% | |
| Q2 2017 | — | — | — | |
| Q3 2016 | — | — | — | |
| Q2 2016 | — | — | — | |
| Q1 2016 | — | — | — | |
| Q1 2014 | — | — | — | |
| Q4 2013 | — | — | — | |
| Q3 2013 | — | — | — | |
| Q2 2013 | — | — | — | |
| Q1 2013 | — | — | — | |
| Q4 2012 | — | — | — | |
| Q3 2012 | — | — | — |
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