Mettler-Toledo International Inc. (NYSE:MTD) Q2 2023 Earnings Call Transcript

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Shawn Vadala: Yeah. Okay. Thanks, Liza. Yeah. So, I’ll take that one. The growth in the second quarter, I mean, was more mid single digit for Industrial. So, we’re pleased on that. As you know, we’ve been kind of lapping some big comparisons in that part of the business as well. As we kind of like look to the second half of the year though, we’re looking at the industrial business to be down probably mid single digit. We are seeing some decline in that part of the business as well. And I think it’s important to remember, like some of these customers are also exposed to a lot of the same end market exposures that we’re exposed to in Laboratory as well, too. So, when we say pharma and biopharma is down, it’s also affecting our industrial business also. And so, maybe not down as much as what we’re seeing pronounced in the Lab business, but still down in the second half of the year and probably more flattish on a full year basis.

Elizabeth Garcia: Great. And yeah, I mean, you guys were talking about — obviously, you mentioned SternDrive and that initiative. But I believe there’s another wave of Spinnaker that’s supposed to be underway or kind of coming under that should be launched, I believe, in right now. I guess, kind of how to think about that and kind of the levers that you have. I mean, Spinnaker has obviously obviously been great in terms of market share and how to think about what Mettler can deliver over the next couple of quarters with the next wave.

Shawn Vadala: Yeah. So, in terms of Spinnaker, we continue to innovate in Spinnaker — Patrick, can you hear? We can continue to work. Okay. You’re live though. You’re live. Yeah. So, in terms of — Liza, can you still hear me?

Elizabeth Garcia: I hear you great.

Shawn Vadala: Yeah. Hey — so hey, I think Patrick just lost the ability to hear the question. So, I’ll just kind of answer it. So, in terms of Spinnaker, we continue to innovate in terms of Spinnaker. And we are in the process of launching a new wave. We’re going to share some of the details on that until we kind of roll it out a little bit further, but something that we’re just at the very beginning of doing and kind of very excited about. And I think there’s some really interesting opportunities for us kind of going forward to continue the journey that we have in Spinnaker.

Elizabeth Garcia: Great. Thanks a lot.

Operator: Your next question is from Tim Daley with Wells Fargo. Your line is open.

Timothy Daley: Great. Thanks. So, Shawn or Patrick whoever can answer here. But it’s pretty clear the guide discounts, any year-end budget flush in pharma biotech. But again, Patrick, given your experience, you brought up Mettler from your prior lives across the life science industry, or Shawn, yourself, given the historical experience you have at Mettler. Can you get a game theory for us, if you will, potential narratives or factors that would influence the outcome for a potential year-end budget flush if macro conditions stabilize or don’t considerably fall off by the end of the year, and that’s a potential outcome.

Shawn Vadala: Yeah. Hey, Tim, this is Shawn. I’ll take that one. So hey, of course, we didn’t — it’s always difficult to be able to judge exactly what his budget flush and quantify it from year-to-year, especially in our business. We did not build in anything specific for budget flush. And I think just like you said, just kind of implicitly, looking at our guidance, we have a much more cautious view in terms of pharma and biopharma as we kind of exit the year. And if you can just kind of like look at how we’re thinking about Q4 in general. It’s not quite the same, but it’s pretty similar to how we’re thinking about the third quarter. So, certainly, if pharma and biopharma had a more robust end of year spend, that certainly could be an upside to how we’re looking at things.

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