MTD - Earnings call transcript Q3 2024 | Mettler-Toledo International Inc.

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Operator

Hello, and welcome to the Mettler-Toledo Third Quarter 2024 Earnings Call. [Operator Instructions]. I would now like to turn the conference over to Adam Uhlman, Head of Investor Relations.

You may begin.

Adam Uhlman

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

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

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

and reconciliation report any to filed and see these of X-K undertaking discussion as please forward-looking law. On A by our call, non-GAAP may available on provided is updates statements, and use comparable uncertainties, measures. financial to financial required a we measures SEC. measures provide the with and annual recent directly any the non-GAAP quarterly to company any the The most these obligation today's is For except of in website. our revisions disclaims or XX-K Form current risks or on reports

over the now me call turn Patrick. Let to

Patrick Kaltenbach

outlined and on during quarter joining X reported call strong third the We our our the presentation. details which in service. Adam, results, particularly morning, Thanks, growth appreciate for laboratory Page in good Last today. quarter and good you we business growth night, third our We are had our of experienced everyone. financial you of

remain conditions the grew sector. particularly market in China modestly this industrial quarter, challenging, While

and the our initiatives, We team's good execution margin in growth pleased quarter. growth are with our earnings of strong supported expansion very which

from the in prior and will fourth to quarter. very execute benefit the delays year continue We well shipping

market remain soft. global However, conditions

of We exciting over sales have many and marketing introduced innovations the generations SternDrive programs well and past year. as our Spinnaker next as productivity

continue and we We the throughout identify gain opportunities and leverage ability and capture to our future. our deliver to very value the growth value market customers' diversity well positioned chain good believe also growth provide and are share earnings to in to business

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

Shawn Vadala

X% Rest in and which in Asia declined Local Thanks, region. an grew Local currency increased the X% grew the Patrick, increase represented Sales sales show million, in in in China we X% in in region X% a and in with in of On X were of in World. Local in year-to-date the for Americas the currency the flat sales the months show sales growth a by Europe, Asia the decreased X% year. on quarter. On growth decline Slide sales currency $XXX.X quarter #X, local of XX% currency #X, first and morning, sales X basis. X% X%. X% in by growth good were growth for and Local China Americas World. first everyone. months sales Slide currency the U.S. we the Europe, Rest dollars of

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

X% Slide a summarize our sales on area. year-to-date growth #X, local currency declined sales this, by currency product we local Excluding basis. On

product inspection with growth Laboratory currency sales on industrial X%, X% Food The quarter X% shows activity increased decreased X%. was months. core core increased and X% next decreased X local Retail sales last project first against XX% industrial up declined and slide and and the Food retail down industrial quarter, sales basis. year. for Laboratory the flat area up a industrial inspection X% by the product For XX% with X%. in product year-to-date significant down

me over interest to the margin of year from prior represents program profit were Gross XX operating million and Adjusted amounted move from prior to was decrease includes operating SG&A X% the the XX final is points partially the realization Adjusted Let the was now other is an SternDrive basis of million. amounted in local XX.X%, X% higher quarter, which and lower #X. P&L. increase $XX.X on margin offset our which million, by R&D Slide to which price prior variable to year. in volume. the amounted the a of points period. basis over million increase expense couple income a quarter, million currency and over unchanged was the as XX% a $X.X million local positive $XXX.X rest quarter to the comments amounted compensation. in in P&L, prior in and $XX.X Amortization increase summarized on amounted to of benefits the year. A $XX.X currency $XXX.X

slide Our in timing option which for is X% to $X.X a stock $X.XX Reported effective is $XX.X a is $X.XX a next compared the of an approximately exercises. the the tax was operating decreased X% in Adjusted unfavorable were and currency, currency. prior or the included That quarter X prior in excluding and due quarter, levels grew from the was flow working declined $XX.XX, increase income the illustrates Xx. unfavorable foreign X-month to of months, items now flat first from X% per sales $XXX adjusted while the me was timing margin to the reported our year-to-date Local was X%, diluted and for was operating covers prior intangible X%, On of restructuring XX over days, EPS quarter. Fully basis tax on year-to-date rate as rate for to exercises. The basis of and XX let year. a adjusted Adjusted excluding the X% quarter flat points. currency million, on option and benefit year. Adjusted period. contracted EPS capital. discrete the P&L, results. increase the year EPS This our costs a decline XX% the EPS free $X.XX amounted for favorable on was prior ITO cash a from before comment purchased amounted the in DSO adjusted shares year. $X.XX share basis basis which amortization, million

turn thoughts to me initial for this now of year our Let our next the remainder guidance on year. and

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

not not seeing a are significant also improvement. market we're a conditions, we seeing While change negative in

economy gradually improve throughout is expect market to in and Secondly, core while our conditions we uncertainty the there geopolitics, XXXX. markets, global

continue from expect customer and near to also trends We on digitalization trends and to benefit -- in automation, shoring.

sales X.X%. please all keep our was mind Third, in quarter at negatively by impacts year. sales we benefit logistics million. results of that XXXX impacted rates. also recovered And current This our first growth foreign sales $XX XXXX in our provider this third-party margin our growth and will assume QX results by QX our which expansion will XXXX. This negatively by in reduce delays nearly approximately finally, our X% in last currency year

our to guidance. turning Now

and This expect For approximately to year currency includes X% shipping from local by sales of the the XXXX, approximately quarter fourth an prior delays. X%. we expected benefit of grow

and be Currency expect the for to EPS. neutral spot We in the quarter would sales fourth be quarter EPS range rates at to adjusted adjusted to of $XX.XX. recent $XX.XX

XXXX, is currency approximately excluding year previously down full at the delays. mentioned unchanged X% sales For local X% our growth the or shipping forecast

low XXXX on $XX.XX repurchases expect the to $XX.XX, range for the be We end of cash EPS range. Free expected share guidance are of to adjusted up approximately to flow year million. full $X.XX be $XXX our prior in and

forecast the have that currency rates, range conditions be sales to which benefited EPS we is exchange growth. And which represents estimated on our of includes foreign to to is in also expect adjusted previously headwind rate headwind XXXX. shipping growth the recent X% delays At X.X% X%. local of to $XX.XX, full EPS initial spot for guidance We a be a based year increase our approximately $XX.XX to provided of would growth the mentioned to assessment market sales to today, XXXX. X% of slight Adjusted from

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

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

Patrick. to remain it tax and $XXX our items in before XXXX. are Free from rate turn expect XXXX back repurchases it $XXX I'll will at side, flow be and approximately now is XX% at approximately forecast cash discrete share We to million million. That's my expected in

Patrick Kaltenbach

Shawn. Thanks,

our to consumables. and year. comments most as robust grew some pace. operating X% Lab, service customer growth and in Pharma and approximately to growth had been We with across and innovations good start to compared me accelerate benefit from a mixed, Let our low the as with has well improving our activity continue regions starting recent last businesses offering portfolio at but which on initiatives of

labs. flat destocking in primarily Our industry Process expand To our China. benefited customers quarter Sales a MicroBlade growth already long as mid-market were recently leadership. Shifting Analytics laboratory to cell have list brought but X% our our to to new to -- of the lower These products to of the offer stain-free expand further due than sales excess quarter the from automated broad help and of for market we this targeting now our growth years expected, innovations initiatives, counter food launched R&D our business and Industrial returned headwinds inspection challenged recent our new new portfolio the slightly remains in QA/QC our business. and a inventories. technology manufacturing we we to Product have bioproduction overall. to customers the instruments, market customers in solid finished growth and add reader

sluggish declined X%, industries. across Our core industrial market most conditions reflecting sales

Spinnaker Our to not which economy, identify team are to active leveraging our in and market reduced opportunities most capture although attractive sensitivity core industrial, remains we has the immune. in the

weighing further control systems. process different customer have solutions, integrating workflows, Additionally, and line our enhanced integrated advanced leveraging into and our of These terminals dosing we feature seamlessly have automation algorithms. provide filling that software portfolio many terminals new expanded for

to food business. Lastly, our shifting retail

year. As food mentioned significant sales retail I the very in prior declined project-related our a growth against earlier,

soft. demand both from the demand Americas, portfolio and core some Laboratory quarter the make benefiting food the while additional manufacturing customers, against slightly pharma in in by with good growth and prior year. in automation declined for Industrial growth geography. from a Core industrial, other across our related in pharma offset X% growth quarter. solutions growth Sales me grew We Starting comments areas. had sales while in retail let declined significant from food declined our Now X% very customers, the was remains as Europe by sales in lower included modest lab

this Our Asia teams And despite Europe region. our across of well results in were economic continue and line Rest our execute challenging with World to quarter expectations. in conditions the finally,

and sales but team, China sales our industries. Our and to the returned growth underlying demand weak capacity due to growth quarter strong to operations in economic execution of due access soft certain easier in comparisons remained

across element summary, to Our our strategy. well. growth. market Southeast of executing well remained and is team have in remain overall share In market but an challenged, Asia such execute growth Asia as markets long-term continue Targeting important and very India teams emerging very on growth conditions sales our driving

have important growth sales guide further wave opportunities and us important investment of these and In will make investments advantages. An like We our with gaining is field of we these our algorithm extend and we to maximize unique growth Spinnaker. market of reinforced continued to our to our force go-to-market pursuing new the and launch identify in areas leadership fund in fragmented competitive faster-growing segments. element our and have Spinnaker in we sales next ensure highly in growth service strategies XXXX, growth market market our our targeted while potential. and areas share the strengthen markets additional innovation helps opportunities

identify energy productivity important technologies, continue supply to see see to At strategically increase develop opportunities new localization trends data the time, solutions same our through automation TopK efforts on customers identify the resilience market opportunities. our digitalization. Spinnaker warehouse world. insights proprietary uses big analytics and opportunities investments to lead houses to programs existing to data customers. significant for the around growth program generation and the future it encompasses potential our related and with to external and with data and We chains internal new customers and topK of and pursue in sources continue

has and area program the the can capabilities accelerating qualification to been Our data generate customers investment teams remains are our analytics This to XXXX. this and sophisticated with alerts focused expanding new processes and our and this important this and sales automation automate for force. lead growth year in in in program adding more our very field tailored of our team sets rate expanding driving that we on actionable enhance

long-term our for growth of our driver important is growth accelerate Another to service business. the

delivering our a is service reminder, very with technicians competitors year-to-date XX% world. has a ability very requirements. We in represents uptime growth consistent growth and as third grown strong believe to is our solutions will includes advantage a throughout the regulatory our service largest productivity of offering driver network direct to the amongst basis a of our X% support As customers which we very part experience currencies, important over have of the and in customers' approximately a with key on and an competitive X% we X,XXX continue maintain to be comply sales future. Service professional important local improved service Service quarter. in the

grow growth Our service term average resources service and customer aim satisfaction levels. aspirations. our Promoter record analytics are are making to our company business We field our in medium high and the in support dedicated excellent are Net and faster technicians the ratings at telesales for than to Scores over data investments business and our

service capabilities use team. Additionally, continue utilizing service our resolve the sales expanded to increase and automation semi-automated including to requests and actions the of from core to service visits serve locations. We're new capacity remotely our leveraging and of technologies and organization increase scheduling our to to customer the also of productivity service we our sophisticated trips reduce of software data expanding analytics estimate dedicated customers, to capabilities benefit effectiveness service triage improve to durations,

we contracts proportion service of penetrated measurements This coverage. Service to on further needs which help of instruments application servicing our when to greater our potential given $X installed their reliable in them our and also sold, billion using vast it's costly precision amount campaigns X/X what can revenue. base, was will being helps used approximates and we it, possess the the ensure specifically are based we help targeted create expand largest like Today, Our it, about opportunity of opportunity, tailored from service sales prevent data. downtime. that a is of have about our this instrument an data who's

point We have more of product on packages maintained selling service our new at sale. the focus

customers. Over to service years, differentiation made important we the relying have and enhancements of the meet to levels of our contracts needs prepaid

We pharma measurements over years calibration Tank Regular are have portfolio services ensure reliable. also our enhanced required scales our and chemical across solutions such tank of and is the like to Scale calibration industries as with service. accurate of RapidCal

methods be with ultra-pure scale not Our would RapidCal discharged Xx traditional and filled require need tank service expensive these faster water to to also be a calibrate than cleaned and that can afterwards. does emptied,

much also efficient faster not and only is but it more friendly. So environmentally

with enhanced and of also our inaccurate calibration cost offering of compliance avoid certificates to ensure certified measurements. regulations have We

highly highest audit are documentation adheres proof differentiated include our competition industry to -- highest to that electronic and standards services from the calibration standards. and Our the the comprehensive

accelerating So customers brief we industries the and approaches of have reinforcing identifying to new accelerate of that and go-to-market a business. opportunities overview rate growth efforts is capturing our our service underway with and unique growth growth our with the Spinnaker, by growth

these and on will the initiatives benefits very execution over focused our expect We deliver next to beyond. continue tangible year

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

Operator

Kumar the from ISI. comes question Evercore of first Your Vijay with line Instructions] [Operator

Vijay Kumar

assumptions for you Patrick, the fiscal maybe one on here. 'XX my first

What on Is XXX line singles with underlying are still in mid-singles And points in industrials? assuming the grow versus to at mid-singles, you helpful. your it's labs was 'XX. high basis headwind, I think I peers. services for comments fiscal in the the think expect plus services

Patrick Kaltenbach

Yes.

of the let the part growth question, So on I'll the the with expectations the you me walk of details last through segments. start different Shawn and let

yes, average. we company expect above to So continue grow services, to

it we single mid-to-high to continue next year. expect So digits to

expanding cover remarks only leveraging I the here, service reach to also quite my telesales in to As strengthening said our service portfolio, more not in in the base. in base our opportunity prepared data is heavily Vijay our of for don't business, that And segment the we future. Shawn installed walk team, investing a we're but tapping installed the yet details growth will you that us into significant today through [indiscernible].

Shawn Vadala

it do but Vijay, so adjusting basis, shipping Yes. delays walk I'll you just on just different maybe a I'll clear. and I'll the for do also that's on headwinds XXXX, the it for reported through assumptions the

but high digit we're a of business, low basis, headwind will lab excluding the our assuming on will the to grow grow delays. mid-single to digit reported mid- shipping single So

it digit a delays, Americas basis a both grow digit and on a to grow adjusted low delays, is our mid-single basis low basis. industrial mid-single to digit. an our And business. adjusted we're then business our or -- basis. both you are adjusted and up the to since And would adjusted on give the grow reported digit to next flat reported grow low for basis and on European that would expected core expected the business businesses on expected delays. And on digit same single then the the mid-single doing grow And would year Our our low China for regions expected be reported I'll And then low single reported is single product to inspection the our digit. both shipping industrial shipping an and estimated adjusted digit for it business total be single grow is retail obviously, is it. for shipping to too,

Vijay Kumar

for service corporate? one in know for you guys fiscal here, expansion helpful, our 'XX what you guidance. margins about operating assuming typically start conservative, Shawn. are I That's margins And EPS margin on maybe

Shawn Vadala

Yes.

margin So next this to our maybe expected up year, flattish is to operating for slightly. be year

yes, have I challenge as this service some delays of But margin opportunity business, I maybe can try earnings because does that's imagine a to an to average. use Our the the it the a shipping understand about hey, the about on maybe optics corporate above to talk guidance.

about we sales then And is first X.X% the a perspective, headwind. sales. a optic, So which it's from on talked

think I understood. that's well pretty

growth were our for -- sales are impact products our XXXX delays. the are as lab since X.X% and the average can QX expansion to in margin organic operating our -- a guidance this like shipping of in adjusted especially well you timing the about affected very also our kind our in that of year or But of year. last our And business, be meaningful QX growth if So you above since this, is profit expected EPS which compression at of in margins. for the margin most there's margin expansion. And think see on operating of

directionally, timing terms in be because have wanted higher related margin If makes to if of percentage be to in didn't directionally, communicate more the incrementals we for at And going associated But so. it about they're because other to something year or guidance. And of typical you if this have you with our in between of and out cost think it then the it be over growth you these this expansion about bit items. of structure. of X% points line higher QX and shifts growth look our our sales see our of effect normal think operating going also a kind if similar nature about implies XXXX. details fixed we a it, a at EPS EPS delays, of estimated we'd margin this our little also after we're last margin compression couple about guidance give in more should EPS QX. to QX additional guidance an you're with overall that, gross something we to we But of back to growth shipping probably time XXX see would our not relationship going we're -- going then year, of basis to get And cadence. And sense

XXXX is is our levels. compensation not target variable in to first back The

that headwind we we back in with optics And the a we to the moment, So investing our a the of good we'll of things remain the going to other down to to have at exciting just message in we have And medium thing XXXX. and these going EPS But when to mentioned currencies that, important grow then very is slightly business, in script. growth. in. And that are that all our -- little communicate step is the we delay for from the investments forward we lot a that just bit very have we of and because slow and that unfavorable about lot too, the to because make ability today, our communicate wanted a not pipeline expand think we confident invest could of to we're to in sure also opportunities shipping I sales other I do of still too, to wanted earnings long-term think margins that's guidance. accordance we're the in

Operator

next Matt comes Sachs. The Goldman Sykes question with from

Matthew Sykes

first services. Patrick, maybe on just

You gave I'm and your prepared average. comments. thing margins great that corporate color lot above curious are One already just of understanding about a

of in side, services to to you that. technology make business I'm that sounds much hiring the from like curious willing maybe you're operating how create increased it the leverage can more on the automation of Just understanding the X,XXX level leverage technicians investments offset and just already you can margin? have, services, operating in extract wondering about

Patrick Kaltenbach

up effectively continuous new recently our that also along care we -- make improvements And a field. schedule technicians. And in services use technicians a a team. including launched make continuously to question. platform, special the And that which great call software little template algorithms deep of our also this, we capabilities, course, most It's of the service service of and bit we to Matt. in with we're Thanks, the effectiveness learning understand improve using takes we just we service that can our that most also mentioned of that how Yes. efficiency drive effectively on sure I

also more But changing product team also course, service driving service I side, more probably technician future of the capabilities, as head for a enough lead service on in we bit more well, there. with efficiency will generation we sure and I this today. the have of are more remote said, mean, count portfolio expand and with that still our that, of not service We as well. that and out that that untapped only don't making have opportunity instruments but we talked marketing to support little the drive we about in field service campaigns of

We been have getting to said, to they application information, service more require they I the technicians for. future. and new and these will used are, are solutions again, also as in we when are to these and have they these out service what bought, broader back portfolio reaching where and instruments And them now offering customers,

a I growth think great it's opportunity.

I to leads something customer think that satisfaction. strong also it's

them Our et and with Net also because only services compliance, helping and of scores Customers efficiency, scores Promoter are the cetera. love service, outstanding. but not our

all helping and they reduce can, when they to the again, when scientists more as it strong again, information all smarter software algorithms knowledge forward -- also the driving increase more dual et on the have also do So to growth right making efforts group drive fixed, visits using they et in also future really and it's a it's us the sure and tools we Besides for deep to require headcount. But to understand driver efficiency can us get have customers, continue will with do to investments this service learning we sure efficiently solutions, the expansion. that maximize to in and moving how margin cetera, data first-time management we make we can the we first customers cetera. at well engineers information

So growth lot this invest in the also continuing to a to And of come, opportunities. and next busniess. that's from years we'll why see are nice we there's in this

Matthew Sykes

And next for then single-digit China, just guidance year low understanding Great. your growth. on for

term, of curious changed Just impact kind more growth on assumptions rate? your to there's of curious been curious China you that Just growth faces your in, you about adjusted. just have it see how And that know longer that of your has longer-term stimulus different how much business? assuming as then lot are growth headwinds I changed. if that's come could potential just but framing a in

Patrick Kaltenbach

for regarding Look for anything next question the factored so have Yes. year. our single digit a of and regarding stimulus stimulus, Excellent. low not Yes. year forecast next in we

have heard pretty from It also probably some traction. our really of vendor gain competitors. is unclear will stimulus you As

a cost take year. next when more the we here So forecast approach we for growth

With our the that out solutions bundle working team that -- with sure actively right stimulus way. our the of they in came making last customers, can is still

potential that term, have in that factored And for in into the year. good brings there's year, single-digit there. they next very this So basically will next for impact basically low us can apply don't mid- still long China. stimulus and we for is have out think anything the growth and model year. Long -- But also I meaningful a it think yet we not

long-term growth environment and think it into investing clean important they health of come areas in into in changed food, safer, China many back We China. we like our serve Yes, customers fundamentals in et have I with in where not investing our will care, dedicated to have outlook semiconductor, single-digit to But growth high all technologies solutions. safer areas. cetera, the

We have very the it And works in for local a also us great makes Chinese China develop our market. customers team to with very against that China effectively players. closely solutions in compete

growth, on participate I and there underlying market That's of in drive for So gain also model share. opportunity we continue have the great but share a top not why long-term China. to we that, think to market have the changed

Operator

with Arias from comes question Stifel. next The Dan

Daniel Arias

of where, sources Obviously, than moving do or Patrick, lot China worse 'XX. you what on Shawn the another big just initial it or see a outlook? have Obviously, one. as outlook you could maybe to today, variability of a out you better when one for sit is the comes there. parts the biggest

it So I have? where get key But in widest bars you of to the add the means. being I'm that, you that or by when see but all China, comes error businesses kind regions beyond the to just if as just there's interested more there than the

Shawn Vadala

I Dan, and that. I zags I'll think relatively in to it. fast zigs way. along can continue it move this take past, mean, is in you have I Shawn. we've always said China, will said things quickly the and And the direction. I'm sure mean either

certainly the that do projects swing things I here big lot back guidance of are markets see in the on of develop companies who upside China, get a When with the of how end to over a knows sidelines really have part mean, year. Other we that. course, our but recently. forward next So to been factors, moving

to really teams on just you you why of core feel think and about outside know those all types macro, of [ things. continue The very of world. for that. teams what energizing whether our engaging geopolitics, our of with we really we and it's good our I exposures But ] the were can world to of trip Patrick conditions, the in be it's into control, recently, just of But terms I control, always our things execute well. quickly around just get kind are. secular X and guys market us all

Daniel Arias

Yes.

think at those of I portion is for [indiscernible] refreshed, with I products Okay. better on to this a you the good And the And have portfolio believe, idea then maybe been replace has margins, margins. that point.

year? that that is it when something So can comes to overall be meaningful profitability you next think

Shawn Vadala

have for but a recently. had mean, the no moves helps. we I us, It launch very I think product good definitely individual -- cadence needle

any new view see this more willingness overall And you margin we're even the just and very marketplace, our margin I that that overall of value in our ingredients expansion but importantly, year. the as -- in the mindful think drives the it X part sure. of kind pay. expansion, of drives and of ultimately, are a that And definitely our products well proposition think received but I for something of to customer's I

So with as well, our it the pricing us certainly market helps in too.

Operator

Leonard from comes question next The with Dan UBS.

Daniel Leonard

a for there are time XXXX preparing business when about tariff question any a change? your potential in have today frame were environment. tariffs XXXX, change I the is versus different anything a topic? you How And the about

Daniel Arias

to have definitely to what you course, have a and our as really us? tariffs production us has U.S. more successfully the changed footprint for back and I expand, navigated Yes. manufacturing really XXXX, is also bit for our flexibility. we past continued Good point to one since we, also in question. production And expand of example, the also then Number mean 'XX, well. Mexico as supply providing yes, worldwide

So If we as a over initially headwinds manufacturing we have. now changes there, the more Mexico. tap if we really not of as X more monitor, the only had do are footprint to to will, or also have manufacturing we But that in continue redundant China, lines already that needed our out some course, started have in global years, also China, flexibility there we that is last manufacturing is building footprint, we then have Mexico to adjust which we -- footprints opportunity into needed. only

we think I and chain, global definitely our fully that. have we to continue unique a supply leverage advantage with

actually, in we that on early that have to I right are think the footprint had but do -- think we we're setup will redundancies that think to prepared exposed those. will to have we I -- we tariffs, derisking continue China good think so. it definitely regard, to the making in steps pretty I and still, sure we enough we react of pretty made on are a And with I bigger start course,

Daniel Leonard

then point. quick analytics traditional rate growth of is behind to in it speaking the in something look a you follow-up, rates? that business process Is growth then mentioned And it business that. long-term does Or back that your absence Patrick, What fully you different? at is destocking destocking? the to like that Appreciate of this

Patrick Kaltenbach

mix destocking are we clear up. tells of see of the It's we is has sign received behind a us that It's only orders product the not really happy normal customers in to frequency business Actually, and the that Yes. that also us. our orders back picked that it's we that momentum received, operation. the extremely to really the are size

the basically the over is we last Shawn, Lab of are X also of growth It within product have products years, we growth [indiscernible]. position I inspection. launches positioned of strong to with the well rate we the terms think our new the market number had do there. last maintain And for and... Therefore, in our quarter rate, that

Shawn Vadala

very portfolio, had out don't give we throughout growth. We our say we within had Yes. the good but I numbers, strong lab specific would growth but portfolio,

we in -- by was in products growth analytics. way, had And process it double-digit good I instruments. really think also the analytical

Operator

with from question Research. Jack comes next Nephron Meehan The

Jack Meehan

ask to simple wanted doing I the fourth the a little assumptions some on bit about quarter I just guide. math. was

-- more just a something think something forecast benchmarking the I like more it growth like was think back, little I looking -- implies over XX%. I X% sequentially. was revenue

if conservatism just bit was a you like previously. were why like sequentially, building more seen curious you I little we've look than it So

Shawn Vadala

sorry, pick I repeat I'm it? didn't up. can Jack, you it

Jack Meehan

is ramp on looking think your the fourth over the X% Just been a at implies sequential the XX%. quarter total to I third it's what in sales, the guide it's little growth about bit past, from quarter

bit Just more embedding why conservative. a you're little

Shawn Vadala

Yes, yes, yes, yes.

I the Yes. So understand yes, question.

even more to closer now. I it. right it sequential, think cautious be We're I understand bit but X% a might little

U.S., think China think We there. little single I conditions kind sequentials, on particularly I the is China, grew because on in market notes process distracted high is And but standout I on you'll in this it thing. of was and hey, that China more one in a I the analytics looking we Europe into general. digit if double of the was see a at the part but yes, you grew globally. digit just dig the is big

Jack Meehan

just what it's us But quarter you've remind follow-up kind expecting to a seen on, little could just have quarter just like And you what maybe you as companies some about dynamic. third [indiscernible]. the if regard? dynamic. like fourth in a you're know what a then to bit -- I And like Can it of again, more you're that just budget talk more flush, historically pertains

Shawn Vadala

think a kind to QX or I is on of I range. QX full from XX-year I of it there's I sequentials right? We're with more X- like think can first question, going mean -- you see your a to typical a and average think some. XX% not be counting flush. in the

talking part So lot also mean, mean I We delayed. definitely on full hear you out activity. China. I to a to counting still our of some related flush. not also when teams. I are positive of a things can definitely see we're that there's there's things that But things is mixed there, we tell but think

you're so a sometimes. on And customer it's bit to talking little which

Operator

next The question JPMorgan. comes from Rachel Vatnsdal with

Rachel Vatnsdal Olson

the I of but wanted to on the some on focused more up China trends. follow near-term comments, really

China You quarter. to this mentioned that returned growth

some that well. also excess pressures the capacity of in industrial and some in highlighted markets as You there's

unpack pressured little us Shawn, Jack's sequential terms to in you then, is more? XQ that on a bit So can just of that China. you by XQ for And that question that mentioned just some of ramp,

as you just what can your XQ through into So well? are assumptions China us walk

Shawn Vadala

let it Yes, Patrick of sure. Maybe I'll start, I'll pick kind and up.

of So through China growth. a of decreases. return to mean, period a last of over if very kind There's now been will, resetting, did we X in positives. One, I overall, significant couple you the going we've this been quarters.

held to was of had on had lab market then easier the in nice low a mean growth low very spite a see and fairness in single-digit the the business, comparison. I industrial challenging business more argue to decline business, of on In overall. the up you have resiliently a started did our lot we So an to situation pretty spend could And it side. kind the the business. single-digit than lab downturn industrial lab in industrial We modest quarter. industrial growth the

on locally. that innovations -- to I things there. and bringing single the the relative just and still the market. a it's kind side, the team out shows continues see there well recently the of lot really of were laboratory was with sharing with And digit of just how and they've industrial and the breadth think, low doing to team execute the So also Patrick come market I to it's neat that to conditions, us they're

I In going terms quarter, overall. I China we're comp and remember. did We of bit comps, of guidance a QX? in terms how for I fourth don't for that because about the little of give seeing of more we're mentioned know. start we can't lab industrial. the these some thinking to don't know, divergent

be exclude clear, a expecting if growth. high comparison of more end And the higher -- of low quarter. basis, into fourth an you so I this be round growth be to down we'll translate QX benefit, single out. kind it still growth industrial see double-digit laboratory there. that acknowledging like think of delay to it China how plays XX, And digit, on more our side, on I going And mid-single-digit single-digit for low maybe on a on in the the might like the just impact easy is reported to then we're digit to will the they're -- guidance shipping single for side, lapping high even it's would

Patrick Kaltenbach

of Yes. China. Excellent. add Thanks, in the and in the Shawn. If unpacking regarding growth I question terms may areas

years, in I process that's think destocking analytics the not and Again, well. we to of that's The the there, some segment in spaces in is last we seeing also is chemical for in seen And over are of lot capacity behind that's the sitting linked area a they are battery the X China. in us. Part still I have recoveries also yet recovering a exceptional mean industrial China, growth pharma where in issue. where we're better have of that all same special truly on in areas mode like, automation. recovery that example, -- overcapacity.

So the investing they pulling automation down of not additional solution, China our on rates not, at industrial that's automation. and expansion in in and growth are some moment, capacity

Rachel Vatnsdal Olson

Great. and through including the That's doing, what geography assumptions you're of comp. by excluding my all And then us walk in as follow-up, helpful. those terms you just XQ segment and could

Shawn Vadala

with absolutely. Yes, going with labs. start thought I'm the to

before you last -- as I'll like the give for number then a did the delay give XXXX, adjusted the I year. on for from reported and number we'll So shipping you

basis be shipping adjusted down low basis, reported up up industrial low to The digit on for the on basis the low mid-single delay we single basis adjusted expect digit business, reported and up an we on be on for an digit single and lab to a slightly core expect So shipping a delay. double digit.

be we single up to inspection, expect digit. product For high both

Europe up up on and we adjusted we a estimate digit reported retail up be industrial basis an up adjusted on the shipping basis down low translate basis. And adjusted and up look then reported and low China, on digit then a basis. mid-single-digit an mentioned, low a digit And total low adjusted down would a will and of for growth as on basis. basis. be Americas and be an reported on an would single And on delay. up would So basis XX% basis on basis flattish reported mid-single single then basis. digits digit adjusted into on on already the digit a then a to be double teens that we on single about geographies, high at an reported low would mid-single

Operator

Research. question from comes next Josh The Waldman with Cleveland

Joshua Waldman

improvement Patrick, you've is it it last customer a of competitive seeing momentum anything momentum the the function a just or preference gains the if on in environment from, efforts? so, and service on of sales like over or that? couple landscape seems a say, made the quarters. you is think here? some building change maybe of Or internal like And of it and you're share to more point more talk a Do more

Patrick Kaltenbach

Yes.

a I the launched I products well. Thanks compete the Josh. we're what seeing in both, different categories for of question. that is but that the have bit it's we -- mean extremely think

win talked in competitors outgrowing or we are customers environment, teams sales this despite our market areas, to we serve categories, are new that , releases that very are with these the in product we received segments worldwide. really see to inspection, market I products And see Actually, organizations -- course, low in products by our in a are lab, That's being our [ that of well portfolio our launched. we our many still also with feedback quarters growth in Shawn compete the different really Of areas. We able they also of ratios and and effectively. same loss products, we well very it's with it's, that the part the effectively compete have very did teams numbers we and for that are our went stable markets growth can before. also into we're last budget are some in we the at are and serve these whether also they latest the looking also that couple doing the ] the in -- we the competitors that when even happy example, whether have didn't got

the them. you about we product If have business, think mid-range launched we of where inspection call product, a number

new level. going portfolio, always on high-end it's historically very mid-range segment. the been leader the So deeper mid-range leader nicely more us. for also have portfolio, and product We the market still this that's But are with tap product can market and we really into

mid upsell We some have that range product the launched and more in winning of helping us helping several is X-ray us products, also doors to but and opening this portfolio.

with customers see it's qualify these and portfolio using right Whenever So topK strategies identify the to together to our these we -- again, get market of our accounts touch top go-to-market hot them materials bring in new that new a these and customers. the segments Spinnaker strong segments, prepare team blend new the and our have portfolio we with accounts mind for of sales it's

product also the tools recipe sales of innovative get front also that's strong And that really bidding serve moving the forward. today the right differentiation. the also portfolio we to of that's think don't in a I a combination customers, new is customers

Joshua Waldman

based market? seeing expect more on accounts within that you're you time And do these these analytics what longer-term and And the and bit it. a benefit strength from to kind in think of path normalized you where real instruments? from kind of back year, a growth the 'XX end in on you're accounts? to seeing then improvement seeing Got we're are Is trends commented on you in a to then, think Or more Europe. Patrick, you you process I on talk strength and U.S. pipettes? pharma can the the

Patrick Kaltenbach

volumes, order happy the Yes. in in space, Good growth question. process definitely also of to I order that is both very about for that. biopharma terms are mean I back analytics with and bit us, we good space the talked pharma frequency and a

sales takes are better see I will out cycles, would who momentum. engagement, honest. better new to On we products, -- if cycles. I mean across still get also quarters this also we'll is for mean, our almost upgrade instrument That had of also quite accounts budget there and business XX% the But to benefit to portfolio, the business, prolonged pharma side, them analytical through replacement to that say customers let's to there approval focusing in best released, optimistic the And sales longer be we wave means are on internal there some X we we're want normal and it but the them to in there their the, years I'm turned come still X our is be say, at that when moving and that get why I capture. the capture of updated to having will these business also getting budgets there already. That's point been innovation now. out forward, catch-up the down much levels. Look, back can more time -- portfolio a so is really that XX% seeing

Operator

from The next question comes Citi. with Patrick Donnelly

Patrick Donnelly

bit? can. we weighing I to Just margin ex up. China catch-up trying the of feel when mean guess down I little off are just a may this seen that guess, sounds if have China catch a wanted trying into margin the 'XX, some going mainly much But to forward like would over kind I due the [indiscernible] the if get look been up. 'XX you levers at 'XX, little haven't a margins? of of to was Just the without talk out by you given I margins catch of into dive at algorithm headwinds piece more the the period, things it boosted certainly logistics just again? the expansion. to drill Can logistics look are the logistics on what pieces kind on on margin flat logistics you Shawn, X-year key for 'XX, here be about the moving that you that X-,

Shawn Vadala

point the to I 'XX or of Patrick. range. kind in understand I question, expand at you sure. profit mean, look is the XX Yes, margin so basis operating if expected

You're right.

would been volumes have the of you kind growth, kind acknowledge like the look would bit. still same it's right? need we little sales at to a So been shipping of the down. If have I delay, probably that are sales down exclude -- as mean you

So if shipping the you delay. for adjust

X. we're you if exclude X%. the So you what's exclude our guidance down X, And pricing, And then if volumes X%. minus

if years, there's growth. there after the So kind been you're at reality where think couple of if I there. But volume last just where a at think hasn't you're back you period looking was but looking volume there a -- like a growth. I And exceptional of look period that that's

to need back, to I'd At XXXX XX%. and under if go pre-COVID margins that And like expanded. look go time, a back, want I to so our back do were they have really you think you

quite we've this line. time. over tremendous just So had It straight wasn't margin expansion still a

margins increase very business. like remain with that still to have to remain the we Now a as we we runway the things and very still kind in forward, as are the Q&A confident, do at earlier look of mentioned growing disposal I why -- we have lot starts our them. confident all It of

We highly a a there. very Spinnaker have lot opportunities investing We lot of launched still We've just been serve new generation of a X. We on innovation. markets. fragmented

about to opportunities sales have forward, plenty we expand we So of then today. talk going and service

Second and a pricing. to key lever. continue will been is be Pricing has

lot We very things of innovative have program. within a the

analytics. sophisticated very have We

tools. We sophisticated have very

around our our product all organizations and as the price. working teams market a together organizations world with optimize well have as We to

of in supply Ocean, that we to efficiencies many remind have on of Still costs. was we're very SternDrive, terms in gives a primarily insights for us to ability year lot continuing shared go are -- also in of of by us then technologies of a program. the pricing the also provide and more new of but it of which as last of terms sophisticated how which processes generation our things in Blue is wave helps interesting increase to manufacturing we improve in be terms earlier about ability We an organization, our our advantage all innings this lot supported business drive a also targeting power have the the people in of propositions providing more is that well latest been to some in analytics. products. And about and talked the And our the it recommendations our take to Blue and also the that things pretty chain pipeline, through to of and setup do runway. Ocean. we to has whether a little advanced of things launching about Lots intentional There this Blue enabler it's leverage call, productive. And R&D reducing about SternDrive, also there's as a then value well of talked able better do, lot centers foundation but better to programs decisions and automate we the productivity, also through and service the make Ocean that

Patrick Donnelly

on helpful. China if margins quickly, mind? the really That's you don't Anything

Shawn Vadala

corporate average at China China, is I above margin. think

last and a growth been over starting year. corner bit it's margin to But on our nice that the see of turn to the going a So we're there forward. overall it's to headwind

has on volume a also have So there we productivity executes like very and areas and organization we've is acknowledging And that the is leaders focused prepared team strong productivity And organization. particular -- well we our when to -- been the for in with nothing comes SternDrive certainly our but future. company driving innovative that. of addressed but issues I'd The say one like very decrease. within they're China, and very team feel it the Chinese

Patrick Donnelly

it China, Can the you're of That's sounds really side. the Is industrial would obviously from kind -- you the things. like issue? helpful. on Patrick, that's And what then, mainly And that on weighing be talk front on just broadly? It China, just helpful. quickly what customers seeing industrial

Patrick Kaltenbach

definitely factor, a is a in said, Europe that also the but have as U.S. China mean, market I and Look, slower question. we Good last I the Yes. quarter. seen in it's

would I longer. areas a bit they is the had the pause, wouldn't although cycle decision say a take of it but Some taking

some of competitors space. reports compare, also if in look at earnings you If industrial you our of the

some bit. You slowing growth a of has been automation can see quite that the down

think changes the subdued, many automation totally immune has are industrial mean, some investment always we quarters. And I there. link don't this to that, I I say, been to effectively, for out down that there has PMI, still in while if I with handling, that and I'm the but would we're into and it and because will not but gains. in will it come digitalization competing been PMIs, of productivity very back when investment data customers et shrinking U.S. That drive is comes we automation also center to there it also that and to front gains look Europe a require need also compliance here productivity empowering needed are and a our is our and for workforce cetera. solutions and sure

midterm, we honest. product Again, a strong portfolio. have not about be So to concerned I'm that,

we the the had think trend also somewhat slow and was will quarter. China, not digitalization for automation a intact. this I Europe U.S. smaller. last yes, was it stay prominent, quarter But are China and only but probably more

Shawn Vadala

manufacturing see our core XX% it of anchored other in business, general a core our longer in a taken our combination and as food It's economy well, still we of and delays too, just the segments these to segments while than reminder, but of also of has a About more as businesses. exposure And general biopharma, little is And things industrial pharma, Yes. chemical. it lot the a -- not economy. bit too. our

Operator

Tycho The Jefferies. with comes from next question Peterson

Tycho Peterson

the follow I some want on industrial of Actually, up to just stuff.

digit a just to maybe single about quarter. the So single but... that low while. deregulation talking in risks, can of days, touch assume on for of know comp with on that's guess, year. any I digit I broader the because manufacturing. easy been you're guiding But it's or early product fourth inspection, next you And food high you're out business new challenging part a portfolio? a for the administration I That's

Shawn Vadala

Yes, you want to...

Patrick Kaltenbach

new Yes, still are start said I mean, beginning, slow and the the is good I you with portfolio Look, really midrange well products. is competing we product pressure. can with the upgraded in the market under our with chime can as in, here are Yes, Shawn. I inspection customers news

that food we a in think, year, [indiscernible] to low expect look package the is impact at under not there, an prolonged QX, That's to they're but easier all, margins. year the pressure think to stay a from for comes course, good mid-single-digit also when the base. we're out sales There's packaged cycles. Still our midterm, that large administration which is right. have a big of will why of of for companies, bit range and it next I would we forecasted for you I seeing If comes their that's PI. it part when engagement customer I fundamental to last But what change, current is comp compared

Shawn Vadala

going to I there people I every whatever, there's is need is with. new -- what buy Yes. a are eat. But to we about going brands, come I mean, see we and there's new still there's like shapes, still out new time think think so what find to sizes, concern there's they are people

to change. so if be always And even opportunities and with risks there's tends so there

Patrick Kaltenbach

package different it's not check that are ], sure also the from concerned they into package that but serve Yes. is the [ we too laying customers and amount right making again, modalities group, much. enough there's

end definitely the their these in when It's wants control Nobody contamination to the brand contamination, physical safe a for of food. prime So food to they a -- comes part and of line. And the is protection protection. companies. then make physical check [indiscernible] it's big have it other customers our laying to want find at we

Tycho Peterson

then And trying -- turns think comments you you next year the then, some reconcile mean given the overshoot just actually of here? Americas. more the automation onshoring do Patrick, I when your to onshoring, Do but was in could I'm automation think actually opening soft initiatives? you in about

Patrick Kaltenbach

business But and I but that reshoring I process tell mean you, that out we onshore of overshoot, takes to can something is a Europe, I and monitor down love China months like to to your the not or time. it X It's within or right? U.S. down through shut slow mean, course, closely. We'd of very this time, somewhere move it takes in then

momentum worldwide. would exact come, years part that forecast, it I to material to think reshoring will to When is the not gain be of activities come. year, timing I of really have you more say, the seen, to probably still honest. That's the next but difficult the

Tycho Peterson

Okay. pricing obviously, quarter just with your coming in the thinking And changed the year, about what's and algorithm all? Sean, pricing next power. one, Has fourth at then assumptions down, last then inflation

Shawn Vadala

thinking still and we're also Thanks, year. for next QX, No. Tycho. thinking X% We're for X%

Operator

comes question Bank final with America. from Your Michael of Ryskin

Michael Ryskin

quick. be I'll

bit? Shawn, correctly, First, earlier. confirm say that margins that some not thought I you sort so flattish, down hard just made the that. a I'm number, heard reconcile XXXX? little not comments little flat want heard will a adjusted you to and sure with like kind I in Is I bit hard flat? a guide that's I of EPS is that an Or to of maybe it

Shawn Vadala

operating And like XX be but up margin gross is margin So yes. flattish, profit the -- then to XX would bps.

Michael Ryskin

Yes. All makes And That then sort follow-up of a Exactly. Okay. sense. right. on that. quick

to way the back to out be to swing. described range, Is On the for XX, say up and bps just shipping margins XX that XX, you the would just something bps of XX trying it make [indiscernible]. component. I sure we kind XXXX. shipping fair it year, it want correctly next I'm that's like ex for

Shawn Vadala

like sounds but exact don't Yes. reasonable I to me. the Yes, a that know math, range

Michael Ryskin

Okay. me. one And for last then

just consistently XX% have things I like often I for little sort bit from like down to of not X was revenues critical issues, retail. back one-time I about pretty of think of product a think to a know face food in something your challenges. been while. just gone to I day you lot, continues want that's it's about comps, and business, mean I some you about tough that. a not ask talk asking declining just inspection. customer part the It's but a

that? are your on a thoughts there strategic solutions be back, what some could of can a to taking think be core business? step Or is the there? Just something that part continue I mean you

Patrick Kaltenbach

a a business. very is you account Well, question. it lumpy do as region, lot key there. say, I look, management of mean, food good We

see don't So a Last last very think that expect but a part valid portfolio. buying -- technology of on customers that really still decline we to you It's it's in year, our major lot from year total really they're of regard, had about chains a the good they a we year. it's weighing projects of solution. With of there. lot significantly It's of revenues. come X% our still that out year strong retail a And this is that the ways. us, increase. leverage overall, a We platform we have. back strong It's project

on also actually scale, the We workflow, out the the received new simplifying not the the products. but what invested put for that's of you updating with checkout automatically detect really interesting also only for features well. very been last bit the customers, a using eye-based for came have couple servants. We in very years And customer to solutions

other So number the technology we see of we again, of of don't than But about platform -- having there this the again, that good also, change in a leverage leveraging immediate don't projects think pipeline. strategically, and part portfolio. any

Operator

for remarks. question-and-answer the This I'll call to concludes closing turn session. Adam the

Adam Uhlman

morning. us Thanks, this joining for everybody,

follow-up reach have a any you to please have questions, Take all you If care. free out. I And feel hope weekend. great

Operator

today's conference Thank concludes you call. for This joining.

You disconnect. may now

Mettler-Toledo International (MTD) 8 Nov 242024 Q3 Earnings call transcript