Gates Industrial Corporation plc (NYSE:GTES) Q4 2018 Earnings Conference Call Transcript

Feb 12, 2019 • 05:00 pm ET

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Gates Industrial Corporation plc (NYSE:GTES) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Gates Industrial Corporation Q4 2018 Earnings Conference Call. Currently, at this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) Also, as a reminder, this conference call is being recorded.

At this time, I'd like to turn the call over to your host, to Bill Waelke. Please go ahead.

Executive
Bill Waelke

Thanks, Dan. Thank you everyone for joining us on our fourth quarter 2018 earnings call. I'll briefly cover our non-GAAP and forward-looking language before passing the call over to Ivo, who is here today along with our CFO, David Naemura.

After the market closed this afternoon, we published our fourth quarter results. A copy of the release is available on our website at investors.gates.com. Today's call is being webcast as accompanied by a slide presentation. On this call, we will refer to certain non-GAAP financial measures that we believe are useful in evaluating our performance. A reconciliation of these non-GAAP financial measures is included in our earnings release and the slide presentation, each of which is available in the Investor Relations section of our website.

Please refer now to slide two of the presentation, which provides a reminder that our remarks and answers 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 those expressed or implied by such forward-looking statements. These risks include, among others, matters that we have described in our Annual Report on Form 10-K and in other filings we made with the SEC. We disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly earnings call if at all.

With that, I'll turn things over to Ivo.

Executive
Ivo Jurek

Good afternoon, everyone. Thank you for joining us to discuss our fourth quarter 2018 results. Let me start with a summary of the key highlights from the quarter, beginning on the slide three of our presentation. We are pleased to report another strong quarter of performance. We generated revenues of $792 million, which represents a record fourth quarter for Gates. Our core revenue growth was 3.5% over the prior year, which was partially offset by a foreign currency translation headwind of 3%.

During the fourth quarter, we experienced solid growth from our industrial end markets. We believe that our broad portfolio of high performing products in a global footprint allowing us to supplement market growth with share gains, which have been seen with particular outperformance in our hydraulics product line. In total, our industrial sales grew 7.7%.

We also had a strong performance in the automotive replacement channel, particularly in emerging markets, where we continue to build out our distribution base and market leading product coverage. Our automotive aftermarket channel grew 7.3% globally, including double-digit growth in emerging markets. This growth in industrial end markets and automotive replacement channel