Mettler-Toledo Pricing Spineometer: 5 of 5 Vertebrae

梅特勒 - 托利多 , a global scales and balances company, had a flat Q2 2023. Revenue rose slightly 0.4% to $982 million and earnings before interest and taxes rose 7% to $289 million over the same period last year excluding restructuring costs.

A review of Mettler-Toledo July 27th earnings call and financial report revealed little regarding their performance but much to the importance of pricing.

Mettler-Toledo operates across the Americas, Europe, and Asia. They segment their activities to laboratories, industrial, and food retail.? Though scales and balances are a niche industry, Mettler-Toledo has significant competition.?

Patrick Kaltenbach, CEO of Mettler-Toledo, made comments regarding soft pipette sales in China and the importance of webinars for driving business. Curious issues for a CEO to take note of, which states a lot about Kaltenbach's attention to detail. But otherwise, little could be discerned regarding what challenges are frustrating executives at Mettler-Toledo.? (As a student of chemistry and marketing, I was delighted to hear that pipettes sales get CEO attention.)

Shawn Vadala, CFO of Mettler-Toledo, had much to state about the importance of pricing at Mettler-Toledo.? He said, “pricing actually was very good in the quarter. For the total group it was actually up 6%, which was a little bit better than what we had expected and as we kind of like look at the second half of the year, that's for the total company. And as we kind of look for the second half of the year, it's probably going to be a little bit better than what we were initially expecting as well too, probably up by about 4%, which would kind of put us in the 5% kind of a range on a full-year basis and what we've kind of continued to observe is that we feel like our value proposition is really resonated and increased over the last few years.”

These comments and business issues provide some expectations of the pricing capability at Mettler-Toledo.? Industry benchmarks indicate Mettler-Toledo should have between 8 and 40 professionals engaged in pricing globally. Many would be distributed globally to focus on price capture with individual customers and some would be centralized to focus on price positioning of individual offerings in comparison to competition.? Issues of macroeconomics, competitive dynamics, and strategic pricing would also be centralized.?

Research uncovered a capability at the upper end of this spectrum.? At least 25 professionals at Mettler-Toledo were dedicated to pricing.? Their titles ranged from analyst and manager to “head”.? Their geographies spread across the Americas, Europe, and Asia.? ?Their responsibilities ranged from analyst to strategic. Their focus was on operations and strategy.? None were specifically identified related to product pricing.

Given the importance and capability of pricing at Mettler-Toledo as indicated in financial reports, management statements, and our pricing team research, and given their performance, we have come to the following conclusion as of August ‘23.

Mettler-Toledo Pricing Spineometer: 5 out of 5 Vertebrae.

MTD (Mettler-Toledo International Inc.) fell from 1,324 the day prior to their earnings call to 1,272 one week later. FY 2022 revenue of $3.9 billion with a 29% operating margin and P/E ratio near 32.?

For FY 2022, a 1% improvement in price would yield a 3.5% improvement in EBIT holding all else constant at Mettler-Toledo.

Engage three in-depth case-study discussions on Pricing and Corporate Organizational Engagement in my workshop at #PPSATL23 and get your #pricingspineometer moving in the right direction. The course is approachable for any MBA but designed for the C-Suite. Will you be there? https://www.pricingsociety.com/ppsatl23