MTD - Earnings call transcript Q2 2024 | Mettler-Toledo International Inc.

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Operator

Thank you for standing by, and welcome to the Mettler-Toledo Second Quarter 2024 Earnings Call. [Operator Instructions] And finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Adam Uhlman, Head of Investor Relations to begin the conference. Adam, over to you.

Adam Uhlman

morning, good and Paul, everyone. Thanks, us. Thanks for joining

Patrick On Executive Chief Officer. is our the with me call Kaltenbach, Officer; Financial our Chief today and Vadala, Shawn

me and XXXX presentation at uncertainties available of U.S. Act call mt.com that statements. is Securities to U.S. copy of the different those is This These available Let financial risks, of Act also be release Exchange on involve replay may results, will A administrative from will and refer forward-looking XXXX. achievements press statements expressed and and today the the for website of website. This performance actual webcast within we meaning Securities factors and include or condition, materially is any call our on cause implied statements the some cover that our the the being other forward-looking matters. by to

please Form revisions reports by recent the or discussion forward-looking and our disclaims any or provide annual of undertaking current as except statements, and any see law. quarterly obligation to on uncertainties, any report filed The and company updates risks these to SEC. For required with XX-K

A call, is X-K to use may today's financial of available on GAAP non-GAAP is measures and On non-GAAP these provided financial the measures. comparable we directly the most reconciliation measure in website. our

turn Patrick. Let to now over me call the

Patrick Kaltenbach

appreciate joining you quarter call of our for you We presentation. X today. we everyone. are morning, the results, financial second our good details reported Page night, and our Adam, of Thanks, on outlined Last which

quarter, including sales in well and deliver Our results in team the Americas. laboratory better-than-expected execute growth continued second in good Europe and to

and our weak in market expected, China conditions businesses. As laboratory industrial both in remained

benefit margin of helped our from the earnings. and headwinds initiatives, We impact which protect and our to continue foreign exchange mitigate productivity

conditions market XXXX, of in remainder China. soft, are the to particularly Looking

our the Spinnaker product believe expect deliver continuing well in remain marketing due sales primarily are second continue of an our local comparisons for as of in to future as focused and easier future sales and portfolio. company market growth to to to our growth. program leveraging the we on share gain and we position return the innovative We execution However, to to currency strengthen excellent our half year, and

me call to our the on and results will guidance, over the outlook. now commentary Let the additional be our turn financial Shawn then with cover to Shawn? and some and back I business

Shawn Vadala

sales Thanks, of Patrick, local which in everyone. morning, and good reduced in X% growth declined by sales X%. million, basis, a currency quarter Sales a X%. were currency $XXX.X decrease the as On dollar at U.S. represented

sales declined in show quarter. currency sales we in Local currency #X, the Slide On decreased sales China growth XX% Americas; in X% in and the of World. X% Rest by in Asia region. the Local XX% Europe; grew

on of a by World. region an year. months X% sales XX% sales growth in Europe; Local we Local #X, and Slide decline the Americas; growth first decreased first Rest On China X X% Asia declined year-to-date currency sales show X% the with half in in for the growth for of basis. currency XX% the in the

reminder, quarter which delayed X% benefited a a As is recovering by benefit results. our our sales from first year-to-date to product X% shipments,

declined on basis. a local X% sales our this, year-to-date Excluding currency

product area. On summarize growth local Slide currency #X, sales we by

against Retail For year. last the the product and quarter, and up quarter down laboratory core inspection in sales significant X% declined X% industrial activity XX% increased project Industrial Food decreased X% with X%.

with Industrial decreased product The increased X% X% sales next decreased slide core Laboratory by growth X% the shows for Food local and product and retail up down industrial half. first inspection currency X%. sales area XX%.

offset X% amounted as variable positive $XX.X on amounted includes by to the in on basis local over lower to the over increase million, which X% price in margin prior a Slide was currency is positive compensation. a of in P&L, is which points to $XXX.X and move period. prior local of SG&A higher Gross year now XX partially the me an #X. Let volume. realization R&D increase million quarter, was summarized decrease the rest price currency the XX.X%, realization

Adjusted million the was operating a Unfavorable was operating approximately quarter, decrease. operating year. the points headwind foreign an decrease profit prior which X% over amounted currency basis X%. $XXX.X to represents XXX Adjusted a of adjusted of to margin in profit XX%,

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

discrete This in also before noncash items the tax rate and a $XX excludes quarter. effective of settlement of This for rate stock relating XX% to discrete adjusted audit. timing benefit million the a tax Our is is the favorable was tax exercises. option onetime

compared the option costs; $X.XX EPS the restructuring intangible a $X.XX. timing that is diluted in a basis unfavorable million, QX; foreign a exercises $X.XX, was On $X.XX EPS trued Reported Fully was and prior discrete tax the benefit which is as excluding of currency. a X% from the $XX.XX year. of decline the of tax EPS included decrease noncash XX.X reported $X.XX quarter approximately X% for to the to X% shares Adjusted a purchased amortization; the year. of prior year prior or onetime decrease the $X.XX up in from in quarter quarter, in benefit amounted over

currency. declined next excluding for margin foreign Local operating currency our basis unfavorable currency, X% and X-month excluding EPS decreased points. or X% year-to-date -- operating slide X%, sales contracted XX basis grew declined The year-to-date results. our period. on income a illustrates Adjusted X%, X% unfavorable the Adjusted or

me a capital. increase from favorable on covers per a on was free $XXX.X P&L, to flow basis, year-to-date cash amounted Adjusted prior share days, That on while Xx. let million and due levels XX basis cash now DSO flow. to a was ITO XX% year the comment working

the and the now me guidance full for our to year. quarter Let turn third

China. soft, As in keep mind in especially Market you review our guidance, factors. conditions following please the are

includes negative positioned to quarter. through innovation, seeing well well are opportunities several believe market growth not improvement. we which a not are change also We a product we're our marketing Spinnaker we we launches, as program last which conditions, significant as discussed capture sales and in While our seeing

We continue on previously and during easier execute expansion, we start second comparisons as of mentioned, benefit the savings productivity prior to will year half margin well from the our And initiatives. to very year. cost

Lastly, from approximately as XXXX will sales recaptured mind, you delayed of results update as models, shipments keep our in headwind we XXXX your face in a XXXX. X.X%

Now our to turning guidance.

quarter of we X%. third currency local grow by sales expect the For to approximately XXXX,

to sales Currency and to rates X% spot at quarter adjusted third We EPS be expect for in would range the adjusted quarter the EPS. of an recent approximate $XX.XX. headwind $X.XX to the be

XXXX, local year to previous guidance. full the currency For our unchanged grow from we expect sales approximately X%,

to We X% EPS expect $XX.XX of $XX.XX, in compares approximately prior sales full and the foreign guidance of growth X% of which expected range exchange. be year $XX.XX. adjusted $XX.XX to adjusted from to to This unfavorable of includes our EPS to headwind an

to Lastly, models. as I'd update share a like your XXXX few to help other you our on you guidance details

is amortization, for on expense $X.XX approximately EPS expect $X $XX is at Purchased approximately is total forecast $XX including million million and the excluded basis per from be pretax at amortization purchased to $XX income or share. estimated adjusted estimated million. intangible a Interest We and million. is other at year amortization intangible

XXXX. We XX% expect discrete items before our will tax rate remain in at

of XXX% approximately of representing a free of adjusted income. flow conversion $XXX cash million, approximately net expect adjusted We

million approximately repurchases it I'll That's share it and Patrick. back expect to my of now continue XXXX. side, We $XXX in turn from to

Patrick Kaltenbach

Shawn. Thanks,

also good with had compared start starting across growth me to We the especially good with had operating the of our Let approximately grew in some last on in portfolio, Americas. year. and X% comments growth we businesses, lab, Europe, which most

We margins well our and our refreshed and applications. continue across to end of benefit our innovative sales solutions from Spinnaker program marketing diversity portfolio as as and

decline sales for customers by are challenging. Our sales X% good up in Americas, in conditions our with food industrial line X% in the manufacturing although still the quarter Europe sales and significant down were a China. Product inspection with both on and expectations offset market in were growth results Europe, were with sales

recent seen has We very innovations. have demand technologies, which inspection X-ray also our benefited for from good

with declined sales in against in retail significant expectations Lastly, food second the our year. sales line quarter last growth project-driven

additional geography. the Now comments let Americas. make some me by in Starting

lab in prior declined year. against with the growth across X% inspection, grew in product while the significant quarter, retail sales good growth Our and

while feel that and a Our than longer observed well. better competing our see engagement were results And customer expected. we team very purchasing bit customer is cycles, good we

in Sales Europe X% in were better expected grew the and about quarter. than

Our results laboratory included and both very good growth industrial. from

an updated doing to conditions considering are leveraging innovative our products. portfolio extremely challenging excellent and continue teams job Our compete well economic of

we to sales results. own through sales of have force, and execution these in the sales Additionally, Europe, program excellent in and highest direct proportion achieve they leveraging our Spinnaker have shown marketing our

China line in were sales Lastly, and and our world the in expectations results rest expected. included decline significant the of our Asia with as

from to demand China, most soft to markets but return we in much second half sales see growth due to the end still comparisons. easier in year-ago continue expect We to

team China remains and arise. as customer potential implemented to enrichment database and advanced they agile Our mapping has sales opportunities identify

the growth team advantage mentioned have of to we quickly past, China in remains in ready strength As change our can and opportunities. take

One final comment on our quarterly results.

areas to regions. with very across continue most business see service and good We growth

process quarter, my emerge business the as additional you the business And important and to which marketing instance growth being Ocean to are and to a data I to are our service sales next such market is we shared program, previous enabler corporate year, analytics SAP. we gain Those Blue support on for all an insights stronger our downturn our and implemented harmonization with of of Spinnaker year. top out we enhanced in of on the which the our with the you from quarter. even initiative X% initiative, An market share this was business excellence various grew rolling single position. Earlier the Our this like now all on would our how programs, on double-digit of sophisticated programs, this how wave comments are in is X, global program. built share continue strengthening

this our XX all to supply chain, and We service development processes that administration our and other marketing initiative touch our business. sales From and functions. finance, of years, over harmonizing for product and centralizing HR have in invested elements

match. With our advantage cannot valuable it into the us in react and Blue environment. Blue Ocean, a turn operating our to of business quickly and real-time industry to business we companies significant Ocean private with able powerful us insights, harness and business been in to provides smaller allowing complexity diversity the that many very have changes intelligence competitive

dashboards our are to better faster. implemented solutions decisions across to real-time have KPIs software advanced reporting leveraging We advanced make of ensure business and

task. By real-time best quality allow digitalization machine end-to-end seamless creating advanced Ocean Our processes apply of can manual enhanced ahead that has outline be with been factors technician Blue traffic excellence, process pricing the service. improvements then of productivity. models this a semi-automated the In this and recent is enabled great enhanced will more to learning us when Blue There automate meaningful able service renewal Ocean devices, template sophisticated us such scheduling, type drive been we with into procurement example predict to productivity of of of complicated advanced the that location, centers years, are and benefits. we be add and consideration new activities, to of efforts scheduling several to features e-shops, A process functionality, and many functionality durations, analytics to service number assignments, and devices our as source or solutions very imaging which global much service improved have a taken also automate have age shared routes. using customer have the to adding also productivity including analytics. and

per identify new all organization we have we and that investment advanced the next to data [ includes initiatives. of of our sales several is rolled by a our using we duration qualified new ] to alerts databases analytics including external corporate internal which static This sophisticated entire foundation rollout for out growth or X at have supporting to a pace. CRM manually push our programs, a organization, the reports Blue releases targeted were out sales the backbone our entire opportunities. capabilities and the new are scan rapid In generated K Spinnaker nearly created these Blue Now in alerts team of marketing into to past, of strong X and year. Ocean program, wave Ocean were our top

real-time leads our is for Today, to of faster advanced opportunities our team into these our qualify response solutions across quicker software units. sales This automatically integrating teams. by feed also a CRM our enables business cross and much lead generation

and in items more portal will base current individual cart. customer's future, suggestions. their offered requirements, customer based these enabling recommendations be our personalized purchase to utilizing customers installed Additionally, standardized today In on tailored application the recommendations an near

supports our Overall, roughly access diagnostics expanding platform X are service. service which, solutions. in rollout request reordering or new today, includes the We from our models business certificates our self-service, remote Blue future, consolidate to journey, also ability or capability calibration into consumables the standardized long the business been XX will remote support for And global and a Ocean cloud-based of has ERP systems maintenance system. and preventative and to software goal different advanced a starting around

new have advanced expanded across productivity features, automation we there, the and support business initiatives From models project the to company. around

central and digital fast our margin globally allows the opportunities Blue and look Ocean at rapid we models at to expansion be implementation makes sales more supports enabling It agile is a future, to we the business today. innovation ideas of digital growth As core pace. as have and new new us scaled

visibility real-time and automation, provides and global cybersecurity, Significant and gains the chain footprint cycle our it globally management. of allows across are and optimization in data-driven business IT value productivity of for bots life reallocation scale support with applications It global to resources. entire the AI-supported our enabled units with decision-making

customers, it experience. while as resources that not offering to mentioned -- which to competitive industry is ability a their our of our to many service the provide in enhancing or Finally, available these platform replicate. advantage powerful MT products digital do connecting -- our many And to capabilities to have value and a are our that earlier, includes I

this Now like questions. remarks. line our to the for Operator, concludes now I'd open prepared

Operator

Instructions] your Dan Stifel. line of the And question [Operator first from comes Arias from

Daniel Arias

some to you growth? making revenue do that driving is conditions that what between be And difference region in the Patrick, Americas given the when pretty think Europe the is of and Shawn do performance seems think doing to What and right nicely comes exist of macro those especially some now, and you that? biggest countries. it

Patrick Kaltenbach

competing Yes, we the comparison customers -- sales may through is in a team Europe are success lot On our in the we with have our Europe many we the in we mean team and Europe sales are in position very platforms, our market, of that a lot in in marketing well new how really really appreciate very And last happy of sales the our of tools we with are happy very are we say of innovation. channel, said direct years. also and and I Spinnaker these We and see other with competes remarks there. top with we that lot direct sales our X earlier force. where we effectively compete how and effectively our based is our results. these that, also Europe. a to launched in would products the over players with I as

we et we know, were Europe, the cetera. -- the you the year, competing war that of our of But that Ukraine lab as we are in beginning the resonating quarter customers. rarely no highlighted impact the now our the are given about new As is release in well concern [indiscernible] also of our extremely especially before portfolio last lab really for we And portfolio. seeing with

Daniel Arias

another the increased? year-over-year just Helpful. Okay. something how the last then but curious mostly one would for for how the because high And expand pretty have, to in the Can Demand from the just for of if potential business still China, think is. get message have back the a maybe updated then on here at compares similar slightly given extent your great to that changed just the all? on hope quarter. if change. And is they I those be different has still you growth mean decline, And thoughts it way just half, assume singles topical sounds weak, outlook year? what or but for here, might conditions to which you and on stimulus that

Patrick Kaltenbach

yes, quarter said, the When all markets, QX. I we in growth had you as That end the positive you And our been said, year. China, you as has soft second last -- it also want mean, look remind at have in across markets. still you expected end to unfolded we I that of

a want would time. point And think remain given in not -- maintain market the also out there's single So this the year. to softness, we at point here for guidance the I we of our rest

the that As you half single-digit compares. it means see full rightfully also in said, year. positive we we that's growth decline expect on high based said, for That and the second will easier

what we more stimulus. the seems that different this probably about the the the is say, would have of This the we I one see asked or much yet to time stimulus year seen not from have mean the before. years focused. you that launched be last stimulus program, is stimulus impact I when been

Chinese them think segments high-quality AI closely of government the the energy, and new new prepare customers for working help also very segments I our with our to teams on biopharma called applications. are and focused materials it aiming at

bundles We to these have can applications. also can they that apply prepared basically

We stimulus mainly guidance effect We any in our be QX of and the topic. in built think the have that will not XXXX for QX.

Operator

Your JPMorgan. line comes next Vatnsdal the from from Rachel of question

Rachel Vatnsdal Olson

I core X% was want in to that quarter. the dig just industrial, down in first

guys I high us think towards single-digit had you pointed declines.

XQ segment full for year? we well? then about the you as also, industrial expectations should core bit. for June the what and of than just How you reached unpack July did in can that it So us -- started just And kind think the us better for and as year the can that you little walk a How through then quarter? and trend off of into rest

Shawn Vadala

that Rachel, Shawn. is this one. I'll take

said, to how expect we division you in being similar of the much think came kind down to X%. So like I pretty

by it's weighted thing versus disproportionately industrial is to our in other that key think I very product categories. China remember a

So business. did very quarter, the the of down lab kind see similar industrial we the in business significantly to

at market. As There we we aspects are quarter, downturn we saw sometimes automation Patrick pretty in did of course, economy in similar China Certainly, performance see companies the I see said, better those categories. and and the better focus China, differentiated of segments the in seeing see, process When kind of the are of like that segments. the look mentioned, that a little the other on, control, digitalization softer we where moment. we are on both of outside opportunities product think We clearly activity. depending across you

But think I resilient been have here. our teams very

and I strong of think go-to-market in is Spinnaker We've kind program I continues from our the industrial a as been back really our market. very with specific opportunities step portfolio robust. areas. strategy the able to target And differentiator And the we think in business. to our be like

the still One lot is reshoring most of exciting think I to is the are around yet come. nearshoring I things think and a opportunities discussions of

And a as we optimistic the so to we're little I of think more future, kind bit look here.

Rachel Vatnsdal Olson

segment then full you just Perfect. for expectations geography XQ us my follow-up. just and and level as well? through year the And Can walk

Shawn Vadala

sure. Yes,

top run the I'll of with down the So, maybe it here kind hey, from products.

So for our low up it our full low digits is QX be And digit. digit. year, laboratory mid-single the business, single to for up up guidance would single

the And digit be product digit. single mid-single for inspection up low Our business full the third year, for would up quarter.

And down how last double retail flat be core a a full were for down business the QX thinking in little is QX, for bit business year. year. industrial digit, single and which be for full would from our for quarter the low and the digit Our we decline of mid-XXs would up

low And we in digit full be the QX. for year. geography, flat expect Americas the By to up single

expect low as mid-single year, for to digit to and slightly expect we down the year. the digit down said in QX We be Europe China before, up up we single single QX, and full high be full in for digit and

Operator

next Evercore. is Kumar from Your question from of the line Vijay

Vijay Kumar

Shawn, the you. quarter, Congrats on X for had questions. this One guidance-related execution here. I maybe, on third

points comps for seems process the easier, X% Curious XXX light. thought right? The get basis a Your XQ. on little

Shawn Vadala

better changes Vijay. than second Yes. in lot acknowledge we our in There the performance be not good the in business, about cautious a seeing little We I here. expected. very did And felt of to any we're uncertainties but continue negative do still macro. Hey, a quarter. we are the

very we the end other cycle saw numbers that quarter. we're PMI do continuing competing I market well some typically as still day. still of And there's we little also like market We longer the share -- from received take of know, In well. -- think feel nonetheless, have from we backlog. initial some the markets, we we other X.X what sales These to you bit each see uncertainty. really new side about results. have our been in But only cycles. And the are of But is see can a we products months

to quarter like end the we'd kind of So little as bit and a get of have kind get more visibility the of then here year. just another we through into

Vijay Kumar

Understood. operational And look pretty you by the Patrick, maybe on one for at you on impressive performance, quarter -- second $X.XX. side, the if EPS

I raise midpoint $X.XX. was guide the think maybe at

in the little bit? guide PMI half assumptions, a business bit. quite Shawn was did temper mentioned your know mix but I a changed has it down the So back

is Your exposure to far PMI lesser.

back it, ago? just months half, your maybe comment So versus how any change you're looking on at X

Patrick Kaltenbach

in to it to we it. -- -- prepared remarks, for we say rolled markets And question. from And expected think of Yes, be you out in end both I been markets change even the also very we we of almost more top rolled fact that of beat have are and trying the Look, what have remainder as we we've QX don't on the we line. mean, year. the very told also I a performance the the honest. good a the QX, see proud bottom have seeded

benefit see mean, PMI little the a really need in biopharma also pharma more is to on moving right. less, end forward strong exposure You're portfolio. getting probably our markets we our and momentum I to stronger even but from

we that to make the live cautious you we that maintained stance We've will for Shawn as taking, course, a said, to -- taking full told sure full also what outlook year. bit the up are here of year. for we're the We can of

pretty confident year, little for the bit visibility honest. X% We forward, be more need to moving full growth are a in but we

Our and excellent. we seeing team engagement sales customers are is sales of with team the our

lot but forward. in environment, through the sales the market living take are especially good guidance are cautiously a better have still on of spending leads, path uncertain also until have some -- We smaller We the where China, And also longer. But also the customers the the cycles high customers really rest from government pharmaceutical world, in given still accounts we rates. example, of with, momentum. the pressure for still the see and areas we of accounts that in big are larger pharma better under biotech interest accounts, see

up, you quarter a if all of of forward where terms been we still ago are think when dynamics. market in that I So sum have I we look

for I well worse, If think still looking are the momentum, forward our And we X% year. moment, with but also full guidance. you at honest, really to we didn't think change to to get it guidance positioned are we the better be see the

Operator

question Next is from Jack Meehan line of from Nephron. the

Jack Meehan

I start versus across any China of you and different ask wanted pharma to regional those? industrial and dynamics about could seeing what across if color again. classes wondering biotech, academic the was provide I about whether customer like are you're

Patrick Kaltenbach

state-owned or are few the in end and that segment a I end and pharma. difference our a down. to whether pretty and with that it's Yes. our are being percent are end same about or than the different seen you huge on QX, China that, markets have underlying between But again, XX% a not all customers. market we government also up end I level difference. multinationals companies, or remind about or They're XX% mean local we companies. much segments is especially XX% big want about again, in the XX% markets, Not want industrial more customers within down

to end before my As they out and to is, how cautiousness plays customers confidence the of is, The the stimulus more earlier want need they really in remark I invest again, market. see more. a lot here there government have in said

I with effectively think in own we are very China. our portfolio competing

to Our local very our connected China is team well customers.

cetera. bundles. they the preparing said, specific et our the stimulus, customers up pay for application to are for I helping As set or We

lot for a solutions have of We localized China.

So really say, investment. we you about are competition overall the the the the, in the concerned I at when increase market would and market is the local end look readiness not mood to

Jack Meehan

stimulus. understand side, the Great. that And seen stimulus is want have when actually And BIOSECURE the China. customers from some from wait on on to the to up? X it the any dynamic Is led kind pharma biotech shows quarter. the and possible discussion then follow-ups second for On in just of I around to funding you pause some Act? impact the

Shawn Vadala

Yes, Jack, I'll one. take maybe that

that hearing then in moment. So we're that, any out with like see too. terms of we when teams. terms the bigger the our a ultimately, other you some of air little not this of hearing But topic, there's BIOSECURE impacts And look parts pocket small. in in would at of of opportunities necessarily customers hey, other well, to maybe say world topic, from to not at the we're we're Not course, maybe that that psychology there, but not hearing as expect

Operator

the comes Goldman Your question Matt line from Sachs. Sykes next of from

Matthew Sykes

direct direct you're you just when outside But direct force want make that sales -- Patrick, the globally? about gaps of across you which Europe, your in reinvest sales might I'm you on in something about the given not good team where I'm I that are seen sales sales discussing does direct do Europe. versus want and success pretty terms wondering, in strength feel the to higher has you Spinnaker a in you mentioned have of that you in exposure is executing entirely clear quarter, in force force exposure just touch region. where you've that, to a are force had exposure from indirect? Or regions

Patrick Kaltenbach

evaluating in strategies the markets. the where and best said, very for we true, as for and lot channels go-to-market customers. fit by Europe, both end And are true, in constantly we sales that our that's a the way, end course, the of we're Spinnaker we the force mean, have of that's tool They of in sets players terms end sales our using of I Look, direct for stand -- I sales. markets what And to are have well.

channel. We also sometimes but parts U.S. we're direct team comes have of investment in channel, sales are the strong a to world, it constantly we indirect using other In the evaluating sales that. in When sales

it's a We we take we cover also and are foremost, direct really market increase around well worldwide it's, momentum a what we look at to the about very all if looking first or underlying the the call segments So differentiated at enough end And we markets our we world? it indirect? is coverage sales either dependent perspective. we there -- Do are cover the thinking force. the investment, important from how Do this. approach hot

look for services, at good in say, team. way, we a have also capabilities services, also quarters, out services. see -- example, us And the also services that's forward. the We building for opportunity would to last we continued in In healthy to service move our I strengthening same very invest moving growth. and our

Matthew Sykes

And could on up follow just if I that growth. services

quarter. X% up the think, I mentioned, You in

at services give you maybe that drive growth of Could remember to yours. single-digit had to exposure room Day, services higher you proportion of about Could ago, still services you years there growth to overall You've has key grown of how a the to you think in high I that that sales? as and just is the consistently a a continue where or just Investor talk driven sort higher. few sometimes mid- initiative was mark-to-market?

Patrick Kaltenbach

also many absolutely. Yes, one hold differentiator really out companies we mean, there. is strong I key a of Mettler-Toledo. the against services, again, It's have other Look, of

that organization the strongest probably our competitors compared have size. to of services other We

invest the portfolio untouched size the offering our team, service but We large only unique a good the customers. of in we to continue and not instrument in of our It are also with sure to there the has installed that for still services. a make part of and out we offerings of base services that differentiated have is

then service that the we we them we're the of that get to also force at also a base, forward, in the service amount after go sales increase moment customers tell in sure our with stronger touch updated the what investing opportunities So these and on installed tell to and contracts. have inside moving hopefully, make about sales the with products

So in eye and downturn have it's back it's strong invest I through we paying we also think last seen an now. year, even excellent keep a it's invest to the think And service. I Again, something that on in continue definitely opportunity. we

reminder, we I good business. you last tough still we year, that we're As double-digit the know of compares, this part as said, X% even a seeing services based the with popular on growth And see. had our most final year. And is growth very

Operator

Next question Dan from is Leonard of UBS.

Daniel Leonard

that Patrick, historical question, your supportive gain is Or of zoomed these gain in share Mettler first Is share X that My prepared for in of you highlighting view it share as efforts your gain? you remarks. on are point accelerating?

Patrick Kaltenbach

a to very about share That's -- much a hard at it's it's good quarter-over-quarter wouldn't really gain quarter. but topic. I question, as how look say you per

also results example, competitors, our share. and we we about pleased from are for we compare our we environment. clear, as how average, what to of on difficult we made in perform even Investor XX% we are very Day, market on this the Of But probably course, own hearing

to help us the automation to to big room per market accelerating are year whether every year, into because or hard and of many why it's additional not, they to with I them are So that's share a would be driving to there's that is the them customers our for looking what we're seeing to to make help And chunks and and but competitors, are share. will make market tell, that with investing share looking products say, more share for productive, side. happy performance, path for them products And market do we're gains data for we also we to don't innovation help And become currently performance the on gains. gains. continue we given market gain innovation ample the the small integrity, this us compared of

Daniel Leonard

diversified [ that curious Appreciate environment. programs specifically share announced that environment I'm then still is upsized as M&A few this target your season, of your a richly thoughts repurchase incredibly valued. peers that. ] a And earnings on follow-up, and the have flagging

Shawn Vadala

back cash years. to we're take execute can that share of in we acquisitions. absent think and the And but I buy for Maybe part -- And one. usually selective. think we're it. consistency very very our is a great Shawn. use free is our how we we worked this repurchases, but about how I flow -- Dan, makes is that move we feel the good you mean, shares. sense, pretty strategic We we're program as success something platform over has I'll quickly, know, also When

as it And program. And the in look so looked at you'll us at think be it same the consistent share past. with we repurchase our I see continue to we

approximates identify $XXX think flow reminder, opportunity. if absent year, our I estimate the And did for cash a an our free which As about estimate is million, year. we this acquisition

Operator

comes from line Ryskin of Your of the from next Michael Bank question America.

Michael Ryskin

one you. maybe for Great. Shawn,

quarterly seems Just third and EPS the you've That's in margins XQ. guide consistent historically. leverage in of of what in the quarter. volume a like lot rest the done quarter in looking the the the it There's progression, pretty jump through year little a at and of with bit a a bigger you're fourth step-up

expansion much quarterly now. you if line of any a that dive SG&A? the How on you basis, nuances we give additional confirming wondering just can versus into Just seeing the on margin are could color gross Just that. margin us

Shawn Vadala

we're what very little from gross full the a up much year our half the basis, spot probably If it about of bit estimates look last quarter. be we to at that second the got volume. probably we going you on It's margin think on. on I thinking a I'd year. were leverage say No, for

well did And in little course, versus you a of also As see, was part the our doing pretty third on a quarter that expectations. volume. we of could bit the better

kind would XX in expansion like bps a kind excluding For and And we're currency. XX for year, QX, of the the gross maybe be bps, of that range. estimating full margin

the what which, QX. points, what inverse little versus from again, the about year, we in thinking for pieces would last gross seen little basis margins, margin quarter. are currencies we And were a a is of have bit least So then terms our affect estimate up the of full bit XX moving is at they how

estimate And operating then these then would for The operating bps. And for third it in the year, numbers too. midpoint quarter points. is at the our be are again, the down terms full basis of guidance, margin. of And also about up margin XX the about XX

teams our really is little be say in executing program in line The things continues bit do. on better in effective. with well. depending expectations. are -- which But otherwise, pricing we at worse or could X% how quarter, do I'd very the came So be a to Pricing the

really also our continue our to cost various expect the cost job a on then productivity to line. the and are program And on working And X% savings in full is teams year. and SternDrive driving for efficiencies We our comment then initiatives. margin savings fantastic nice doing some maybe

Michael Ryskin

more implied seasonality on all guide. weird one the maybe delay. shipping to about, in as year That's of That's Okay. end tools, a talked other you've as an of really bit guide little in comps also goes to A in more then the helpful. And of got to and But return both year bit peers referring bounce. the traditional last from year number a your XQ then a well. and the expecting little Europe

flush seasonality you this a for are through you, huge any So I like point? thinking you there? if could still expecting from there perspective? view just just about the it's but what are driver what walk know you Is at on us not budget

Shawn Vadala

if Yes, -- to to then seasonality guidance for looking kind at depending adjust think you a XXX% little shipping you the way shipping you is can of not at are Probably results our sequentials. things way I of like more adjusting the how for see topic. reasonable we kind the expecting the I on delay to sales best maybe bit go, think, topic. you -- but take back typical are, if seasonal best look delay pretty sequentials that the the -- And and start historical look versus back. far But

back us the that So year. some gives half the confidence for of

flush budget we're In say, terms a of typically not budget as flush, story. you

all But early bit nonetheless, QX think I'd to year. we it's judge. did I still a feel last say

As at X.X see Patrick only positioned mentioned, difficult And probably basis. judge, feel to same otherwise, of typically sequential we're But I we're about think to but be year something this months' the of with longer but there here like sales the we the sitting is from half backlog. obviously we relative versus should customers. -- time, feel the still year. worth But a on year second for cycles last the do good how magnitude we

Operator

of is Josh Cleveland Research. line Waldman the question next Your from from

Joshua Waldman

Two I for think. Patrick,

expectations? major across could more First, curious seeing what the if and Patrick, you're I how geographies wondered inspection about a versus how of last you business bit and couple talk months? over performed the tracked in your product orders have markets kind I'm of the end

Patrick Kaltenbach

pressure, customers new offering we with that the that the have still, launched know portfolio last are also the pleased into still also the actually we inspection markets demand. are I we mean deal cycles that X-ray we are investments. end longer under are midrange Product now. business us of lot result. cautious a of quite the And in year, from We product know with products but broadened lot over high a end mainly for our doors opens their

we good So around have with engagement portfolio. really I our healthy teams sales the globe think a of our

But we new healthy also The some more broader see investments the are for competing very a caveat have I the is portfolio. seeing seen are have picking we We're So probably funnel sales is that with the and also would cautious the customers customers areas again, still they cycles say portfolio longer there. until up. than effectively. And us before. underlying market with upside in

Joshua Waldman

it. Got

distribution upside the from so book a in lab. are channels. Any also to funnel question half a the follow-up anticipated? did opposed then as quarter on buying you than that conversion? And then better sense you new directly I Do maybe at maybe a opportunities see through question the think. to on exclusively was higher willing customer into and or a such in more the coming rate you get work you with And Okay. there's a if change sense that Or the accounts

Patrick Kaltenbach

is this broad Well, question. let's say, mean, very I

now. well. Let's competing -- right mean the focus that with our portfolio, I again Lab products we very on we are see

new half as the a some converting first platform in We and second well. saw especially launched the of and also the there projects in have year. Europe, quarter We bigger

of it's we that a it's on are not again, competing -- effectively I in it think and things, the market. would grand portfolio say when grand in But I scale comes our So is, the good to in a position like there good now. as lay in especially The behavior been markets, But momentum. the out, change is have soft, rather in has it right end laid China. we a seen in out we Europe, still significant and buying behavior customer

seen have also last lab up. U.S. the the in in picking We quarter, business the

the we're position market momentum a portfolio, good think mean can with I So honest. and I this parts the capture to more recovers, the we in of be

Operator

Patrick Next from of line question is Donnelly the from Citi.

Patrick Donnelly

Shawn, one this for is you.

China. I optimistic the outside on guess, core more, You sounded little of a industrial

focus industrial can has a season. The a just of earnings piece this terms we for maybe in So complex second. on that little commentary softer of been

piece of soft. thinking little acknowledging But that way it? is and pretty optimism, developed bit from that hearing read to the here, about you're world what from China there's hearing you're what just thinking you're core again, how you're industrial customers, right how Just piece, a the in curious customers about

Shawn Vadala

we growth mean, of that's had to it people economy I then quarter, your good been And what I can other talk picked exposed And was industrial. question. up against voice And lot Europe, more right, Yes. economy we about. say, I at that you of a my lab did No, if our there. just the lot backdrop on about in is I segment is when this the would probably market in we're and you better mean in depends than relatively this historically, the -- Patrick, yes, than a look talking cyclicality, that's business thanks, but historically on hey, we weak would industrial a think a businesses. still the part the have what say

but and into in of there. had digitalization, talking control the that we automation resiliency is well. really that we colleagues, in discussions is same hear And are the pretty the are end I the comments and of like so see what that's think good those some business do about to course, something the started as supporting customers hey, our with you . Part it lab of process markets if feel actually about of pharmaceutical, we're around, gets and I've end-to-end industrial customers quarter like doing business,

saying the quarter the understand business of more headlines talking you're had a I segments, to challenging discrete customers team If are results. certainly about and types what having from well, as conditions. I too, this see because And past in our because a industrial challenging you're of that question much manufacturing, those of companies more a lot of similar we the lot

bit of So I little it's a guess both.

well. it going about trends. forward trends, very and market in product both really great over also we're accelerated I that positioned try we investments mean well the some good are well, executing some opportunities to on meantime, But necessarily that very think sales lean these to on but we what And the certainly, more a the I favorable always into economy. development but few control, of think can we and teams on we business these focus feel on marketing side. of of to immune the pipeline R&D we've the the And the side, last years think some that doesn't we're in have of I as

Patrick Donnelly

guide, obviously, a a got questions I've here. Okay. then on And XH few the helpful. really That's just

seasonality change thinking your about back ago, because it, to but guide a one bit mentioned kind have XXX% XH view? your anything implied months XH is used raise in of quite lot view less are we're in you're changed Shawn, to of little the Obviously, few you people even Mettler just yet. than of -- I given not again, how times, someone just the think to answers terms has think and just guys I standard a conservatism, of a the relative

months just would a few So relative how be you're market thinking to about helpful. the ago

Shawn Vadala

X.X of think months sit I -- on we we're always backlog.

So going us out a it current we for I start always little makes the that when quarter. challenging think beyond

half, than to second executing aspects cautious acknowledge really well. half. assuming But the We to think too. market there. little like lot cautious should that uncertainty tried of do going from about bit prudent we quarter, but conditions see a think the element but to to just add think in I in Like I is environment. not are it's the we did We the we're also there being expected different We an easier I do second we be this feel out comparisons. better we're soft us the of a good sequentials. that in second There benefit

no all that's looking can the happen. And by course, one we're by robust exactly seeing product, signs going region a we're world. say turning, think to diverse but I business by end of when of really pretty more forward and to of market things

to this look to step And guidance everybody. to And how we're so -- -- right to way feel we at appropriate we but good I think feel our of we do an when is like the But actually kind course, now, going better. forecast. of position guiding, back look about feel we're we and always

Operator

Schulte of Catherine is Your line the from from next Baird. question

Catherine Ramsey

Maybe first Shawn. for

Just your going back to commentary. margin

versus full you the XX% XX% quarter. about XX% last I about points then but talked gross talking think were last basis year margins you quarter, at versus the said margin for op XX up the you

that side, guess, bit and guide? then prior on margin op what's the I versus you So through a being actually gross your down where are aren't little absorbed margins OpEx passing

Shawn Vadala

Catherine. the earlier. same the and is over the business we in just investment opportunities, bit that balance have with productivity pipeline I And we're we're such also like the great but are side, in investing mean side about the OpEx still the realizing trying we changed between and a terms right mix of a business, last time. gains, talked noise the of how And good at find too. some to of reinvesting quarter. gross in the right doing Yes. some on also think I little the certainly, I have margin question, But better then this No, of currencies

Catherine Ramsey

On first are the you talk that for we've quarter, in the Can shipping increased any the academia. between and Adjusted seeing? pharma, the just encouraging. on digits caution spend of terms easing recaptured in like it customer lab through revenue very delays which business. seeing you high differences seeing sequentially, looks single you're Maybe seems pharma been

Shawn Vadala

-- and hear was positive pharma pocket out sign. there's would some think woods. do started biotech that, so even bit we into big a smaller We better the where about to projects still say not But of comments hey, challenges hear a companies those hear or performing still of than I small there. for that pharma, that previous was the projects little converting, we're I some -- the getting hey, mentioned in in it that some talk stood has sidelines but still Europe. his we there seeing caution was a out maybe been you in yes, one We're it to Patrick do the bit team, responses. more of on we're his one When

down But you as only the was which we bit it process from inspection, was with product when the a inspection, mean, we what feel being still better the at look good we analytics not that pretty to from a look when perspective, a bioprocessing. one. analytics of I the second -- product us about But little to kind maybe our with down of saw little process year, being a throughout some bit product at because growth bit encouraging of half little portfolio exception exposure

Operator

of Peterson question your Jefferies. comes Tycho And next of line from the

Tycho Peterson

us on on lower of peers. what restock about kind think kind can kind it's price maybe are of period upstream versus we left in I of I and just kind for you're your off than mix, you gone equipment part of downstream, a through obviously Shawn, to where is Your pick little you know up that the some points guys? maybe give But of we've cycle a as of curious, long destock just where there? sense but seeing right you kind smaller a of bioprocess.

Shawn Vadala

business. you'd in. start mean, I we're we're feel second pretty of feel I definitely as particular think headwinds good. our Patrick downstream like a don't so, I -- I'd go downstream [indiscernible] close we But Patrick upstream think were encouraged kind wants but of Maybe there. you getting pretty say if the to we if lot into seeing the I'll very or and we know chime we year, and half in of say

where on the also, us For was side. single-use that we're more exposed

with it even of could that just and the part kind when to the look the qualitative customers for more well, more the second of we're been all as So data But the points have and to a the half half. having importantly, of too. team second much discussions we favorable year, situation

Patrick Kaltenbach

I Yes, can a absolutely. to and that. you Europe. I bit the U.S. if again, the differentiate confirm little about regions mean, want in

some You so. asked stocking are issue U.S., the destocking behind we be over we're and Europe should also still There's from in have But hearing the what I would or about facing in the issues. China. quarter destocking that issue say customer we that us. a residual

Tycho Peterson

pricing. question Shawn, then, about And Great.

basis you to forward, we this about First, levels XXX more still year? guys per I assume inflation think the going -- XXX for about getting to I as back, mean, then pull around starts should is points, pre-COVID assumption year importantly, bps but

Shawn Vadala

hey, historical I how of it's think also And we pricing. Yes. but year of remind understand would next for probably us Tycho. just kind about to think how question, little we maybe guide ever for bit a like to last I historically earlier the on than don't environment, more expect basis during we've never this the were think environment. for typically guided, necessarily we XXX inflationary in typically -- points years few even the we're guiding inflationary more -- I

than do basis I can XXX guide reasonable kind assumption. a look will. we points that, at if probably better mid- of of we a hey, But to is long-term as course, So

Operator

today. session for over to remarks. Q&A for to hand would back our concludes I closing call like this And Adam the

Adam Uhlman

to everybody, call thanks, And this me have any and Take for all free I you questions. Bye. Please our feel weekend. great if you to Paul, reach morning. have care. a hope Thanks, joining out further

Operator

weekend. your conference call. today's concludes This Enjoy

may You disconnect. now

Mettler-Toledo International (MTD) 2 Aug 242024 Q2 Earnings call transcript