Gates Industrial Corp Ltd. (GTES) February 18, 2026 Conference Transcript

And we've got Gates Corporation with us today, which we're very excited about. Ivo Jurek, who's the CEO. Ivo, as I walk over to you, you've been a main see at this conference for a long time, which we very much appreciate. So the temptation to ask you is, why is this year different than the last couple of years? Like, you know, it seems like there's some green shoots out there, maybe even more than green shoots. I think you just reported earnings, so I won't ask you about orders, you know, for the last two days. But at the same time, I think you talked about four of seven of your major markets growing, only one modestly decreasing, markets such as personal mobility and data centers driving you. So it seems like 26 could be a stronger growth year, yet you forecast 1% to 4% organic growth. So maybe talk about what the puts and takes there.

Yeah, I think it's a good way to open it, Andy, and thank you for having me and Gates here at the conference. Thank you. You know, when you kind of look back for maybe the last couple of years, I think both in 24 and 25, we have seen some positive earlier incursions of, you know, PMI, some sentiment shifting around, and in both years kind of ending up with a little bit of a head fake and, you know, overcoming some more impediments. So when you kind of fast-forward maybe to end of 25... And the quarter that we've just reported, I would say that we have seen a slow and steady buildup in kind of more positive picture across some of our, you know, larger industrial OEM markets, commercial construction, less bad behavior in ag in particular. In exiting, uh, 25... We've reported reasonably good strength in order intake, as you indicated. What's really different, I think, in my mind, is that for us to see... More foundationally based recovery of our business, we need to see an industrial OEM strengthening order trends. And we have seen that. So I think that that's a good early indicator. I think when you combine that with kind of three years of really tough macro background. Which is highly unusual, right? You have to go kind of all the way back to World War II to see that type of behavior. And then you start seeing maybe early formation of a little more constructive PMI. You know, it starts to feel like maybe things are improving. I think it's early in the year. As we indicated, yes, our markets anticipated to be better this year than they were last year. Some of them already are. So, you know, you now have more than one data point that would tell you things potentially are forming to be much more supportive in 2026 than we have seen in 2026.

And, Ivo, when you say, like, industrial OEMs look a little better, like, any sort of examples will you talk about?

Yeah, look. We have seen much stronger trends in commercial construction equipment builders. We have seen better ag, OEM, order trends. You know, we have reported, actually, our ag business was up high single digits in Q4. And, you know, that's taking into account that... Those OEMs are still reporting pretty negative numbers. So, you know, we are doing some things better, maybe, than the markets. So we are performing the markets, as we have indicated in our call, and, you know, we're certainly quite pleased. Now, when you combine that with super strength in personal mobility, you know, we have had really another year of good end market support in automotive replacement side of our business. So the aftermarkets are doing really, really well in the out-of-sight. You know, we still see positive trends. Car fleet, it is aging. It's still growing. You know, people are keeping their cars longer. They're servicing them better. You know, nothing that we do is... You know, of choice. I mean, if you, you know, we make critical, mission-critical applications, support application, mission-critical applications, so you will have to replace those components when they fail. So, you know, those are all positive things that are happening there.

Guy, then, you know, we talked on your Q4 call about some distributors having carefully managed their inventory. I think that was specific to your industrial aftermarket business, so maybe comment broadly on how you characterize channel inventory today. You know, what are you seeing selling versus sellout, and whether you see potential need for channel restocking of PMI where to get better?

Yeah, look, you know, I'm not really concerned with the performance of the behavior of the industrial aftermarket channel inventories, simply because it was kind of more seasonal, not really something that is, you know, kind of a consistent level of the stock. I think that the channel partners, you know, they frankly didn't have a great year last year, and so there was no real reason to preposition yourself with 26. You have an opportunity to have a really good 26, and, you know, my sense is that SPMI strengthens, and frankly, as the industrial OEM businesses strengthen, you know, that benefits nicely the industrial aftermarket channel partners. And so my sense is, as you continue that to recover, as you continue to see the PMI signals to get healthier, I think that you will start seeing that the inventories are getting replenished maybe more aggressively than they have been over the last three years. And you should be setting yourself up for a nice rebound in performance in the aftermarket on the industrial side.

Yeah, that would be interesting. So I want to go back to your last investor day, I think, was 2024, right? And you had talked about sort of various ways to outgrow industrial production. You mentioned then on a baseline of 2% industrial production growth, the gates could grow 3% to 5% through programs such as Echo Innovation, Chain to Bell, you know, personal mobility. So maybe talk about rate the progress you've had in these areas. We talk about personal mobility a lot. We don't talk about these other things that much. So I'm just curious where you are in this stuff.

Yeah, so I think that, you know, let me not spend a ton of time on personal mobility, because I think that we have demonstrated that that algorithm is working really well. It's very healthy. We continue to take, we continue to penetrate much more meaningfully dead space, and we certainly believe that that's a long-term trajectory of growth for us. And as we have highlighted over the next three years, we anticipate to deliver kind of mid-20s to 30% compound annual growth rate. So that's very healthy from a $140-ish million base. On industrial chain to belt, look, we're doing some really good things there. We feel that as we are approaching cost proximity to the cost of industrial chain, that opens up the opportunities in, I think, in a similar fashion that we see in personal mobility. So we are quite optimistic that that will start adding a really nice growth for us. We have demonstrated a really nice performance in automotive aftermarkets. We have grown that business very steadily. Actually, in a way, it was a nice, chunky growth in 2025, and we certainly believe that the long-term trajectory of the business remains to be kind of GDP plus in addition to some market share gains around the edges, so that offers a good opportunity for us to add to our growth rate. What I'll say is that during that 2024 CMD, We did take into account that we anticipated to have more positive end-market backdrop, and if you think about it, Andy, while we haven't really delivered exactly at the growth rate, I think that we have grown in line with our high-multiple multinational industrial peer set. On average, we have grown as well as they have, and that is in addition to continuing to do a selective participation in our other OE segment. So while we continue to grow the business, we are improving the quality of our portfolio, our mix, and we continue to grow at the rate of some of our peer group aspiring competitors.

Yeah, and your margins have come up pretty significantly, so that's kind of what I want to ask you about. There was, as you remember a couple quarters ago, some confusion around what you were saying about your margin in 27. So maybe let's try to clear it up again here. So, if I'm interpreting your 26 adjusted EBIT.margin guidance correctly, it looks like you should be exiting the year-round 24% margin, and your 27 target, I think, right now is 24 and a half. So, like, I know growth is a huge variable here, but let's say you deliver the middle of your organic growth range, one to four in 26, it looks like you're set up to well achieve that 24 and a half. Anything I'm saying there that's not right or, you know?

No, I don't think so, Andy. I think that we have a couple of rather large projects that we have undertaken that are a bit of a headwind for us in the first half of this year. I mean, obviously, we've spoken about the deployment of the ERP in Europe, which has actually gone quite well. We have some footprint realignment projects that we are working on that we anticipate will be completed in the first half of the year that will be a benefit and accretion to second half of the year. We have committed that we will be exiting the year at 23.5% EBITDA margin, which is the lower end of what we have forecasted during the CMD in 2024. But during the CMD, we also have anticipated that over that period of time, we will see 500 to 600 basis points of organic growth through that. Three-year period of time. Now, obviously, that has not happened because of the end markets, but we have yet still delivered a rather significant margin expansion, and we are hitting the bottom end of our range at that negative kind of end market backdrop. So we are exiting, I think, we are troughing the end market macros. We are exiting that troughing environment at record level of profitability, near record level of margins, and we are very, very bullish about our ability to not only deliver on what we have committed, but frankly, probably overachieve if you take into an account that our first 12 months incremental market.

So I want to ask you about that because I think you've got separate programs, right? One is delivering 50 base points of material savings from here. I think you've been pretty bullish on that. And then 100 base points of footprint optimization savings. I think they're both supposed to contribute to a 27 target. So I know you said you've got, you had 10 million so far from footprint. We're going to be talking about the current work that's going to impact this year. But then, obviously, it's got to ramp up from there. So how do you think about these programs?

Yeah, the programs are performing quite well, actually. The material cost savings and some of the efficiency projects like 8020 and some other restructuring that we have continued to do through the cycle have done or have created bigger benefits than what we have anticipated, I think that our footprint optimization, I think on a call, Brooks has indicated that we feel quite confidently that in the second half of the year, it may be 10 million-plus that will ramp up into 2027, and we anticipate that in the first half of 2027, we'll deliver another 10 million. on that project alone. So we're in really good shape, and 2027 certainly should be a year of terrific performance. But we're also quite pleased with how we have framed our guidance for 26. We don't need to skip necessarily over 26. I think 26 is going to be quite an okay year for us.

Time goes fast enough, Vivo.

Yes, it does.

So maybe just digging into 8020 just a little bit more, maybe how much more runway do you have in the journey on 8020, and how do you think about 8020 in terms of an annual margin tailwind? How do you think about that?

Yeah, look, I think that 80-20 is a long-term journey for us. I think we have done quite a bit of work on the front end. If you think about this project as front to back, and I think that that's a really right way to think about it, we are just starting in the middle of a journey for us on taking 80-20 into our factories and to the back end. So I think that there's a ton of opportunity to work through there. I do think that going through the ERP implementation in Europe, that will give us some incremental opportunities to drive some more efficiency in our European footprint and, you know, how we manage our business there in addition to just driving 80-20. So I do think that you have a good runway for a number of years ahead. And, you know, when I think about our business, you know, I don't, you know, somebody asked me this question. When you get to 24 and a half, do you think that that's kind of the end of the journey? I said, no, that's not the end of the journey. That's kind of the next train station that we are planning to stop by, and then we'll continue to drive the train forward.

Yeah, that makes sense. And then just maybe honing in on this quarter, Q126, I think you talked about 2% to 2.5% organic revenue decline in the quarter. I think 500 basis points of heaven, right, from two fewer business days in the selling season, and then your European implementation, Europe. So, you know, being an analyst, I'll exclude it, and I'll be like, oh, your underlying growth is pretty good compared to how it's been. So, like, why is it pretty good? Is it because Europe has been trending better lately, as you talked about? You talked about construction and ag and personal mobility. Are those markets starting to really pick up? You know, maybe what's in that underlying, you know, 3% growth or whatever it is, 2.5, 3?

Yeah. By the way, Andy, thank you for actually doing the fundamental work. So, you know... We actually have a very, very, I think, doable guide. We have no ramp up in second half of the year. If you think about it and you carry forward a 2.5% of our organic growth, that's kind of what it is for average of the year. You know, one would assume that certainly if our thesis plays itself out, you should start seeing further acceleration in the second half as the recovery takes hold. Presently, you know, again, strong performance in personal mobility. That's almost 100 basis points of growth that we are delivering on the enterprise. You're going to have a little bit of pricing, certainly, and improvements in ag and commercial construction in the industrial OE side. Europe has been doing better. I mean, we have grown in Q3 and Q4. Interestingly enough, I think that Europe is performing rather well for us, and I think you certainly sense a degree of kind of relief from the European customers and certainly from our European teams. And look, our Asia business has been doing quite well. We've been growing in China nicely. I think we have probably differentiated our performance versus our peer set. And East Asia and India, you know, I think that they are kind of at an inflection point of delivering some sustained level of growth as well. So things just feel better.

So, Yves, I don't know if anybody on the stage today said the words Europe and well together, so maybe you can talk about why Europe is performing well for you guys. You know, is it the market? Is it something you guys are doing?

Yeah, look, I think that our team is executing really well in Europe, and, you know, we're focusing on things that are within our control. Look, I don't control what happens in the macros, and they are what they are. We've got to deal with that. But, you know, we have had tremendous growth in personal mobility in Europe. I mean, our personal mobility in Europe has grown, you know, like 75% rate. You know, that's... They do like to ride their bicycles there, right? They do, riding their bicycles there, and the adoption of the gauge drive is rather significant in Europe. I think that we have been doing a really good job in automotive aftermarket in Europe, so that's been performing well. Look, the industrial businesses are recovering, I mean, similar to what we have seen in the U.S. I would say that maybe Europe is a little bit ahead in ag and commercial construction recovery. Ag has been quite bad in Europe since 2023. So, you know, we feel better about what's happening in Europe.

Maybe same question on China, Ivo, because, again, I think you've generally been outperforming in China for a while versus other U.S. multis, and I think you expect continued growth in China. So what does Gates do better than peers in China? Is it the same thing there? What's the outlook? I think you talked about the outlook a little bit for the rest of Asia.

Yeah, look, I think we have a terrific team, and we have had a very focused strategy to build our industrial footprint. If you look at our business in China over the last 10 years or so since I have been at Gates, we have very dramatically retooled our portfolio. We have diversified the applications that we participate in. We have been able to take a nice amount of market share. We have built rather significant automotive aftermarket presence. You know, today we are the number one market shareholder in China of the products that we manufacture in the automotive aftermarket. So our business in China is nicely diversified, and, you know, it continues to perform well. It's a large industrial economy, and, you know, we like what we do there.

And then I'm going to open it up to the audience in a second, but I wanted to follow up on ERP more specifically. I think you talked on the call about ERP being 140, 150 base point drag on EBITDA margin in Q1, 50 base points in Q2. So can you remind us where you are in terms of ERP implementations in general? So once you get through this European implementation, the first half of 26, what's left or what's next on ERP?

Yeah, I think that there was kind of the last large piece for us. We were operating in Europe on very legacy, obsolete systems that were coming out of support. We needed to de-risk it, so we have decided to go and launch SAP. About two and a half years ago, we have deployed the SAP finance module, so we felt like we have kind of had at least phase one covered, so we got a good experience with it in Europe. Meanwhile, we have launched a bunch of SAP applications in Asia. Those worked well and ran well, and so this was a rather large-scale project. It was a big bang. We have gone live early in February. You know, kind of one of these things where you kind of push the button and see if the engine starts. Engine started really well. You know, we are taking orders. We are shipping. We are dropping manufacturing orders. We are making things. We are transitioning things from factories to DCs and back and forth. We are invoicing. You know, there are days that are really good. They are days less efficient, and so the drag is really more associated with the cost of support to get back to a standard operating efficiency. But presently, you know, we feel quite well about where we sit. The team has done a terrific job, and, you know, while there are still efficiency issues to work through, we are able to do all the functions that we We need to do as you restart on a new system. I certainly don't envisage that there will be another implementation of any size anytime soon. We got all regions basically operating on reasonably good systems at this point in time.

Got it. It's good to know.

Any questions from the audience? Anyone? Anyone want to ask a question?

Okay, so maybe if I dig into the businesses a little bit more, Evo, so let's talk personal mobility again. So it was up, you know, greater than 25% for you last year. You talked about the business compounding at high 20s at 30 through 28. So can you remind us of the size of the business today for Gates? And then when you're thinking about these elevated growth rates, I mean, we just talked about Europe. Is that the region that stands out or other regions, like, where does personal mobility have the best traction?

Yeah, so, look, the personal mobility business is about $140 million business. At present, it's about 3%, 3.5% of total company revenue. So, you know, it's not, you know, super large, but it's a nice size. We have committed that we anticipate a business to be about $300 million by 2028. We surely are on the trajectory to be able to deliver that. And, you know, this business really took off in Europe about three or four years ago before we start seeing some of the de-stock with, you know, post-COVID. The business has completely re-accelerated back at those very high growth rates. We see good growth in Asia as well, and we have a ton of opportunity with that business in North America as North America is embracing, you know, a little better quality e-bikes in particular. So, you know, we feel that, you know, for us, it's a penetration story. We are competing against non-traditional competitor, industrial chain. We think that we have a better technological solution for electrified two-wheel application. And so, you know, now we are getting, Andy, to a point where we feel we are on the cusp of mass adoption. And we have done that through two things. Number one, we have demonstrated this is a better solution than chain. And two, by very focused execution on innovation to drive the cost of our drive. To near-cost proximity to industrial chain, and we are approaching that level of performance, and you see a pretty broad-based adoption of that solution.

There's still no real competition in belts, right, for personal ability, correct? Not real competition.

Gates got basically the vast majority of the market share against...

So it's just conversion from chain to belt that you need, right? It's a penetration. And is that just happening a little faster in places like Europe than the U.S.?

It is because the solutions in Europe, people actually do care about the quality solution. They want low maintenance, and the price points have been a little bit higher there. As we are approaching the cost proximity, it opens up doors to much broader penetration. And, look, I mean, we do have some interesting, you know, we do have some interesting applications. I mean, I think if you go, for anybody that shops at Costco, you can go to Costco side, and you can buy your kid's bike with Gates Drive. So, you know, we are starting to get to a level where that cost is no longer the end.

It's an interesting question, Ivo, because it's like you are, I mean, I remember you as the premium product in most respects, right? So how do you balance competing, and I hate to say that the U.S. is a lower-cost market, but how do you balance that and still be premium? Can you do it?

Absolutely. I think that the solution is still a premium solution. I think that the bell drive is a premium solution to an industrial chain. I think what we have done is we have continued to innovate in a way that gives us still a premium capability through development of new technology. And the technology, I think, is now getting broadly adapted. And you will have an opportunity to support kind of the mid-market products all the way up to the super premium applications.

Got it. So moving on to data centers, I know it's also a small business for Gates, but you seem pretty positive at getting to 100 to 200 million by 28 liquid cooling adoption, conditional RAM. So if I think about your products, do they need to be specceded by customers? How does it work, and are there particular customers in regions that you view as better opportunities for gates within data centers?

Yeah, so first of all, it's a brand new sort of applications for our company. We really have not participated in that part of the technology, and so we had to start with developing technical expertise in what problem are we trying to solve. And I think that we have not only understood the problem, I think that we have developed a specific set of solutions that differentiate us from our main competitors. And we have developed a front end sort of professionals in commercial applications as well as the engineering applications to be able to go and work across the spectrum of customer base to get our products designed. So to your questions, look, we have projects with hyperscalers. We have projects with server manufacturers and design products into server cooling in racks. We have projects with large infrastructure providers. We have projects that we supply our hoses and our couplings. We have projects where we supply our water pumps. And we have projects where we supply our water pumps and our hoses and our couplings, so a full spectrum of portfolio. And look, we have talked about a business that we want with a hyperscaler that's being fulfilled through an Asian ODM. We have a number of nice... We have project awards with large server manufacturers for integration. We're working on specs that will get us into the critical infrastructure. So, you know, it's quite positive. I talked on a Q release about the fact that, you know, our sequential order growth rate in this segment, And the data center segment grew nearly 400% sequentially, 700% year on year. Our revenues have increased, you know, four or five X in 2025. And we anticipate the revenue to grow in a multiple of 2025 in 2026. So we continue to demonstrate the trajectory of that growth. And I think as a team, as an organization, we are quite confident that we'll get to that $100 million, $200 million of revenue by 2028.

Yeah, that's great to hear. So maybe to some of your larger businesses, Industrial Off-Highway is your second largest business behind Auto Aftermarket. And, you know, we talked about it a little bit. I know commercial construction is driving and things like that. You know, is it global? It's getting better? Like, is it more construction than anything else? Like, you know, you said ag was a little bit better in Europe. So any more color there to be able?

Look, we started to see a little better performance in commercial construction kind of towards the end of Q3. We have seen continuation of that trend in Q4. So I think commercial construction is recovering. Ag, as I said, has done reasonably better in Europe. We have now started to see inflection in North America as well. Ag has been actually quite okay in Latin America in 2025. So, you know, if you're kind of three of the larger economies that are doing okay, you know, I feel a little more optimistic about it not being a drag in 26 and being a creative talk growth.

Yeah, that's good to know. And then auto aftermarket, it's always kind of a steady-eddy. It's your largest end market. So maybe talk about the trends you're seeing there. Obviously, the global car park continues to get older. That should be helpful to you. So level of visibility and anything you're doing differently in that vertical to outperform the markets.

Yeah, well, we have been outperforming the markets over the last several years. That is a large, important market for us. The trends, as you indicated, are very good, right? The car park grows, the car park is aging, people are trying to take care of their cars more or better, I guess, is the right choice of words. So that's an opportunity for us to continue to deliver the GDP plus growth. Andy, while we represent this business as GDP plus business, we are not satisfied with GDP plus performance, even in this market. We want to outgrow the market materially, and we've demonstrated we can do that. I mean, we have onboarded a large customer in the U.S. in 25. We believe that we still have opportunities globally to continue to add nice chunks of And so, you know, if we can just grow kind of, you know, 2x GDP, I think we will be quite satisfied. Are we going to be able to do that every year? I don't think so. But, you know, we will have years where we're going to get some chunky, meaty wins.

Are there prospects out there like that for 26 or?

Yes, there are prospects like that in 26. But we also, you know, we've added, you know, that new account that we've added in 25, you know, there was meaty. But I think that there's, You know, there's a large opportunity to continue to scale that participation. So I think that, you know, there's still lots of opportunity in automotive aftermarket.

Got it. And then maybe diversified industrial has been a little hard to get a read on. It's pretty big, too, almost 20% of your revenue. So maybe I know you're expecting growth in the market in diversified industrial for 26. So maybe talk about what's driving that growth in 26. I think you might have been down in the 4Q.

Yeah, so, look, diversified industrial, I think, is really well-torked towards BMI, and, you know, when you start hearing, you know, anecdotes, I mean, even from our, you know, from our peer set, right, you know, whether it's Rockwell or, you know, when, you know, Parker's indicating, you know, pretty good strength in factory automation, those are all drivers of our revenue sources as well. So, you know, we are certainly closely monitoring the PMIs. We believe that the market is improving as well, but, you know, I would like to see more validation on the PMI side before we kind of go and declare victory on strength in diversified industrials.

I know at OEM it's just going to be like high seven digits of the company and kind of just kind of be.

You know, I think so. Look, the other OOE business that we have is a really good business. We make good money on it. We will continue to practice selective participation. We don't really spend lots of resources on that business. The business generates a nice amount of free cash flows and good profitability. And while it's there, we will have it. We will not be chasing any business in that set of applications. We are really focused on growing our industrial business. And remember, we've shrunk that business now to about 8% of revenue, and that's been doing while, you know, the industrial businesses haven't done well. So when the industrial businesses start re-accelerating, that will naturally continue to compress that participation. And, you know, we really have an aspiration to be a broad industrial company, not being, as I say, just overtorked to other applications.

Got it. So let's shift to cash flow and balance you because you mentioned cash flow. I think you had a good cash flow year in 25. You know, you're going to 90% plus in 26. You know, free cash flow does tend to be a little lumpy for you guys at times. So maybe talk about what's different now that supports consistency moving forward. Yeah.

Look, I would actually say that our cash flow, while it has been lumpy, it's been lumpy because we have been making significant investments into our business. We are investing in the front end. We are investing in new plant and equipment. We have done quite a bit of restructuring. So net, net, net, I think that we are kind of at the proximity to 100% free cash flow conversion as a percent of adjusted net income. In 2026, again, we are forecasting 90% plus, and that's why we are spending more on capex and more on cash restructuring, right? So as those abate, and we anticipated those will abate in 26, you know, we have a very high degree of confidence that we'll get back on a consistent trajectory of 100% plus free cash flow conversion. And, you know, that just gives us lots of options. This is a business that generates a ton of cash. And, you know, we are very happy with our performance. And again, I would, you know, I would say that... We have yet to gain, outperform our peer sets in 2026, 2025, so, you know, I think that that just gives us lots of optionality to deploy that cash, whether or not it is through, you know, share repos, so, you know, now maybe being more thoughtful about M&A.

Yeah. So you ended 25 with a net leverage under two times, 1.85. I think it's the lowest it's been since you became public. So how are you thinking about capital allocation in the current environment? You know, can we see you lean into buybacks more if you don't do deals? Like, how are you thinking about it?

Yeah, look, I mean, we have exited the year with over $800 million of cash nobology. So, we have about, you know, slightly under $200 million of buyback authorization. We have bought $105 million worth of, we've returned $105 million of cash back to shareholders through buyback in Q4 alone. We generated a ton of free cash flow in 2026, our forecasted too. So, you know, I anticipate that we will be more active, whether or not, again, it is in buyback. I mean, our stock is reasonably inexpensive as a, you know, comparison to some of the peers that we comp ourselves against, so I think that that still is a good opportunity for us to do that. But I will say that, you know, we are significantly ahead of the game of what we have committed I'm excited on deleveraging, the financial deleveraging, and that now gives us that opportunity to look at M&A more aggressively, and there are some good assets available that I think would be very highly accretive to be added to our portfolio.

Could you do a transformational deal, or are you looking more at bolt-ons?

I think that we need to earn the right to do a transformational deal, and I think that That we will start with things that we know a lot about, so something that is very near our core business and gives us a meaningful opportunity to add decent amount of revenue and profitability. I don't think necessarily you need to do a transformational deal, but you can still do a reasonably sizable transaction that's actually meaningful to your level of profitability and will be highly accretive in terms of your capability.

For sure. Okay, so last question. So I've asked you this every year. What are the top two or three innovations and structural changes affecting your company over the next five years? Are there any emerging industry trends that are perhaps being overlooked in the current discourse?

Look, I'm always surprised at finding new applications to adaption of the core technology that we have developed. So if you think about it, you know, while I don't necessarily believe that the whole electrified proportion of vehicles have played differently than what I have believed, I think I've been a pretty consistent believer that there's going to be room for it, but it will be just another option that a consumer is going to have. You know, we've developed some interesting technology for the application in those vehicles, and we've taken that application and we are now adapting it into data centers that we would have otherwise not been able to support. We are developing a number of new applications of the technology into personal mobility where we're going to continue to broaden our ability to become more integrated provider of drive systems. You know, I think that a lot of technology is evolving, but what we're also finding out is that... There's this fundamental need for our products, and as technologies evolve and new adaptions are being brought to a forefront, that just offers more opportunities for companies that provide foundationally sound technologies that are just required on a daily basis, and we don't really think about that. So I would say that the bigger surprises for me from From a technology perspective is how we can continue to branch out and see significantly better future than the past 115 years that we've experienced. I'm really super excited about what's ahead of us, and I do believe that the best times are ahead of our company, not behind.

Awesome. Well, it's a good time to stop. Ivo, thank you very much.