Gates Industrial (GTES) risk factors, FY2025 10-K

Risks Related to Economic and Market Conditions

1. 01U.S. policies, actions, or legislation could have a material adverse impact on our and our business partners’ operations and financial resultsNew
2. 02We are subject to economic, political and other risks associated with international operations that could adversely affect our business and our strategy to capitalize on our global reach49% rewritten
3. 03We may be unable to obtain raw materials or other manufacturing inputs at favorable prices in sufficient quantities, or at the time we require them
4. 04We may experience adverse changes in our relationships with, or the financial condition, performance, purchasing patterns or inventory levels of, key channel partners

Risks Related to Our Business and Industry

1. 05We are dependent on the continued operation of our manufacturing facilities, supply chains, distribution systems and information technology systems, and a major disruption or closure, including as a result of a catastrophic event, could have a material adverse effect on our business
2. 06We may not be able to accurately forecast demand or meet significant increases in demand for our products28% rewritten
3. 07Our revenue growth may be dependent on market acceptance of new product introductions and product innovations38% rewritten
4. 08Longer lives of parts used in our end markets may adversely affect demand for some of our aftermarket products22% rewritten
5. 09Increasing competition may limit our ability to grow or maintain our competitive position or marginsNew
6. 10We may pursue strategic transactions, including acquisitions, divestitures, joint ventures, strategic alliances or investments, which could create risks and present unforeseen integration obstacles or costs
7. 11We have investments in joint ventures that limit our ability to manage third-party risks associated with these ventures
8. 12The loss or financial instability of any significant customer or customers could adversely affect our business29% rewritten
9. 13We have taken, and continue to take, cost-reduction and other restructuring actions that may expose us to additional risk and we may not be able to maintain the level of cost reductions that we have achieved
10. 14Societal responses to sustainability issues, including those related to climate change, could adversely affect our business and performance, including indirectly through impacts on our customers and value chain partners37% rewritten
11. 15We may not be able to maintain and enhance our strong brand on which we depend

Risks Related to Cybersecurity and Information Systems

1. 16Cybersecurity vulnerabilities, threats and more sophisticated and targeted computer crimes could pose a risk to our systems, networks, products, solutions, services and data49% rewritten
2. 17Information systems failure may disrupt our business and result in financial loss and liability to our customers
3. 18Global data privacy, data protection and data security requirements are complex, evolving, and may increase our costs to comply

Risks Related to Legal and Regulatory Matters

1. 19Existing or new laws and regulations, including but not limited to those relating to HSE, sustainability and product compliance matters, may prohibit, burden, restrict or make significantly more costly the sale of our products and the operation of our business81% rewritten
2. 20We may be subject to recalls or product liability claims, or may incur costs related to product warranties, which could have a material adverse impact on our business, financial condition, and results of operations
3. 21Failure to develop, obtain, adequately protect or enforce our IP rights could adversely affect our business, and third parties could allege that our products infringe on their IP rights, adversely affecting our business83% rewritten
4. 22engineers in the future may not prove to be as valuable as those of competitors, or competitors may develop similar or identical technologies and inventions independently of us and before we doNew
5. 23We are subject to anti-corruption laws in various jurisdictions, as well as other laws governing our international operations. If we fail to comply with these laws we could be subject to civil or criminal penalties, other remedial measures, and legal expenses
6. 24We are subject to risks from litigation, legal and regulatory proceedings and obligations, and our insurance may not provide coverage or may not fully cover future losses we may incur related to these proceedings and obligations or otherwise

Risks Related to Human Capital Management

1. 25If we lose our senior management or key personnel, our business may be materially and adversely affected
2. 26We may be materially adversely impacted by work stoppages and other labor matters, including labor shortages and turnover25% rewritten
3. 27Certain of our defined benefit pension plans are underfunded, and additional cash contributions may be required34% rewritten

Risks Related to Tax Matters

1. 28Changes in our effective tax rate or additional tax liabilities could adversely impact our net income
2. 29Changes in tax laws could result in additional tax liabilities45% rewritten
3. 30Relevant tax authorities may no longer treat us as being exclusively a resident of the U.K. for tax purposes

Risks Related to Our Indebtedness

1. 31We may be able to incur substantially more debt and enter into other transactions which could further exacerbate the risks to our financial condition described above
2. 32Our variable rate indebtedness subjects us to interest rate risk, which could cause our indebtedness service obligations to increase significantly26% rewritten
3. 33Our failure to comply with the agreements relating to our outstanding indebtedness, including as a result of events beyond our control, could result in an event of default that could materially and adversely affect our results of operations and our financial condition

Risks Related to the Ownership of our Ordinary Shares

1. 34Because we have no current plans to pay dividends on our ordinary shares, our shareholders may not receive any return on their investments unless they sell their ordinary shares for a price greater than that which they paid
2. 35Our shareholders may be diluted by the future issuance of additional ordinary shares in connection with our incentive plans, acquisitions or otherwise28% rewritten
3. 36We may issue a new class or classes of shares whose terms could adversely affect the voting power or value of our ordinary shares
4. 37U.S. investors may have difficulty enforcing civil liabilities against our Company, our directors or members of our senior management
5. 38The rights of our shareholders may differ from the rights typically offered to shareholders of a U.S. corporation
6. 39Our Articles provide that the courts of England and Wales have exclusive jurisdiction to determine shareholder and derivative disputes, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, former directors, officers or employees
7. 40Transfers of our shares outside DTC may be subject to stamp duty or stamp duty reserve tax in the U.K., which would increase the cost of dealing in our shares
8. 41If our ordinary shares are not eligible for continued deposit and clearing within the facilities of DTC, then transactions in our securities may be disrupted and/or our ability to issue shares under our equity compensation plans may be restricted