Mettler-Toledo International (MTD) 3 Nov 222022 Q3 Earnings call transcript

Good afternoon. My name is Audra, and I will be your conference operator today. At this time I would like to welcome everyone to the Mettler-Toledo Third Quarter 2022 Earnings Call. Today’s conference is being recorded. All lines have been placed on-mute to prevent any background noise. there a remarks, session. speakers’ the will question-and-answer be After [Operator Instructions]

I At Investor turn ahead. would the time, Relations. conference go at to Uhlman like this Adam over Please to

I everyone. and CEO; Mettler-Toledo am and Kaltenbach, CFO; I happy all our am evening, am Relations you I good and welcome Shawn this and for Investor Vadala, Audra, Adam Thanks, Mary our Uhlman. to am to joined responsible at Patrick I Finnegan. call. with

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

of Securities of and actual performance uncertainties cause from implied the by to U.S. This results, any Act include Exchange and expressed may be conditions, or materially call statements will Securities the statements. other XXXX meaning forward-looking involve U.S. our XXXX. forward-looking financial the statements These of that risks, those achievements factors Act and different within

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

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

to call over the turn now Patrick. me Let

sophisticated chain strong continues to strong that pleased appreciate product good programs, our and I joining results sales report competitive agility am supply our marketing quarter Adam, and everyone. innovative another be We of portfolio and to advantages. you Thanks, evening, as our call.

three highlights as our detailed prior quarter in sales performance to the of page compared the increased on XX% third-quarter Local of presentation. the currency are The year.

in our Yet, in businesses. Industrial Laboratory particular growth very the and Americas it’s results good in We and Core strong China. have

growth robust operating margin execution and foreign earnings and good adjusted of adjusted in sales very significant in growth profit our headwinds. despite Our effective exchange initiatives resulted growth

look greater These As and remains is strategic remain identify the year the on macroeconomic uncertainty there challenging leveraging remainder on to will forecasting namely, profitable opportunities. growth in we agile strong and the require us to acknowledge our factors environment. we can XXXX, focused uncertainties and we programs and target to control, towards of

position digitalization. such growth we in well and We of remainder sales year continue Based the for and our the will XXXX. as benefit strong generate market market as initiatives, automation conditions on to growth trends good and of market the favorable strengthen execution we today, our from as believe

productivity will execution support initiatives our Continued of margin results. strong and financial

it me turn Later to have But on to comments and some the I will Shawn? let guidance. our now financials business. Shawn cover additional

sales reduced Thanks, basis quarter that of which $XXX.XX as million, the was a Russia X%. X% represented war impact headwind Patrick, currency a increased dollar and U.S. sales reduced by increase due evening, about everyone. good growth. the currency in X% On were a Sales XX%. sales to estimate in of We sales local growth of the to

in in sales increased Local we four, currency increased in Local the XX% region. in number sales World. growth Europe of currency Americas, the by quarter. Asia/Rest sales show XX% slide in X% XX% On China and

X%. Russia Europe grew in Excluding sales our

Local year-to-date growth on on in currency XX% sales Americas, months growth in sales five, with increased region number the slide currency basis. XX% XX% X% the for sales we basis. by a growth first On in of the Local a China Europe XX% Asia/Rest and growth show grew nine in year-to-date World.

X% Excluding grew basis. year-to-date a Russia, Europe on our sales in

product by On currency local summarized area. we slide growth sales six, number

with XX% quarter. Core XX%, For in and X%. Industrial Retail Inspection the up Product the quarter, Laboratory Industrial Food X% sales up increased XX%, grew increased

growth next Product year-to-date shows sales Inspection increased Food basis. a Retail declined up on basis. on including X%. area XX%, Laboratory and currency Industrial X% in year-to-date sales by XX% product local a Industrial growth The Core slide increased XX%,

Let rest me P&L summarized now number the of move slide the to which is eight. on

pricing the than material was gross quarter, growth, points. third by margin higher in benefited For at XX.X%, increase from which costs. basis better We of offset was an expected part XX volume favorable and

increase R&D amounted prior to which project in period year—prior reflecting the in local $XX.X over XX% quarter, is currency activity. million the a increased

and and million, to year investments. increase $XXX.X amounted increased over sales marketing prior the includes SG&A a X% currency in local

operating Currency amounted growth of by operating XX% the increase which margin an XXX represents year. basis approximately Adjusted X%. profit the million over $XXX.X XX.X%, in Adjusted quarter, increase. a prior points to profit reduced operating was

A Other related couple pension to P&L. the $XX.X the quarter, non-service income. in primarily on quarter million of in the quarter. income was final Amortization expense in million, million amounted to interest $X.X reflecting comments $XX.X amounted the

rate XX% This before adjusting tax-rate exercises for quarter. stock timing quarter. is and was effective items the Our the the in option of discrete in

XXXX. QX maintain expect and rate We this to in in

million increase Fully from Adjusted the quarter for year. is XX% currency. the to prior over EPS the $XX.XX, increase was XX.X which or a excluding prior diluted in quarter, the shares amounted unfavorable year a XX% decline a foreign X%

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

the currency. unfavorable foreign or year-to-date margin grew Local We expanded basis XXX XX% are very next are EPS year-to-date or unfavorable XX% and XX% currency XX% grew summarized Adjusted currency with XX% results, income points. which sales adjusted excluding a happy excluding increased our slide. operating for period, our operating on nine-month the on basis

P&L. the covers That

was days, Now times. cash quarter amounted DSO at cash X.X ITO to let me levels the $XXX.X In while million. compared cover was free year flow to adjusted flow. flat prior XX

for this year with of Let considerations our to and me now and guidance year. remainder next guidance begin turn for the some overall

remains rates, Ukraine interest and COVID economy able the First, environment, in the of is China’s recognize macro in zero forecasting change. quickly challenging. very impacts the of react to agile greater from policies. conditions market importance if There being war the higher the uncertainty including We global and

for XXXX our basing conditions assuming as guidance are QX remain market today. in We are they

Second, these we feel believe identify that our innovative to particular, In and growth an opportunities we have business. we initiatives. we very good strategies portfolio about place supports growth product in and have pursue

benefit in nearshoring. on and favorable as well mix, global We in a trends also continue to digitalization investments and business from more automation, as market

on believe initiatives. our will also we We execute continue to well margin

improving. but remain challenges chain supply are Third,

an demands Our three of over risks continue the job acknowledge years. a overcoming advantage, but dynamics various our the the supply meet customer supply has outstanding believe done chain remain in to competitive is to team We chain. ability of the last global

compared spoke. headwind we greater September since respect for last-time To headwind. to Finally, a I as QX for particular, XXXX. currency to are a higher moved we all rates the degree, with a headwinds dramatically of bit creating know has also as a you are In early and significant significantly have interest aware currency lesser

limited have we debt. floating Fortunately, rate

rates in movement has expense. our significant increased the However,

let would helpful to overview me it specifics. provide be cover now the thought comment and guidance on -- I this

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

offset the rate largely represents EPS expected expect range of the adjusted our higher full performance to growth has of by a $XX.XX, than currency headwinds about midpoint guidance XX%. QX in $XX.XX be We been adjusted as to is which our than quarter. previous of EPS in guidance slightly year The stronger fourth greater

headwind be of full EPS in the to approximately and currency fourth the Specifically, we year. growth to X% expect a adjusted XX% for quarter

respect expected -- to local fourth would expected be XX% of of growth At quarter a we X.X% as be headwind be EPS for growth the of XX%, approximately had the to we This X% approximately represents year. time last currency call, currency full X% we the EPS to in of sales our quarter, mentioned, adjusted a XX%. of approximately to earnings rate fourth and growth to just includes had earnings With to and range headwind a I currency adjusted $XX.XX. $XX.XX the and to expect

For our of and a of currency range EPS a includes XXXX, based growth X% of be adjusted in X%. sales growth which $XX to to rate the market X% approximately expect of would we This today, be assessment local to headwind conditions represents currency on full to estimated approximately year $XX.XX, an X.X%.

further on XXXX guidance. Some our comments

to intangible amortization at expense approximately including intangible We excluded purchased amortization EPS on from million, million, or is estimated $X.XX to adjusted per be purchased expect basis interest pre-tax share. a $XX $XX total $XX million and amortization, be is

is approximately profit income, and Other $XX be million. is forecast to reflects income which operating pension below non-service

will be items We rate XXXX expect XXXX. for tax discrete and before our XX% both

to Now, flow. cash let’s turn

flow full $XXX which in we the range cash guidance. XXXX, year previous For expect now below of million our free is

to team exemplary global expected. chain level expect customer levels normal supply the We our challenges return given it has XXXX. higher an more meeting we higher overcoming challenges we higher in inventory demand, had has believe been the than -- hold and us required While a to will it has in necessary in job supply done a in chain

I per excellent, each both also and in want share XX% a XXXX in flow remind cash basis growth was free you on to our XXXX exceeding that year.

per represents expect allow a in flow approximately a EBITDA which and net-debt basis would would of approximately growth expect of a share rate XX% times. million, billion in of maintain we on the cash repurchase to shares rate of $XXX free on to XX% to We XXXX, income. X.X a net For -- ratio us $X of of XXXX, which conversion range

shares As to in we throughout aim our will the the past, we evenly done year. have repurchase

billion years, -- has to billion that year announced previous be next the repurchase $X.X is repurchase utilized authorization. authorized have $X additional remaining share which on We $X.X our million over the the our also few today an to program an Board to addition

to respect an growth in growth rates, At X% by full for impact growth, currency exchange currency with X.X% of on to sales sales X.X% expect the our an reduce including today’s the in we sales our additional reduce would growth XXXX. foreign year headwind XXXX, QX. currency by Lastly, sales

That it side I will and back is it from turn Patrick. now my to

of and with the for world of in-depth global budget around initiatives operating our our and units. key meeting Shawn tour, recently reviews colleagues frameworks strategic Shawn. Thanks, I completed our annual

closely colleagues us important followed the Those have analyze our our to this spend considerable of process of diverse time with know, discuss allows it us that as to is planning opportunities element across annual you and business. an our

for enhance well-positioned Although, our have believe in market good are outlook we and in the the over underlying place uncertainty the economy very feel next forward. to about going exists year, I the strategies position global we

can that in share XXXX. generate to continue confident we quite and gain and earnings XXXX are We good

well as more our outlook results, Let on details me as some with share operating you comments our for XXXX. on

Starting our across have year-to-date, with business. the I good pleased am with growth most strong Lab and portfolio. quarter we of sales and very this results we delivered saw

fourth good sales expect and performance continuing in the quarter next We year.

think to opportunities for accelerated address and realized drug over we expect our our validation our biopharma investments modalities The requirements. solutions Labs also compliance provide into will As great productivity them of and pharma about digitalization the medium-term, customers has trend growing data business we gains and Lab by and solutions. new us support with in helps

level on approach the to take a will systematic in we in batteries, capture a leverage customer look to agile occurring growth segments product to highly applying marketing the growth them. a identify roadmaps a efforts application hydrogen and attractive name the polymers strategies, ensure We segment to and these significant have green like sustainable advantage segments, also semiconductors, opportunities in to place of We talk approach of correct hot lithium-ion and and few. voice

to and Industrial Core solutions is had and third customers to Switching increased look in There our good the demand for productivity now results as our yields. business. strong year-to-date. the particularly very Industrial quarter automation improve

activity Core segments have and from Europe seen customers important bring China, Laboratory and drugs the pharma our interest lithium-ion as customers to they efficiently from business, and solutions good as we business for have Industrial in industry strong also are We production. battery serving very hot new utilize seen well to our our Americas. biopharma Like

more business While High cost resilient Core Industrial are good in date business not our the we and our may activity has to and customers. growth in demand in shifted business expect to softer economic Industrial changes solid our our economy. seeing is and particularly chemical the over years customers fourth in on to energy quarter we deliver to year. next Nevertheless, industries, immune Europe Core in in the and the weigh

benefit establish years. more is trend expected reshoring to long-term, our the Over the of coming to resilient shortages labor Core Industrial nearshoring supply and over chains and the business

in solutions cyber product and most new very been customer integrity to we is requirements. stringent Additionally, critical to for customer’s security easy equipment success into data needs that also the control development provide integrate systems and automation meeting meets our has and

We and exciting are also our product have to about brought innovations come. and new optimistic to-market portfolio we products

a addition to customers floor to before contact automation coming new hygienic well example, food in in bench the win growth strong line have For and pharma years. we offering, of us scales positions the and our seen

Product to activity now we growth the part in Turning Americas, in investment Inspection good was by offset strong Europe. demand had which with business, more in cautious

from packaged Some operating challenging customers margin manufacturing our fruit chain focused mitigating and environment disruptions. more of on are pressures face and inflation supply

expect in fourth still the into growth overall However, and quarter we XXXX. would

for have in Inspection war remain that convinced in the growth While lower remain the we in pandemic, growth years, strong. recent the dynamics sales and input the Product high Ukraine relative costs resulted long-term

not including to continue seek customers, we offerings out with growth in new pharma coverage metal with expanded X-ray in our detection. check of and have and mid-range standing product are or mid-market confectionery and still weighing industry, pockets and We our

advanced include support and our uptime, that we have want recommend customers manufacturing Product customer’s to remote service our new initiatives productivity. reality to remote underway time important while same remind identify you and quick These augmented I’d support to to very customers and improving up our running. keep also to customers service the technician for food and at is repairs Inspection our diagnostics

in results Lastly, weakness our offset strong in China pandemic by delivered the quarter, to third strength with due business Americas the the Retail related Food in lockdowns.

we growth recently over generate XXXX built product good and next that momentum can pipeline and attractive the has team Our an has are profitable year. for we optimistic

Product good Americas, last make me comments in Let in Core again the strong with We Retail. quarter had across Industrial growth strong third some and Inspection, by performance geography. year’s very growth

year have XXXX. a for favorable We and outlook in of the the remainder

grew sales the higher Switching region across customers. food the sharply Ukraine to as The Europe, on chemical of Russia. impact in war our particularly appetite, some manufacturers our investments about costs packaged to and customer’s excluding some of has led and X% energy weighed

in from customer segments, vehicles. good involved and biopharma We investment of other still see level including electric and development the production firms

We in and expect year. next moderate growth QX

the third COVID also operating challenging had as very Finally, World, our strong executed very and for on successfully pandemic Asia the growth initiatives. and the XX and our in well the team Rest of they navigated quarter lockdowns conditions with strategic

force opportunities also Going to attractive forward, activities we look continue pursue approaches to optimize to on in we will leads. generate customer increase focus sales guidance digital to and our our China leveraging

persist Industrial Lab expect well very the Our for we of year business the and year, and XXXX. in this have performed to which rest

and development in We China, electrical remain key market optimistic several drivers continued biotechnology, about the micro including of vehicles, electronics long-term material pharmaceutical, industries. new

support of advantage well-positioned efforts have sales to are growth our our these and in take marketing growth invest and to China. to continued very We opportunities in

the that in remain and from long-term, to us agile. days change the we can economic China know optimistic the in we we and uncertainty very acknowledge past requiring short-term, quickly about conditions While remain

So outlook summary that the quarter for a year. our fourth and is next of

sales long-term As mix you -- of growth our believe very term as our about earnings business the X% our is think you currency our about of and favorable years, growth initiatives longer think mid-teens local market improved growth that supportive growth. we plus dynamics, term longer strongly algorithm and

selling initiatives, will Spinnaker, This engagement point-of-sale. with force and through includes digital execution our which tools increasing customer gaining by guidance at additional the share accomplished be strong and services optimizing market sales cross-selling of

continue resilient market attractive, and pursue will fast growing to the Our most segments. team

deliver new will go-to-market -- to product in our for note that invest requirements is continue and be be future foundation We will and the and innovations digitalization. to of I will and customer uniquely approach would growth also that portfolio on automation positioned

gaining driving growth. be initiatives continue well and the strategies to are will sales organization, share and margin and critical Our throughout and in we operating well-developed and ingrained market

prepared That want now remarks and call open the concludes our for to I questions.

Bank We of Bruin from Instructions] will first De Derik America. question [Operator you. of Thank our take

Derik. Peter is This you. on [ph] Thank Hi. for

Just also real too? for year by fourth guys quick. your as walk Could next by maybe geography, assumptions through the and quarter and just you segment well,

Peter. I is one. take Hey, Yeah. This Shawn. that will

our me business. with So, let start Lab

high we double-digit the low and which be for for would single-digit So XXXX. growth growth fourth the quarter, QX, estimate full year single-digit growth in for mid-to-high

XX% single-digit year For for full our Core and estimate growth business, growth we for Industrial would be QX, approximately low-to-mid which single-digit growth XXXX. the mid for

for mid growth For Inspection, estimate full low-to-mid which the Product year growth approximate we for growth QX, single-digit XXXX. single-digit low for would and single-digit

which estimate about growth we XX% for the mid single-digit for and Retailing, Food And QX, XXXX. single-digit approximately full be low for year in growth would growth

then, growth kind double-digit go mid the And of that estimate would low I Americas single-digit be high if single-digit and in for for the QX, we which next in region, year. through by year growth growth full

and For estimating QX, mid year estimate and are XX% would Europe, XXXX then single-digit QX, growth growth for be in full single-digit the in and growth the XXXX. low-to-mid growth growth would low we high China approximately which single-digit full for are year single-digit we estimating which for in to translate growth we double-digit for

expectations And Thank I on for third and us guess, you what guys maybe embedded comment XXXX did update Okay. you on what’s give quarter an on for pricing? you. the and could updated XXXX?

Yeah. Yeah.

the pleased environment, are value very towards solutions how were automation execution and organization our the this more digitalization. and proposition in in see customers valued also we is to we our really seek of as quarter with So continue especially

of in came at the QX beginning range. about in we price estimating the X% we the At were quarter kind X% actually and a of for realization

of we expected. so As we forward, than look did better kind

similar X% price at in of are XXXX, And range. in a look kind the about of then kind of something a of as kind again at are kind realization we the we looked we range. expecting we estimating QX As a X%

think we the pricing second of say year. to year better will actions first because would we during important bit of do then some I that will it’s benefits the half that But our in some from get half XXXX the of a little the happened

you helpful. so Super Thank much.

you. Thank

Welcome.

our will Cleveland Josh next question at from Waldman take We Research.

more year, just taking and assuming I the talking of Hey. at though are questions. through a a Shawn, I for X% base, segment X% number. my guess there you level, am appreciate high next we geo I start is given mean, assumptions. price much that it your I Thanks think expect given guess, where that’s the is to I how of variance a like to year, volume, do seems the fairly conservative? you X% point only

Yeah. in trends think about we We good uncertainty continue are we there a digitalization things share. about good The well. well. well. can as feel market -- of I we automation mean, feel lot I and nearshoring. doing on world there’s teams world we executing like that and the feel very control. the gaining to is that But talk We of hey, yeah, like are feel We in the are like course,

in years, about more think, three are look we our three if importantly, at well, that’s over kind too. you also so of really I mean, comparisons. the And and last period mind organically as strong we year I something coming think, I CAGR to think keep I it’s off X% multiyear need a of like

a feel time. guide like is we point good this overall, at So, this in

of change and we play-out the we go approach things planning no along. as Of from has will otherwise kind update But get past. been things how see into our year course, and we we process to the kind there how of as

about internally? in of talk and it in around but, Got update maybe hear forthcoming while, didn’t hear if time I an Patrick, We you the wondered you it. see through provide that a gauge metrics up could talk there. then, research opportunities against could if often come talk you the And wonder kind LabX. quite I first the for maybe you you

question Thanks the good. for Yeah. Very Josh.

aware, reflects the who our Lab being products, So, strong look, out It instrument products a rolled who It LabX reputation those most entire -- instrument. market in it’s are not the for is workflows. world. the the really happy know to very control not of Lab background LabX, customers around controls for LabX, we how our also are has don’t of our for actually software Baloney more

compliance So that also it’s solution side. our strong software data and a helps integrity very the customers on

increasingly strong our us restrictions for And points it’s in Lab who space. one whole even and it’s well more the we pharma compliance customers through selling instruments for products lab becoming are us as Lab of more strict differentiator broader definitely strong connect a the on customers LabX, for the positioning and as

to who Again, this we strong a if out continue see to only entire instruments continued have reflective accounts, forward, more our et broader using to software the -- roll stored instruments LabX moving the we success said also and but backbone space, several to most of data roll our -- for but are to our and indoor helping to software had is that reflect cetera. very goal expect out, around workflows, but LabX accounts to Lab only we connect customers workflow key our base, this with instruments on connected we not having our in

a who proposition solution. against competitors Really similar and us strong also selling don’t for our have

we where forward. features and again and connect I add are happy with really continue to we instruments So moving am more

it Appreciate guys. right. All

Thanks. Yeah.

Evercore We Kumar next ISI. at will Vijay go to

the Jordan for of Hey. and fiscal was of on my assumptions go Vijay. year talk are for could This kind margin if wondering year Thanks question. what as the I remainder for we you XXXX. you is assuming your taking about into

I Hey. Jordan. take Yeah. will that,

next like, were year. with performance I guidance and -- with very before provided and already we our for we So, pleased have for pricing, QX QX I said

key a assumption. certainly our lever in that’s margin think I

of our we expanded by points. QX, basis kind gross at XX margin you look If

about gross basis of looking are margin of kind XXX points we we expansion. As QX, look at to

basis to our XXX just of XXX probably, dropped margin, at to in QX margin of about points. as points we in are XXX kind amount looking down are points, kind We under be of going about to XXXX points about basis if XXX basis look and a expanded you we we QX, similar by basis operating then

points. at As about looking look at basis we next XXX year, are we

a key see will terms but be a will to price slightly degree kind we QX, lesser as of material ingredient realization in QX. some And we costs, headwinds up elevated maybe inflation than what towards we go look still we as of in our forward saw on

Great. if I But maybe And can forward? time was you some in talk one quick seeing wondering about the you seen in talk across remarks. upon I about what for geographies you know it you touched your in and are are opening could you follow-up. expectations seeing and you kind Europe, from have quarter that your an order of perspective factors moving what

Yeah.

we we you backlog, terms our on are or But course, orders, so and year. we typically of we month a half a that guidance only so backlog. typically next fourth in So don’t consider the of -- don’t of and probably for familiar, for quarter or about comment have as orders in

most Inspection of typical lot -- our Product but our businesses, companies part in fit the are and a would area and that in too I particularly $XX,XXX, delaying which add is Patrick packaged CapEx, seen into CapEx Inspection foods, of remarks. what if are in Europe, our area slowdown above is a one degree investments in sales much below on not certain know I’d I opening of to in our terms our have to is don’t said Product Inspection we some impact mean Product that. the of In that portfolio,

but we hear crisis, at mean, potential of the good still as from industries then industry. and look our like on are the also kind energy chemical we I impact the we the things mindful of situation organization, overall And

Great. Thank you.

Tim next Wells go will Fargo. to at We Daley

Great. Thanks.

China on to wanted I question, First here. touch

in And the year XX%. previously think were previously think you low double said talking about I delivered you the for I digits. double-digit So, about you expecting XX% were quarter and today

on drove exactly changed, just guess? outlook for going -- what’s in your what year the is upside has quarter and I So curious the the there, been how

Look, as Yeah. this Patrick.

in very our We with are pleased China. results

also quarter have growth fourth-quarter. double-digit in said, the are XX% forecast we the for you we As and

So we us. supporting are how China happy really is for

well. really have there very We a organization and it’s strong extremely performing

reach not operational. out have the leveraging vehicles, restrictions, segments time but towns, been also still to Spinnaker China, remarks, lot very said We by in see really momentum to continue good lithium-ion corporate to in sales our tools fast capture segment, in the sites big segment, lock we a our they seeing fully really manufacturing as electrical manufacture we some We growing as the been the team, are have in battery affected the of behind customers pharma as biopharma also and growth well China. for and but

still performance, to and by course, are have outlook is or -- we actually for be totally have It continued very we optimistic in surprised as So pleasantly came we expected the again, better been long-term, China QX. positive for anyway our even of so positive.

but at growth I acknowledge a that short-term perspective. lockdown others, Short-term, look should China think, long-term impacts there always we you can risk in China, as or all be of course, from

promising. very It’s

see continue we I think will growth. to

have China really the good can Day I we market quickly a forget to drives We strong perspective, we what also have don’t from have growing understanding and segments side, capture is on well. R&D momentum those. and fast in And organization that about very but think, sales both there and that adopt and marketing manufacturing also as

All right. That’s a very bit two-parter a margins. And helpful. on here of

the inflation, going on of First, kind impact. to price and be is on then the second FX cost and

or currently higher embedded on Is the on that you the So are and upside the we in come general should then impact things. currently and price lower much on margin? downside consistent on that higher year, forecast the outlook that be next should pricing if it the cost be the to points for I the line four pretty impact lower inflation we think, of in about that’s to the comes FX outlook. similar expected to of operating the well. And just FX How of in quarter income consistent, in side as inflation but seem or kind thank then thoughts? thinking outlook, be topline

on impact we to rule of is and FX So topline thumb the best to that bottomline? can the of like-for-like use kind the

Good questions, Hey. Yeah. Hey. Tim.

the of one the start with first end me one will I -- one kind -- first. start will second second with this So with the I let --

think, I you way, mean, recognize are relationship the best between what I EPS. I So, sales saying and the

our renminbi. I U.S. think to be way at exposure about major best it say, largest exposures, the But the so our dollar the is to would look probably, would -- our to

And so renminbi million would to X% of our dollar U.S. $X.X million. profit in the change to for about $X operating affect the every about that

largest second the euro. -- exposure be to you the if then And would franc Swiss our

are it think long company and rate. kind So, cross in franc if inherent creates about look we the in are natural within so we euro, you short we the that of at hedge and but

the so every X% -- our $X about effect million as are changes franc And changes as that has operating Swiss profit. an on of or rate cross the the

look it earnings. really a And dollar how impacts probably so think those of I I basket of good major rest the that’s have proxy the on for then currencies, two against the would don’t the our at and but I are

In the okay, costs, price first yeah. terms what was of --

Yeah.

inflationary certainly cost, that in price the well I terms saw to If very we able in were XXXX. I headwinds you mean, of to think, respond

the actually to into a or take to can get Of course, two market. actions it for be quarter us able the

to react But if to articulating a year, with we a understands the next job market. similar organization explaining would confronted great market our I think the inflation, same I do way that think, the and able situation were we was and exactly that

value highly are the going-forward. and that to our market And supports provide really ability importantly, appreciated and to appreciate also them I they strong we realization support propositions the is these value propositions and then, most think, price providing

you Thank Great. much. so

Yeah. Thank you.

comes from at UBS. next Our Garcia question Alonso

Evening, so Thanks much. guys.

expecting just wanted of to you little start-off to kind maybe how about of been obviously components with there a think actually what and talked and of manage to to improving and you a the the the the bit with. to about challenges of think But kind impact kind the about about could kind you dig understand little previously chain kind improvement the bit electrical guess, to of I of have I if through kind have have us to into help cadence. of, kind of are -- and kind So, you talked how that guidance? kind how think of of and margins able and balance the you supply into that’s how of kind XXXX about

Alonso. Hey, Yeah.

months there’s other imagine of moving next in had expect things are seen some year, gross broker of course, have going going have a categories cost where out year to we parts our additional year some have material are several we electronic like have categories. different benefits of do is a terms can like assumption you next There going where seen but carry So, we like there’s year in be this buys or to into simple margin where to components, next we lot benefits our to see two examples.

will be about best impact then and to the XXX overall year wide margin, range other points the think next XXX-basis-point pricing think inflation basket. by our of about categories assumptions way on expecting our that I come it offset of basis gross in margin from we were improvement is this a that, will in

kind of And think year, material in to more on arrange. going think right -- low assumptions kind planning as we I single-digit something for about now the we you next probably are cost are modest of

Great. Okay. great quarter is organic on kind kind get but performance at to know update part a the the contextual performing is relative it I just would point trying of And how to maybe the of… this number, company to in be and PendoTECH of

Yeah.

… your expectations?

is how happy total with will very acquisitions growth. has our that, I volume, expectations. of of exceeding but not been growth, may Absolutely. It overall overall take in terms best really It’s the Yeah. one we performing. are in probably look, PendoTECH

end are our strong from happy still we We customers. demand seeing very are

as continue It’s organization. the to We and the meantime build we now overall know, started, engrained you mainly as sensors, business. the out look the future pressure into well-connected well. as additional really single-use product sensors And process in in we in

optimistic forward. So outlook on for we are very business the the moving

so Thanks much. Great.

Thanks.

move at to will We next Citi. Donnelly Patrick

color of in taking said one and is on there for more. was be any entire my Europe, Thanks helpful? a Patrick. Was I if that bit that you for you on more you just, seeing question. that little I particular wondering delve maybe Inspection. weakness region have sort a [ph] Thank there the would Product countries, are could Lucy into is what you This Hi.

multinational I but lot what question. large projects, Thank Product are Yeah. Inspection, are international, of in you. are not are delaying Look, that, they them they will and the take a we companies canceling seeing Europe and is projects.

I and QX, think, their in to any are overall, in have, better they things so of are more how postponing Europe. in would It’s in also they particular with line-of-sight have bit cautious spending probably, least develop this quarter, at specific they a become country projects I the Europe. and they not projects money say, and how

from customers So, I can overall. country from you linked see say, one just but to would are it’s most not several

Investor gloomy? then, anything Great. And terms you. we what in up, the can that for share I Thanks. that, of am expect the coming not around Day Thank

Yeah.

I initiatives. different think our business and an you on will update see our

to we We some will that chain you about then to of through supply of opportunities and will through expand also our talk walk kind continue exciting and pricing. our margins

value Investor it’s Massachusetts the going Analytics and also Day are is Process feature we so to and and then a to now be detail to lot And here typical so you showcase serve going more in our going actually business we you be right of kind biopharma at -- show show of how in we are -- then of business the business based, kind customer. stream a that that

Great. Thank you.

at to Goldman Sachs. will next Matt Sykes We go

sure a risks those the them and you baked have whether I obviously my am taking a in become the the one dynamic not dynamics others those the meaning also risk, change or but areas? of the improve, could the of to about of year, is the or inflation as Shawn, progression into for there of kind If out how of one guidance Thanks three or XXXX, look or certain first really you the Europe were question there Hey. Patrick Maybe into growth supply you and presented. questions. business think that just certain there’s have of, weakness it’s chain you one,

Let’s see.

take I Look, this. I can mean…

are coin. a We flipping

Okay.

crisis, continued risks As yet but China, that COVID-XX, I of in there are energy Europe, we some it’s Europe, in talk further, lockdowns not and it maybe quite for did, about evolve related war will and XXXX. -- Europe are et mean, is only about to uncertainty related ongoing clarity how the of shows course, as to is of just in it cetera, mean, it potentially it’s still I not talking again the we -- multiple outlook

current would if see course that to we would projection. our resolved upside Of be

sight be mean, short-term be there that’s I will many impacts affected, -- also not of program… How customers there will like knows? no who really how But in and right? resolution the is about actually those it’s big clear be, will chemical

Yeah.

course consideration we away, outages, all -- we does the try right? now to and know this of into would for those forecast. we that XXXX. it forecast risks very what can’t our these reasonable it make be are Energy upside, there would -- strategy, they course, entire mean and took But If in cannot of and right neglect for go

Yeah. Exactly. And…

quantify. But how really hard to much is

Yeah.

how respond how customers to also crisis. these will again -- It

lot back, is upside-downside the beginning to key Josh be the it is with kind do macro. asked an at like the end about think kind I going in of And the a to and you go of

Yeah.

a there and for us lot of Like, one up agile good could there the out be just out to world I and our a and it control monitor… in them are -- mean, any we downside -- to topics are they an be big a if stay try worsen, we could continue to of upside away, and an and of they would as things go if could organization be those

Yeah.

and can react have … very we closely make and these situations quickly. sure

into organization conditions mean, incredible in COVID-XX measures last any to back crisis, demonstrated forward our adjust if say just crisis same new apply the what agility market moving I will up. really looking and to comes and we also the I similar want is, we as went

team organizations very agile flexibility place, tools actually to and have I and tools react identify where as and send I to how can and demonstrated pockets our in we in capture are my sales we said, place the remarks think we we the market conditions in we at growth well-trained have also of the as changing have of those and up. quickly those beginning, market have come the they opportunities the very very can and in

a Thanks it. second I me And indulging the follow-up. question appreciate in quick question, color. Got just a for that

obviously of I smaller volatile that. As your you business. It’s impacting a at look Food been Retail, obviously fairly part are it’s comps and think

that manage growth XXXX? maybe there that mid-single decrease digits expect an that revenue year, mid for to look the help business, in manage you a are for might see of that is the of things better we have or you As or done volatility there that that to continue we average volatility of next that single-digit into sort should

it’s Well, said, a you business, smaller rightfully look X% total it’s part as business. the of of our about

we have really the have -- projects months, where last are We seen successful. we been over couple really good of

the upgrade are changes. short-term any terms overall looking of optimistic often products at of don’t rollout in We and are have. in But portfolio we see product the of we also market, volatility the we

China which continue. currently long lockdown, don’t how retail the and customers know lot Again, there in exactly with are the an of I we will also markets a facing we affects have in mentioned that issue we that the

probably that expect number is we say there some portfolio is, also But significant in of projects also total up we again, over What do, won in gives it of the don’t a portfolio. volatility couple XXXX. have, the eases the confidence to last I we us with that If months, and the I have change upside. want strong

Great. Thank you very much.

from next Rachel at And JPMorgan. comes question Vatnsdal our

and Hi. on taking Rachel the Neil This for for question. thanks [ph] is

quarter on the the of you have on some us had come a additional First, and/or could you during last color pandemic. inventory, bit customer it heights had give on us stockpiled knowing after customers some inventory pipette levels, updated color tips down

inventory your change your in You by at product are to key kind was and talk products the some it then noticed more provide they some had you could in like have there same here inventory of on levels? the any looking and of material relation like free how a both levels flow us you how cash today about so here inventories customer color bit changed,

from add take perspective. will wants it I Patrick and if Maybe customer Hey. the to something

start me internal. Let with our

our the years and few global supporting the really just So, say customers that are extremely tremendous, during great is, job competitive terms the supply has. of it’s comment advantage really first I chain pandemic for last would organization. in we Really a with been happy

times, traveling I than heard competition. Patrick cases little they several significantly so our really -- the might past, allowed we a and and the that’s they are And businesses just are were that. our and but visiting were about we different world than good they better how able share just be around longer from feel delivery gain around in to in different we the about -- We world, antedotes us

have safety course, of in make higher of other inventory the that side could to that sure carried stocks is, we we Now, be levels, categories do able different higher to that.

are our key necessary -- components to think we range category it’s any I don’t get there’s mean, different detail of one particular a of and or to As types with I different that into the another, portfolio. wide

SKUs. about We have XXX,XXX

where it’s we to chain stocks. increase that can and had complexity manage think supply safety pretty and through to I have the has you to complex So imagine Ocean allowed us visibility the Blue know

to we But course outlook from and position kind for guidance shipping China especially also the coming our XXXX, just XXXX. in with look dramatically and included to into now recently. We in of reduce shortening those was are times., a we feel XXXX which U.S. as levels of like our in

we a our heard kind -- are pleased of tips. much quantify pipette to our tips perspective, I very area area pipette the the exactly that to with in in probably, overall that customer how business. mean, From one Difficult have we is but some business, our overall noise of

through grow side it’s that, hard with But the consumable good really well overall the but third quarter. business. in in actually on in also were visibility it’s a our down as you our to biopharma research. The continuing not we say then demand customers impact instrument are to And to significant have sales very

Yeah. right customers to lot now I the you didn’t which biopharma labs, overstock COVID -- or Shawn service same testing labs, been would majority majority said, have the say, didn’t not testing a of did. after research significant because we a also, as serve as et-cetera, extent

much. -- on region. some there That’s of just noticed been that, so different particularly you you helpful. Awesome. heard any government and could sort any updates China Have on in rumblings previously had of super on noticed updates and the Thank benefit that that have that one then you stimulus you that’s in regions, potential probably And more it.

Do you to want take.

can Yeah. No. I take.

at are question, the have changes actually driven by -- good initiatives We but significant we or no, moment. any impact any heard government not

Yeah.

Awesome. Thanks.

That does call. conclude concludes the question-and-answer Thank session participation. your for conference and today’s you

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