MTD - Earnings call transcript Q2 2019 | Mettler-Toledo International Inc.

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Operator

Good day, ladies and gentlemen, and welcome to our Second Quarter 2019 Mettler-Toledo International Earnings Call. My name is Maria, and I'll be your audio coordinator for today. All lines have been placed on mute to prevent any background noise. And after the speaker's remarks as there will be question-and-answer session. [Operator Instructions].

like today's our call, now your over would for hostess Ms. I to presentation turn to And Mary Finnegan. Please proceed, ma'am.

Mary Finnegan

I'm Investor Thanks, Maria, Treasurer, at us for the CEO; I'm Filliol, joined Shawn Finnegan. Mary you're here Mettler-Toledo. today Relations by . and hello, Officer. and Vadala, everyone. I'm our I'm Financial happy joining that our Olivier I'm and responsible Chief

copy a is on on cover just to couple the A being our and me matters. refer call of and Let This the release available webcast is website. we the of press administrative website. presentation also is

Exchange Let implied any Securities presentation which is materially which Act the statements U.S. XXXX. of me may achievements meaning forward-looking our on risks, this actual historical other harbor not performance the in and from constitute levels different XXXX These facts those and Statements to summarize the are cause uncertainties statements Securities by safe or U.S. page factors the of forward-looking language or activity, within statements. X. of that results, be Act of involve expressed

For and see uncertainties a Form XX-K. of discussion these our risks please

in Factors Results Form the Management's All statements by our to in the our Analysis are of factors and Discussion and Results Operating Affecting captions Operations discussed XX-K. and their of reference Future of in the under and entirety qualified forward-looking the Business Condition Financial

Form financial and directly X-K. information our measures. Just one differences detailed non-GAAP most is and other use item. non-GAAP the measure comparable -- More use call On respect may between to today's with GAAP we in the of

Olivier. to call I will turn the now over

Olivier Filliol

and the will we quarter for will on additional most Q&A. financial and the our evening It results have of from for Friday details Shawn Thank then us lines I and and you will you, guidance. start is a on for summary open I provide on call the some we're then which doing and the will China. Mary, to welcome morning with comments Thursday of phone. everyone

of for solid the Core currency highlights The product we very X good a had in sales page and quarter in excellent are lines. Local solid, particularly the We second presentation. business Laboratory was growth our and growth Industrial on the quarter pleased with growth are results.

currency Total the local quarter. X% grew sales in

Excluding the Food had declined Retailing, was grew tariffs, very strong Americas in We headwinds Asia currency and X%. local a quarter, in despite which another sales operating good EPS. currency quarter and we Growth of achieved growth, in and good. from increase margin the

is exception in remainder Food the the of outlook positive. is demand to year, our of third Retailing, our the for with Turning markets favorable the quarter and

particularly of China. year, disputes, we due As U.S. towards global greater to the the to trade uncertainty macroeconomic data we due and the look end to economy potential acknowledge the unfavorable consequences and deteriorating between

believe we monitor our well market remain share focused We our and necessary. today, markets of can are if to gain will be we market to growth conditions. We in we remain regardless good conditions agile, on growth on and believe ready closely, initiatives to Based XXXX. plans of adapt continue earnings positioned generate our execution

turn now it and me later comments on additional back to and financials cover will our I Let guidance, come to Shawn with the business.

Shawn Vadala

increase the were Sales $XXX.X million currency. an Olivier. in Thanks in quarter, of X% local

approximately Growth of growth the Americas, were World. sales On pleased in in quarter. X% U.S. Americas growth Retailing, Local a X%, X% we're the as sales by and currency quite basis, by was currencies X% excluding Asia/Rest Food region. the level both with. reminder, the in slide dollar reduced As a sales this sales a growth we show X, total organic. On is all increased

in Inspection, growth the in in quarter, Sales business. had up growth timing X% our Product Inspection impacted growth QX, given sales quite from Absent Europe in X% some we which currency a included by is decline in the local benefit which the Europe good Product particularly declined was of was holidays. X% and in Easter

Finally, currency growth. strong China with had sales quarter X% another local very

slide increased X% results. sales X% growth X% Local shows during World. the the In of Asia/Rest Americas; first of sales the half Europe half XXXX. year-to-date in next the in in of in currency year; X% grew and total, The first

product currency X, On grew X% slide Industrial product local in up increased X%. X% quarter, X%, area. Product In Core by was Retail Laboratory declined Inspection down we the X%. outline and sales sales Industrial – growth while with Food the quarter.

exclude in half and first half, total sales our of for Food X% up X% -- during local the if As reduced in Food up Laboratory X% X%. overall of the Product we currency, quarter. X% Core sales from first slide X% the Retailing you growth Industrial Industrial X Inspection months Overall Retailing sales the grew first the in next sales currency; X%, X% year. local Olivier, The Retailing. by shows growth overall declined year. with heard Food up first for the grew were

P&L let in is XX.X%, quarter, X. quarter move Now the to slide of summarized the was rest XX.X%. a basis year XX on of the the increase number for me over level the points which prior margin Gross

to R&D the product contributors and some million, costs which from launches. $XX.X Productivity represents to local X% to were trade amounted continue growth. pricing and positives U.S.-China be a increase currency. Partly margin tariffs these dispute in with associated strong offsetting

in The in currency investments the amounted increase to a offset driven was local million, prior X% in by part cost over our by field increase force, initiatives. year. our SG&A $XXX.X savings

$X currency quarter, X% income $XXX.X $XXX.X to approximately by operating year million. the estimate of amount a million. reduced million represents We which Adjusted operating the over increase prior profit in amounted

to estimate operating income XX% currency impact in would gross adverse the income also by have were headwind the operating a quarter. the $X Absent tariffs, of tariffs million. approximately We gross and increased

we faced in We're in headwinds XX.X% meaningful reached quite the growth XX-basis-point from pleased prior quarter. given margins a increase the this quarter, the Operating with the year.

in the quarter, $XX.X $X.X was the A amounted in expense interest couple the comments on final million. $X.X to of income P&L. amounted quarter, million other million to Amortization

Let's turn to taxes.

to We in up for tax which quarter. the The effective from tax are the for first catch year XX%. XX.X%, effective XX.X% quarter full the reflects is lowering rate our rate the

tax before is rate exercises. discrete for option timing and items stock the adjusts effective of Our

which XX.X fully repurchase diluted the reflecting the prior million share and shares, from year to amounted quarter of in X% to our Moving a is the decline program. impact

level prior over have growth been and adjusting Adjusted rate at. XX% was are quite pleased gross for currency EPS XX% the an Absent and for a tax the the in $X.XX. amount of $X.XX, of would adjusted quarter the tariffs impact EPS the increase our change, year we quarter,

basis and as quarter, Reported $X.XX and amortization, exercises. to quarterly the $X.XX $X.XX between the our was reported rate of of to of in restructuring stock option EPS in $X.XX EPS a annual intangible tax difference $X.XX a On includes timing purchased compared year. prior due

cash quite P&L P&L of and with slide tariff these given XX we'll We're the XX%. for particularly the improvement costs. a half. We're pleased earnings sales X%, first and with currency it operating local growth the meaningful with results for pleased faced next which is basis flow. margin now shows results, headwinds The our shows points, of adverse these That cover growth and we of currency

$XXX.X flow on $XXX.X share compared XX% basis, as the On increase amounted a million free a cash per with adjusted to basis. a in This prior million year-to-date represents period.

times. DSO with solid X.X remained statistics capital ITO at at XX working and days Our

guidance. me Let to turn

We our execute growth continue initiatives. to our on good and feel very about to productivity ability

As Retailing, Olivier Food the with is mentioned, of favorable. our markets exception in demand

to the due of disputes. trade acknowledge the uncertainty the global growing economy of We deteriorating impact and macroeconomic indicators

Our outlook for positive assumed the market third as conditions. is we have quarter to change no

fourth the year. also economy. comparisons in the we to look quarter, a very of in the uncertainty face tougher strong We're due to we As the will growth global prior cognizant

business to segments. shift past is to due susceptible We than the less an business Laboratory to percentage the our in downturn of more within attractive market believe and our economic our greater sales in Industrial

However, immune we to to economic and are cycles remain we adapt will agile we necessary. believe if don't

One reminder. final

While estimate in XXXX headwinds X.X% remainder half our business the lower year. headwinds the the the earnings to first be compared and for half, currency will in of the adverse still we second impact of as of tariffs

reduce For the X%. expect currency EPS tariffs by year, we and to gross growth full approximately adverse

sales cover basis guidance approximately largely point Retailing. X%. now driven XX is currency previous our in Now weaker-than-expected by XXXX from the a in reduction to specifics. This We be let expect Food local me growth results

be Retailing double-digits QX Food mid single-digits expect for down to down high year. in full We to and the

excluding Our Food guidance is full year sales currency. local in Retailing X%

growth sales guidance bottom-end in range of worse offset are now to be of year We part raising is QX, XX%. currency. $XX.XX, $XX.XX range slightly the the growth and in rate lower is EPS which tax adjusted the to from by in benefit rate We'll XX% of the expect to lower a full beat which and our and

EPS impact currency be With currency QX and X.X% in expect the of gross to $X.XX be be to we sales a of Absent range X.X%. the be expect of Retailing, to quarter to XX% growth to in tariffs, the we to respect excluding to XX%. and Furthermore of quarter, to would third in approximately XX% local third adjusted in EPS $X.XX, XX%. would the would growth growth Food growth to range range the of the rate X% sales X%

X.X% we the by on on in to sales Some approximately to growth, currency final currency comments guidance. reduce expect of sales respect With impact growth XXXX.

reduce we growth sales approximately quarter, to For the third by expect currency X%.

I'll now back And turn to Olivier. it is from That my it side.

Olivier Filliol

Thank you Shawn.

Let comments by additional some me on our results. providing start operating

year. chemistry continued local regions Our the good sales prior particularly was automated the currency against growth did Analytical lab growth with well. lab growth. in X% perform well pipettes All good instruments, and a three business which showed to very in quarter,

resources, disproportionate R&D laboratory investments. from and business investments marketing benefit continues to sales Spinnaker initiatives field and in Our

expect the driven demand the more It good challenging quite first won't half, we in favorable by market be year. level second principally We to expect the and at comparisons. the of remain had half growth in

in was but by in in quarter. In Inspection to Americas, growth Product was a well in more decline Asia offset we continues our and This than Industrial business, terms business of the do down better it slightly business. the saw European our

medium-term. business good growth the continue to to the in year in about We low over the mid-single-digit likely half range. very expect second feel see the would type We of to this

quarter in with local Growth currency. in regions. the in comparisons was quite Core X% Core quarter. challenging then Industrial the quarter growth in particularly in they solid third of continued fourth in good will the expect We and would Industrial face growth well all did

the we down impacted timing expected. challenging This it faces Finally, than quarter. Food further slightly profitability activity, This Retail the customer for growth. is managing that and in business project we are market demand was and not for which sales worse was X% in of

down market be business this to year. We will meaningfully expect conditions and remain this challenging

quarter. Lab some with Now Core well Europe, were start Both the in I was the additional against comparisons slightly products Industrial me inspection the did will and were geography. quarter. they and let tough period. make comments in as the retail which earlier down particularly from down year by

is For of X%, first level the with. very Europe half pleased up we year, a are

year, retail continuing will low For the the QX. to second we in to be growth, on of believe with single sales be particularly half up even drag Europe digits continue a

Americas had quarter. growth strong very in the

the Core Lab and Inspection Excluding good X% Food in well. Product as strong Retailing, had quarter. Americas very growth Industrial grew had growth and

For the digits. full to grow we year, for Americas mid-single digits Retailing, Americas Absent low I would the remainder the to grow would of mid-single to year. expect expect Food

up good of growth. quarter quarter up high very digits. Industrial lines business quarter All did digits of was Lab China had another the in again well. Asia/Rest had World strong another in single China was the while of growth. double Finally

first One the Our quarter, the the local X% good the of quarter business, half had currency comment due in moderate another although final of up for positive, service to of year in remains quarter both we year. the and on growth more expect outlook this for comparisons. the second for region multiyear growth would half

That comments different the pieces business. on of concludes the my

China I you and Let on me on will insights our on provide newsletters and update segment business. additional our also marketing initiative sales then some

and have a Spinnaker are tool of long an newsletters part marketing our approach. and been sales core important Segment

our showcase to studies the case our industry They relevant and Our specific and use customer knowledge newsletters of highlight to segment. products build and challenges, expertise and awareness brand processes. most trends discuss

Analytics, content specific are Process as managers for XX total, Product chemist, In or Laboratory businesses Inspection These with scientists, such industry Industrial segments. across XX we our newsletters and production create different covering decision customized engineers. workplace newsletters makers R&D different Core

and XX marketing is fine-tuned editions developed languages. year Two to published sales we and Spinnaker each to to are million distribute X.X enough have expect copies translated approach. of with our and our a each example the customers we year. Overall, good capabilities unique about This

Newsletters products. interest customers our tool have to proven to be an our communicate generate important with for and

Board visiting I've me and on conducting Now a comments week meetings additional in senior our the over and the operations, last China. some management half make days. two we meeting been here let our had last

As number one sales. China is product XX% China majority of our at to we in our a the is have lines reminder, vast here. group in of overall approximately market total similar that position

our our market against as number competitors. market share relative to compete share market Our smaller we is share, similar a is higher of however, global greater

I'm development. very here new in programs, and mainly team R&D also and of teams progress happy product with sales development field progress The in the global resources. made the and investments have marketing excellent Spinnaker and our

and business about here into questions China too offering market, X+X China the generics Lab and than less now that represents the one of a sales, initiative currently the here underway. we not little our market different only company. half know our in A I are do of overall in it sell there generics China. the China piece globally lab here strength while in is our of is diversification, than

wide at segments customer various sell a customer a price points in range to of of relatively applications. We low variety products

in to market we on shifting we it faster capitalizing targeting for weakness resources can and segments. strength often up area to under-penetrated growing make segment in may segments. While one this Central with encounter other

in of limited in on chemistry China, Lab focused a Within was this. automated and with good historically pricing is potential. example AutoChem service academia China

and have last the focus chemical. pharma shifted Over we years to to several

of and explosions heightened increased the safety production and resources programs. our Currently, market and given sales attractive terms We particularly field on our is investments marketing in made and some have chemical recent scale and up. priority

in of but capitalize safety. demand now for you to we this. set shift and AutoChem example, is to is on it gives quarters solutions We achieved the China market. market example I bioproduction one chemical for our approach small growth to Analytics just This think the are another this penetrating and continue how the targeting of most have many to resources sense the able double-digit by potential. Process and They are helping standard the

this XX Historically, but China to from and was Industrial. Industrial Core Industrial to mix such Core as industrial our heavily has faster-growing and Industrial, business has to pharma weighted last such within as about over of Core the sales more Turning China shifted end heavier now years. changed others the XX% food manufacturers, market in cement represents the and chemical. markets, steel,

of smaller under-penetrated example but Inspection Product is world, quality product. markets. the disproportionately the higher as in demand and food in mature we positive is China than target an the very of continues packaged people rest outlook This and is excellent the to economy more the eat how

team we cost to For you those The China in mid-market our over will the product our Tampa for you weeks. XXX. the The the of been results features November, Pacific launch facility last adapt are we local that the chance manufacturing. XXX to new promising this last some a instrument has had localize Asia instrument in see X-ray that for visited coming market six to our working reduce as and months and the refer new to of

R&D global invaluable reusable new priority on Our design and modular product launch. for was this

its at being You versus several industry the our can infrastructure that driven was growth from core. examples, in is China from historically value-added see how

They We challenging with ability in change consistently that react have the China a the to be MT very can aftermarket many quickly. and have of strong experience. years team conditions to demonstrated

That remarks. concludes our prepared

the pleased with our quarter. very in are We results

can I in to second want believe the good for half, than half to first ask questions. operator we and line be the gain the open growth. deliver more to continue the earnings share the we markets may While in challenging

Operator

Instructions] of [Operator question the comes first Your line Peterson from Tycho from JPMorgan.

Your open. is now line

Tycho Peterson

thanks. with we'll start out Olivier Hey Maybe product inspection.

from seen points data some great. what industrial we've your haven't peers, Given of been

getting Product better a the Inspection maybe You're year? recovery. confidence just in particularly to back of Can half talking about half back of year the your you in the talk

Olivier Filliol

me Yes, comment. let

in in from already spending but So, better was and Americas good these growth It expect against as that really seeing manufacturers And also the also food weak, we regions we was well had comparisons. QX solid Europe Asia. regions. in these in strong growth

be For growth I what year overall. expect This flat, this feel couple below forward. relatively low-to-mid overall, it's I years of our below to I single-digits I QX but and Europe, long-term if expect also here is a look trend,

are But I really, really certainly also return expect will packaged hey, And food we to growth. well-positioned. customers

We multiple see so-called combine here becoming leading more We positions important. more and customers in Combitech technologies. more that these of is have technologies,

with position unique service network. our a have We

about feel this. So, I very good very,

something control quality here and about food think trends help growing in changing the markets, course, macro remains of Asia that important. the us population just packaged with consumer very all American And, trends. And in

we recognize short have term, So, little more. feel bit expected a but good, in the that I could

Tycho Peterson

guess guidance another tariff assume but we your I the it's business Obviously, macro Industrial on if more broadly you know a soon. talk reduction that? in, if we deteriorate? think I seems the that think mainly tariff XX% then should the our today, then to factored about And continues And can you can the front. little as there's pull impact leverage I wasn't how a to follow-up about just coming bit of

Shawn Vadala

this the Hey second answer maybe question. I'll the part is Shawn Tycho, of

today, terms In that our of tariff out on the one little has impact that came very business.

China XX% than more our a are imports subject reminder, already tariff. a from to of As

$X.X on gross at basis. it's basis, the a last So, probably annualized we probably it's piece, if like year million like an kind of on look a

Olivier Filliol

solid the whole the think drive -- Core had gain. can really all replacement we QX, another market Back regions, reflects good across growth go can but the the conditions. I remind in want first But Industrial, as for half. actually for feel enough, business we good market also to economy we long That actually actually is we ourselves, to I as actually share one

nicely go industry executing the Our nicely. segment really marketing also segments we very very that the feel that after I here certainly have is helps team can because growth potential. good

very the initiatives. momentum in Spinnaker have good We

growth. especially for strong So, I We're have this two growth due QX. Good we a lower expect mid-single-digit comparisons in years little last very going strong had for year, to comparisons XXXX what to up. mainly the although than coming in business,

segments performing, are key to here terms that how I a reminder, exposed serve little And economic also we're of in industry bit cycles. we feel But less as the good. the a

Tycho Peterson

you. Thank Okay.

Operator

of the comes Your next Dan Brennan question UBS. line from from

is line Your open.

Dan Brennan

Thanks Olivier, don't if for taking the question. China mind. to back you

peers, your China. on Sartorius, robust of it But sounds anything just like One you're for you remain is maybe -- that slower China. obviously your I'm lab front formation in there. discussed seeing? can discuss you lab in And there very business things wondering are that

Olivier Filliol

Hey, the we been performing organization go market opportunities our see very the had also China the the in really of I business couple lab into I lab deep quarters. after that around. has I met happy team. and many are team are in well, I very when Friday last executing a dive business to how the And last feel

the here helping price is different course the at lot of applications. our of broad what's a end-user solutions Now, are serves range points low our end. industries, of lab of business a And

here. yes, we And see so a -- it's don't slowdown

very, that, good. have I the But multiyear, I think we growth. topics had that really in the we very really absent good of rather feel terms comparisons

on we in is all And programs Chinese have it. well the executing place, very that these team

Dan Brennan

Thank to certain thanks there then, have and of this, but figured fabric any -- of to a related local, sure how peers something areas, is you're country I that you. could XX to then Tycho businesses. Or part it maybe to I'm the few peers, you've that non-U. years, at players not is something all and that I a already of something -- And your government be addressed But Got seems S. impact relates that in I is it. of pop the there. one kind you? that favor in the of other and know the discussed But know that the just are all? and been Olivier. you're if And seeing few managers your China. local trying just up for so

Olivier Filliol

Valid any have -- -- Yeah. you said, just and don't see reason about of that, talked what in question, of but we XX the years that. China. one we is And we really

We are local viewed as a company.

big presence. We have such a

local team. have management We

have local as is a for company. long. brand around We brand, Mettler-Toledo The been so viewed local

-- products because locally imported part also, the the first products from that coming sell any manufactured, are we Switzerland. of big then remaining we from And products And majority hardly the have U.S. we come big and of

a us. for we are it's here viewed again, non-topic. And It's good a we very So, -- in way.

on to that yeah report So, one. happy

Dan Brennan

Great. Thank you.

Operator

Bank from comes Your De next of from the line Derik Bruin of question America.

now Your line is open.

Mike Ryskin

question. that another out? Derik. quarter. talk I This just for is in taking -- very quarter service It Anything out been very to want called -- wrong Hey. Mike stands on for in for Thanks long about robust you the particular the it's a runway the there. like seems

So wondering there how the play into the guide. dynamics

on a the to be follow-up going then was pacing XQ to XQ. of And

the You the gave and sort lot macro for Food second slowdown talked out, I general it your you more comments and on the moderate Industrial. if that part there, Retail slightly to of even backed in half. uncertainty expectations that like you looks of for but know expectations of a

general Just or it's on that curious if specific anything if caution. there's more just

Olivier Filliol

Yeah.

Okay.

part, first will Shawn the take part. then general address the me Let second and

performance So service, we now quarters. very that here indeed, yes have good performed many

you strategies on We have with shared service. our

executing businesses. that executing every It's on also global across one. is pretty And very country we much that on country are We really solid focused every I are programs with service have see very we the that involved. growth. something all

continue had service. group sales. going we're year-to-date. is our well to expectation with -- my average grow a We in the I growth And about as And to above QX as as XX% is service X% reminder, of today that

to We more have years go. have that these many programs

when the in where total, to solid different would also We the journey. kind more beginning are quarters. last China there have But, include far one. of also being we service we I from couple go. growth saturated there's markets at are are of percentage at the where of the in you of on look And that room

add associated And a I if at are one That that's sometimes of also that third business. one focused service. business combined, one we together, growth which consumable and additional business. very about consumables had I also and is also our the That's look would we today better than even on. service

performed top So happy on we that, need also topic. services very of And on an the do to tactical very we again, is and all be well how on you much execution aspects of and that, this.

Shawn Vadala

and Mike to of in of the number Overall, your of quarter I X%. strong we was And very up other had QX pretty question. comparison part Yeah. also in year. changes particular moderation between in XX% year. maybe do is We and business. particular in any last our up fourth one core of a Europe too. difficult Industrial don't would QX the we face business terms were a of the in highlight QX that But see thing you challenging last the in terms But

just maybe comparison that's So topic. a

Mike Ryskin

it. that. Appreciate Got Thanks.

Operator

your Steve Research. from line next from the of Cleveland question And Willoughby comes

open. is Your line your now is Mr. open. line now Willoughby,

now question. may your You ask

Steve Willoughby

me Can you hear now?

Shawn Vadala

we can. Hey, Yeah, Steve.

Steve Willoughby

Okay.

I I I between then moving headwind settles negative FX Good And have that and pieces saying quick and for I Shawn, that guidance assuming believe morning. all just your X% how out? the it -- correctly, one heard be And was now. you just to that so said down a to follow-up. negative out old you X.X% you're that. guidance about if your before you're Sorry had and figure and new I’m trying tariffs

Shawn Vadala

any we And terms if little like Yeah. topic. before. it Hey, rounding might I'm Steve spoke. tariffs time seeing in versus the about the what last the a modestly anything changes than is of be of we worse not more particular FX talked a bit

Steve Willoughby

just markets assuming Okay. your how at about And prepared change are any you'd mentioned second not commented in more that first commentsm he double the conditions. Shawn, end then than half end of the in the market near here. the comments you're challenging But Olivier's then half. checking of the

are are overall? of and terms how markets underlying overlying -- what in So you assuming you end the

Shawn Vadala

QX our feel Yeah. of our good Retailing. units, of Right exclude quarter the out seeing Hey in bottoms-up execution. we we're I you business if mean feel when good about about we now to hard our to guidance. what is, especially front our it's submissions we beyond in very from always look Food look at continue And us. course, our

don't a announcement with statistics, the like trade the in which So economic which this need anticipated is the back But question is insignificant. bigger to are impact acknowledge what time, be business very on the tariff also dispute, impact in is we a that this obviously probably may direct we question. that feel dynamic Tycho's transparent to of at with very there situation, our have fourth out we on global economy there quarter. uncertainties we But to slowdown fully build any -- particular in tried moderating terms

Steve Willoughby

right, much. thank very All Sure. you

Operator

question from of next line Wolfe from your Research. the comes And Beuchaw Steve Mr.

Your line is open. now

Steve Beuchaw

on remarks And your that implication headwinds the you those are your in is that in challenging environment believe I was you One, become the mentioned on Hi thanks very offset earnings I in I well. there that give it. if of questions as briefly revisit the were power for touched us could here, want to you to thanks the that detail -- of to terms topic more take a and can company. prepared bit but the two. for wonder time the later you I'll ask that was actually -- a steps more event

So you could if to it those worse. would an steps know helpful do have the be might you macro what be think does and impact how big get

on appreciate is that that to tougher. here but with so a on eye food keep in the in relates tougher to Europe in what eye you diligence so relative the the thematically particular we expectations specifically. understand I as really food an we of food little Thanks stack? helpful much segment would U.S. pulse coming try to that that your food actually it going recommend question revenue sounds into of an second gotten going on to is keep My much. is also of some year. has and what's the like why it Be on And what's

Olivier Filliol

and start me then add will flavor Let Shawn to this.

So in the economy we react, terms market changes. how of or changes the if can

this allocate I how So resources. is we can would foremost that that flexibility we have highlight

our We we after generation that visit resources to We we agile pockets shown have are type particularly other. the our to in tool quite strong us we this certain that also we allows exist place that programs the segment in of to have set have And also markets go sales shifting customers drive around the segments. growth program. guide by a business to then marketing. force leads from can of and one the in can in And past a

So one always leverage. we that avenue that's

one And this in depends to diversification our markets cautiously the that and structure. we we course, Yeah, business course, give. And would very it a these severe try we that is, we is. in is the good second the things in and think have core implement our I it track And, agility how discipline this anticipate us a record much have also very not tremendously. something high that and monitor of helps very And system. the that's have of cost we certainly I the

we can by us. business you that to and big comes a have and a diversification country advantage industry and diversification As huge the imagine end-user huge we by to a have

Shawn Vadala

to anything I to than actions Olivier implies also Steve other that tailor wouldn't our what add said, situation. the he Hey we Yeah.

and we We're adapt constantly so these productivity gains if programs. looking leverage necessary. And we'll for

Olivier Filliol

The second Food the part was Retailing.

noncore kind that our profit for Food is we to very call reminder profitability. a to for I'm -- a for below in us of we business It's not the terms it group average terms. as but these -- always said and it in run growth. Here we business committed Retailing is business of

in And managed have we that the some so where in we complexity to way quarters taken business. have including recent the always also reduce steps

of We out have some the take step business. taken also some cost to

have. And so that's one effect that we

bigger I'm adjust that in downturn from franchise. that, actually it's than see fight bigger a from are is and also my Retailing by in year it -- strategic again terms whole but expected. this effect measures second it of the Food of on. But group worried not we business are And standpoint we about which to changes and trying to is rather that a we we particularly a terms market lumpy or And here not taking. the even going certainly is impacted

comfortable are We and it hurts top But with of course, for line QX is this the that. more But year. our numbers.

As all. I'm next at pessimistic that for not year,

Steve Beuchaw

Okay. appreciate Really that.

Operator

Donnelly next from line of from Sachs. comes the Goldman Patrick question Your

open. Your line is

Patrick Donnelly

just mixed level know the points, even particularly even you feeling Industrials on how overall? Great. Obviously, for your few seen Olivier. I talk guess I geography data in but it's Thanks. asked Core Maybe a we've the the Can just bunch ways, by different a of the outlook. one that Industrial's market confidence space. back maybe half into visibility through about you're been

Olivier Filliol

feel whole I that If our the strong really has from enough all it in market QX, for team. areas the world. not really we of all here first pretty We Yes. the in and regions execution I look half. at conditions strong been the much good but feel have only in performance year-to-date,

really the XXXX just But I also in for expect cautious we about -- be of have QX comparisons. feel I The so mid want visibility, good. And to growth. whole because single-digit good the QX where here

in the face to stronger main That's much reason. going are QX. We a comparison here

promising serve sales our most also a guide can said end-user base by or previous also I force of Then even slowdown. the be what I the more here highlight broad to China strongly occasions applications hit at economic to very would some if industry would tentative marketing segment the of industry a apply We in end-customer also for Industrial, context in we segments.

Patrick Donnelly

more mid you then on Could be Americas. here? a That be the there? one what think to you Can And been just ex Food. I continues just parse And segment for source strength the strong single-digits would has outlook of be just the guys. particularly maybe upside levers? then Okay. there what upside And you out said

Olivier Filliol

was offering. nicely as and was year-to-date QX. certainly particularly strength performance very pays solid Inspection our in Core here. in But lab that was continued had very down also We the expect with retail the retail again. field also off also well resources nicely. growth in The Product Industrial solid well. well. down. down quarter. the QX. The this be here business And in very was in execution. The And as did do that to up happy The otherwise, very I was indeed yes one also good would in QX expect feel team significantly product Industrial investment So about good I

sales in and -- region. marketing program Our that here great show fruits programs

Patrick Donnelly

Thanks. Olivier.

Operator

Eastman from from question line Your the Richard Baird. of next comes

is Your line open.

Richard Eastman

the I of it Could seem in good was year XXXX but more pricing mean, of half last year. would give just quarter? year? Shawn, be year-over-year bit you back I maybe X% how snapshot back of of us plus the pricing I noted increases the if here challenged this second then I in of have a the X% might kind And to cadence think just the in be properly, half that the price little a would in Yes, -- afternoon.

Shawn Vadala

No...

Richard Eastman

No?

Shawn Vadala

Well X.X% that's I in good I it. back the what with this part at -- half. commentary to about also respond really related the say the very half the to more And We're execution question the in of world. be is public probably fully is about the the the we've year. back -- in around well. I first our like agree place And that we've timing the program been did like that last Rick maybe pricing in much or to it consistent the program will moment. your the as be put midyear feel so saying price X% feel QX the might very I in I'd fantastic difficult how we're you executing just more in significant increases the in mean the good range of year. world And X.X% and very we around to said of then

Richard Eastman

so industrial exposure there within do also Okay. But you more trends process you're within to segment, in a to of just might have inflection some Lab to that chemical And any associate Olivier underexposed speak those the of just markets. industrial-oriented you kind the change or lot markets. then maybe lab exposure, petrochem

Olivier Filliol

particular that would No highlight. I

plays diversification bulk even from industry, again so many there think are within over chemicals a and the subsegments in this fine And chemicals chemical role. to -- I everything. here

We have different applications.

highlighted we benefiting I automated chemical characterization for the additional industry the example demands to also focus On is for and process are chemistry, from for analytics. in safety the where a prepared all due China heightened for on remarks, partially us triggering particular dynamic material these that explosions

one stay still expect for little see might is is then segments but the that example you other for good that way. All-in-all, chemical us industry have being a the while the down serving So, I have chemical industry, it are bit that that maybe world, to and segment automotive also you we up.

Richard Eastman

give And some question color active? the any is for But kind a on okay. maybe last approach shed refreshing keep M&A there? us Is can in pipeline? few thoughts maybe Okay, you these could just Is days there provide you anything do How there. could -- there me. there it? the you Or you things of just that

Olivier Filliol

-- my Hey we approach standpoint. the the Ric. from very problem one. No consistent way way much yes. that Yes, strategic look is on it very it we at It's

the fit an have focused on certainly We feel we are need are important synergies. We already. adjacencies We leg. don't strategy where additional well we diversified that

don't our very add What additional want we value customer add We franchise. to can value acquire an a and have for we We leg. strong where we is solutions. need companies

are that And particular Inspection opportunities Lab we in area. so the bolt-on have typically targets Product

company. look we and Biotix we not universe have acquisitions that have And done it's would I -- But if the back, -- something corner. have Troemner. rather be would a just of with We our here kind around few that you target

welcome and organic It's want we companies. to in disciplined next while it's not when to I I dependent very are well. to we expect what years have on it continue Yes, -- the these not comes much I -- pursue will story. continue very I are this and us also a we growth so add, that yes, fits the are we think must couple focused We also that very be. yes, the think it's to And on of strategy. to M&A, always availability of valuation. and -- And such

Richard Eastman

Okay, very good. Thank you.

Operator

Jason Instructions] And the Rodgers from next Lakes [Operator question your Great Review. line comes from of

is open. line me Excuse your open. Jason line is Your Rodgers, Mr.

Jason Rodgers

Can you me now? hear Hello?

Shawn Vadala

we Yes, can.

Jason Rodgers

half did I the it, Thanks. for have missed the second China, Okay. of give you year? might growth in expectations but

Shawn Vadala

businesses. the high our we're growth both Yes, half looking for single-digit with growth at mid second to Industrial in and good Laboratory

Jason Rodgers

slightly improvement for from that region? is looking at you're some expected are Europe, comps? second of that looking Or better Product in easier you're that Inspection expecting the improvement results you type in primarily the and in half, then for And looking the economically

Shawn Vadala

Yes.

to best probably I the Europe way basis. on is a think year-to-date at look

we Easter about this have talked first We topic in timing that the quarter.

plus is year-to-date So, on a basis, Europe X%.

mid-single For retail a of year, little to we're this half second the to but probably the going have like it's low of digit, bit effect.

exclude mid-single-digit you in probably more the we're range. If retail,

to we any third the of at the to organization, of expecting our assuming we're outlook feel half. what as the kind second their enough We're look good quarter be kind the not business. in economy for about in from people continues particular in we're we stick So, our that seeing good to replacement changes cycles. And execution

Jason Rodgers

the the for the -- for program still And XXX Turbo additions is issue qualified And year? in figure then is the candidates Field moving any finding on that to there? planned

Olivier Filliol

Believe approve me I it's be have attractive I process selective good a more one. and because can the just to think for proposals that most go I always

and it this to As context the and reach -- top-down we economic the is to a of reminder, good countries in business lines. industry comes how have or continue bottom-up a also and the also opportunities very we review But economy of the review particular kind we process segments when opportunities. in

coming also I I certainly mode. the topic here are But Turbo are and approved. annual in good And around be the that review. budget around a still that will projects feel weeks program good Shawn feel in we the that I the investment about be about and already will on our we further will and

Jason Rodgers

And then the to any was $XXX expectations change last share lastly, I the year? for the million number repurchase think given.

Shawn Vadala

No. all. at changes No,

Jason Rodgers

right. Thank All you.

Operator

comes Couillard question of Jefferies. next line from your the And Brandon from

open. is line Your

Brandon Couillard

could you help with gross the But missed between I this. year-over-year currency just margin afternoon. pricing the tariffs? sorry if us and of the bridge components Thanks. Good Shawn,

Shawn Vadala

Yeah, sure Brandon.

before had of Kind points. basis the had kind XXX up positive make gross of basis pricing the effect things was good that up the ways mentioned both variety was tariffs, So we And was margin. XX X.X%. about which about the as That going quarter offsetting I of in then to a an to impact bridge. points of of

Brandon Couillard

net and other on the And interest just Super. an expense year. then update for

Shawn Vadala

Sure.

million you. So we'll interest year, the for check $XXX the for have double Mary sorry, expense I'm for sorry. Oh, sorry, year.

line… wrong the at Looking

Mary Finnegan

XX.

Shawn Vadala

XX your sorry. the for was question? million. And oh, million what Yeah, other $XX $XX -- year.

Brandon Couillard

kind net all interest up other rolled of and together. just guess I

Shawn Vadala

that way. then would $X.X And income the be other And million. would by about be Okay.

Brandon Couillard

Thank Super. Okay. you.

Shawn Vadala

Yeah.

Operator

there you this As are no at time, continue speakers. further question may

Mary Finnegan

Thank you. this Thanks Maria. evening. Hey, thanks joining us for everyone

Have back any the let have of you. to you but if we're nice in China, a easiest questions way just us Take Hey, night. are to email, get care hold probably us always, get so everyone. through know. happy As to me we is or a

Operator

conference And this concludes today's call.

disconnect. now may You

Mettler-Toledo International (MTD) 2 Aug 192019 Q2 Earnings call transcript