Mettler-Toledo International: Reports Q2-2023 Results

Columbus / OH. (mti) Mettler-Toledo International Inc. announced second quarter results for 2023. Reported sales were flat compared with the prior-year. In local currency, sales increased 2 percent in the quarter as currency reduced sales growth by 2 percent. Net earnings per diluted share as reported (EPS) were USD 9.69, compared with USD 9.29 in the prior-year period. Adjusted EPS was USD 10.19, an increase of 9 percent over the prior-year amount of USD 9.39.

Second Quarter Results

Patrick Kaltenbach, President and Chief Executive Officer, stated, «Sales growth in the second quarter included strong growth in our Service business, as well as solid performance across our Industrial product categories, which was offset in part by softer market conditions in Laboratory and China following very strong growth over the last couple of years. Focused execution of our margin expansion and disciplined cost control initiatives resulted in good growth in Adjusted EPS despite a very significant adverse foreign exchange impact.»

GAAP Results: EPS in the quarter was USD 9.69, compared with the prior-year amount of USD 9.29. Compared with the prior-year, total reported sales were flat at USD 982.1 million. By region, reported sales increased 1 percent in both the Americas and Europe, and decreased 1 percent in Asia/Rest of World. Earnings before taxes amounted to USD 263.4 million, compared with USD 256.7 million in the prior-year.

Non-GAAP Results: Adjusted EPS was USD 10.19, an increase of 9 percent over the prior-year amount of USD 9.39. Compared with the prior-year, total sales in local currency increased 2 percent as currency reduced sales growth by 2 percent. By region, local currency sales increased 4 percent in Asia/Rest of World, 1 percent in the Americas, and were flat in Europe. Adjusted Operating Profit amounted to USD 307.7 million, an 8 percent increase from the prior-year amount of USD 285.4 million. Adjusted EPS and Adjusted Operating Profit are non-GAAP measures. Reconciliations to the most comparable GAAP measures are provided in the attached schedules.

Six Month Results

GAAP Results: EPS was USD 18.15, compared with the prior-year amount of USD 16.84. Compared with the prior-year, total reported sales increased 2 percent to USD 1,910.9 million. By region, reported sales increased 3 percent in the Americas, 2 percent in Europe, and 1 percent in Asia/Rest of World. Earnings before taxes amounted to USD 490.0 million, compared with USD 469.7 million in the prior-year.

Non-GAAP Results: Adjusted EPS was USD 18.82, an increase of 9 percent over the prior-year amount of USD 17.25. Compared with the prior-year, total sales in local currency increased 4 percent as currency reduced sales growth by 2 percent. By region, local currency sales increased 3 percent in both the Americas and in Europe, and 6 percent in Asia/Rest of World. Adjusted Operating Profit amounted to USD 574.2 million, a 9 percent increase from the prior-year amount of USD 526.7 million.

Outlook

The Company stated that forecasting remains challenging. Management cautions that market conditions are dynamic and changes to the business environment can occur quickly. There is increased uncertainty in the economic environment today, including the risk of recession in many countries, and management acknowledges that market conditions are subject to change.

Based on today’s assessment of market conditions, management anticipates local currency sales for the third quarter of 2023 will decline approximately 3 percent to 4 percent, and Adjusted EPS is forecast to be USD 9.55 to USD 9.85, a decline of 3 percent to 6 percent. Included in the third quarter guidance is an estimated 3 percent headwind to Adjusted EPS growth due to adverse currency.

For the full year, management anticipates local currency sales growth in 2023 will be approximately 0 percent to 1 percent, and Adjusted EPS is forecast to be in the range of USD 40.30 to USD 41.20, representing growth of approximately 2 percent to 4 percent. This compares with previous local currency sales growth guidance of approximately 5 percent and Adjusted EPS guidance of USD 43.65 to USD 43.95. Included in the 2023 guidance is an estimated 3 percent to 4 percent headwind to Adjusted EPS growth due to adverse currency.

While the Company has provided an outlook for local currency sales growth and Adjusted EPS, it has not provided an outlook for reported sales growth or EPS as it would require an estimate of currency exchange fluctuations and non-recurring items, which are not yet known.

Conclusion

Kaltenbach concluded, «As we look to the remainder of 2023, there is increased uncertainty in the global economy and our end markets, and we continue to face challenging sales growth comparisons. Market demand in China has deteriorated sharply, and we expect reduced sales during the remainder of 2023. We remain confident in the factors we can control, including executing on our best-in-class sales and marketing programs and our margin expansion and proactive cost savings initiatives. Our team remains very agile in adapting to changing market conditions, and I am confident that our efforts will deliver good financial results this year in a more challenging business environment.»