Mettler-Toledo International Inc at Stifel Healthcare Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : Likewise, and my pleasure. Maybe we can start off on a somewhat topical note and just talk a little bit about what's transpired since the election. The conversations that are being had about China and tariffs. We've had conversations with you about tariffs before. So maybe we can just think about how it is that this experience compares to the last -- the first time that we talked about this. And then the things that you think you would be able to use in order to offset any impact of whatever might transpire here.

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : Okay. So that's a process that's been started and has taken place in earnest. But you still think that should the need arise, there are moves that can still be made.

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : Okay. And to your point on pricing, I mean, you guys have been refining your pricing strategy for a long time through the initiatives that you have. Has that enabled you to be more nimble in certain areas? Should we think about certain businesses having pricing power that maybe they didn't before. And then ultimately, the question would be do you think that in the future, you can push harder on price than maybe you have? I mean I think you're among the better in the group, but you don't -- I also know you to not be a company that doesn't try to like make life too difficult for your customers.

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : Yeah. Do you -- just for clarification, do you have a ballpark estimate of what percent of your products actually are under $10,000? Just to sort of conceptualize the low way, I guess.

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : Yeah. Well, the average is $10,000.

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : Okay. And then just thinking about China more broadly, can you talk a little bit about stimulus expectations in the tool space? There are some companies that are starting to talk about seeing some activity on tenders. There are others that have really kind of just put it off on 2025 as something you're likely to see. Where do you fall and what would be the things that you would be looking for in early '25 if that's when the time frame was?

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : Okay. So said another way, the guidance that you've given for 2025, which you just gave with the 3Q call, doesn't really assume anything in the way of China stimulus impact.

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : Okay. Longer term, you've talked about China being -- you've talked about being comfortable with a high single-digit growth rate in China. Does the geopolitical situation change the way that you think about that? Are you any less comfortable with that idea? Just thinking about how things might transpire over the next couple of years if things -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : Do you think that there are market share gains to come out of China with this sort of dip in growth? I mean there are some businesses that seem like they're able to take advantage of economic conditions. You happen to have a pretty fragmented competitor base when you think about who you're bumping up against and what the scope or the scale of those customers are or those competitors are. Is that something that you think you could see two, three years down the road in a more favorable way, just the ability to sort of push out some of the smaller players?

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : Okay. Maybe just setting China aside, I mean it's part of the 4Q picture for sure. If I look at where organic growth in the model goes to for 4Q, it steps up to 8%, but that's very obviously a function of some of the European logistics issues. Can you just talk about where biopharma is heading into the end of the year? And then what your expectations would be for either acceleration, deceleration or sort of flatlining in your major customer classes?

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : Yeah. Okay. And would you say -- you've provided an outlook for lab for the year that's mid to high, if I remember correctly. Do you think the bias is to the upside or the downside on that outlook?

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : And then on the industrial side, low single digits as an outlook. Does that assume any sort of change in the macro picture? Or is that the outlook as you would see it today based on current PMIs and current IP numbers?

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : Yeah.

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : Yeah. China as a swing factor, not news.

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : Okay. I want to ask about Spinnaker in a second. But before I do, just sort of a clarification on the logistics issue as it pertains to 2025. What drives the 300 basis points or so decline in op margins in 1Q? Is it really just a function of comps? And then can you just remind us how much of lab was impacted there? And then the last question would be, is that generally out of the numbers come 2Q?

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : One of the things that I do when I sort of think about what the setup is for any given year is just say, what historically has EPS growth been like in a year where organic growth has been X, Y or Z. I can't go back and find a year where on an organic growth level that's 3% to 4%, you don't do double-digit EPS growth. 3% to 4% organic EPS growth this year gets helped by the 4% that you tack on if you don't have a logistics issue. So that puts you in the high single-digit earnings growth range. Is there anything that you think would sort of break that mold or make that historical perspective less true going forward?

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : Have you thoroughly canvassed the portfolio and the business with those two programs? Or is part of the iteration development for these two to point in a new direction that maybe it hasn't been in the past?

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : Okay. So it's not a matter of this corner of Mettler-Toledo hasn't been fully fleshed out from a Blue Ocean or SternDrive perspective.

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : Let's go back and see what we've done across the business in previous iterations and now what we can do on top of that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : Okay. So in general it will be a fair statement to think that you feel as good about op margin not just opportunities but performance going forward [as it had in the past].

Question: Daniel Arias - Stifel, Nicolaus & Company, Incorporated - Analyst : Okay. I got lots more for you, but we're out of time. So I'm going to say thanks. Happy Thanksgiving to you, Shawn, and I'll talk to you soon.