MTD - Earnings call transcript Q2 2022 | Mettler-Toledo International Inc.

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Operator

Good day, and welcome to the Second Quarter 2022 Mettler-Toledo International Inc. Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Adam Uhlman. Please go ahead, sir.

Adam Uhlman

morning, good and you, everyone. Thank I'm Adam Uhlman. for to welcome responsible Investor this Relations happy I'm and Mettler-Toledo, all at call. I'm of to you and Finnegan with with Chief Relations. Financial I Kaltenbach, Investor and Shawn Officer; Officer; Mary joined Chief Vadala, course, am of our Patrick Executive our

today's is mt.com. the cover me on A on refer the release and and copy that available matters. replay we on to is being This of is Let for call our presentation our will administrative webcast some also available call website at press website.

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

these and discussion with of other SEC filed discussion to Form XX-K risks most a uncertainties, and reports the please the time from in For our time. see recent

of non-GAAP and the use Management's by most and financial statements information Discussion respect of qualified forward-looking measure with in X-K. future filings. and GAAP sections between our and use One the on detailed the in of of Operation All captions, financial more affecting provided of the Business our measures. to the in Analysis reference Condition A we measures their item are factors entirety to factors comparable call, the non-GAAP under and other Results and discussed operating directly the Financial is results today's the may differences

turn the Patrick. now to call over Let me

Patrick Kaltenbach

very we well as morning, reported Adam, and executed call joining strategies. growth our quarter strong on second results everyone. from which good We morning, We you doing team are this appreciate our Thanks, our Switzerland.

compared growth culture and to detailed have focused agility of inflationary outlook feel allowed market in full the despite combined the drove growth favorable year. margin for with with our in growth of we presentation. and Core pleased on very EPS demand strong Industrial in very prior XX% challenging and positive adjusted had of are Shawn? will We our be as guidance. Local navigate about chain sales for we growth on the our quarter me are now QX sales recognize highlights We X strong and currency. Page and laboratory and foreign navigate quarter good us China. Excellent Our to some to increased and the in the improvement conditions. good adverse performance second and our agility The execution supply our cover currency turn resilience Shawn comments capitalize the on and Later, market financials business, very conditions. business, I but have to year, to will let pivotal it particularly additional

Shawn Vadala

represented Local increased year. a which first region X the sales everyone. of first of we XX% X% Asia/Rest the sales half that China estimate XX% show reduced in sales to #X, in China increase in On for X%. the and area. sales basis, headwind with growth the On on a and Russia-Ukraine in growth dollar the product Local local year-to-date the Slide XX% by #X, Americas, X% by sales a a quarter of of war the sales Americas, summarize we quarter. as reduced currency to and Slide months, Local sales in U.S. Europe On X% due million, in the growth we Patrick, We currency sales World. by impact for in was currency in region. about sales currency sales of increased local growth. in show increased were Europe good of X% by morning, XX% XX% in #X, On in $XXX.X XX%. currency grew Local Thanks, growth XX% Sales currency World. basis. Slide currency increased the Asia/Rest XX% growth sales

For increased Retail the Industrial The for declined first Core Industrial growth up retail sales Food the by the Laboratory up including product X%. next growth sales product currency sales X%. increased increased Food Industrial slide XX%, in increased XX%, and up half. X% product in area Core shows quarter, X% quarter. X%. XX%, with Laboratory Industrial and XX% inspection grew local XX% inspection

reflects prior in was quarter profit XXX final operating of margins a amounted Other to pension XX.X%, currency now in higher the $XX.X combined the move was Slide reflecting which the benefited strong primarily to was quarter. Adjusted in local profit increased margin basis $X.X of reflecting to amounted A prior P&L. the rest increase in a increased a year, points. sales an and currency-neutral amounted the Amortization which $XXX.X in Gross and X% period, a P&L was points. me in an to operating prior quarter, SG&A on quarter increase growth to over million is basis, volume Adjusted an by good investments basis the material million, growth. year. adjusted increase. activity. project currency XXX over million $XX of million, amounted in interest nonservice-related in X% Currency million margin On sales We increase operating marketing. #X. with from the the to includes which couple on $XX.X the XX increased summarized which million points part offset the local comments Let basis increase quarter, strong XX% XX.X%, pricing to R&D income. of growth, execution. represents headwind income the amounted X% quarter, in $XXX.X The the in expense over was increase is which costs. operating

amounted in EPS the amortization, rate discrete an currency, and exercises. for and a year-to-date the This intangible million due rate adjusted $X.XX diluted to the currency. XX.X for which stock tax X% items increased million. unfavorable is before quarter, excluding $X.XX, next our basis period. expanded results. a let our on option foreign the tax $X.XX of is the or cash quarter. XX% timing illustrates free year. difference excluding basis the includes P&L was quarterly On the our or In or flow. to flow EPS XX% the of currency. XX% year. quarter between EPS increase in Adjusted increase, quarter. margin to the very XX% to option The cash annual to pleased effective prior operating due XX% X-month EPS prior in of the purchased XXX adjusting prior excluding from That Adjusted comment year. EPS reported me stock XX% in was unfavorable $X.XX shares EPS covers restructuring exercises $XXX.X compared as income was the the quarter, amounted decline the of unfavorable sales was Fully over Our on timing with for Adjusted foreign and a year and points. $X.XX of given basis year-to-date than rate adjusted operating XX% a grew quarter We're adjusted that especially second now up Local in growth, benefit quarter, grew more last in currency Reported XX% the a slide the $X.XX XX% this and

was the days to XX prior year. We declined in continue days million. as $XXX.X came which to compared cash Year-to-date X make flow nice to improvements at X.Xx. on free DSO, ITO adjusted

Let turn guidance. me to now

to conditions. continues given be Forecasting dynamic challenging, market

forecast of growth factors can control, remains margin initiatives. our remains focus Our we -- on successful and namely execution our on

on specifics. general comments some before the make year the me full Let covering

about is chain, navigate macro noise our well. there continue the X and remain been While challenges demand to ago, environment to to initiatives our them cautious supply solid well. compared is but feel in we the able date, growth business. are today in on Customer months we about We more executing as very have to good

foreign greater to earnings to headwinds as ago. compared exchange our months are we growth Second, facing X

Including earnings of X% Specifically, range a and in our approximately EPS as be currency to adjusted now the initiatives. of quarter fourth the reflecting foreign adjusted the in basis, headwind and for At of growth margin to expect now headwind EPS earnings this is XXX our approximately to compared to slightly in quarter -- the operating currency a of year midpoint our the will now X% on growth a that last basis call, headwind margin we to margin we second At currency, on points will currency-neutral spoke. estimate we to the the headwind last X.X% similar growth good increase reported well. expect would approximately X%. guidance, we be means be time higher. higher year profit of half execution adjusted time in volume X.X% What of operating to a margin was the profit expect the full the as

sales our think due of in you guidance, growth through as remainder keep Finally, reduced to for approximately Russia. will by year our sales the sales mind, in be X% the

me let the specifics. cover Now

XXXX, of XX%. the in year of growth X%. we compares guidance range now currency full to the to local be previous to expect For X% This sales

year-to-date results second outlook sales half. our better our We strong year the increasing are full guidance for and for a

range the rate $XX.XX excluding full growth We $XX.XX, of of growth a XX%, XX% approximately which adjusted be rate to XX% in of to year is to and a expect EPS currency.

EPS excluding in third $X.XX to a of currency a quarter, growth XX%, For based we $X.XX, adjusted growth currency. expect a conditions range expect growth and to sales XX% be today, of rate on market to of local XX% of XX% approximately and to X% the

guidance. we about on to the expect in X.X% With currency sales Some growth, decreased impact year approximately sales and final to sales by currency growth for details the full on decrease QX. respect X% of

XXXX. continue shares cash million In expect flow in approximately $XXX we terms $X.X expect flow, -- cash range year full we expect billion to the repurchase to in and in of

turn leverage it Patrick. approximately I'll X.Xx. That We expect my net back a ratio to of from and side is debt-to-EBITDA now it

Patrick Kaltenbach

Shawn. Thanks,

businesses, me with comments on our operating which the product quarter with very categories. with had growth starting Lab, growth Let sales in start all across strong major good some

share we in to market portfolio and product our effective excellent markets marketing continue remain end to with our business. And expect favorable. believe and our We initiatives, Laboratory gain we can sales

business. Turning Industrial to our

are Industrial. pleased We strength continued with very Core in the

we chain. is to little challenges for optimistic lower overcome inspection well came than Product and efficiency for team supply they year this our quarter. our and on remainder sales quarter expected in is business Our outlook gains productivity labor improvement automation, work is needs, but this capitalize market in of third the a customers' to favorable, the the and positioned believe as the

conservative more some We food in strong see packaged have in started Americas but have customers' momentum behavior to Europe.

Finally, Americas Food a as and X% Europe pandemic in sales the in grew China offset significant disruptions due Retail to growth lockdowns. sales decline from

some Sales growth make about additional against had year. quarter, geography. X% me the increased prior the the let Europe in in expected by Now XX% as and comments we in

Ukraine, quarter shipments World particular strong of great The finally, of Europe. Asia/Rest strong the China do our was, navigating Industrial. of As major Laboratory with growth in to Industrial. to product a after growth of growth Core had the growth in Lab grew a challenges in in across with excellent which team growth reminder, Russia with invasion is and continues again, robust job market. another and XX%, impacting And all Core the Americas we stopped the in double-digit Sales categories.

Assuming China continue remain XX% in momentum business. growth believe and market XXXX. on grew we in they conditions today, deliver the show final as in Service consumables comment One to excellent quarter. strong will we the and are

growth the this concludes of part profitable and business. in with comments pleased very are That my the important the business. We on

to Now I initiatives. sales like marketing some you on insights share would and our with

growth is pandemic agility recovery. provides Spinnaker of our have subsequent both accordingly. opportunities seen and in market downturn agility gain us quickly this share helping to invaluable scenarios, the was years demand The adapting in the force to and the environments. the and sales in We recent provided identify customer that initial guide effectiveness Under various evident Spinnaker

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continue initiatives, difficult marketing sales for strong and which refine copy. our We makes build, foundation and our for it to adapt competitors already and to reinforces

potential products, the customer are with Our Spinnaker for are summaries use these The our and the to proprietary this information, for potential sales cross-selling relevant generated. from then these for more investment opportunity offering. guide teams. our also up at throughout all customer projects our to alerts These sales activities customer sites. us customer our XXX,XXX follow including these Top data A we With penetrate broad identify these the summary and organization most and structure Top product generated potential opportunities world of program opportunities organization site, info, with opportunities to Top we analytics than other is program. who Last benefits provided K and to actionable K sales of the with K, of opportunities. teams contact allows efficiently prioritize year, to opportunities continuing qualify

chemicals. this year's vaccines, also and follow battery for And foods markets and with While launching include, this and semiconductors. identified up the we lithium-ion pharma, industries Target year. we we materials. include continue are opportunities fast-growing food wins also and additional to advanced Other beverage example, in examples last alerts, of for wave plant-based

identify rapidly. helps happen seen have accounts demand, We growth we shifts are quickly convinced and adapt opportunities that quite to related to in all our us to unique who ability customer can

cross-selling Face-to-face on-site to be value-add and Our again. sales solutions teams to to potential, also happy allow meetings customers able assess identify very are key us our best visit promote opportunities.

the However, X interactions saw, can during we customers also be. online effective how years, last with

sales virtual online significantly enhanced the meetings opportunities including online have to or meetings, leveraging We webinars smart mix to our of a importance of recognize and orders. convert capabilities, remote e-demos. on-site We and

contracts Net a our a terms Internally, the of has service the service the Finally, right service sale at we importance the be We Scores. of the for This organization sales years of in selling at the of focus our quoting point saw when very revamped process. X contract to the articulating high-priority process sold. of of point value our product the us. ensure favorable Promoter throughout continues is reinforced have value service to the selling on focus critical is last

requests. front-end The version handle reps providing prepare tool introduced new to sales site that to also and directly enablement team more efficiently our have be visits update includes sales an dashboards in sales for library follow-up digital CRM, We updated our allows value selling. our software upcoming effective into tied of our

I provides conversion customer selling the improve applications our great the end how in to resources greatly guides, are targeted also us and not best most to our strength effectiveness reallocate marketing growth a core helps examples teams example yet is our process, in the This growth and and the enable we guide These our this potential successfully experience the of sales. opportunities. improves new the have to such solid. thereby to adapt which to to by us rates. is At last the demonstrated strategies the market few of convinced enhancing best teams the markets. in Spinnaker provide changes Spinnaker, importance several And also just years. we and as cross-selling a do programs, enablement am penetrated. identify Business in that selling sales order information have Our remain with helping the sales favorable to today conditions we over tool tool as conditions sales opportunities accounts agility enhanced application illustrate strategic our will

mix ever. stronger is business If than at you the of look it today, our

growth industries. XX% to pharma XX% from like within Our from of has sales opportunities our sales to same of as sales approximately our business in end biopharma business has has grown Core of shifted mix the our more markets. sales, XX% and changed target XXXX time, we of secular Laboratory Industrial that and today favorable XX% the At our to our

our estimate fact, that biopharma, sales more In our service X/X consumable is of pharmaceutical, Core manufacturing with remind we I profitable. approximately of business Industrial and And than chemical would that XX% you our are and very now revenues food customers. and

Our food also science markets. about diverse of estimate many of the other life to to we that, about are beyond breakdown strength sales total beverage XX% Today, market customers, to our end we our and And business. chemical. XX% reinforces and serve XX%

We to Well, prepared nicely diversified. are we to biased clearly remarks, more at open markets and, questions. same call time, that the concludes higher-growth and our towards want now the

Operator

now. [Operator first Instructions] our We will take question

Your open. line Please ahead. is go

Vijay Kumar

And a did talk one, Can guide? inflation have you prior and mention how on here. the inflation. assumptions congrats pricing you print about versus really pricing on strong Maybe and changed

Shawn Vadala

Vijay, this is I'm to happy do Yes, that. Shawn.

were So chain. very in supply pleased our execution but also with quarter, on our in we the pricing both

organizational use I think us word just across really organization. the fantastic lot, execution a you but continues the hear agility global the be to and agility the

about expecting kind at look into in came quarter. of quarter, kind we we you second pricing was was when what If X.X%, the our better than of the price estimated which realization were

pretty second kind is of also just mind. which at continue still the of like say much On elevated and bit were little came your a material was kind I transition expected costs and into level. elevated quarter, remain of which in better as the QX Maybe I an would of sure than we material remain they we side, year, the as into the I half here but I'm kind

it about point about the Last So the we're in you include XX on currency, point year than of of higher us of second now I our for for number more than our then our currency-neutral points time full we we're on be reported guidance. kind the a And about drop our of in as XXX is right put more the in to for basis, margins, a of a at down full to range if about if mean, that And of you right if if year, looking currency kind margins, QX kind gross so, a is year basis of assumption now, would and or basis basis, which then range. a operating XXX excluding were translate X%. right on actually, we kind price points. a margin about basis point basis is operating spoke want would XXX margin currency estimated basis. And reported -- you on exclude bit margin about about the points now, little realization kind currency-neutral a think basis And in operating at the half QX a basis, X.X% thinking year. year into then like and XX the a full basis, basis X% XXX on which that probably reported improvement full about you

Vijay Kumar

slow What the one you implication versus 'XX, 'XX, mix was And And compare helpful, Can were business comments last if changed. business has 'XX that for and how Patrick your on has the towards the in and end contrast back the for then that mix here? changed? on down maybe economy mix cycle, to the how what's 'XX? extremely That's the Shawn.

Patrick Kaltenbach

in. I'll Shawn, first then and you go Yes. chime

Shawn Vadala

Yes.

Okay, that Vijay, maybe take I'll one.

business. Lab business So of our if today, look XX% about at it's our you

exposure. me of about business. business market it and look have But within over go back it's you Industrial what's our have to XXXX, if Industrial mix XX%, would would now, end just Core think, XX% it And at and is 'XX, the back in overall our I more even been then our about interesting you If to been, right XX%.

business to now, we our is historically biopharma, chemical estimate Core manufacturing. more XX% is that sold which of So right more pharma, than today than susceptible XX% food the into more and business, of economy, that would Industrial

So continue I job think end of business we segments. good more attractive do a to market redirecting towards

Patrick Kaltenbach

me to let course, also of and add that. Clearly, Yes.

the strong We're And by We in across well momentum Lab as markets. healthy at seeing as are driven the Industrial operational market needs. seeing very businesses efficiency demand the they moment. automation and end both go both

think from [indiscernible] So are well the customers. to markets I very right products both of our serve benefiting the

the We segments. are really happy with [indiscernible] for of both

Lab a Our this lot know. units. bigger much also to as and we products And lot is of both course, the year have good continue a pipeline of in launched business, products have exciting you of for

QX so So on this and the outlook is optimistic for QX. why we're also

Operator

next [Operator question. company will before with ahead go name pose state Instructions] our We question. your your Please you and

Catherine Schulte

Schulte you Catherine year? digits the rest is Baird. the for for This currency that do we I view growth the about local expecting growth the upside I XX% you of guess in region the China? single were the talk quarter How with drove can think first, there? what high so for

Patrick Kaltenbach

Yes. first well. Thanks, Shawn I'll as the and chime Catherine. take let then question in

We sales So -- really really are XX% to year, sales strong remarkable the Core growth XX% pleased in growth. job mix of delivered our done year. more all growth Shield has We good segments, very as in product reminder, Lab the our And growth the our XX% particularly yes, also business XX% about of had growth second showed we exactly of strong our attractive second are mentioned last China quarter Shawn in we strong also lines team the a And in business before. increasing as Industrial. saw Lab growth, given in exceptionally very last is the quarter which also grew growth. so almost quarter. across of we with with a we

that particularly talked this driving have We automation for demand in we strong efficiency seen about. solutions

But in so we very really underlying conditions don't change. confident if China, the on China And they optimistic. quickly can So far, for we are are lockdowns. market change

half as well. the are expecting we I As growth second strong in said,

Shawn Vadala

very a kind know of lot I the we Yes. lockdowns was as mean, quarter, but we add from impact much. don't China minimal quarter. had concern I'd of the perspective, really about there our I I entered during think

leaning themes has that about, lithium China our you portfolio. production did are into job in hot many in these with we of well. they're think as quarter. stimulating most China able a very into their in as course, actually prevalent that that Patrick a of We to are in first to a locally then, plan, of beneficiary companies government's as think all terms and navigating also prevalent that of of I team I well. product flows digitalization. that one And think of wonderful battery of of are Shanghai, the our they our we're team the our that. going really were the keep I reopen been throughout we're are lot I our course, well. they're which is about that these know mean, And semiconductor of how themes economy, outside leaning segments about Shanghai And then talks very talk automation, Those also too, and X-year And

Catherine Schulte

And you slowing bit food the year? seeing Okay. to businesses view talked signs that And a do of product customers have in inspection Europe. Europe? packaged other in rest then seen the you from unfolding of for conservatism any the on some more you about How see start side

Patrick Kaltenbach

Yes.

in are Customers that actually inspection. in for We see the food. capture it's inspection a just careful where don't their a see first me in product investments Let mainly piece. little packaged the bit U.S. we very, little in more with And us conservatism. strong still very Europe some yes, The is U.S. product bit --

bit also do -- Europe environment We have good and that environment conservative. But customers course, some more in Europe cautious of the become has with overall that, very a there. to pipeline get economic more a has

and really rest we our with seen the Europe in mean, pleased we I of quarter. growth On the the businesses, that other second have are

single now businesses As see It European to you have concerns in in any or We any team had last in also don't for know, came and we year. other the of quarter of is Europe. in parts better, against digit. XX% expected our the growth this sales low right come

place. this I the to with of change real monitor the carefully quickly, fully the be no, very and a supply, that no have as mitigation need plans would situation we So in agile put course, But and can we time. right energy say downturn of market signs given conditions, change which at we acknowledge also

Operator

We to next our Please on question. ahead. go move

Matt Sykes

Sachs. are Sykes, Matt now Goldman of mentioned services total you that first, revenue. and Patrick, Maybe It's consumables X/X

Just And given mix? your plans recurring can long product that take product potential that, term. the mix, like revenue you just to the your given are wondering feel do what you where over

Patrick Kaltenbach

Absolutely. Good. Yes.

Let me start with that.

we foremost, of strong. also and very still So service very, first I ample think business, have opportunity to is which our grow

instruments. we call break would the but part We not a and what have fixed say a of And would of huge big is installed installed base on services. base currently I more under contract it's calling

also talk time. time being service proved contract, and every then the on have to some we a drives the there They means of from growth to they which contract with customers and response we access of opportunities have rate fast services. about a value are we they have have broader services. go under faster They contracts if So portfolio a have our

course, that. focus, portfolio on team instrument also We high-value strong services very the point sure for overall, has focus at customers, our more of to connect a continuously. we of making adding a rate. better And at services we increasing our services get have also of strong we are sales, right sell The

bit, really and I of that making course, see have little growth And this in we double-digit trails our to last share revenues a growth, Services increase. progress also continue service the service forward that for strong strong growth. good the having on we're is to reminder footprint. but XX% usually confident very service that broadening again, instrument a I'm the that, the X Consumer of had mean, So very years, we

and our from at has perspective, not Chinese it grow potential a regional very Traditionally, of to have that. my we I even of From that other every takes optimistic China, self-maintainers have, working very focus that automation you the the areas, with in perspective, also a Lab to services history of more part also business that change moving meetings They business share consumables. and package very I'm seeing and has titrators, the share more putting well included the If services. being increase with pet leaning sales been increasing forward. are were products a as of been internal other we to on consumables. U.S. instrument, look healthy solutions, much in how In in we they're example, strong still I'm the example, the for the time Europe. have, The of and, market business, In as can they with overall we and are it business, a into it come strong that as for lot consumers service. course, mentality, all

long business piece So I'm term, will that the we further optimistic the consumables. service for in that of and move X/X

Matt Sykes

Great. And of a then general question. maybe more

in automation as that? challenging decision you automation customer it position you're trade-off a might conversations if but discretionary? enhancements the not your do money are spend meaning that spend from than to see more capabilities some your they from Or Just want productivity do your might terms the environment, to automation given not more for of have and a the to see going want you of just and offset capabilities to is strength you in purchase, more we of have the seeing economic there, discretionary

Patrick Kaltenbach

question. excellent an That's

automate continue think leaning their productivity are, interested second large can in more this robust, where Industrial is productivity. direction. we automation play part more alone. their to in and not for although actually get of businesses. customers "automation" customers big several we that factories is that look also, driving course, all why to It's This as really even labor them. Lab. solutions. invest and right productivity sure possible very you is them are to long-term What or hearing play much from profit. that about to are automation Getting of now. driving drive reasons, in making gain [indiscernible] that -- when with in as the and processes also. for performance your driving It's more very the sure automation automation their cheaper And well end, I It's they that the they making of the reliable in are the in manual out in they make question our It's business right gains that, the the willing that at responding It's you

Operator

to your We question. before move on our name company question. Please state and your next do

Patrick Donnelly

what the X focus Patrick it maybe is amount Donnelly little on X guidance? maybe trended Expectations quarter? versus similarly, maybe Patrick, This a cadence you terms of there? And bit recovery? back instruments Can -- saw another the going to consumables, going saw the just you in about How a the the you then what bit forward, come on given of there little just talk from just on throughout of just just there. China, versus lag the Citi.

Patrick Kaltenbach

out The In continue to China say, I significant or to who a during let's also quarter. they in itself, locked for didn't really from customers down, home. call look, team reaching quite the the they're where held of up areas was have have us. provinces folks been the in, slowdown even some we sales strongly mean, customers quarter

referred well. about in tools we other some We fully engage our of how and leverage digital the with customers. also They in this China can calls in -- our earlier as

we a side, on And know, Shawn, haven't difference I quarter. of heard And perspective, So on seen the if recovered I in real we terms anything I don't dip momentum, all. instruments China. versus quickly. order haven't the there was very but no at in else the different a have throughout very, would manufacturing consumables you say

Shawn Vadala

mean, the market of of very retailing going portfolio. mean, the portfolio. has the And strong Laboratory lot business. nature store But business. of spot a X% the both No. did lockdowns, throughout we the on is by growth on double see on is been digit, hard that grew hit the Chinese closures product side but rest of the that of absent What retail I was strength of a less the lot our there food throughout mean, country. inside just is than I and in the what the just that, the lockdowns business, I see it's total of -- side one the Industrial the food breadth maybe well nice soft to of we as was was business our as

Patrick Donnelly

there. No, And quick Okay. for definitely one maybe a encouraging Shawn, you results there.

the if then guidance Just well breaking it of segment the have you terms just do it by and you XQ, growth for as just mind in out of geography terms in rates?

Shawn Vadala

Sure. full well, the I'll result give as you Patrick. QX give and you I'll then year

So me with start let divisions. the

double-digit Lab year. the growth division single-digit high QX and low our So growth is full for for for the guidance

for to our be for remember think digit important product QX to high in retailing, to going full of last the full the the year. range just in the of more And and Russia digit than the in of that QX digit digit geographic year. Core for full given half. digit on basis, year's a our for half guidance have for half for first or is Russia mid- to mid-single the might Industrial, headwind. that the be Europe a year. And mid-single guidance guidance seasonality and It mid-single of a is low our QX year I to little then we're in bit the to terms high so digit low high second flattish X% could it's for second to for food For and sales, inspection, the headwind single for high guidance for year. single And Europe then full is in in mid- the headwind year. our and single QX And digit single the is low

approximately single QX the digit year. -- low is guidance our digit then Americas, In our for double And China, full and terms for high guidance full digit for for is double low XX% and the of QX have for year. we

Operator

Please move to go ahead. question. next on our We

Your line is open.

Dan Arias

Dan in capabilities up Arias the function been had are a you a it where just you're showing that finding have that push is the evolved traditionally Or and up harder successful? power has you you've of bit from before? able pricing internal what own Stifel. in the pricing the it market areas is just that pushing in to hadn't overall. areas through where really maybe you as Shawn, your to back evolved, and Maybe to step going ability

Shawn Vadala

approach a think look product pricing, our I really categories. the -- like the we ask if to from just try the and question, hey, Yes, do lends to way about a and moment, Dan. to mean circumstances, most to good we geography. talk the higher conditions tailor in by that's business and the the I whenever pricing we pricing itself we cards it to at And differentiate we're dealt of at kind perspective how you always

by do that's sales this force, people is they looking we because in that And more as regards, what And is solutions. than up customer. emphasize try propositions. to And about Q&A they are so direct productivity it. it proposition, our Patrick the then can we build and category organization this then really in articulate value the higher educate is And for can that value -- they is then previous look product environment pressures environment they're to much also And important cost was we we our can really geography. many the like were seeking and in do at category what the with we I that our and in think saying

plays that the well price our very to portfolio ability to position so increases. And our and overall

market the able organization, helps the too. think it we're certainly of then understands very much that. if to I So the execution customers, And at support you look when

in what to I ability customers that? think increases with to of -- lead certainly mean terms compare times I the competition, that, to by chain. challenge relative look and mean, support moment. pretty also pay. our at us and that some And willingness like Just I of we I good things the customers' But level so has every if think you we our in do company supply

been And So the it's of we the little which better be QX. in really half just to comments, even to better the we the price realization, think I lends good, previous execution itself environment, my actually in has obviously, second bit a year. saw expect and with it

Dan Arias

or remember just -- at a XX%, to the wanted end to consider don't the needle for so XX% that the B, Okay. guys I are ask I Very last correctly, that helpful. And full those right, it point. time I the rollout? that of follow-up, global then If really comes at much? meaningful XX% right? cetera? the so about think across a that at move sort what to Or XX% would users if Blue et that is Maybe is as A, implemented this And you of visibility, line margins, -- day, or is number as Ocean. XX% that regions pricing, is when of you all are is

Patrick Kaltenbach

the on to use within process company. a for across drive many will their current company. productivity -- it And Look, left to running and ERP help we around this then Yes. We get template Shawn are first a Look, in Blue continue chime there of of number the XX% as the I us can are I'll common Ocean still so of mean, well. own they systems. that let shared on are countries the we definitely to I'll bring use rollout far. or

efficiency efficiency in So cost an drive gain down to company. a use internal across the lot of also and it and terms just of is us helping

some there On is -- Shawn the let take I don't side, pricing that. I'll but impact,

Shawn Vadala

Yes.

tools centralized discounting then that. we have like a me, a and pricing administration, the when improved mean, I lot a embedded things lot also about always we'll of that terms processes manage processes. we but of there's side, and benefit Like from controls On think part we'll global how too. of also price of are business around the you to in And analytics, big -- pricing can it,

live. And market said, World. And go mean, primarily is with some then before just which Ocean. organizations in the Blue and just we by those expecting overall in with left of you end-to-end global about I very always comment the that smaller general to We Rest for Patrick, who Patrick of last of there's much go instance integrated next harmonized fully it transparency benefited years largest handful X benefit And service, that are HR of ERP we we're visibility CRM there's organization So hand like program. it's when an to year. a that from Ocean, have we our a our Ocean business Europe I live and and enable mean, Blue maybe but see of less in always having is with very, the I into we the familiar processes, Blue back more single couple business. have over France,

which So very single last over couple much we've have instance, of then of transparency, interesting years. benefited very we a really with from X lot the

Operator

go question. ahead. next We Please move to on

Derik De Bruin

It's Bruin De Derik from America. Bank of

So how versus higher couple interest and rates you guide impacting question. fixed year housekeeping the of expense Full a a are variable? you and in done how net, little are for income questions. first, Shawn,

Shawn Vadala

No, question, good Derik. Yes.

for -- I know so it's So we today early you -- and morning. for thanks apologize early for the

also XX% In terms at next the have in we're rates, year this we the about in interest exposure, short any maturities And actually, fixed when like or prices moment or mean, of which and a a things. significant like of of out with term, year. at don't I variable lot smaller then our that about probably look couple X% is so. you euro,

years. look here. over we're last And at few you even at end well think been positioned what last lot the XX-year like last locking if few we've done we've in year, over of the kind pretty just a I debt So years, of of the

We million in December going in March, in years XX we're XX-year last and debt another X.X%. of in funded funded example, for September we to tranche just $XXX for tranches. priced that X.X% So at X of year, then $XXX fund million

the interest And to or positioned. be so this on for for feel specific estimate year is term, we're like, well our we million. and pretty medium And short expense, then $XX guidance

Derik De Bruin

pricing customers' things? -- have have picture. your the With moves, people on pricing the impact power, basically you also seen Great. but And just hesitating and just purchasing because some any bigger the another budgets they currency for given more didn't question

Shawn Vadala

it's think I opposite. mean, just the I No.

question, kind appreciate I And really much and the they just to trying value -- there's support how balanced like environment very it's in terms it. very inflation to of it's people them. appropriate much of story, do increasing a think was think story like ability we're way I with where this answering I course, appreciate in doing of associated things and we're the the like prices a cost in

I we're And so the any we're proposition between approach overall providing, our just noise. really and hearing that think value then not

Patrick Kaltenbach

said, a really, a become cautious [indiscernible] in product not with little we bit bit customers as no. Otherwise, inspection And maybe more investments.

Shawn Vadala

mean it's and It's -- European on to pricing -- and a say PI, as topic. much I said clarify very where conservatism in a Yes. product just get of topic it's going the There more to are projects been a I packaged delayed -- more some wouldn't get we Patrick inspection. for that sense -- some has projects the foods we in maybe Europe. earlier,

Derik De Bruin

in anything of seeing or And then of of you're on inventory, what stockpiled? the hoarded any have more. of tips, your just that's like X maybe Just people customers. [indiscernible] sort commentary Is there signs some sort like that electrodes, pipette long life of sort has shelf

Patrick Kaltenbach

supply, not biopharma are into these the That's not coming question, seen, usually we I pipette but Yes. that suppliers as of have research, make a just the to customers is labs many now. last normal back tendency applications. had, tried sales And we beginning many would in mean, broader even realize up year, they into we, exposed. a pandemic, the do the try say, possible, testing that have going as you also of a customers we buy course, of that electrodes I have other the stocks their would to lot and that of at hear the much from tips. I the tip good as lot during industry levels, testing possibly stockpiled have say, same more pipette have get probably a And bio pipette or tips to, don't as you levels or we to in we that not going been have filled their stock but day as have more heard year,

Operator

line is your Our next question, open.

Josh Waldman

follow-up on Josh Cleveland Patrick, product It's a Research. inspection. from

commercial out lighter the or softer sounds curious or quarter QX remains was assumptions growth the the more And it versus team guess, result not reflected pushing a just in and order guide, like of in than a Your HX plan? how but recent trends whether a installs like bit reflection was down have optimistic. come kind of prior intake? of were slower the I

Patrick Kaltenbach

question. Very I little than have good bit Yes. the Well, softer a Margins like But off mean, not bit is QX had softer. been thanks, not we huge results by look, factor. a Josh. a It's expected.

by digits. off more lot of We was projected single A X to high in actually not a so I think it's mid-single factors. came that we digits, far. triggered had by bit

we not the the full this And seen upper have seen a have because they supply of infrastructure. side, didn't have then into it the because necessarily project we customer some We usually, some -- larger but pushouts the on also money, piece they our the whole installations just but product were to of were line, inspection flow quarter. final to so make take suppliers not ready speak, not ready of to

some also in to on was, in come able been delay suffered of didn't side, has from some there of that just the to the we supply quarter. led this not chain So pushouts. everything actually could being components deliver What so electronic time, in terms we

pharma United the we States. said, The quite we for optimistic sees in are especially As good a team QX.

are the We have monitor the situation to to Europe. with But we otherwise, continue guidance. in okay I think

Josh Waldman

price than additional you Would the is you here is any thoughts strong maybe segment to in underlying in hear expectations or Got lab segment. the the I in And benefited has love upside in in from it, whether okay. coming Lab demand? what this the gains on quarters. guess quarter? driving China outperformed consistent of of better just testing think expected, share kind recent much And how then mean, COVID just I have

Patrick Kaltenbach

automation COVID showing that. happy solutions segment, segments what product broad-based demand strong we strong Look, mentioned demand is so cetera, with like biopharma. segment, accounts show with big we Should sales board, the have They targeted very that Yes. solutions. very again, right I factor mean, very portfolio. that of call across And with we just There biopharma, Chemical remarks, we our quickly solution, automation application to The again, our hot what the our for also in is add demand very are the portfolio. if et for have we drove I also all you across battery about we China especially where but force of this growth regions I growth. these pharma storm a testing strong all, lot need a being and mean, wasn't at for food, think the our very see across in plant-based mentioned continuous across together from we

Operator

We move on next to go question, please ahead.

Rachel Vatnsdal

JPMorgan. is Rachel This from Vatnsdal

replacement resiliency, recession replacement So questions through softening can you any what even Or the how softening earlier given that thinking macro see inflation some Do of just demand us can kind the of pull budgets field sticking the cycle, customers you and really capital for evolving about with your dynamic? the these a some and of levers walk inflation? new recession Mettler products? cycle are on in

Shawn Vadala

jump to wants and this is Patrick in. Rachel, I'll it, Shawn. take

delaying at indicators our we're any than that that this there's look other So X replacement indicators not or we any talked when about any with are about people have in concern seeing Europe, business, topic that any cycles. packaged we -- food cautiousness

the seen the go was is At XXs good to it Europe, to have to people And remind we've of enter need had enough didn't with one in enough. the we've it economy replacement same and past, double-digit PMIs high because try be to but that still in the the need economy, that As we cycles. be seen we typically high We time, cycles. that were about about it we sticking next this the will we into the growth. good to mid- talked phase into of to in and thing we in XXs, in mid- stick kind people we've people like Europe, growth, PMIs and replacement past

our like Europe, that well at the that most a -- need our enough. the part then good selling in average exposed to are business our are just is of less economy than which arguably just And we And moment, geography of selling much of is to that kind on $XX,XXX. is replacement that European mind stick the cycles so be price here. the very is we products And

products the that a are not to below that's budget. in And level. we think like our say, first I'd estimate of going something I we're so actually And get cut more that XX% instrument than

direct And we personal can us. so the -- kind for and and that all stuff. sell value proposition, them sales We of the instruments they're with articulate

a these So that situation other I feel comments then to is prepared earlier. past. were the like us. remarks more lot that's we in about next the made just little favorable and of that on bit we we into should this for a in economy phase a think the And thing be compared I mix where the resilient talked going

Rachel Vatnsdal

Great. And then one quick me. one for

on You I flagged think during conservatism prudent. your supply is which prepared some chain remarks,

you're backdrop, things really but sight XQ? supply of improve? chain? can line on you given since Just continued deteriorate walk or Have have And they improved can the on then any things macro what through to do when here us you seeing

Patrick Kaltenbach

that. take I'll Yes.

we of It It's a a say bit look, give quite we but in somewhat to that. everything supply chain mainly transportation little challenges, items. seen honest logistics see light would stabilized be I improved would on What still to here. So and challenges seems green have semiconductors. get have continue not bit. I have they on certain on to

time. we really it we with the have some slight aspect, improvements. whether components already, seen in congested product still line have an getting tell you the of I also electronic But I in constantly have we so businesses right example, of of be, not. the we is making that this for issues mentioned enough less suppliers, a available. but for it's to course, in And can't who the used where still trend example, material. some We sure supply semiconductor -- get have these overall had components. calls others helps, some see that see, our Again, as Shanghai, improvement port of we

to our are very for make and and areas we in very, all see suppliers agile stay that stock we enough in sure with it safety critical. conversation very close We hoping the that very have holds we

Adam Uhlman

we'll that, morning Thanks, with wrap and think on call. early I this today's joining ahead Operator, call. everybody, go up us for Okay.

to forward day. Take later in catching on up Looking with the you care.

Shawn Vadala

Bye.

Adam Uhlman

you. Thank

Patrick Kaltenbach

Bye. Thank you.

Operator

everyone. you, Thank

disconnect. may You now

Mettler-Toledo International (MTD) 30 Jul 222022 Q2 Earnings call transcript