Gates Industrial Corporation PLC (GTES) 2024 Q4 法說會逐字稿

Good morning, and welcome to Gates Industrial Corporation's Fourth Quarter and Full Year 2024 Earnings Call. (Operator Instructions). As a reminder, this conference call is being recorded.

早上好，歡迎參加蓋茲工業公司 2024 年第四季和全年財報電話會議。（操作員指令）。提醒一下，本次電話會議正在錄音。

I would now like to turn the call over to Rich Kwas, Vice President, Investor Relations. Thank you. Please go ahead.

現在我想將電話轉給投資人關係副總裁 Rich Kwas。謝謝。請繼續。

Greetings, and thank you for joining us on our Fourth Quarter and Full Year 2024 Earnings Call. Obviously, cover our non-GAAP and forward-looking language before passing the call over to our CEO, Ivo Jurek, will be followed by Brooks Mallard, our CFO.

您好，感謝您參加我們的 2024 年第四季和全年財報電話會議。顯然，在將電話轉交給我們的執行長 Ivo Jurek 之前，先介紹一下我們的非 GAAP 和前瞻性語言，然後由我們的財務長 Brooks Mallard 接聽。

Before the market opened today, we published our fourth quarter and full year 2024 financial results, Copy of the release is available on our website at investors.gates.com. Our call this morning is being webcast and is accompanied by a slide presentation.

在今天市場開盤前，我們公佈了 2024 年第四季和全年財務業績，新聞稿副本可在我們的網站 investors.gates.com 上取得。我們今天上午的電話會議正在進行網路直播，並附有幻燈片演示。

On the call, we will refer to certain non-GAAP financial measures that we believe are useful in evaluating our performance. Reconciliations of historical non-GAAP financial measures are included in our earnings release, and the slide presentation, each of which is available in the Investor Relations section of our website.

在電話會議上，我們將參考一些我們認為有助於評估我們績效的非公認會計準則財務指標。我們的收益報告和投影片簡報中包含了歷史上非公認會計準則財務指標的對帳表，您可以在我們網站的「投資者關係」部分找到這些內容。

Please refer now to Slide 2 of the presentation, which provides a reminder that our remarks will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks that could cause actual results to be materially different from as expressed in or implied by such forward-looking statements. These risks include, among others, matters that we have described in our most recent annual report on Form 10-K and in other filings we make with the SEC. We disclaim any obligation to update these forward-looking statements.

現在請參閱簡報的第 2 張投影片，它提醒我們，我們的評論將包括《私人證券訴訟改革法案》所定義的前瞻性陳述。這些前瞻性陳述具有風險，可能導致實際結果與此類前瞻性陳述所表達或暗示的結果有重大差異。這些風險包括我們在最近的 10-K 表年度報告以及向美國證券交易委員會提交的其他文件中所述的事項。我們不承擔更新這些前瞻性聲明的任何義務。

We will be attending several investor conferences during February and March. We look forward to meeting with many of you. And before we start, please note all comparisons are against the prior year period unless stated otherwise.

我們將在二月和三月參加幾場投資者會議。我們期待與你們中的許多人見面。在我們開始之前，請注意，除非另有說明，所有比較均與去年同期進行比較。

Now I'll turn it over to Ivo.

現在我將把發言權交給 Ivo。

Thank you, Rich. Good morning, everyone, and we appreciate you joining us today. Let's begin on Slide 3 of the presentation and review what we've accomplished in 2024. We. The Gates team globally made significant progress in 2024. We grew adjusted EBITDA margins by 140 basis points, significantly exceeding our initial forecast while encountering a more challenging demand environment than we've expected at the outset of the year.

謝謝你，里奇。大家早安，感謝您今天的加入我們。讓我們從簡報的第 3 張投影片開始，回顧我們在 2024 年的成就。我們。2024年，蓋茲團隊在全球範圍內取得了重大進展。我們的調整後 EBITDA 利潤率成長了 140 個基點，大大超出了我們最初的預測，但我們面臨的需求環境比年初預期的更具挑戰性。

Our teams executed well on our enterprise initiatives and our focus enabled us to deliver strong gross margin expansion relative to 2023. Our profit improvement helped us to generate record adjusted earnings per share and adjusted EBITDA (inaudible) in 2024. Further, we successfully refinanced our debt stack, lowered our financing costs and reduced our net leverage ratio. Lastly, we supported Blackstone sell down during the year by repurchasing $175 million of our stock ultimately facilitating their exit prior to year-end.

我們的團隊在企業計劃方面表現良好，我們的專注使我們能夠實現相對於 2023 年的強勁毛利率成長。我們的利潤成長幫助我們在 2024 年創造了創紀錄的每股調整收益和調整後 EBITDA（聽不清楚）。此外，我們成功地對債務進行了再融資，降低了融資成本並減少了淨槓桿率。最後，我們支持黑石集團在年內減持股份，回購了價值 1.75 億美元的股票，最終促成他們在年底前退出。

Fundamentally, we believe our business operations are positioned to capitalize on potential industrial demand recovery during 2025, and we've made strong headway towards achieving our midterm targets. Brooks and I will provide more color on the current state of our journey later in the presentation.

從根本上來說，我們相信我們的業務營運能夠利用 2025 年潛在的工業需求復甦，並且我們在實現中期目標方面已經取得了長足的進步。布魯克斯和我將在稍後的演講中詳細介紹我們旅程的現狀。

On Slide 4, we summarize the key movements in our 2024 adjusted EPS. We delivered earnings per share growth led by operating income contribution, augmented by lower interest expense and share count, which more than offset a higher tax rate and lower contribution from other items. We believe 2024 was indicative of our organization's operational strength and improved financial flexibility.

在投影片 4 中，我們總結了 2024 年調整後每股盈餘的主要變動。我們實現了每股盈餘成長，這主要得益於營業收入貢獻，以及利息支出和股票數量的降低，這足以抵消更高的稅率和其他專案貢獻的降低。我們相信 2024 年顯示我們組織的營運實力和財務靈活性已提高。

On Slide 5, I will review fourth quarter results. Core revenue performance was consistent with our expectations, while the strengthening of the U.S. dollar during the quarter negatively impacted reported revenues. Our replacement channel posted growth, supported by a mid-single-digit increase in our replacement. Our OEM sales decreased primarily affected by volume reductions in the Agriculture and Construction end markets. Encouragingly, personal mobility core growth increased for the first time in 7 quarters and expanded approximately 20%. Our book-to-bill remained above 1 at the end of the year.

在第 5 張投影片上，我將回顧第四季的業績。核心營收表現符合我們的預期，但本季美元走強對報告收入產生了負面影響。我們的替代管道實現了成長，這得益於我們替代產品銷售的中等個位數成長。我們的 OEM 銷售額下降主要受到農業和建築終端市場銷售減少的影響。令人鼓舞的是，個人行動核心成長 7 個季度以來首次實現成長，增幅約為 20%。截至年底，我們的訂單出貨比仍維持在 1 以上。

Our profitability performance was solid as adjusted EBITDA margin expanded 30 basis points to 21.8%. The increase was driven by 130 basis point increase in gross margin to 40.4%, a record gross margin performance for a fourth quarter. Gross margin primarily benefited from ongoing contributions from our various enterprise initiatives, which supported improved operating performance and price realization as well as favorable channel mix. The overall volume was a drag.

我們的獲利表現穩健，調整後的 EBITDA 利潤率擴大 30 個基點至 21.8%。推動這一成長的因素是毛利率上升了 130 個基點，達到 40.4%，創下了第四季毛利率的最高紀錄。毛利率主要受益於我們各項企業計畫的持續貢獻，這些計畫支持了經營績效和價格實現的提高以及有利的通路組合。整體而言，銷量不佳。

Our free cash flow conversion during the quarter was 160%, and which brought the full year to 74%. We believe we are at or near trough demand levels in some of our end markets and are seeing green shoots in others, and have maintained our inventory levels to ensure that we fully capitalize on an expected cycle inflection. Additionally, we have positioned inventory and invested CapEx to support our continued footprint optimization plans, which launched in earnest during the second half of 2024.

本季我們的自由現金流轉換率為 160%，全年則達 74%。我們相信，我們的一些終端市場的需求水平已經達到或接近谷底，而其他市場則出現了復甦的跡象，我們一直保持庫存水平，以確保我們充分利用預期的周期拐點。此外，我們已定位庫存並投資資本支出以支持我們持續的足跡優化計劃，該計劃於 2024 年下半年正式啟動。

Our net leverage ratio declined to 2.2x from 2.3x at year-end 2023. We allocated $175 million of cash to share repurchases during the year. Resources that would have reduced our net leverage ratio further. We believe that we're in a strong position to hit our 2026 target net leverage ratio of 1 to 2x.

我們的淨槓桿率從 2023 年底的 2.3 倍下降至 2.2 倍。我們在本年度撥出了 1.75 億美元現金用於股票回購。這些資源可以進一步降低我們的淨槓桿率。我們相信，我們有能力實現 2026 年 1 至 2 倍的目標淨槓桿率。

Please turn to Slide 6. Fourth quarter total revenue were $829 million which represented a 2.6% decrease on a core basis and was slightly better than our expectations. Total revenues were down just under 4%, inclusive of unfavorable foreign currency effects that incrementally worsened through the quarter. Automotive grew low single digits on a core basis. This was offset by mid-single-digit declines in industrial end markets, primarily driven by North America and Europe.

請翻到幻燈片 6。第四季總營收為 8.29 億美元，核心營收下降 2.6%，略優於我們的預期。總收入下降了近 4%，其中包括本季逐漸惡化的不利外匯影響。汽車業務的核心成長率僅為個位數。但這一成長被工業終端市場的中等個位數下滑所抵消，主要受北美和歐洲的影響。

Our Asian business continues to see signs of industrial recovery. Replacement sales grew modestly as we continue to see constructive demand in the Automotive replacement business. OEM sales decreased in line with expectations as auto OEM builds were flat and Agriculture and Construction industry inventories remained elevated.

我們的亞洲業務持續呈現工業復甦的跡象。由於我們繼續看到汽車替換業務的積極需求，替換銷售額溫和成長。由於汽車 OEM 產量持平且農業和建築行業庫存仍然較高，OEM 銷售下降符合預期。

Adjusted EBITDA was $181 million and yielded a margin of 21.8%, an increase of 30 basis points. The expansion was led by a solid 130 basis points improvement in gross margins. Benefits from our enterprise initiatives more than offset the adjusted EBITDA impact from lower core sales. Adjusted earnings per share was $0.36, which was down 3% versus the prior year. Operating income was approximately $0.02 headwind driven by lower sales volume and partially offset by initiative savings. A lower share count contributed $0.01.

調整後的 EBITDA 為 1.81 億美元，利潤率為 21.8%，增加了 30 個基點。此次擴張主要得益於毛利率大幅提高 130 個基點。我們的企業計畫帶來的收益遠遠抵銷了核心銷售額下降對調整後 EBITDA 的影響。調整後每股收益為 0.36 美元，較前一年下降 3%。營業收入約為 0.02 美元，受銷售量下降影響，但部分被計劃節省所抵消。較低的股票數量貢獻了 0.01 美元。

On Slide 7, we'll review our segment highlights. In the Power Transmission segment, we generated revenues of $520 million in the quarter, which translated to approximate 1% decrease on a core basis. The replacement channel was up year-over-year, supported by modest growth in Automotive replacement and some stabilization in Industrial replacement. OEM demand was under pressure with both Industrial and Automotive posting declines.

在第 7 張投影片上，我們將回顧我們的部分亮點。在動力傳輸部門，我們本季創造了 5.2 億美元的收入，核心收入下降了約 1%。替換渠道同比增長，受汽車替換溫和增長和工業替換一定程度穩定的支撐。由於工業和汽車行業的原始設備製造商 (OEM) 需求均下滑，因此 OEM 需求面臨壓力。

Notably, (inaudible) return to growth in order with a double-digit increase that lessened the overall magnitude of the OEM channel decline. Our Transmission adjusted EBITDA margin declined 30 basis points, impacted by the lower top line.

值得注意的是，（聽不清楚）恢復成長，實現兩位數成長，減輕了 OEM 通路整體下滑的幅度。受營業收入下降的影響，我們的傳動調整後 EBITDA 利潤率下降了 30 個基點。

In the Fluid Power segment, our sales were $309 million. On a core basis, sales peak approximately 5%. The replacement business remained stable, supported by Automotive replacement, which grew high single digits. This was slightly offset by softness in Industrial replacement, which declined mid-single digits. Industrial OEM sales declined high teens on a core basis, driven by continued demand pressure in Agriculture and Construction. Fluid Power segment EBITDA margins expanded 120 basis points, benefiting from our enterprise initiatives and a higher replacement sales mix, which more than offset the volume declines.

在流體動力領域，我們的銷售額為 3.09 億美元。從核心基礎來看，銷售額高峰約為 5%。替換業務保持穩定，受汽車替換業務支撐，其成長達到高個位數。工業替代產品的疲軟表現略微抵消了這種影響，工業替代產品銷售下降了中等個位數。受農業和建築業持續的需求壓力推動，工業原始設備製造商銷售額核心下滑幅度達到十幾歲。流體動力部門的 EBITDA 利潤率擴大了 120 個基點，這得益於我們的企業計劃和更高的替代銷售組合，足以抵消銷量的下降。

I will now pass the call over to Brooks for further comments on our results.

我現在將把電話轉給布魯克斯，請他對我們的結果發表進一步的評論。

Thank you, Ivo. I'll begin on Slide 8 and review our core sales performance by region. China and East Asia performed well in the quarter, delivering modest growth. This was more than offset by a broad macro weakness in Europe and soft industrial activity in the Americas.

謝謝你，伊沃。我將從第 8 張投影片開始，按地區回顧我們的核心銷售表現。中國和東亞在本季表現良好，實現了適度成長。但歐洲整體宏觀經濟疲軟和美洲工業活動疲軟抵消了影響。

In North America, core sales declined approximately 3% and were primarily affected by lower OEM demand. Industrial OEM channel sales decreased double digits with the Agriculture and Construction end markets most impacted to our performance. North American replacement channel sales expanded mid-single digits with high single-digit growth in Auto replacement and a slight increase in Industrial replacement.

在北美，核心銷售額下降約 3%，主要受到 OEM 需求下降的影響。工業 OEM 通路銷售額下降了兩位數，其中農業和建築終端市場對我們的業績影響最大。北美替換通路銷售額成長了中等個位數，其中汽車替換銷售額成長了高個位數，工業替換銷售額略有成長。

In EMEA, core sales fell just over 6%. OEM sales decreased double digits with Automotive experiencing significant weakness. Industrial OEM sales were down low single digits. Replacement sales were mixed with Automotive replacement core growth in the low single digits and Industrial replacement down in the low teens. At the end market level, Agriculture and Energy were headwinds, while Personal Mobility returned to growth. China core sales grew modestly and benefited from strength in the replacement channel. Industrial replacement grew mid-teens, supported by demand strength in the diversified industrial end market. Automotive replacement expanded high single digits, the growth was slightly offset by a low single-digit decline in OEM sales, driven by Automotive softness.

在歐洲、中東和非洲地區，核心銷售額下降略高於 6%。OEM 銷售額下降了兩位數，其中汽車行業表現明顯疲軟。工業原始設備製造商銷售額下降了個位數。替換品銷售額漲跌互現，汽車替換品核心銷售額成長率為個位數低位，而工業替換品銷售額則下降了十幾個百分點。在終端市場層面，農業和能源遭遇阻力，而個人移動出行則恢復成長。中國核心銷售額溫和成長，受益於替代通路的強勁成長。受多元化工業終端市場需求強勁的支撐，工業替代產品成長率達到十幾歲左右。汽車替換品銷售額呈現高個位數成長，但由於汽車產業疲軟，原始設備製造商銷售額呈現低個位數下降，略微抵消了這一成長。

East Asia and India posted 3.5% growth in core sales. Automotive OEM sales declined low single digits, which was more than offset by growth in the Automotive replacement channel and Industrial end markets. South America core sales declined mid- to high single digits, primarily impacted by logistics disruptions in Brazil.

東亞和印度的核心銷售額成長了3.5%。汽車原始設備製造商的銷售額下降了個位數，但被汽車替換通路和工業終端市場的成長所抵消。南美洲核心銷售額下降了中高個位數，主要受到巴西物流中斷的影響。

On Slide 9, we display the key components of our year-over-year change in adjusted earnings per share. Lower volume was a $0.06 per share headwind to adjusted earnings per share but was largely mitigated by contributions from our enterprise initiatives. Other items and a lower share count contributed $0.01.

在投影片 9 上，我們展示了調整後每股盈餘同比變化的關鍵組成部分。交易量下降對調整後每股收益造成了 0.06 美元的不利影響，但很大程度上由於我們的企業計劃的貢獻而得到緩解。其他項目和較低的股票數量貢獻了 0.01 美元。

Slide 10 has an update on our cash flow performance and balance sheet trends at year-end. Our free cash flow for the fourth quarter was $158 million, which represented 168% conversion to adjusted net income. As previously mentioned, we are keeping healthy inventory levels to help strengthen our ability to fully capitalize on an anticipated demand inflection. Also, we pulled forward some CapEx investments to accelerate the timing of certain footprint optimization projects and deploy capital to certain systems enhancement programs.

投影片 10 更新了我們年末的現金流量表現和資產負債表趨勢。我們第四季的自由現金流為 1.58 億美元，轉換為調整後淨收入的比率為 168%。如前所述，我們保持健康的庫存水平，以幫助增強我們充分利用預期需求變化的能力。此外，我們還提前了一些資本支出投資，以加快某些足跡優化專案的進度，並將資金部署到某些系統增強計劃中。

Our net leverage ratio was 2.2x at the end of the year, down slightly from 2.3x at the end of 2023. We made good progress with our balance sheet in 2024. Specifically, we lowered our gross debt by over $100 million and executed a successful refinancing of our full debt stack during the middle of the year. In the fourth quarter, we delivered a 50 basis point reduction on our term loan spreads, which will lower our interest expense for 2025. We believe that we are in a strong position to realize our 2026 net leverage target of 1 to 2x.

我們的淨槓桿率在年底為 2.2 倍，較 2023 年底的 2.3 倍略有下降。2024 年我們的資產負債表取得了良好進展。具體來說，我們在年中將總債務減少了 1 億多美元，並成功完成了全部債務的再融資。第四季度，我們將定期貸款利差降低了 50 個基點，這將降低我們 2025 年的利息支出。我們相信，我們有能力實現 2026 年 1 至 2 倍的淨槓桿目標。

Our trailing 12-month return on invested capital finished at 24%, a 100 basis point increase compared to year-end 2023. We continue to deploy capital to support enterprise initiatives and system enhancements. These internal projects are typically our highest return opportunities.

我們過去 12 個月的投資資本報酬率達到 24%，與 2023 年底相比增加了 100 個基點。我們將繼續投入資金來支持企業計畫和系統增強。這些內部專案通常是我們回報最高的機會。

On Slide 11, we introduced our full year 2025 guidance and our expectations for the first quarter. For 2025, we have initiated guidance for core revenues to be in the range of down 0.5% to up 3.5% relative to 2024. Importantly, at the midpoint of 1.5% growth, we have assumed end market contribution as a slight headwind on a weighted average basis. We anticipate year-over-year core growth will improve as the year progresses. We are budgeting about a 3% headwind from foreign exchange for the year, with greater impact expected in the first half of the year.

在第 11 張投影片上，我們介紹了 2025 年全年指引以及對第一季的預期。對於 2025 年，我們已開始預測核心營收將比 2024 年下降 0.5% 至成長 3.5%。重要的是，在 1.5% 成長的中間點，我們假設終端市場貢獻在加權平均基礎上會略微受到阻力。我們預計，隨著時間的推移，核心業務年成長將會提高。我們預計今年外匯將帶來約 3% 的逆風，預計上半年的影響將更大。

Our initial 2025 adjusted EBITDA guidance is in the range of $735 million to $795 million. At the midpoint, our guidance represents a 50 basis point year-over-year increase in adjusted EBITDA margin. Our adjusted earnings per share guidance is in the range of $1.36 per share to $1.52 per share. We are spending more on capital expenditures in 2025 to support high-return projects. We anticipate our free cash flow to exceed 90% of our adjusted net income in 2025.

我們最初的 2025 年調整後 EBITDA 預測在 7.35 億美元至 7.95 億美元之間。從中間值來看，我們的預期是調整後的 EBITDA 利潤率年增 50 個基點。我們的調整後每股收益預期在每股 1.36 美元至每股 1.52 美元之間。我們將在2025年增加資本支出，以支持高回報項目。我們預計，到 2025 年，我們的自由現金流將超過調整後淨收入的 90%。

For the first quarter, we estimate total revenues to be in the range of $805 million to $835 million and core revenues to be down approximately 1% at the midpoint. For the first quarter, we expect our adjusted EBITDA margin to decrease in a range of 40 basis points to 80 basis points compared to Q1 2024.

對於第一季度，我們預計總收入將在 8.05 億美元至 8.35 億美元之間，核心收入中位數將下降約 1%。對於第一季度，我們預計調整後的 EBITDA 利潤率將與 2024 年第一季相比下降 40 個基點至 80 個基點。

On Slide 12, we show a walk that helps explain the moving pieces in our Q1 adjusted EBITDA margin. Starting from the left, our Q1 2024 adjusted EBITDA margin benefited 70 basis points from the realization of insurance proceeds. Excluding these nonrecurring proceeds, our Q1 2024 adjusted EBITDA margin was approximately 22%. At the midpoint of our Q1 guidance, we expect a 1% core sales decrease, which we estimate impacts adjusted EBITDA margin by about 40 basis points. We expect to more than offset the lower sales with contributions from our enterprise initiatives and improved mix. As such, we would be generating a 22.6% adjusted EBITDA margin in the quarter without an estimated 50 basis point headwind from unfavorable foreign exchange rates.

在投影片 12 上，我們展示了一種有助於解釋第一季調整後 EBITDA 利潤率變動情況的走勢。從左邊開始，我們 2024 年第一季的調整後 EBITDA 利潤率因保險收益的實現而受益 70 個基點。不包括這些非經常性收益，我們 2024 年第一季的調整後 EBITDA 利潤率約為 22%。在我們的第一季指引中點，我們預計核心銷售額將下降 1%，我們估計這將對調整後的 EBITDA 利潤率產生約 40 個基點的影響。我們期望透過企業計劃和改進的產品組合來彌補銷售額的下降。因此，我們本季將實現 22.6% 的調整後 EBITDA 利潤率，且不會受到不利外匯匯率造成的約 50 個基點的阻力。

On Slide 13, we provide a walk to our 2025 adjusted EBITDA at the midpoint. We expect operational items to add a little over $50 million to our profitability with contributions from our enterprise initiatives and footprint optimization. FX is estimated to be about a $34 million headwind to profitability based on about a $100 million reduction year-over-year to our top line. We also had some favorable items in 2024 that we don't expect to repeat in 2025 such as the insurance proceeds I just noted as well as a gain from the sale of real estate. An important point on the slide is the profit headwind incurred from foreign exchange. The $34 million headwind is more than the difference between the consensus 2025 adjusted EBITDA at the midpoint of our guidance.

在第 13 張投影片上，我們提供了 2025 年調整後 EBITDA 的中點預測。我們預計，透過企業計劃和足跡優化的貢獻，營運項目將為我們的獲利能力增加 5,000 多萬美元。由於我們的營業收入比去年同期下降了約 1 億美元，因此預計外匯將對盈利造成約 3,400 萬美元的阻力。我們在 2024 年也有一些有利的項目，但我們預計 2025 年不會重複這些項目，例如我剛才提到的保險收益以及出售房地產的收益。投影片中的一個重要點是外匯帶來的利潤逆風。3400 萬美元的逆風超過了我們預期中點的 2025 年調整後 EBITDA 之間的差額。

On Slide 14, we display an adjusted earnings per share walk for 2025. From left to right, we project about a $0.12 benefit from operational items. Foreign exchange represents a $0.10 headwind to adjusted earnings per share compared to the prior year period. Nonrecurring and below-the-line items net to a $0.03 share improvement.

在投影片 14 上，我們展示了 2025 年調整後的每股盈餘。從左到右，我們預計營運項目將帶來約 0.12 美元的收益。與去年同期相比，外匯對調整後每股收益造成 0.10 美元的不利影響。非經常性項目和線下項目淨增加 0.03 美元。

On Slide 15, we provide some more color and background on our CapEx plans and our margin progress. On the left, you see we intend to spend above our depreciation expense in 2025 and 2026 to support our footprint optimization projects and enhance our system capabilities. In the middle, you see our [march to 4.5%] adjusted EBITDA margin by 2026. Our 2025 adjusted EBITDA margin guidance of 22.8% includes a 40 basis point headwind from unfavorable FX and system investments. Importantly, our margin progress to date has been achieved with no volume support, and our footprint optimization savings are yet to be realized. As such, we believe we are in good position to deliver our 2026 adjusted EBITDA margin target.

在投影片 15 上，我們提供了更多有關資本支出計畫和利潤率進展的細節和背景。在左側，您可以看到我們打算在 2025 年和 2026 年花費超過折舊費用的資金來支持我們的足跡優化項目並增強我們的系統能力。中間部分，您可以看到我們到 2026 年調整後的 EBITDA 利潤率 [預計增長至 4.5%]。我們 2025 年調整後的 EBITDA 利潤率預期為 22.8%，其中包括不利的外匯和系統投資帶來的 40 個基點的阻力。重要的是，我們迄今為止的利潤成長是在沒有銷售支援的情況下實現的，而且我們的足跡優化節省尚未實現。因此，我們相信我們有能力實現 2026 年調整後的 EBITDA 利潤率目標。

I will now turn it back over to Ivo.

現在我將把發言權交還給 Ivo。

Thanks, Brooks. Slide 16 provides a refresher on our 2026 gross margin target, which we introduced last year at our Capital Markets Day. As you can see, we generated approximately 40% gross margin for the full year 2024, which puts us a little over 200 basis points away from our full year 2026 target. We expanded gross margins almost 200 basis points last year despite a decline in our core sales. We have made good progress with our material cost reduction initiative and additional savings opportunities remains in front of us.

謝謝，布魯克斯。投影片 16 回顧了我們去年在資本市場日上提出的 2026 年毛利率目標。如您所見，我們在 2024 年全年實現了約 40% 的毛利率，距離我們的 2026 年全年目標僅相差 200 個基點。儘管我們的核心銷售額有所下降，但去年我們的毛利率仍提高了近 200 個基點。我們的材料成本削減計劃已取得良好進展，並且我們面前仍有更多節約機會。

To date, although we have not realized significant benefits from our operation excellence initiatives, we anticipate those savings to pick up steam as our volumes recover. We also expect to realize initial savings from our footprint optimization initiative in 2025. As a reminder, our footprint optimization initiative is estimated to yield over 100 basis points of margin improvement at maturity. Further, we believe there is a volume recovery ahead of us which should result in a solid core operating leverage. With the progress made to date, we believe we are in a good position to achieve the gross margin target we outlined for 2026.

到目前為止，儘管我們尚未從卓越營運計劃中獲得顯著的收益，但我們預計，隨著業務量的恢復，這些節省將會增加。我們也預計，2025 年我們的足跡優化計畫將帶來初步的節約。提醒一下，我們的足跡優化計畫預計在到期時將產生超過 100 個基點的保證金改善。此外，我們相信未來銷售量將會出現復甦，這將帶來穩固的核心營運槓桿。憑藉迄今為止的進展，我們相信我們有能力實現我們為 2026 年制定的毛利率目標。

Turning to Slide 17. We highlight some of the key secular growth opportunities in front of us. Our mobility business continues to see strong design win activity and we have developed applications for new segments such as e-mountain bikes and are incrementally reducing the cost of our systems to penetrate lower price, higher volume areas of e-bike and [escolar] applications. We expect our mobility business to generate solid growth in 2025.

翻到第 17 張投影片。我們重點介紹了我們面臨的一些關鍵的長期成長機會。我們的行動業務繼續看到強勁的設計獲勝活動，我們已經為電動山地自行車等新領域開發了應用程序，並正在逐步降低系統成本，以滲透到價格更低、數量更多的電動自行車和[escolar]應用領域。我們預計我們的行動業務將在 2025 年穩健成長。

In data centers, we are deep in the specification process across a variety of customers. including web hosting services providers and hyperscalers as well as server and rack manufacturers and cooling system integrators. We offer fluid conveyance products that support the major form of liquid cooling systems, including direct to chip, immersion and rear door heat exchangers. We believe that we have a good opportunity to capture a meaningful portion of the total addressable market for liquid cooling applications over the mid to long term should differentiated product performance and we are expanding our capabilities to fully capitalize on that opportunity.

在資料中心，我們深入參與各種客戶的規範流程。包括網頁寄存服務供應商和超大規模供應商以及伺服器和機架製造商和冷卻系統整合商。我們提供支援主要形式的液體冷卻系統的流體輸送產品，包括直接晶片、浸入式和後門熱交換器。我們相信，從中長期來看，透過差異化的產品性能，我們有很好的機會佔據液體冷卻應用總體可尋址市場的很大一部分，並且我們正在擴大我們的能力以充分利用這一機會。

The other replacement market globally continues to offer multiple avenues for us to grow. We added a major new channel partner in North America during the second half of 2024, which we expect to be a nice contributor to our revenue base in 2025. We have opportunities to capture business with both new and existing channel partners in North America and EMEA. In addition, we are expanding our product reach in various emerging markets, and intend to be well positioned to support demand as their car park ages.

全球其他替代市場持續為我們提供多種成長途徑。我們在 2024 年下半年在北美增加了一個重要的新通路合作夥伴，我們預計這將為我們 2025 年的收入基礎做出良好貢獻。我們有機會與北美和歐洲、中東和非洲地區的新舊通路合作夥伴開展業務。此外，我們正在擴大我們在各個新興市場的產品覆蓋範圍，並打算做好準備，以滿足這些市場停車場老化帶來的需求。

Moving to Slide 18. I'll offer some few thoughts before we take your questions. First, our global team executed well in 2024, driving a margin increase in a softer-than-expected demand environment. We are highly focused on serving our customers and increased our service levels to best-in-class in 2024. We also grew our design wins nicely and are deploying a material science and process capabilities to new markets that possess secular growth services. Second, we believe our business is well positioned with the potential industrial recovery. As I mentioned earlier, our margin expansion journey is ahead of schedule. Within our framework, we are making investments to improve the business for the mid- to long term.

移至幻燈片 18。在回答您的問題之前，我想先談談幾點想法。首先，我們的全球團隊在 2024 年表現出色，在需求低於預期的環境下推動了利潤率的成長。我們高度重視服務客戶，並在 2024 年將我們的服務水準提升至一流水準。我們的設計成果也得到了顯著提升，並且正在向擁有長期成長服務的新市場部署材料科學和工藝能力。其次，我們相信我們的業務已為潛在的工業復甦做好了準備。正如我之前提到的，我們的利潤率擴張之旅已經提前完成。在我們的框架內，我們正在進行投資以改善中長期業務。

As Brooks referenced earlier, we are making investments in our systems to improve our organizational efficiencies and increasing our responsiveness to the evolving needs of our customers. In addition, we are adding commercial resources selectively to take advantage of circular growth opportunities available to us. Our balance sheet continues to improve, which should help widen our capital deployment aperture over the next few years.

正如布魯克斯之前提到的，我們正在對我們的系統進行投資，以提高我們的組織效率並提高我們對客戶不斷變化的需求的回應能力。此外，我們正在選擇性地增加商業資源，以利用我們可用的循環成長機會。我們的資產負債表持續改善，這將有助於在未來幾年擴大我們的資本配置範圍。

Before taking your questions, I want to extend my gratitude to the more than 40,000 global Gates associates for their commitment and perseverance applied towards fulfilling our strategic goals and meeting our customer needs.

在回答大家的提問之前，我想向全球 40,000 多名蓋茲員工表示感謝，感謝他們為實現我們的策略目標和滿足客戶需求所付出的承諾和堅持。

With that, I will now turn the call back to the operator for Q&A.

說完這些，我現在將電話轉回給接線生進行問答。

(Operator Instructions).

（操作員指令）。

Maybe just the first question around the margin levers as you've given very good revenue and end market color. So looking at those slides on the margins, I guess, for example, Slide 12. You've got the margin up around 50, 60 bps year-on-year in the first quarter underlying aside from FX on the insurance. The full year guide, I suppose, stripping those out is up about maybe 70 bps or something. So it doesn't look like you're embedding a big EBITDA margin improvement after Q1, even though I think volumes on the top line are meant to improve.

也許只是關於利潤槓桿的第一個問題，因為您給了非常好的收入和終端市場色彩。因此，請看一下邊緣上的投影片，例如，投影片 12。第一季度，除保險外匯外，基本利潤年增約 50 至 60 個基點。我認為，扣除這些因素後，全年指導價可能會上漲約 70 個基點左右。因此，儘管我認為營業額會有所提高，但看起來第一季之後 EBITDA 利潤率不會大幅提高。

So maybe just help us understand, is that conservatism? Is there anything else moving around within the EBITDA? What's the phasing of efficiency savings, for example. Any color on that, please?

所以也許可以幫助我們理解，這是保守主義嗎？EBITDA 中還有其他變動嗎？例如，效率節約的階段是怎麼樣的。請問那上面有什麼顏色嗎？

Yes, Julian. So I think, look, if you look at Slide 13, I think that kind of lays out really the margin walk. We've got significant margin upside, mostly coming from our enterprise initiatives, and it continues to be very material oriented. The big headwind is FX and so FX is really a pretty significant headwind as we've got it modeled today based on the year-end rate, right? We don't try to predict the FX rates. We just more based on the current going rate.

是的，朱利安。所以我認為，如果你看一下投影片 13，我認為那種方式確實展現了邊際波動。我們的利潤率有顯著上升，主要來自於我們的企業計劃，而且它仍然非常注重材料。最大的阻力是外匯，因此外匯確實是一個非常顯著的阻力，正如我們今天根據年末匯率建模的那樣，對嗎？我們不會試圖預測外匯匯率。我們只是更多地基於當前的匯率。

So we -- the levers haven't changed dramatically. We have not embedded an inflection in terms of the market recovery in our numbers. And we still continue to drive the enterprise initiatives within the 4 walls of Gates that are going to drive margin improvement year-over-year. So I think does that answer your question?

所以我們——槓桿並沒有發生巨大的變化。我們的數據中還沒有體現出市場復甦的轉折點。我們仍將繼續在蓋茲的領導下推動企業計劃，以推動利潤率逐年提高。所以我認為這回答了你的問題嗎？

Yes, I think that's mostly -- I guess I was just trying to get to, is there any sort of phasing difference of efficiency or footprint first half, second half, but perhaps it seems pretty (inaudible).

是的，我認為這主要是——我想我只是想了解一下，在效率或足跡方面，前半部分和後半部分是否存在任何階段性差異，但也許看起來相當（聽不清楚）。

Yes, I think the FX impact is definitely going to hit us harder in the first half. And then definitely the phasing on like some of the footprint optimization savings and is going to hit in the second half. And so that's kind of the phasing first half versus second half. The material savings is fairly linear as you move through the year.

是的，我認為外匯影響肯定會在上半年為我們帶來更大的打擊。然後肯定會分階段實施一些足跡優化節省措施，這些措施將在下半年實現。這就是上半場和下半場的階段性對比。隨著一年的推移，材料節省量相當線性增長。

That's helpful. And then just a follow-up topic. In terms of kind of your exposures on, say, COGS, I don't know if you're willing to give any color around the sort of Mexico, Canada, China grouping of how much of your sort of total buy represents imports into the U.S. from those three? Or any broader commentary you'd make around the tariff backdrop?

這很有幫助。然後只是後續話題。就您對 COGS 的風險敞口而言，我不知道您是否願意對墨西哥、加拿大、中國這幾個國家的購買量進行詳細說明，即您的總購買量中有多少代表了從這三個國家進口到美國的商品？或者您對關稅背景有什麼更廣泛的評論嗎？

Yes, Julian, I would say that China and -- excuse me China and Canada kind of de minimis. So that's not really lots of exposure. I mean obviously, we have a reasonably large footprint in Mexico. I will also say that we have a good presence of assets in the United States that we would sweat more and flex up and down as needed.

是的，朱利安，我想說中國和──對不起，中國和加拿大是微不足道的。所以實際上曝光率並不高。我的意思是，顯然我們在墨西哥有相當大的影響力。我還要說的是，我們在美國擁有良好的資產，我們可以根據需要付出更多努力並靈活調整。

But we've gone through this process before we have tools in place that would give us the opportunity to manage tariffs once we actually know what the actual situation would be vis-a-vis tariffs, we would very likely use price to offset any impact. We cannot rebalance to production in between Mexico and U.S. assets. But China and Canada, that's not really much of the concern.

但是，在我們擁有適當的工具來管理關稅之前，我們已經經歷了這個過程，一旦我們真正了解關稅的實際情況，我們很可能會利用價格來抵消任何影響。我們無法在墨西哥和美國資產之間重新平衡生產。但對中國和加拿大來說，這並不是什麼值得擔心的問題。

Good morning, everyone. Since we've been waiting 7 quarters for Personal Mobility to have an uptick, I feel they should get a little bit of spotlight here. So is this a turn? Or is it easy comp? And where and how do -- what are key indicators that you're looking at?

大家早安。由於我們已經等待了 7 個季度才看到個人行動出行成長，我覺得他們應該在這裡得到一些關注。那麼這是一個轉折嗎？還是很容易比較？在哪裡以及如何關注—您正在關注的關鍵指標是什麼？

Yeah, good morning Deane. I would say that, yes, all of the above. I mean, obviously, the comp became much easier. But that being said, we have seen a very strong performance, primarily driven by EMEA and Asia broadly. So very constructive Q4. We've also seen very constructive January so we are now starting to see very positive trend line on the recovery in personal mobility inventories and manufacturers have very steadily declined since the peak in June of '23.

是的，早上好，迪恩。我想說，是的，以上都是。我的意思是，顯然，比賽變得容易多了。但話雖如此，我們看到了非常強勁的表現，主要受到歐洲、中東和非洲地區以及亞洲的推動。因此 Q4 非常具有建設性。我們也看到了非常積極的一月份，因此我們現在開始看到個人流動庫存復甦的非常積極的趨勢線，而製造商自 2023 年 6 月達到高峰以來一直在穩步下降。

So at this point in time, the inventories are more or less normalized levels. Activity, quote activities are very, very strong. We've talked in the past about the design wins that we've gotten. So I would say that easier comp, business inflecting pretty broad strength in Personal Mobility, and we believe that we will deliver very nice growth that we have also embedded in our guidance for 2025.

因此，目前庫存水準基本上處於正常水準。活動、報價活動都非常非常強。我們過去曾談論過我們所取得的設計勝利。因此我想說，更容易的競爭，業務在個人行動領域體現出相當廣泛的優勢，我們相信我們將實現非常好的成長，這也體現在我們對 2025 年的指導中。

All right. I really appreciate that. Now Ivo, you teased us they are beginning to say that there were signs of green shoots and maybe part of Personal Mobility countered the debt. But if you just kind of step back, look at your verticals, you're very short cycle. So at the margin, any sort of activity can certainly show up as a green shoot. So if you were kind of frame for us to prioritize which are the green shoots that you are referring to? And how meaningful are those embedded in terms of trajectory and your '25 guidance?

好的。我真的很感激。現在，伊沃，你取笑我們，他們開始說出現了復甦的跡象，也許個人流動計劃的一部分抵消了債務。但如果你退一步，看看你的垂直線，你會發現你的週期非常短。因此，從邊際來看，任何類型的活動都可能呈現出復甦的跡象。那麼，如果您能為我們列出優先順序，那麼您所指的綠色新芽是什麼呢？就發展軌跡和您的 25 年指導而言，這些有多大意義？

Yes, sure. Thank you for the question, Deane. Look, let me kind of start with more of the purview of our customers. Our customers are very optimistic that things are going to get better for them. But that being said, we're not really in the business of forecasting recoveries based upon how folks feel, but it certainly is a good thing. We manage what's in front of us, we manage from the data points that we have as you know we look at a very significant amount of forward-looking indicators to give us a little bit of a better sense of we think that's going to happen.

是的，當然。謝謝你的提問，迪恩。瞧，讓我先從我們的客戶範圍開始。我們的客戶非常樂觀地認為他們的情況會越來越好。但話雖如此，我們實際上並不是根據人們的感受來預測復甦，但這確實是一件好事。我們管理眼前的事物，我們根據我們擁有的數據點進行管理，正如你所知，我們查看了大量的前瞻性指標，以便讓我們更好地了解我們認為將要發生的事情。

But that being given, industrial activity has been suppressed for over 2 years. And certainly, it would appear that the inflection on industrials is much closer than probably not. We were very encouraged by the January PMI (inaudible), for the first time in a very long time, somewhat about (inaudible) last month, new order component of the PMI and that is December, component of the PMI started to inflect nicely above 50. We are starting to see a good behavior in the industrial base of customers in Asia. We have seen a pretty nice core growth in Q4. So that certainly is giving us a degree of data points that things should start inflecting.

但即便如此，工業活動已被抑制了兩年多。當然，看起來工業的轉折點可能很快就會到來。我們對 1 月的 PMI（聽不清楚）感到非常鼓舞，這是很長一段時間以來的第一次，大約在上個月（聽不清楚），PMI 的新訂單分項，也就是 12 月的 PMI 分項，開始順利回升至 50 以上。我們開始看到亞洲客戶的工業基礎表現良好。我們看到第四季的核心成長相當不錯。所以這無疑為我們提供了一些數據點，表明事情應該開始改變。

Look, Mobility, as we discussed, is definitely a very strong green shoot. Ag and Construction, it really is not. I mean that's really very dislocated. Our Automotive replacement business is doing very strongly, and we believe that's got the green shoots remain, I would say, not that just show up. So it's a mixed bag, but we are starting to see more green flashing on our screens than red. And we've done a really good job in '24, offsetting a couple of the very, very negative end markets. I think we have delivered very strong results. We've managed what is under control. We have improved profitability. We've done that through just grid and improving our gross margins. We're very optimistic that at a time that inflection may occur. And again, we have not embedded any inflection in our forward guidance that we will see a very strong performance for the underlying business.

正如我們所討論的，移動性絕對是一個非常強勁的綠芽。農業和建築業，事實並非如此。我的意思是這確實非常混亂。我們的汽車替換業務表現非常強勁，我們相信它仍有復甦的跡象，但這並不是剛剛顯現出來的。所以這是一個混合體，但我們開始看到螢幕上閃爍的綠色比紅色多。我們在 24 年做得非常好，抵消了一些非常非常負面的終端市場的影響。我認為我們已經取得了非常出色的成績。我們已經掌控了一切。我們的盈利能力有所提高。我們僅透過電網和提高毛利率就實現了這一目標。我們非常樂觀地認為，轉折點可能會在某個時候出現。再次強調，我們的前瞻性指引中並未嵌入任何暗示，顯示基礎業務將有非常強勁的表現。

Andy Kaplowitz from Citigroup.

花旗集團的 Andy Kaplowitz。

Good morning, everyone. Ivo you're obviously sticking to your gross margin, adjusted EBITDA margin targets for '26 despite a continued slower organic growth and pretty big FX headwinds. And you said you haven't really experienced big savings from operational excellence and footprint optimization yet. So it seems like material cost reduction has been much bigger than you thought. Maybe you can comment on that? And can you reach that 24.5% adjusted EBITDA margin without resuming a 3% to 5% organic growth in '26?

大家早安。伊沃，儘管有機成長持續放緩且外匯逆風很大，但你顯然仍堅持 26 年的毛利率和調整後 EBITDA 利潤率目標。您說您還沒有真正從卓越營運和足跡優化中獲得巨大的節省。因此，材料成本的降低似乎比你想像的要大得多。也許您可以對此發表評論？如果 26 年不恢復 3% 至 5% 的自然成長，您能達到 24.5% 的調整後 EBITDA 利潤率嗎？

Yes. Thank you for the question. We definitely believe that we can get certainly very close to that 24.5% adjusted EBITDA without the 3% to 5% organic growth. What we did say is that we need to see the organic volume declines to stop but we don't necessarily need to see a significant rebound of growth for us to deliver on that commitment. Coming back to the first part of your question, definitely, the material cost out has been executed really well.

是的。謝謝你的提問。我們堅信，即使沒有 3% 到 5% 的有機成長，我們也能非常接近 24.5% 的調整後 EBITDA。我們確實說過，我們需要看到有機銷售的下降停止，但我們不一定需要看到成長顯著反彈才能兌現這一承諾。回到你問題的第一部分，毫無疑問，材料成本的會計執行得非常好。

Our teams are doing a fantastic job. We believe that we have a terrific runway to continue on a trajectory of further improving our efficiency vis-a-vis raw materials. We did state that we believe that we have about 100 basis points of margin improvement coming from our restructuring activities that will be run rated by the end of next year.

我們的團隊做得非常出色。我們相信，我們擁有良好的發展基礎，可以繼續進一步提高原材料的效率。我們確實表示，我們相信我們的重整活動將帶來約 100 個基點的利潤率提高，並將在明年年底前實現。

So all in, we believe that we are in a position to be able to deliver on our midterm commitment that we have made to our shareholders at the Capital Market Update last year without necessarily a significant rebound.

總而言之，我們相信我們有能力兌現去年在資本市場更新中向股東做出的中期承諾，而不一定會大幅反彈。

Very helpful. And then Ivo, one think one of the big drags on the business that you just mentioned the Construction and Ag. I think in the presentation, you mentioned Energy a little bit of a drag in Q4 too. But maybe you could talk about what you're baking in for expectations on those businesses in '25? Did they stop going down in '25? Do you still have them going down in the first half of the year, for instance? And can you talk about inventory in the channel that you're seeing in those markets? Does inventory -- is it bottomed out here? And do you have any more confidence that a turn is imminent in these businesses?

非常有幫助。然後伊沃，我認為您剛才提到的對業務造成巨大拖累的行業之一是建築業和農業行業。我認為在演示中您也提到了能源在第四季度受到一些拖累。但也許您可以談談您對 25 年這些企業的期望是什麼？他們在 25 年就停止下降了嗎？例如，今年上半年這些業務是否還會繼續下滑？您能談談您在這些市場看到的通路庫存嗎？庫存是否已經觸底？您是否更有信心這些業務即將迎來轉機？

Ag and Construction, they have been super negative, right? I mean I think that you have seen CNH and [Accor] reporting over the last few days. So those numbers are pretty staggering, right? I mean they just had a really dislocated market. And we've managed through that really well. Our business is down significantly less than anything that you see coming out of the 2 verticals.

農業和建築業，他們的態度一直非常消極，對嗎？我的意思是，我認為您已經看到了 CNH 和 [Accor] 過去幾天的報導。這些數字相當驚人，對吧？我的意思是他們的市場確實混亂了。我們已經很好地解決了這個問題。我們的業務下滑幅度比您在兩個垂直行業中看到的任何業務下滑幅度都要小得多。

By sense, Andy, is that the end market, the Ag and Commercial Construction end market is going to be less that in '25 than it was in 2024, but we still believe that it will be down kind of mid-single digits versus what versus prior year. So it's still not good. I mean, I think the first half is going to be significantly dislocated for those customers still -- they are still reasonably high levels of dealer inventories with the equipment that has been put on the dealer lots. I think that it's going to still take some time to work through. I would say that perhaps by the end of Q1 of this year, the dealer inventory should be in a much healthier position. And so we anticipate that that's going to be still a pretty tough market, but it should start getting less bad in second half of 2025.

安迪，從某種意義上來說，終端市場、農業和商業建築終端市場的規模將比 2025 年的規模要小，但我們仍然相信，與上一年相比，其規模將下降中等個位數。所以還是不太好。我的意思是，我認為這些客戶在上半年仍將面臨嚴重混亂——由於設備已放到經銷商地段，經銷商庫存水準仍然相當高。我認為解決這個問題還需要一些時間。我想說，也許到今年第一季末，經銷商庫存應該會處於更健康的狀態。因此，我們預計這仍將是一個相當艱難的市場，但到 2025 年下半年情況應該會開始好轉。

Jeffrey Hammond KeyBanc Capital Markets Inc.

傑弗裡·哈蒙德 KeyBanc 資本市場公司

Maybe just to start on this FX dynamic. So you called out, I think, 100 million top line and 34 million in EBITDA. So I just wanted to understand the drop-through there just seems very high. So I don't know if there's a translation and transaction? Just walk me through why such a high drop through on the bottom line?

也許只是開始這個 FX 動態。所以我認為，您所說的是 1 億美元的營業收入和 3,400 萬美元的 EBITDA。所以我只是想了解那裡的下降率似乎很高。所以不知道有沒有翻譯交易？請告訴我為什麼底線下降幅度這麼大？

No, you hit it on the head. It's a combination of translation and transactional that doesn't repeat that we don't have model in repeating in 2025. So that's exactly what it is.

不，你擊中了它的頭部。它是翻譯和交易的結合，不會重複，我們在 2025 年沒有重複的模型。事實確實如此。

Okay. And then maybe just speak to where you think inventories are particularly in Auto replacement, Industrial replacement? And just Auto aftermarket seems like it's been a bright spot and the OE side obviously has some challenges. But just wondering if you're seeing any cracks or if it's just simply as people extend the life, that aftermarket holds up?

好的。然後也許可以談談您認為庫存在哪裡，特別是汽車替代品、工業替代品？汽車售後市場似乎是一個亮點，而原廠設備市場顯然面臨一些挑戰。但我只是想知道您是否看到了任何裂縫，或者這只是因為人們延長了使用壽命，售後市場才得以維持？

Yes. Look, the aftermarket is doing really terrific for us. And that's really kind of how we have all this envisage that our portfolio is going to perform, have a little more stability through these different cycles. The inventories in the channel are not out of line for the Automotive replacement side of the business. So my sense is that, that's going to continue at kind of that GDP growth for the baseline of that business. Obviously, we are taking market share and adding new customers and broadening our presence globally with existing and new accounts. So we are very -- they're very bullish on what is happening in the Automotive replacement side of our business.

是的。瞧，售後市場對我們來說確實表現得非常好。這就是我們對我們的投資組合表現的設想，即在不同的週期中保持更高的穩定性。對於汽車替換業務而言，通路中的庫存並不算過剩。所以我的感覺是，這種 GDP 成長將會繼續作為該業務的基線。顯然，我們正在佔領市場份額、增加新客戶，並透過現有和新客戶擴大我們的全球影響力。因此，我們非常——他們對我們業務的汽車更換方面的情況非常樂觀。

The Industrial business is, we've been talking about feeling that the destocking is going to be done. I think that we are approaching that destination. Again, I always hate to state that we are there. But my sense is that we have -- if we are not there, we are very near the bottom and we should start seeing a little better performance as we move through progressively 2025.

就工業業務而言，我們一直在談論去庫存即將完成的感覺。我認為我們正在接近那個目的地。再說一遍，我總是不願意說我們已經到了那裡。但我的感覺是，我們已經——如果我們沒有到達那裡，我們就非常接近底部了，隨著我們逐步邁向 2025 年，我們應該開始看到更好的表現。

Michael Halloran Robert W. Baird & Co. Incorporated

麥可‧哈洛倫 Robert W. Baird & Co. Incorporated

How do you think about what the customer saying or an answer earlier question, there's more optimism in the channel with your customers. Is there anything different that they're basing the optimism on relative to what you referenced earlier, Ivo? And what do you think it takes for that from their perspective that optimism turn into actual purchasing and accelerating the demand curve?

您如何看待客戶所說的話或回答先前的問題，您在與客戶溝通的管道中是否更加樂觀。伊沃，他們之所以如此樂觀，與您之前提到的相比，有什麼不同嗎？從他們的角度來看，您認為需要什麼才能將樂觀情緒轉化為實際購買並加速需求曲線？

Yes, Mike, I think that -- I will say that in general, we take customer feelings under account, but we try to take a look at the hard data because sentiment and optimism doesn't always go hand-in-hand with kind of what's happening in the end markets. But I think that the folks are enthusiastic about some of the industrial policy that may come their way, maybe some tax certainty and ability to actually put money to work, invest in CapEx, get some of these bigger projects of the books that have been in plain stages for a while. We certainly see that the activities in places like data centers remain quite robust.

是的，麥克，我認為——我會說，一般來說，我們會考慮客戶的感受，但我們會嘗試查看硬數據，因為情緒和樂觀並不總是與終端市場發生的事情並行不悖。但我認為人們對可能出台的一些產業政策很感興趣，也許是一些稅收確定性和實際投入資金的能力，投資於資本支出，獲得一些已經處於簡單階段的較大項目。我們確實看到資料中心等地方的活動仍然相當活躍。

So I think that people start getting a little more optimistic. And it's been hard 28, 29 months of looking at the deceleration in the manufacturing PMIs. So I think that folks are just ready to feel better. But again, as I said, we just want to make sure that we see hard evidence of things turning. And the things that I am looking at certainly would give you an indication that things should improve. But again, we are not embedding improvements into how we think about our guidance for 2025. I think that we are in a position to wait and see when it turns, we will let everybody know.

所以我認為人們開始變得更加樂觀。製造業採購經理人指數 (PMI) 在過去 28、29 個月內持續減速，這對我們來說很艱難。所以我認為人們已經準備好感覺好些了。但正如我所說，我們只是想確保看到事態好轉的確鑿證據。而我所關注的事情肯定會給你一個跡象，表明事情將會有所改善。但同樣，我們並沒有將改進融入我們對 2025 年指導的思考中。我認為我們可以等待，當情況發生變化時，我們會讓每個人都知道。

And then just on the capital deployment side, any shift in the thought process? Willingness to continue to be a little more aggressive on the buyback side with where leverage is and just thoughts on the M&A cycle.

那麼僅在資本部署方面，思考過程有轉變嗎？願意在回購方面繼續採取更積極的措施，考慮到槓桿情況以及對併購週期的看法。

Let me take the first part, and I'll let Ivo hit the M&A part. So look, we're pretty evenly distributed in capital deployment between stock buybacks and debt pay down. We still have $125 million of authorization for stock repurchases. We still think that returning capital to shareholders via that route is a very good return for us. So we'll continue to look at that. We've continued to work on our balance sheet from a debt perspective. We've refinanced our debt stack. So we've got maturities until 2029. And we got -- we shaved about 50 bps off of our term loan in Q4. So we continue to do work there.

我來負責第一部分，然後讓 Ivo 負責併購部分。所以看，我們在股票回購和債務償還之間的資本配置分佈相當均勻。我們仍有 1.25 億美元的股票回購授權。我們仍然認為，透過這種方式向股東返還資本對我們來說是非常好的回報。因此我們會繼續關注這個問題。我們繼續從債務角度研究我們的資產負債表。我們已經對我們的債務進行了再融資。因此我們的到期日是 2029 年。我們在第四季將定期貸款利率降低了約 50 個基點。所以我們繼續在那裡工作。

Having said that, we've committed to getting our gross debt below $2 billion. So that's something we're going to continue to work on. And then we've got great investments internally, you can see that our capital spending is going to be up over the next couple of years. Well, that's the highest return on invested capital money we can spend, right? And so we're going to continue to work on that for footprint optimization and some of the other things we talked about.

話雖如此，我們已承諾將總債務控制在 20 億美元以下。所以這是我們將繼續努力的事情。然後我們在內部進行了大量投資，你可以看到我們的資本支出將在未來幾年內增加。那麼，這是我們可以花費的最高投資資本回報率，對嗎？因此，我們將繼續致力於足跡優化以及我們討論過的其他一些事情。

So all three of those capital deployment options are very, very good for our shareholders. So we're going to continue to go down that path.

因此，這三種資本部署選擇對我們的股東來說都是非常非常有利的。因此我們將繼續沿著這條道路走下去。

Stephen Volkmann from [Freeze].

史蒂芬‧福爾克曼[凍結]。

Great. Just one quick follow-up. I'm just curious, historically, do your distributors into restock inventory when they start feeling better about the world? Or is it more just kind of a quick pass-through for them?

偉大的。只需快速跟進一次。我只是好奇，從歷史上看，當您的經銷商開始對世界感覺更好時，他們是否會補充庫存？或者這對他們來說只是一種快速通道？

I think Stephen, I think it's a more quick pass-through. I mean our service levels have gotten so good. We service at extremely high fill rates and so everybody is looking at optimizing their working capital. They know that they don't have to be restocking significantly in advance of end market recovery. So my sense is that it's much shorter fuse so to speak as to the restocking. And again, like I said, our performance is just (inaudible) vis-a-vis fulfillment. So my sense is that they'll want to see the turn before they'll start acquiring more inventory.

我認為史蒂芬，我認為這是一個更快捷的傳遞方式。我的意思是我們的服務水準已經變得非常好了。我們以極高的填充率提供服務，因此每個人都在尋求優化其營運資金。他們知道，在終端市場復甦之前，他們不必大量補充庫存。所以我的感覺是，對於補貨來說，保險絲可以說要短得多。再說一遍，就像我說的，我們的表現只是（聽不清楚）相對於履行而言。所以我的感覺是，他們希望先看到轉變，然後再開始購買更多庫存。

Nigel Coe Wolfe Research

奈傑爾·科·沃爾夫研究

Just a couple of cleanups here. So Auto aftermarket was actually really strong in the fourth quarter, up to the mid-single digits. Did you have any benefit from this retail conversion that you talked about? I don't think -- I think it's meant to be more (inaudible) beyond, but any benefit there? Can you just remind us how much of a tailwind you expect from this in 2025?

這裡只需進行幾次清理。因此，汽車售後市場在第四季度實際上非常強勁，增幅達到中等個位數。您從您談到的這種零售轉型中獲得了什麼好處嗎？我不認為——我認為它的意思是超越（聽不清楚），但有什麼好處嗎？您能否提醒我們一下，您預計 2025 年這方面將有多大的推手？

Yes. So good morning Nigel. Yes, we did have some benefit, and we spoke about accelerating the fulfillment into Q4. So we have seen some of that benefit. I mean it wasn't massive, but it was good to see that we started to convert a couple of the PCs for that account. And we will start seeing more significant ramp up in Q1. By end of Q1, we should be fully ramped up with a business that was allocated and then we go into straight line, just replenishment model from second quarter on. And we anticipated that was -- I think we said it's about 100 basis points to 150 basis points of incremental growth on a company. So that's the scope of that design win.

是的。早安，奈傑爾。是的，我們確實有一些好處，並且我們談到了加速實現第四季的目標。因此我們已經看到了一些好處。我的意思是它並不是很大，但很高興看到我們開始為該帳戶轉換幾台電腦。我們將在第一季看到更顯著的成長。到第一季末，我們應該全面完成分配的業務，然後從第二季開始進入直線補貨模式。我們預計——我想我們說過這是一家公司大約 100 個基點到 150 個基點的增量成長。這就是該設計勝利的範圍。

Okay. And then my second question is around the liquid cooling commentary in the slides. But maybe could we just clarify that FX margin comment? Was that a prior year gain? What we're lapping that gain? Just I didn't quite understand that. But the question is really around -- you talked about becoming specified with customers. So I'm just wondering if you could just maybe add a bit more color in terms of where we are in the process of getting specified and whether 2025 has any benefit from DC ramp?

好的。我的第二個問題是關於幻燈片中的液體冷卻評論。但也許我們可以澄清一下外匯保證金的評論嗎？這是去年的收益嗎？我們要獲得什麼？只是我不太明白這一點。但問題實際上是圍繞著——您談到如何與客戶具體化。所以我只是想知道您是否可以再多介紹一下我們在指定過程中所處的位置以及 2025 年是否會從 DC 坡道中受益？

Yes. So to your first question on the FX, yes, that's exactly right. We had some favorable transactional things. And then the way the hedges all worked out in 2024, kind of we lap that in addition to the translational part of the $100 million and then the fall through on the EBITDA on that in 2025 because we just don't model the kind of the hedging activity as we look out into 2025.

是的。所以對於你關於 FX 的第一個問題，是的，完全正確。我們有一些有利的交易。然後，對於 2024 年所有對沖的結果，我們將其與 1 億美元的平移部分以及 2025 年 EBITDA 的下降部分結合起來，因為我們沒有模擬 2025 年的對沖活動。

Let me take the data center part of your question, Nigel. Look, we have significantly ramped up our engagement with a pretty broad-based at set of customers from server manufacturers, system integrators, sold away to data center operators. And we are in a very varied stages of design and testing across the full spectrum of these customers. We have projects that are in the process from validation testing that's being completed by potential customers to getting print specified by a number of server guys to working on negotiations with the business awards that are in very late stages.

奈傑爾，讓我來回答你問題中有關資料中心的部分。你看，我們已經大大加強了與相當廣泛的客戶的合作，這些客戶包括伺服器製造商、系統整合商以及資料中心營運商。我們正處於針對這些客戶全方位的設計和測試的多樣化階段。我們正在進行的專案包括潛在客戶完成的驗證測試、一些伺服器人員指定的列印以及處於最後階段的商業獎項談判。

So it's a full spectrum of effort here. And we certainly believe that we are very well positioned to take advantage on the available applications, and we will advise you when we are in a position of the wolds. We've certainly seen revenues start trickling in, in 2024 nicely but we believe that we will be in a position to make some announcements, much bigger awards as we progress to '25. And I'm hoping that, that's not going to be too far in the future.

所以，這需要全方位的努力。我們確實相信，我們完全有能力利用現有的應用程序，當我們處於有利地位時，我們會向您提供建議。我們確實看到收入在 2024 年開始穩步增長，但我們相信，隨著我們進入 2025 年，我們將能夠宣布一些更大的獎項。我希望這不會是太遙遠的未來。

Jerry Revich from Goldman Sachs.

高盛的傑瑞·雷維奇。

Brooks, I'm wondering if you could just talk about the efficiency gains as you ramp up over the course of the year, it looks like the margin tailwind from the green bar is higher for the full year than the first quarter. Can you just talk about how much of that is margin improvement versus operating leverage, if you flesh that out for us so we can get momentum into '26?

布魯克斯，我想知道您是否可以談談您在一年中提升效率的情況，看起來綠色條帶來的利潤順風在全年都高於第一季。您能否談談其中有多少是利潤率提高與經營槓桿的結合，如果您能為我們詳細說明一下，以便我們能夠在 26 年獲得動力？

Yes, I'd say the way to think about it is, like I said, I talked about FX a little bit, and that's a bigger number this year, bigger in the first half versus the second half. The efficiency is pretty linear because it's mostly coming from material savings. And then I would say kind of a little bit of improvement is getting some operating leverage, Q1 is still a little bit down in our guidance from an organic growth perspective, largely on OEM's just not cycling up to their normal seasonality. I mean typically, you'll see them build a little bit faster in Q1, but we've talked about Industrial OEM being down and Construction and Ag.

是的，我想說，思考這個問題的方式是，就像我說的，我稍微談論了外匯，今年的數字更大，上半年比下半年更大。效率非常線性，因為它主要來自於材料節省。然後我想說，一點點的改善就是獲得一些經營槓桿，從有機成長的角度來看，第一季在我們的指導中仍然有點下降，主要是因為 OEM 沒有按照正常的季節性循環。我的意思是，通常你會看到他們在第一季的建設速度會稍微快一點，但我們已經討論過工業 OEM 以及建築和農業的下滑。

So as we kind of lap the comps and as we start to get some additional shipping for the AR customer that we got for the balance of the year, we continue to see mobility improve. That a little bit of volume uptick will get us a little bit of operating leverage as we move through the year.

因此，當我們在某種程度上超越競爭對手，並開始為今年餘下的 AR 客戶提供一些額外的運輸時，我們繼續看到移動性的改善。隨著全年的推進，銷售量的一點點上升將會為我們帶來一點點的經營槓桿。

Super. And Ivo, can I ask you another question on the data center side. You've laid out the TAM at $1.5 billion for your range of products. Can you just talk to us about how you're thinking about it in terms of dollar per megawatt given the evolving range of estimates on the magnitude of the build-out and in terms of the competitive positioning you folks versus post versus [Parker], anything that you'd point out on the Gates offering versus your major competitors?

極好的。伊沃，我可以問您一個有關資料中心方面的另一個問題嗎？您為系列產品設定的 TAM 為 15 億美元。您能否與我們談談，考慮到對建設規模的估計範圍不斷變化，您如何看待每兆瓦的美元成本，以及您與 Post 和 [Parker] 的競爭定位，您能指出 Gates 的產品與主要競爭對手相比有何不同？

Yes, sure. Look, I don't think that our thinking has changed on the size of the TAM at this point in time. We actually see is that there is a -- the commitments to liquid cooling remains pretty firm out there. For us, look, we have interesting technologies, both on kind of just the normalized liquid cooling all the way to emerging liquid cooling across the spectrum of the products.

是的，當然。看，我認為我們目前對 TAM 規模的想法沒有改變。我們實際上看到的是——對液體冷卻的承諾仍然相當堅定。對我們來說，我們擁有有趣的技術，包括標準化的液體冷卻以及覆蓋整個產品系列的新興液體冷卻。

So we have launched late last year, a fluid conveyance house that can be used in both of these applications that's data center specific, and we are starting to see a good amount of enthusiasm building around that from our customer base.

因此，我們在去年年底推出了一種可用於這兩種特定於資料中心的應用程式的流體輸送房屋，我們開始看到客戶群對此表現出很大的熱情。

We are definitely demonstrating that our industrial pumps that we have designed in conjunction with [cool-IT] are presently, probably best-in-class in terms of power per cubic inch of space so that's highly differentiated, and we are in specification process with dozens, frankly, dozens of people that are in that space from servers to the backdoor cooling folks. And we are working on our own coupling.

我們確實證明了我們與 [cool-IT] 聯合設計的工業泵目前在每立方英寸空間的功率方面可能是同類最佳的，因此具有高度的差異性，並且我們正在與數十人（坦率地說，數十人）一起制定規範，從服務器到後門冷卻人員，他們都在這個領域。我們正在致力於我們自己的耦合。

Presently, we are working with a partner on a coupling for liquid cooling applications, but we are also working on a highly differentiated, unique design that we believe we will be able to bring to the marketplace sometimes latter part of this year. So we are well positioned but it's all within our house of what we believe we have a right to play from comps to that conveyance in that application.

目前，我們正在與合作夥伴合作開發用於液體冷卻應用的聯軸器，但我們也在研究一種高度差異化的獨特設計，我們相信我們將能夠在今年下半年將其推向市場。因此，我們處於有利地位，但這一切都在我們的掌控之中，我們相信我們有權從補償到該應用程式中的運輸進行遊戲。

Christopher Snyder Morgan Stanley

克里斯多福‧史奈德 摩根士丹利

Just first one quick on China. I mean you guys said modest growth in Q4. It seems like that was led by replacement. But any just color on specific end markets that are driving the growth in China?

首先簡單談談中國。我的意思是你們說第四季成長溫和。看起來那是由替補隊員帶領的。但是，有沒有哪一個特定的終端市場正在推動中國的成長呢？

Yes. Look, I think that we are pretty proud of what our team in China has to avert. China has been tough, as you well know, for some time. And I think that gives us to differentiated result in China. Predominantly driven by -- I mean, we had pretty broad-based strong performance. I mean Mobility was quite substantially -- Personal Mobility was substantially. We have had terrific performance with our diversified industrial there even Ag and Commercial Construction were both constructive in China as was Automotive replacement.

是的。瞧，我認為我們對於我們中國團隊所避免的事情感到非常自豪。眾所周知，一段時間以來，中國一直處境艱難。我認為這將使我們在中國取得差異化的結果。主要原因是——我的意思是，我們擁有相當廣泛的強勁表現。我的意思是，移動性相當大——個人移動性相當大。我們的多元化工業表現非常出色，甚至農業和商業建築在中國都表現良好，汽車更換也是如此。

So it's been quite good, pretty much across most of the end markets that we are present with in China. By the way, by the way. Yes, my view is that I think it's really important to start seeing the turn in Asia in Industrial because, generally speaking, Asia is an early precursor I think what's going to happen in more of the developed economies.

所以，在我們目前在中國的大多數終端市場中，情況都相當不錯。順便說一下，順便說一下。是的，我的觀點是，看到亞洲工業的轉變非常重要，因為一般來說，我認為亞洲是更多已開發經濟體將要發生的事情的早期先兆。

Yes. No, it's a great point there and makes a lot of sense. I do wonder in this kind of particular time period, if some of that early cycle China strength could be maybe tariff prebuy that are flowing into, I guess, at least the US in the developed world in that context. Any views on that?

是的。不，這是一個很好的觀點，而且很有道理。我確實想知道，在這種特定時期，中國早期週期的強勢是否可能是流入已開發國家的關稅預購，我想至少是流入美國的關稅預購。對此有什麼看法嗎？

I do not believe it's a prebuy by the way. We are in China for China predominantly. Predominant presence is, frankly, with Chinese OEs so less with kind of the large multinationals. But I would kind of point out to another item, and that is that our core growth in East Asia and India was as constructive as it was in China in Q4. So that would kind of tell you that more broadly across Asia, as a more ubiquitous region, you are seeing kind of a similar strength. So I wouldn't say that it's specifically China driven and prebuy driven. We have not seen evidence of that.

順便說一句，我不相信這是預購。我們在中國主要是為了中國。坦白說，中國原廠設備製造商佔據主導地位，大型跨國公司則較少參與。但我想指出另一點，那就是我們在東亞和印度的核心成長與第四季在中國一樣具有建設性。所以這在某種程度上告訴你，更廣泛地看，在亞洲，作為一個更普遍的地區，你會看到類似的力量。所以我不會說這是專門由中國和預購驅動的。我們還沒有看到這方面的證據。

David Raso Evercore ISI Institutional Equities

David Raso Evercore ISI 機構股票

I just wanted to let you expand a little bit upon the comment as our balance sheet continues to improve, it will help widen our capital deployment aperture over the next few years. I'm just curious to get a little more color on how do you think about sort of what level of financial leverage? Is it clearly more of a time to lean forward maybe the situation with Blackstone sort of being in the past, how that also might change how you think about utilizing the balance sheet? And then just what are you seeing in opportunities, if you've at least been kicking the tires a little bit on M&A?

我只是想讓你稍微擴展一下這個評論，因為我們的資產負債表不斷改善，這將有助於在未來幾年擴大我們的資本配置範圍。我只是好奇地想進一步了解您如何看待財務槓桿的水平？現在是否顯然更應該向前看，也許黑石集團的情況已經過去了，這是否也會改變您對利用資產負債表的看法？那麼，如果您至少對併購進行過一些嘗試，那麼您看到了哪些機會？

Yes. Look, we believe that we have gotten the balance sheet to a good place in general, all being the same. We have an ability to reduce our leverage by about half a turn a year through a very strong cash generation capability of this business. We still believe that our stock is significantly undervalued. So from where I sit, I have a significant amount of strategic initiatives that add a tremendous amount of improvements to our financial metrics. You take a look at our ROIC, every project that we do gives us the ability to drive better returns, which is something that we are very laser-focused on. We have opportunities to invest organically into getting more exposed to highly positive end markets with strong secular drivers so we continue to do that. We continue to evolve organically our portfolio gives us the ability to position us during the next cycle to deliver much stronger top line generation capability.

是的。你看，我們相信，總體而言，我們的資產負債表已經處於良好的狀態，一切都一樣。透過這項業務非常強大的現金產生能力，我們有能力每年將槓桿率降低約半倍。我們仍然認為我們的股票被嚴重低估。因此，從我的角度來看，我有大量策略舉措，這些舉措將大大改善我們的財務指標。看看我們的投資報酬率 (ROIC)，我們做的每個專案都讓我們有能力獲得更好的回報，這是我們非常關注的事情。我們有機會透過有機投資來更多地接觸具有強大長期驅動力的高度積極的終端市場，因此我們會繼續這樣做。我們將繼續有機地發展我們的產品組合，這使我們能夠在下一個週期中提供更強大的營收產生能力。

And we obviously are looking at M&A, but we think that there is more opportunity to invest in our business vis-a-vis stock buybacks and/or in total investment. And if we can find businesses that we believe that are highly accretive that we can buy at a reasonable multiple, we are right there. We are happy to take a look at that.

我們顯然正在考慮併購，但我們認為，與股票回購和/或總投資相比，我們的業務有更多投資機會。如果我們能夠找到我們認為具有高增值潛力、且能夠以合理倍數收購的企業，那麼我們就這麼做了。我們很高興看到這一點。

We have no further questions. I'd like to turn the call back to Rich Kwas for closing remarks.

我們沒有其他問題了。我想將電話轉回 Rich Kwas 來做最後發言。

All right. Thanks, everyone. If you have any follow-up questions, feel free to reach out to me and have a great rest of the week.

好的。謝謝大家。如果您有任何後續問題，請隨時與我聯繫，並祝您本週剩餘時間過得愉快。

This concludes today's conference call. Thank you for your participation. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。