All right. For our Monday afternoon session, we are really excited to have Gates Corporation with us and gotten to know Ivo. Ivo's done a great job in a tough environment over the last few years. Ivo Jurek is the Chief Executive Officer. Ivo joined Gates as CEO in May 2015 after spending the entirety of his career in the industrials area, both in the U.S. and internationally, where he's held senior positions at some of the world's leading industrial companies. Ivo, I'm going to walk over, and while I walk over to you, I'm going to just ask you one kind of question and sort of what's going on in your markets these days? You've got a 5-9% growth, obviously still strong growth. What are the biggest expected drivers of the growth across your segments, and what are the biggest risks as we sit here today? Yeah. Thanks, Andy. It's really great to see you and appreciate you guys having this conference in person. Look, we're coming out of a terrific, terrific year in 2021. We've delivered 21% core growth, which was kind of at the upper decile of performance of industrial companies, and we have a terrific tailwind. As I said on my Q4 call, our book-to-bill continues to remain significantly north of 1. We have a strong backlog, and as you know, we know the backlog business. We have book-to-chip business, so we would love to get that backlog worked out and worked off, maybe a better way to say it. I think we were pretty pragmatic about setting up our 2022 guidance, predominantly taking into account what is happening with availability of raw material, availability of logistics, and frankly, availability of labor. On my Q4 call, I said, "Look, we are starting to slowly see a little bit of green shoots on the raw material side." I know I get lots of questions from investors that, "Hey, why are you seeing green shoots?" because most companies we talk to do not really see the green shoots. What I say is you have to be a little bit careful because we are a company that is an industrial technology company, material science-based. We use lots of highly specified compounds. Many of these compounds were restricted compounds during the COVID pandemic. They were part of the restricted list once the government invoked the Korean War Act. That has expired at the end of Q4 of last year. We are starting to see slow improvements in those in the supply chain. Not everything is breaking green, obviously, but we are more optimistic as we exit Q1. With raw materials, they are going to be less of a headache. Certainly, as COVID rolls through during January, we were seeing some peak rates in absenteeism driven by folks actually getting sick. You have to give them time off, and you want to make sure that they get healthy. That has, frankly, driven our purview of what is going to happen in 2022. Frankly, as we discussed, there is a lot of uncertainty still. The business remains very strong. It is now upon each individual company to, frankly, create a little bit of their own fortune. We are well positioned to do that as some of these impediments work themselves through. Q4 of last year, Q1 of this year, we believe are going to be the worst to deal with, and we anticipate that things are going to start getting better. Ivo, you're very global, right, as a company. Maybe you can just address any geopolitical concerns you might have, given what's going on in Russia, Ukraine over the last couple of weeks. You mentioned Omicron. February, much better month for you, I assume. We'll only stop there because I'm stringing together five questions. I'll string through. Look, I think that we are all trying to still figure out what happens with the most recent situation in Ukraine. The good news for us is we do not actually have lots of revenue in Russia. We generate maybe 1% of our global revenue out of Russia. It is a great business for us, of course, but we are being very cautious about what will happen. Obviously, we are very much focused on ensuring that we do not get caught up in some crossfire with currencies and restrictions and so on and so forth. I think that time will tell over the next couple of quarters and maybe a couple of months. When you take a look at Omicron, coming back to that, look, we start seeing pretty significant infection rates with our factories, particularly in the United States, at the end of December. We were seeing peak more or less at the beginning of February. Things are starting to improve. People are coming back to work. I also remind everybody this is end of February, so we kind of got impacted for two months out of the three. That being said, we have accounted for that in our guidance. That is why we were being, I think, pragmatic about what we can anticipate and what we will see in Q1. Ivo, that's helpful. I think you said to me, actually, on the last call that once the supply chain bomb is easy, you'd be able to better show sort of the market outgrowth that you've talked about before, sort of the mid-single digits. Maybe you could update us on where you are with a lot of these initiatives and the sort of target that you have of 20% in product vitality, how close you are and how you're progressing toward that goal. We are extremely pleased, actually, with what's happening with our business because we are business initiatives. Let me start maybe with the product vitality. For the last couple of years, I've been speaking about how much progress we have made with the revitalization of our hydraulics business, in particular, fluid power business. That business is the revitalization of that business is nearly complete. We are doing really, really well. Just kind of a point of reference, about 77% of our 2021 revenues in fluid conveyance side of the business was the contribution from the new products. Okay? Of all hydraulics, about 33% of the total hydraulics revenue is from new products. We are doing really, really well, and we are very excited about it. I also believe that the investments that we have made in 2017 and 2018 in the three fluid power facilities have been essential for us. Frankly, we have, I think, delivered incremental growth with these new products, these new facilities that resulted in increasing market share. We are very pleased with that. Now we are pivoting towards power transmission. I have spoken on the Q4 earnings call about some incremental machine capacity. We are not doing any brick and mortar, but we are building some incremental machine capacity to be able to keep up with the transformation of power transmission and, frankly, to be able to keep up with the demand that we are generating of some of these initiatives, particularly in personal mobility, micromobility, call it whatever you want to. We call it personal mobility, chain-to-belt in personal mobility, and frankly, in diversified industrial with industrial chain-to-belt as well with just simply keeping up with market changes that we have had in our belt business. The businesses are doing great. A couple of examples. Last year, we have grown our personal mobility business by about 96%. Again, I remind everybody in 2018, the business was less than $15 million. The business is now 4% of our revenue of a much greater company. I would say that I give our team an A-plus on delivering on that initiative, and we believe that we are only in early stages. In 2019, when we were talking about setting these targets in NPI, the new product vitality index, we were having aspirations to get to about 20% NPI. We were, at that point in time, very low single-digit vitality. Taking into account the progress we are making, we are kind of in the low teens today and very much on the way to that 20% new product vitality index that we are committed to deliver. Ivo, let me ask you a follow-up there. You mentioned you think you're taking market share. Is there any sort of how do you measure that? How do you look at that? The ability to attract and retain labor is a big deal these days. Maybe talk about how Gates is able to attract and retain labor in the current environment. Look, we have a very detailed process where we assess what new platforms we are winning. Look, as an example, if I just focus on personal mobility for a second, right? All of that is an incremental market share gain. We're just not taking it from belt competitors because we are the only belt company in the world that can deliver belts instead of industrial chains. We are taking market share away from non-traditional competitors, which to us is also a great example of market leadership and the execution of that technology that we are bringing into the marketplace. Retaining that is not only, frankly, key, but more importantly, we believe that we have an incredible runway. This is a very large, very sizable market. We've talked about that market that we kind of $8 billion in the past. We have a panelist day that's coming up. I will see you again. In a couple of weeks, and we're going to size the market up, and we're going to also offer an incremental line of sight of what we believe are the opportunities for our company and how big of a runway we have and how we can reward our shareholders that have been, frankly, very patient with us and that have been very supportive of our execution. Ivo, of course, I want to see peak into that analyst day. Let me just ask you a question like this. We know what your mid-term targets are. $4 billion in sales, 24% adjusted EBITDA margin, 20% ROIC, 100% cash conversion. Which target seems easiest to achieve, and which one do you think seems most difficult? And your. I tried to ask the question the way that. I tried all these tough questions. Look, there are some targets that are easier to achieve than others. I'm very pleased how the team has delivered over the last three years despite the fact that we were dealing with trade war-induced China or recession-induced by the trade war with China, and then we straight went into a pandemic. Look, I go back to those targets. There are some targets that we have actually already achieved. We are already north of our target on ROIC, as an example. We are very near our target that we've anticipated on free cash flow conversion. Yeah, around the edges, but I believe that we are right there. You take a look at our leverage. We have reached our mid-term target in the short term. So we've already achieved our leverage. I feel very positively about revenue. The revenue, we are on a trajectory to reach our objective, I think, with a high degree of confidence. The target that's going to be a little more difficult for us is the 24% EBITDA margin. I have to tell you, I feel very good about the target as well. We are nowhere near going to decommit the target. Absent of the unusual level of inflation that we have seen and, frankly, the dilution of margin that you have seen, even when you are taking price, that set us back a little bit. We believe that we have a line of sight of how we're going to get there. It's not going to take another five years. I mean, we will recommit the target, and we will give you a line of sight of how we're going to get there in detail and when we believe that we can get there. We are very optimistic about being able to grow earnings quite nicely over the midterm as well. Let me ask you one follow-up to what you just said, which is the ability to price. What have you learned through this time period? You had some inflation in 1999. Now you have massive inflation. What is the company doing as a pricing to maybe do a better job or improving its ability to price? Andy, I would say that we have done a really good job in 2020. We have been priced materially economics positive ever since I have taken over my leadership position at Gates. That is an extended period of time where we have been able to price for inflation. I will tell you that one of the probably biggest challenges is being able to react to the acceleration in inflation. Given in 2020, for the full year, price materially economics was neutral for the company, including logistics. We got upside down in Q4, and that has been the sole reason of seeing the compression of margins that we have seen in Q4. We are very positive about the pricing that we have taken since. We have done that knowingly because, as you know, Andy, we have a very broad portfolio of products. To go in and price the full book with our channel partners is very complex. We would have maybe gotten a month out of the quarter. Would things be better? Yeah, they would be better around the edges. We just felt it is more orderly to do it starting in January, and we are in a very good place with our big pricing. Let me ask you, I think for this year, your guidance is to be price cost neutral, right? What does it take to sort of get there? We already talked about maybe sort of material costs are starting to come down a little. Do you assume they continue to come down? Are there any more incremental price increases that you have to take? What are the conditions to get to your target? First of all, I will say that what we've committed is that we're actually going to be margin neutral for the year. Margin neutral. Which is a much bigger deal, I think, than price materially economics neutral. We're actually very positive with the price materially economics neutral. What we felt is that we have taken an adequate amount of pricing to be able to deliver on that objective, particularly as the business progresses to the second half. As all the pricing ramps up, we've taken price through every customer, every channel. It's not one customer that we didn't touch. Whether or not it is automotive OEM or it's a channel partner that is distributing our industrial products. It doesn't matter if you're in the United States or you are in China. We have taken price every region, every customer, every commodity. So we feel good about price. It's going to ramp up over the first half of this year. We certainly anticipate that as we come out of the most difficult, most challenging period of time, which is Q1 into Q2, you will start seeing progressive improvements in our operating margins. We are confident of that. You will start seeing normalized incrementals absent of something else of significance coming forward in the second half. Right. It is normal for you guys nowadays, mid-30s to 40%? Got it. Okay. Let me go back to ask you about basically, you talked about that 4% that is in personal mobility, right? You are sort of going into it. You have also talked about accelerating trends, the longer-term growth, high growth, and market acceleration trends. I guess, what do you mean by that? Are you shifting a lot of your R&D that way? Is it just the markets have moved more toward I love to be outside on my bike or whatever during the pandemic? What is it that you are doing to accelerate? Look, there's about 170 million two-wheelers that are manufactured every year. Okay? When we talk about some of the trends, we are not relying on a dramatic growth in the output of these two-wheelers. Two-wheelers are bicycle, e-scooters, scooters, e-bikes, and so on and so forth. The trend that we are seeing is a very rapid adoption of electrification in those devices. Whether it is an e-bike or it's an e-motorcycle or e-scooters, first of all, the easiest way to reach a solution because in many regions, people rely on scooters as the primary mode of transportation. You don't have the same level of impediment that you have on a vehicle to support charging and the battery construction and the battery sizing. As the generation of folks is getting a little bit older, people want to be more outside. There's a pull from the market to electrify those two-wheelers. When you electrify, you really want to have a Gates belt drive on that e-bike because it's quiet, it's reliable, it doesn't require maintenance, and frankly, it generates a much greater output based upon the size of the motors that are being mounted on those devices. That bodes well for us. We don't necessarily depend on more two-wheelers being manufactured, although there is a forecast that will grow very nicely over the next 10 years. It's the rate of electrification that we are very excited about, where we play a major role and where we are the only alternative to a chain and by far better solution than that chain. Maybe we could step back and think about electrification for the overall business, Ivo, because it's interesting, right? When you went public, a lot of people asked you about your content for a car, blah, blah, blah. As it is today, you have a very different business. You have a much larger auto aftermarket business than auto business. How do you look at electrification impacting your business? Does it accelerate growth outside of what you just talked about in the e-bikes? We are very excited about our automotive business. Over the last four years, we have organically trimmed a highly commoditized business in automotive OEM that we had no interest in. We have lost about $100 million of revenue through that process, which was strategic. It was planned, and it was executed. We presently have a nice-sized business with other OEMs that is very profitable, and we like that business. As you said, our replacement side of the business continues to grow nicely. It is a business. We are generating a tremendous amount of profitability and cash flow generation. That being said, we are excited about electrification because our content goes up by over 2x. Our content on the electrified platform goes up from about $125 to $300. What I think people don't realize is that although we don't transmit electrons, so we don't make motors, so we don't make connectors or inverters, the function that our products serve is much more important in an electrified platform than in an ICE because the batteries, the motors, and inverters need to be cooled and warmed. During winter, they need to be warmed, and during summer, they need to be cooled. If you don't have a good thermal management system, you will run into difficulties. All you need to do is take a look at what's happening outside of the shores of Canary Islands, right? I think that the opportunity is very exciting for us. That being said, again, we are a replacement-focused business. We need and we serve customers that have cars that are 7 to 12 years old. That's our sweet spot. That being said, that means that two things need to happen for us to capitalize on that opportunity. First of all, that car part needs to grow in vis-à-vis electrified, right? That's going to take some time before ICE turns into an EV in new car sales at the volume. Then it needs to age 7 to 12 years. We have a great opportunity. We are very well prepared for it today. We are winning business on the electrified platform with OEMs today. We actually talked on our earnings calls the last couple of quarters. We are already supplying products today on the engine cooling side, on the battery cooling side. We will continue to invest, and we will make sure that we protect our replacement franchise and that we scale up as that business scales up. Ivo, how does that reconcile with, as you said, auto OEM you've taken down over time? Does it now stabilize? And you tried to sort of convert it more into EV-type work? If you think about our OEM presence, we want to keep our automotive OEM business plus or minus the same in the dollar size. As the company grows, obviously, the percentage is going to get a little bit smaller, but the dollars we want to maintain. We will be predominantly focused on taking electrified platforms only. We are very selective in our participation, frankly, on both types of propulsion, electrified as well as ICE. We will continue to be selective and be there when customers need us on the replacement side of the business. You mentioned to me during the earnings call that you were, what's the word, cautious on auto OEM builds and maybe low single-digit growth. IHS does not have a single digit. Have you seen anything to make you feel better about that market? Or do you still feel good about your conservative view? I think that I feel very good about my view, frankly, because unfortunately, every time you open up Wall Street Journal, Financial Times, you see some of these car companies becoming more volume, right? I think that it is going to work itself out. What I said on my earnings call, Andy, as you said, I said, "Look, I believe that it will be tough sledding for the automotive OEMs in the first half." I do not think that they are going to start seeing any improvements maybe until the second half of the year. It is tough to ramp up capacity in semiconductors. It does not happen overnight. I think that maybe there is a little more enthusiasm out there than the reality would warrant. We want to be grounded. We do not want to count on revenue that may be difficult to attain if the end market is not going to be able to support it. I think that we are reasonably realistic about what is going to happen with our OEM business. I think that will be proven probably more right than wrong. I'm guessing we'll talk about this more as the investor did. I did want to go back to something you said around the three new fluid power factories. How have they really fared during the market where they were designed for a market like this, right? If I remember from the last investor that you had, you have this sort of program where you're going to slowly take out old capacity and sort of replace it. I assume you probably slowed that down with the demand. How do you think about sort of the transformation of your assets, what that could mean going forward? Andy, of course, when you remember the time frame, it was really tough because we were bringing this capacity online as one of the cycles was ending. We were rolling into a somewhat of a recession, maybe a natural recession that was induced by the trade war with China. That being said, today, we have proven to be pretty foresightful. The business has grown very, very strongly. As you know, our entire business in 2021 has had a record year. Put Q4 aside, right, we have outgrown our premium industrial peer group in 2021. We feel very good about the growth opportunities that we have. We have been executing on those. The hydraulics, despite the fact that we have delivered very strong growth, I think over 24% core last year, we have been able to service our customers much more effectively than we have been able to do that in 2017 and 2018 upcycle. We are doing it through all the impediments that everybody has to be dealing with. That just validated that strategy. We are in places where you can find people more readily. You are in places where you can operate more effectively. We are very pleased with the capacity. It allowed us to reposition ourselves. It gave us the opportunity to launch new products, with new assets, with new technology. By the way, we will talk about a little more of that during the analyst day as well. We are very excited about where we sit as a company. We are very excited about the transformation that we are driving. We are turning the company to be a premier supplier of highly engineered precision components that are mission-critical. I think that it's going to bode well for our investors and for all of our stakeholders as we move forward. Despite the fact that they are day-to-day impediments, our team is executing quite well. Is there any more low-hanging fruit? You mentioned trying to hit the 24%, even down market target. Is there any more low-hanging fruit in terms of the cost structure to go after to help accelerate the process over the next couple of years? Yeah. No, absolutely. Look, hopefully, you took from my answer to your earlier question that we are still very optimistic about hitting the target over kind of sort of a short to midterm. We get three things that we believe are the biggest opportunities. First is new products. New products are lower cost, and they give us the opportunity to drive margin improvement as we drive adoption. In addition to the fluid power, we are now on the trajectory to revitalize power transmission. So we believe that that's going to help. All those initiatives that are giving us market share gains and a volume upload, that's going to give us another component of the margin uplift. Look, we still have lots of self-help that we can do. We still have a very broad, complex portfolio. A number of times, you and I spoke about how we are thinking about product line simplification. We have done that through innovation. In hydraulics, as an example, we have taken about 30 product line constructions. We have taken that down to 11. We have done under-the-skin simplification. We can now move into above-the-skin simplification. We think that there's a great opportunity for us to improve profitability there. Frankly, there's some piece of continuation of restructuring and continuing to move production into places where you can find labor and, generally speaking, scale up those assets and give yourself an opportunity to have a much more efficient way of manufacturing this product. That's kind of how we think about being able to get to that. Yeah, that's very helpful. There is an audience question. I'll get to that. It is more of a cash flow or cash deployment question. Let me just ask you quickly about China in the sense that that has been a bit more difficult to do business in over the last couple of quarters. You still have a reasonably positive outlook for this year, up mid- to middle digits. You have some real strengths there, auto replacement, industrial business is good. Maybe talk about the confidence level you have in performing in China over the next year. Yeah. Look, I view China as, look, first of all, we are in China for China. We have no expats. We are basically a Chinese business in China, okay? We have Chinese nationals that manage it. We have Chinese assets, Chinese employees. We are doing development in China for our Chinese customers. We view ourselves as kind of a local business. We have made lots of investment in helping our customers to professionalize on the replacement side of the business. We have continued to build our presence and scale our presence in industrial applications. Very similar to what I have spoken about in general about our business, look, huge opportunity in personal mobility, particularly in places like China, where personal mobility, two-wheeler mobility is huge. Light industrial automation, robotics, those are end markets that have a very positive element. When I look at what happened in the second half of the year, the biggest headwind that we have been dealing with is the one that we already talked about, which was automotive OEM. I mean, they were hit just as hard in China as in the Western world, given the semiconductor supply and construction equipment. There was a large overbuild of construction equipment in the prior three years. That slowed down. We have absorbed that reduction of volume. We have a great aftermarket business. We see the programs that are ramping up in 2022. Look, Q1 is going to be challenging anyways, which we have anticipated. Olympics, COVID issues that are kind of popping up in China here and there. We are very bullish about China long-term. We believe that the mid-to middle digit growth in 2022 is absolutely in the cards. Ivo, just maybe one thought there on the competitive landscape. What's happened there over time as it's been relatively stable? Because it seems like you've had a good share in something like auto replacement. How do you sort of stay ahead of the competition? I imagine it's very different in here. In a way, it is different. In a way, it is identical, right? We are executing the same playbook that we have executed in any developing, and I almost hate to call China a developing country. It is not a developing country. It is a developed country. The channels are not well developed yet. We use the same playbook in developing channel partners. We have the broadest portfolio that we supply, particularly to the automotive aftermarket. We are number one market shareholder in automotive replacement for the products that we manufacture. Our playbook is working well. We continue to grow. Even in 2021, and that may be a little tough year for us even by our standards, given the growth, we still delivered positive core growth in most of our end markets and channels with the absence of automotive OEM. We continue to grow. We believe that that opportunity is there. Look, the business has the potential to be the size of our European business. China is a very industrialized country. They need our products. We are focusing on building all of the capabilities that we have everywhere else in the world, locally in China, so that we can support those customers from the vantage point. As we develop new technology, we'll put it there. We'll compete against the industrial chain and against some other house-and-build manufacturers, as we have done in the past. How, if at all, have you changed your products or your pitch for ESG/sustainability trends? That's a really good question. We actually view ESG as kind of a natural extension that generates demand for our products. We are looking at it two ways. Number one, we are looking at it from the end market. Look, we want to be a good steward for the environment. I think that we are a good steward of the environment. We are engineering harmful chemicals and harmful compounds out. We are developing products that, if they go to landfill, they go there in significantly lower quantities. We are focused on consuming less power. We are focused on consuming less water, just like everybody else. However, when we are developing products, we are looking at the type of constructions we can put in place so that we can have a dramatic reduction of some of these attributes that we have done. In Q4, I talked about an incremental investment in capacity for power transmission. I called it out specifically for a couple of reasons. Number one, because it's going to give us a nice tailwind in supporting the demand that we see in the marketplace kind of from the end of Q2 into the second half of the year. It is also a new manufacturing process that is consuming significantly less energy to build the products that we've built. By the way, we are eliminating all harmful chemicals that we have put into those belts that are built on that equipment. That is the attribute of what we control. The other attribute is what type of pull we see from the end market, right? If we can eliminate harmful chemicals from lubricant that you need to use on industrial equipment, and you can put Gates proprietary belts where you do not have to lubricate, you will consume less energy. You will have higher uptime because you do not have to shut it down for maintenance. Those are real meaningful drivers that will drive demand for our products over the midterm. We are very excited about that. In this context, we will talk more about it as well a little bit. We have coined the term eco-innovation. That is how we think about everything that we do. Environmental attributes of new product development are as critical as cost, quality, or construction. The audience question is, that has come down materially over time. Where do you go with capital allocation from here? This is a great question to start addressing. I'm really pleased that I'm actually being asked this question because. Usually, we just say, "Thank you, Dennis. Over the last five years, we've been trying to deliver the business. I mean, we have done a very nice job delivering the business. Now we're in a situation where all options are on the table. Clearly, we have had a $200 million share buyback authorization by the board. We feel pretty good about that, and we continue to execute on that. We do have an opportunity to do both on M&A. There's a pretty good pipeline of assets that we have been developing. Look, we're going to be very pragmatic about the multiples that we pay for those assets. The sellers have a very heightened level of expectation of what their assets are viewed. We feel very good about our opportunities to grow our business organically. We're going to be very disciplined. We will go out and buy assets if we believe that they're going to help us to accelerate our strategy or give us the opportunity to do something more meaningful and drive a significant amount of synergy and accelerate our earnings growth. We are in very good shape. Look, we have also an opportunity to reduce the cost of debt, right? I mean, most recently, I think last week, we've gotten Moody's upgrades, which is a plug-in. I'm very happy about that. That is starting to put us on the trajectory where we can start refinancing at lower cost, spend less money on servicing our debt, and do some of these other interesting things. The other thing, as you know, this business is not very capital-intensive. I mean, we do not need to spend more than kind of $80-$100 million of CapEx a year, which is less than our depreciation, so. 100% cash conversion. How far away is that? I do not think we are very far away from that. Because if you think about it, we have an elevated level of working capital cost last year. It was driven by two things. Number one, it was driven simply by inflation. Inflation has increased the overall level of inventory by the deflation factor. The other point was, with the logistics issues that you are facing, with the issues of lack of raw material availability, we wanted to make sure that we protect our output. As the logistics becomes more predictable, we can start drawing down in transit level of inventories that we have. As it becomes more predictable and as the material becomes more available, we can start drawing down on maybe a little more of the safety stock that we have built out to support our customers. I believe that as we start exiting 2022, we ought to start seeing a little more normalized performance. Look, the inflationary factor on working capital inventories, that's going to be with us for a little while. That is not going to change in 2022. I think that we can do things that can drive self-help. I do not think that we are too far away from being able to deliver 100% cash conversion. We have done it before. Certainly, over the midterm, we ought to be able to be there consistently. I think we're out of time, Ivo. So we very much appreciate the time. It's great seeing you in person. See you again in a couple of weeks. Thank you. Thank you very much.