Q1 2022 Mettler-Toledo International Inc Earnings Call
[music].
Good day, and thank you for standing by and welcome to the Mettler Toledo first quarter conference call. At this time, all participants are in a listen only mode.
This presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone if you require any further assistance. Please press star zero I would now like to hand, the conference over to Mary Finnegan. Please go ahead.
Thank you and good evening, everyone I'm Mary Finnegan.
Responsible for Investor Relations at Mettler, Toledo, and happy that you're joining US Tonight I'm joined with Patrick Kaltenbach, Our CEO , Shawn Videla, our Chief Financial Officer, and Adam Uhlman Senior manager of Investor Relations. Let me cover a couple of administrative matters. This call is being webcast.
Aspen is available for replay on our website a copy of the press release and the presentation that we will refer to on today's call is also on the website.
Let me summarize the safe Harbor language, which is outlined on page two of the presentation.
Statements in this presentation, which are not historical facts constitute forward looking statements within the meetings of the U S. Securities Act of $19 33 in the U S Securities Exchange Act of $19 34. These statements involve risks uncertainties and other factors that may cause our actual results.
Level of activity performance or achievements to be materially different from those expressed or implied by any forward looking statements for a discussion of these risks and uncertainties. Please see the discussion in our recent Form 10-K, and other reports filed with the SEC.
From all of the forward looking statements are qualified in their entirety by references to the factors discussed under the captions factors affecting our future future operating results and in the business and management discussion and analysis of financial condition and results of operation sections of our filings.
Just one other item on today's call. We may use non-GAAP financial measures more detailed information with respect to the use of and differences between the non-GAAP financial measure and the most directly comparable GAAP measure is provided in the form 8-K, I will now turn the call over to Patrick.
Thanks, Mary and good evening everyone.
I'm happy to be here with your Tonight before.
Before I cover the quarter, let me make some overall comments would be great.
Yes, deeply concerned about the ongoing war on Ukraine, and its impact on so many people.
We are monitoring the situation closely.
Relieved to know that our employees in Ukraine could find shelter in places.
We sincerely hope that the war will stop soon and the suffering of so many will come to an end.
Now turning to our results.
We had a very strong start to the year.
With our first quarter results the highlights on page three of the presentation.
Local currency sales increased 14% as compared to the prior year.
We had excellent growth in our laboratory and industrial businesses and January saw broad based growth in most regions.
Food retail was again a headwind global growth.
Our ability to navigate the challenges of the global supply chain and meet customer demand is again proving to be a competitive advantage.
We did face higher costs associated with supply chain and transportation in the quarter.
However, despite this.
Very good increase in adjusted operating profit and adjusted earnings per share.
This growth is particularly impressive given the extraordinary growth we had in Q1 of last year.
We feel positive about our outlook for Q2 and for the full year, although we are facing greater macro uncertainties as compared to the last time, we spoke.
Recognize all about agility and resilience will be pivotal to navigate the challenges of these market conditions.
Later I will have some additional comments on our business, but let me now turn it over to Sean to cover the financials and guidance Sean.
Thanks, Patrick and good evening everybody.
In the quarter were $897 8 million, which represented a local currency increase of 14%.
On a us dollar basis sales increased 12% <unk> contributed approximately 1% local currency sales growth in the quarter, while we estimate the impact of reduced volume of pipette tips and Covid testing was a headwind of approximately 1% of sales growth.
On slide number four we show sales growth by region local currency sales increased 16% in the Americas, 10% in Europe , and 15% in Asia rest of the world local currency sales increased 16% in China in the quarter.
On slide number five we summarized local currency sales growth by product area for the quarter Laboratory sales increased 18% industrial increased 12% with core industrial up 15% and product inspection up 9% food.
Food retail declined 14% in the quarter.
Let me now move to the rest of the P&L, which is summarized on slide number six.
Gross margin in the quarter was 57, 9%, we benefited from volume and pricing, which was offset by challenges in the global supply chain, namely higher material and transportation costs.
R&D amounted to $43 million in the quarter, which is an 11% increase in local currency over the prior year period, reflecting increased project activity.
SG&A amounted to $235 $3 million, an 8% increase in local currency over the prior year.
Investments in sales and marketing contributed to this increase.
Adjusted operating profit amounted to $241 2 million in the quarter, a 15% increase over the prior year amount of $210 $7 million.
The increase reflects strong sales growth combined with good execution.
Adjusted operating margins came in better than expected at 26, 9%, which represents an increase of 70 basis points over the prior year.
We're very pleased with these results, particularly since our operating profit increased almost 50% and our margins were up more than 400 basis points in the first quarter of last year.
A couple of final comments on the P&L.
Amortization amounted to $16 $6 million in the quarter interest expense was $11 3 million in the quarter.
Other income in the quarter amounted to $3 $7 million, primarily reflecting non service related pension income.
Our effective tax rate was 19% in the quarter. This rate is before discrete items and adjusting for the timing of stock option exercises in the quarter.
Fully diluted shares amounted to $23 million in the quarter, which is a 3% decline from the prior year.
Adjusted EPS for the quarter was $7 87.
A 20% increase over the prior year amount of $6 56.
In the first quarter of last year adjusted EPS grew more than 60%. So we're very pleased to have such good growth on top of last year's performance.
On a reported basis in the quarter EPS was $7 55.
As compared to $6 32 in the prior year.
Reported EPS includes <unk> 22 cents of purchased intangible amortization <unk>.
<unk> <unk> of restructuring <unk> <unk> of acquisition costs, and a <unk> <unk> benefit due to the difference between our quarterly and annual tax rate due to the timing of stock option exercises.
That covers the P&L, let me now comment on cash flow in the quarter adjusted free cash flow amounted to $75 $5 million, which came in pretty much as expected as mentioned on our last call first quarter cash flow was impacted by our variable cash incentives given our record year in 2021.
We continue to make nice improvements in DSO, which declined approximately three days to 37 days as compared to the prior year.
<unk> came in at four.
One times.
Let me now turn to guidance.
Casting is challenging on the positive side momentum in our business is good and the team is executing well.
However, there are greater challenges in the macro environment as compared to the last time, we spoke.
These include risks of Covid related Lockdowns in China, as well as ongoing risks of Covid in general.
It also includes tough dynamics within the global supply chain and in transportation and logistics and higher inflationary pressures.
Foreign currency movements have also been volatile, particularly with the strengthening of the Swiss franc versus the euro and the weakening of the renminbi versus the dollar.
And finally, the global impact from the war in Ukraine is also a factor.
A hallmark of our culture is agility and we recognize the importance of being able to react to unexpected changes in the environment. We remain focused on the factors within our control and are confident in our initiatives.
We believe we can continue to gain market share through our spinnaker initiatives and our excellent innovative product portfolio. We will also drive margin improvement via our pricing and stern drive initiatives.
Let me make some general comments on the full year before covering the specifics.
First we were facing greater foreign currency foreign exchange headwinds to our earnings growth as compared to three months ago.
Specifically, we now estimate that foreign currency will be a headwind to adjusted EPS growth of approximately three 5% as compared to 1% headwind when we last provided guidance.
We expect to increase operating margins on a currency neutral basis by approximately 100 basis points.
Our reported margins will be slightly higher as currency as a headwind to operating profit benefits margins slightly.
Now let me cover the specifics for the full year 2022, we now expect local currency sales growth to be approximately 8%. This compares to previous guidance of 7%. We are increasing our full year sales guidance, primarily for our Q1 beat.
We expect full year adjusted EPS to be in the range of $38 20.
To $38 50.
Which is a growth rate of 12% to 13% and a growth rate of 16% to 17% excluding foreign currency.
We are bringing up the bottom end of our previous adjusted EPS guidance range slightly while leaving the top end unchanged.
Our Q1 beat is more than offset by increased unfavorable currency and the remainder of the year.
EBITDA leverage ratio of approximately one and a half times that.
That is it from my side and I will now turn it back to Patrick.
Thanks, Sean.
Stop if suncal mental level operating results.
Oh, well that business with excellent growth into quarters, almost all product lines, showing very robust groups.
You expect another good quote of growth in queue too, although it won't be at the at the level you have in the first quarter as comparisons are more challenging.
We expect and markets to remain favorable.
And before my excellent product portfolio and effective sales and marketing initiatives. He believes he can continue to gain market share will of oratory business.
Droning doorway industrial business.
Call industrial did very battling the quota you had expected as strong star to 2022, and it came and even better than we expected.
I'm, a strong product portfolio and good market demand.
Which is driven in part by 11th leveraging I was spinning a sales and marketing initiatives are driving the good results.
You don't have solid growth in the second quarter and expect to continue to make sure what will face tougher comparisons.
Product inspection came in pretty much is to be expected.
He continued to be optimistic that'd be that'd be have good growth. This year as large packaged food companies have shown strong interest in our product offering.
Finally, food retailer was again down meaningfully in the quota as expected.
You're probably impacted by lack of project activity weak market conditions, especially in China and shortage of electronic components.
Now, let me make some additional comments by geography.
Sales in Europe increased 10% in the quarter the flap showing excellent group, while industrial had very good growth as well.
Retail Walter had been to growth with the double digit decline in the first quarter.
I will face growth in Europe for the remainder of the year will be modestly impacted due to lack of sales in Russia.
Otherwise at this time, we are not assuming a considerable impact all European sales growth due to the war in the Ukraine.
Overall, we expect solid growth.
In 2022 in Europe .
America excellent growth in the first quarter laugh.
Laugh at Great growth, while industrial also had very strong growth.
Retail had good growth as well.
Americans will have a tougher comparisons in the second quarter, but we expect good growth will Q2 and for the full year.
Finally, Asia and the rest of the World had excellent growth in the first quarter with outstanding growth in laboratory and call industrial.
Retail was down significantly.
China grew 16% with excellent growth and lap and call industrial.
With respect to the Lockdowns in China.
Main manufacturing facilities are enjoying Jew, which is about 115 miles outside of Shanghai.
These facilities will not subject to district Lockdowns that are cute in Shanghai.
We do have a smaller production facility and offices in Shanghai, which were impacted by the shutdowns Neil.
One of the first group of companies to receive approval to reopen in Shanghai, which we did the last week.
You also have suppliers in Shanghai that have been subject to the lockdowns.
Our team in China has done a great shopping navigating these challenging and dynamics.
But the situation is very dynamic and can change quickly.
Assuming market conditions remain as they are today the belief you build deliver strong growth in China in 2022.
One final comment on the business.
Service and consumables performed really well and we were up 15% in the quarter.
You are very pleased with the growth and is important and profitable part of the business.
That concludes my comments on the business.
The teams continue to show, great agility, and adapting to challenges and the macro economy.
Has contributed to all those strong results.
Also contributing to these results as our continued focus on what we can control, namely providing solutions with clear bailing, Utah customers.
New product development is an important component of our strategy and we are constantly coming to market with new products that enhance customer productivity reduced cost and support the data integrity requirements.
With no one product by itself is significant to Santa Cruz.
Together, our new product launches strongly support of organic growth strategy and market share gains and reinforce innovation leadership.
There are two important trends, our customers and both of them and.
Industrial are facing.
Namely the need for greater automation and digitalization.
I also allusions play very well in these private prevailing trends.
They may give you some examples.
Oh, well up customers.
The increasing president for productivity improvement, while at the same time facing labor challenges.
Automated solutions can increase the productivity of workflows minimize arrows.
Improved safety and lower costs.
Have some good examples so public products that support our customers need followed a nation in the lab.
Last year being introduced our new automatic balance, which sets a new standard for waiting by providing automated dispensing of powders and liquids, which speeds up and simplifies the often tedious and error prone manual waiting process.
Did you sign up target amount is simply ended on the balanced terminal and to substances dispense directly into the container in a fully automated process.
The balance is flexible and easy to use can allow for smaller sample size and as a fully integrated benchtop system with a sample change of that can be added to dispense up to 30 samples and a fully automated wrong.
This automated balance also supports digitalization needs of customers wind path with our instrument controllers software lab acts, which can provide automatic data handling workflow guidance and central data storage, thereby meeting data integrity requirements of overlap customers.
You also have good service opportunities in terms of installation qualification and ongoing calibration.
This balance is a unique solution is a great example of how our innovation can support customers seeking to increase automation in their everyday operations.
Another lab exam Billy's automated liquid hand look for titration they'd be recently launched.
Titration for example is used to measure concentrations and requires fast and precise handling of samples solutions for analysis.
Oh and your instrument allows for automated sample preparation and precisely illusion.
Importantly, it eliminates cross contamination and delivers highly accurate dispensing, thereby allowing for continuous processing of complex workflows.
The instrument allows for quick and easy switch between applications setups and automatic recognition on RFID Tech.
<unk> can also control the instrument.
To cure data in support regulatory needs fall off the customer.
Turning to industrial.
The trend of automation and digitalization also very relevant for all of our customers of manufacturing.
Labor shortages and targets for increased output continued to accelerate the demand for industrial automation.
Customers need easy to use strongly guidance solutions that drive tangible productivity improvements.
At the same time increase demand for higher speeds more data.
Life Divine instead as in real time control drive could utilization needs, particularly around Ethernet based plan flaw connectivity.
And the second half of the year, we introduced a new compact automation weighing indicator that executive fulfilled these customer customer demands.
[noise], Oh, what instruments seamlessly Pete's wait data data and system status for any of those scales and sensors into an end users automation system.
Thereby helping customers automate very precise processes like pharmaceutical feeling.
It is easy to use with a quick system startup increased system running speed simply find programming and instantaneous and very reliable.
Data transfer to more precise control.
[noise] customer response has been very positive given the strong value proposition.
But this new instrument provides.
Software is important to our industrial customers as well as a lap customers.
Our statistical control and process control software freely use this costly almost filling in support of our customers demands for data integrity regulated environments.
Debate deviations during manufacturing can be immediately corrected to achieve optimal fill quality, while meeting all regulatory compliance requirements.
For food and can make the customers, our new form plus recipe management software.
Helps customers replaced people base recipe workflows.
Guiding operators to precisely way ingredients for perfect patches and of course full traceability for regulatory compliance.
These are just a couple of examples however technology development is supporting the trends.
Our customers are facing.
Understanding these trends in combination with our in depth knowledge of customer processes underpins, our new technology developments.
New product launches combined with a highly effective spinning our sales and marketing initiatives are key drivers falb organic sales growth and market share gains.
That concludes our repair remarks.
While challenges exist in the world today via convinced that we thought about whether ingrained growth initiatives and our agility and focus on execution became continued to gain market share.
I will now like I would now like to Ostial, the operator to open the lines for questions.
Uh-huh.
Mhm.
Timeline.
By the phone.
Okay.
Okay.
Question.
Mhm.
[noise] okay.
Okay.
Bank of America.
[noise] great. Thank you hi, <unk> for Derek So I'd like to start on the margins what was the pricing contribution.
How much did pricing add two margin and the quarter and kind of just looking at the rest of the year has anything changed in regards to your confidence on the gross margin expansion for the whole year.
Yeah, Hey, this is Shaun I'll take that one so in terms of price realisation pricing came in pretty much as expected maybe slightly better just north of 3% for the quarter, which resulted in.
And impacting the gross margin of about 140 basis points.
Of course, we also benefited from sales volume as well, but but both of those factors were offset by higher material costs as well as higher transportation costs. Overall, if you remember like last quarter, we were in.
Q for the margin was down 110 basis points and at that time, we were saying we thought that the gross margin in Q1 would be down at maybe a similar levels. So overall, it's actually a little bit better than what we expected as.
As we kind of like look for towards the rest of the year, we kind of see our price realization continuing to improve given increases in inflation that we've kind of continued to see here. During the first quarter. We will continue to do things throughout the year as we deem appropriate at the moment where.
Thinking that our overall gross margin will still be slightly down in queue too you know maybe like in the 20 basis points kind of range, but then by the end of the year where.
We're expecting our gross margin to be positive probably in the 20 basis points range, maybe even maybe even 30 basis points for the full year and kind of behind that we would be assuming.
About a 4% price realization for the full year, which is a little bit better than.
What we're looking at last quarter, when we spoke which we were saying about 3.5% and then I think it is also worth looking also at the operating margin I mean, if you look at for talking margins. It's also important to look at our full year operating margin, which we think currency neutral will be up about 100 basis points, which you know which were pretty app.
With because that's pretty much the top end of our typical guidance in the way currencies work.
In this environment at the actual number will actually be a little bit higher but it adjusted for currency would probably be 100 basis points.
Great. Yeah that was that was really helpful. One bar so with the core sales guide right now that's two consecutive quarters, what kind of gives you the confidence with macro uncertainty.
Looking towards lots of course of the year.
I mean, hey, I think we feel really good about our business I mean, we came off with a very strong Q1, much better than what we expected. We we kind of observed our markets and we also observed the execution around the organisation, but we have really great momentum on our.
That's you know whether it's our sales and marketing initiatives. Our service program is doing really well and then you know and all the things that we do from an innovation perspective with product development et cetera. I mean, we just feel like we have a lot of great things.
Coming out to the things that we control we feel actually really good about of course, there is a lot more uncertainty in the world and we'll see how things play out, but I think you know if you look at our multiyear caters we feel good about where we are in Q1, and we feel good about our guidance for the.
The rest of the year, but you know we we we acknowledged there is uncertainty in the world, but we are but we feel like we we feel very good about our guidance.
Great. Thank you.
Next question comes from the line.
[noise] ISI airline is now okay.
Hey, this is Jordan.
<unk>. Thanks for taking my question I was wondering EPS wasn't raised despite the <unk>.
I was wondering if this was an incremental I've had some back or if anything change on the margin replacement assumptions about yeah yeah.
So what I like to take this question again, yeah, Yeah, no problem, Yeah, I think I think you kind of answered it for US I mean, we had the we had the Q1 b, but then.
He mentioned in the prepared remarks.
Foreign currency actually more than offset that I mean, if you. If if we kind of go back three months ago, we were expecting about our estimating a 1% headwinds EPS in regard to currency. We're now estimating about a 3.5% headwind and a lot of that has to do with all this.
Few things one is the strengthening of of the Swiss rank versus the euro.
The second is the weakening of the Chinese Roman B versus the U S. Dollar and then there's probably just this general factor of of this the strengthening of the dollar generally versus most countries in the world.
Thank you and just one more I was curious if you could go into detail on T mobile supply chain precious <unk> anything training better or worse.
Yeah, I can patriots.
On the supply chain of course, we're still facing headwinds like many other companies as well that the majority of add winds assumed coming from medic 20 components.
There's a shortage in the market on several forms so we have to go into the.
Broker buys trying to mitigate it sometimes we have to redesign some of them are bored to tears golf club.
Alternative electronic components et cetera, but overall, the manufacturing team and he'll supply chain team is handling the situation extremely well.
Those headwinds, we think will remain for the remainder of the year does not a lot of hope that the physically the parts.
Issue and for poets issue will resolve throughout the year. So we have taken care of that again by almost flexibility in terms of being able to really signboard. So to also be increased inventory for some of the critical components of the fall of boards.
Otherwise I'm trying to transfer the logistics I mean, you see the same music <unk> definitely in China in Shanghai, you'll see a lot of vegetables and O five.
Waiting in front of the pool to be loaded so there'll be some strengths that Israel Lindsey being able to anticipate that the overall logistic challenges, but will not cool off and and Q2, maybe towards the later part of the year.
Mainly b C. But again, we are very confident in a way the ability for Q2 with what we have so far.
The way, we think we will be able to do you don't want your numbers.
Great to know.
Okay.
I'm sorry go ahead.
No I just was wondering millett also the question okay.
Next question comes from.
Josh Sparkman.
Caroline is helping.
Hi, Thanks for the time and thanks for taking my questions, maybe once or Patrick and one for Sean.
18% growth and while I was well ahead of the low double digits. I think you guys do for the first quarter.
Guided that level kind of been early February I mean, any more contact you can provide on what drove the upside here in the quarter if he wasn't.
Was it burning down backlog was a stronger than expected pricing games.
And then I guess, a follow up and what what is the Guy now assume for the second quarter and full year for lab.
Okay, Great. Let me take the first part of the question and then showing them a couple of seconds, while I'm looking at yeah extremely pleased with all growth in the first quarter and again that that's coming on on ancient percent growth in queue last year. So it's not an easy compare the.
Same by the way is truthful Q2, and you looked philosophy of 27% growth and this year. We also.
<unk> is a very solid growth full cute too.
Everything that is included driven by our strong collect portfolio and our strong.
Go to market strategy, and the spinning of sales and marketing tools, which are really really strong and helping us to guide our sales force to the most attractive targets being very agile in identifying where the growth is and is this going across all end markets. We see strong growth in the lap area B C excellent growth still in the.
Julia you'll be able to see a lot of demand for automation and the output portfolio is perfectly positioned to address the demand. So I would say it's good to reflect some.
Market share gains that we are seeing right now we have a strong portfolio excellent strategies, bringing this innovation to market and it's also a way buyers are confident on the rest of the year.
Sure.
Yeah in terms of the guidance word guiding lab to high single digit for the second quarter. As a reminder, we we groove I think 35% in Q2 of last year and laugh and then for the full year, we're guiding approximately 10% for the full year in lab.
Got it and then Shawn a follow up on the Guy could you give us a bridge to the New earnings Guide I think you'd beat your Q1 guy by something like 52 cents, but aspects I think is something like an incremental dollar of a headwind for the full year I guess is that right and what are the other.
Moving pieces in the to the reality to guide them yet.
It would be less than a dollar Josh, but but you're right. There. There is a there is a little bit of a gap between those two numbers and you know hey, I just think there's a lot of things that we're working on and the company, where we can we can mitigate these things whether it's productivity or other things, we do with our margin program. So so we we feel.
It's early enough in the year for us to make up that that small gap.
But I appreciate it thank you St Charles.
Next question comes from the line I'm afraid coming back in style.
Keeping mark and your line is helping.
Hey, Thanks for taking my questions. The first stop is great to hear any of that great, 16% in China, I'm, just giving a dynamic sir so could you just walk us through what they stand for grass in China for the guidance and to kill and then you also mentioned that you expect China can sell Gorazde here. So can you just talk about your confidence.
When you think that China will probably return your breath it yet.
Yeah, I'll I'll start enjoying them.
Sean and feel free to join me in so let me start with.
Again repeating the same as we get off to a great start is at 16% growth in local currency and some excellent growth of more than 40% of the prior year.
Despite.
Despite the challenges if you're here in the country, we I'll I'll look for you tube and for the full year is very good and I think the manufacturers to contribute to this but it's the diversity of our business in China and that should not be overlooked immediate very broad footprint in industry very broad footprint in lap and.
We've got a tremendous diversity and customers and markets and product lines.
That's actually a great advantage, particularly particularly when mark conditions on both turlington challenging like at the moment so.
So.
Loved danza as I mentioned in my remarks, before but it didn't affect us too much in Q1, given that double major manufacturing centre resolved outside of Shanghai.
And then both of our logistics up in China has not most not materially impacted.
This quota.
So.
Yeah again that gives us a lot of confidence for Q2, and Q3 B C strong interest in our products. We have a broad based portfolio days in China still has a lot of demand for automation, though in the.
The lap side, a lot of demand for new products, especially about smaller lapse in the Bible of apps and data integrity as I mentioned is driving a lot of demand for our products. So.
Oh, well confident in China, moving forward, but because we also have a very strong team that apply as well we'll go to market strategy seamlessly.
The spinnaker sales to marketing.
Opportunities really looking for the hot segments in the market like the batteries segments and all the stuff that he <unk>. Okay. I can clearly identify very early behalf.
<unk>.
Mark to market search tools in place, but yeah.
Yeah, and identify the customers without going to invest using different data sources and intelligence behind the to identify that and then we have very dedicated sales force guidance tools in place to drive Jose before was two d's new investment targets and then agility I think speaks those that drives political growth that we see in China.
In terms of the guidance Ah Rachel we're looking at high single digit growth for queue to.
That compares to 35 per cent growth last year in Q2 and for the full year, we're still maintaining our full year guidance of approximately 10%.
Great. That's helpful. And then tend to attack that can you repeat that about one per cent. During the call. You said I was wondering can you just walk us through how 'bout asset performing Rosemary internal expectation and just any general update on integration off at the bar.
Oh, Yeah, <unk> is performing extremely well, yeah, very very happy with that acquisition, it's clearly exceeding all expectations.
If at all I would say be running sometimes hold on in terms of all capacity because there's such strong demand for the team does an outstanding job and really trying to address all the customer demand producing and we do not really see a slowdown in demand moving forward. So really happy with the decision integration is going really well we've.
We could really leverage to synergies between metal do you just go to Margate strengths you know the the stronger manufacturing footprint, the buying probably happened and they're bringing this this small accompanying that wasn't a as an inflection point to reach out to a broad global market, but all came to fruition so extremely happy with.
With the acquisition and how the integration is going.
The same by the way is to put a software company to be acquired last year to scale up systems that also helps to drive a lot of sales with all the kind of business and just shows that when you bring the smaller companies in and you are the right partner for them because the right portfolio Dysgenics accelerated growth.
Next question.
Okay.
[noise] for Patrick Uhm, I'm, just wondering you talked a little bit about the chip shortage in packing a little bit.
Can you share some more color around that and I guess for your <unk> for the area is that something that you see a sustained or not thank you.
Yeah. Thanks, I'm happy to take that question, so regarding chip shortage, yeah I mean.
I'd say the.
Product line or the division of voice most affected by it actually was a retail business and I think we have there's no way month as well and that has to do with the fact that would be using some specific chips that also use in the consumer industry for some of the displays for example, but I think some some significant shortage, which and introduce delays for us.
In other product areas, we could mitigate mostly by broker buys which drives up of course.
Cost of goods, but we also tried to compensated on pricing et cetera.
So.
To your question with obese, but we see this easing up for the rest of the not really I think the market will remain to be hot so I dunno on semiconductor and microbe possessors.
Again, our agility to really Signboards and <unk> is of course always.
D C and making.
Making sure that you have to sign alternative in place to go into alternative microprocessors, former bullets wherever possible to make sure that he can fulfill customer demand demand, which is still very very healthy.
Great. Thank you and then just one more in terms of the second quarter I'm. Just wondering I know you said that you can expect that labs grow high single digits.
Do you mind sharing with any other two segments as well, what you're saying there and they get across geography, as well and now you've talked bad Chang alrighty.
Well I don't know it yet so he went and I'd just run down the the divisions in the geographies for the quarter and full year. Just so that everybody has that so I'll start from the top and repeat labs. So lab, we said high single digit for Q2, approximately 10% for the full year four Cora industrial or guidance is mid to high single digit growth for both.
Q too and for the full year for product inspection or guidance is continues to be high single digit growth for both Q2 and for the full year and for food retailing, our guidance as to be down.
Low single digit in queue to and to be down slightly for the full year.
If we look at the geographies.
For Europe for Q2 is where guiding low single digit and for the full year regarding low to mid single digit.
Keep in mind that will be an impact that a little bit by Russia.
And then America's will be up high single digit for Q2 and also for the full year.
And then for China as I already mentioned were guiding high single digit for Q2, and approximately 10% for the full year.
Thank you that was really helpful.
Thanks.
Your final question that comes from.
Somebody called me in South Carolina cellphone.
My question, maybe just on the industrial side would just love to hear some of the feedback and hearing from customers in terms of some of the capital equipment decisions assume you're more insulated just given a lot of decisions are opex, rather than capex space, but just given the the the growth concerns over the back half of the year, just would love to hear any kind of.
Feedback hearing from those industrial customers as your as your working with them.
Yeah, I mean, hey, Matt. This is Shaun we're feeling I mean, it's interesting that despite what you're reading the headlines were not hearing anything particular from our industrial customers. I mean, we had a really good first quarter and good momentum going into Q2, and we saw really good momentum I would say.
Globally.
And particularly including in China, now I don't want to pretend like we're immune to the economy or not but I think if you just look at our business, we're just very well positioned.
I'm a couple of perspectives. One is there's this trend in automation and digitalization that we talked a lot about and mentioned it in the prepared remarks, and I feel like that trend is really we're very well positioned for that trend and we just continue to see very strong momentum globally in that area and so I think I think that's a good one for us and.
And then I think what we talked about it in the past is in terms of spinnaker the ability to guide our sales force to the most attractive opportunities and if you think about like the diversity in the market as well as in our business.
[noise] that focus really makes a big difference and I feel like our teams have done an excellent job over the last few years of really targeting these more attractive market segments and if you look at the mix of the business.
It's it's a better mix of business and it it was five years ago, let alone 10 years ago, So a little bit less cyclical, but again not not immune to the economy, but probably less cyclical than it than it used to be and then I think the teams have also done a really great job in terms of the product portfolio. If you just look at a lot of the things that we've been coming out with us.
The last few years it it really has been well received in the marketplace.
And then just maybe my last one is just just a broader.
A broader question on pricing just given a realize you're very thoughtful in terms of geography segment et cetera, but as you look over the course of the last couple of quarters. When pricing is really picked up has there been a certain segment or geography, where he believed in more on pricing or is it pretty well balanced over the course of your segments and also geographies.
Amy we're always differentiating like you say, but we are generally seeing you know getting price and all the different <unk>.
Categories and markets, if I had a differentiate a little bit I'd say, we get a little bit more on the laboratory side of the business, but I would say, there's pockets of industrial where we've done exceptionally well is also so I really wouldn't wanna try to differentiate that one.
Too much and then geographically I'm really pleased with how how we performed the globally in terms of price realisation as well and wouldn't necessarily call anything else.
Great. Thank you appreciate it.
That's interesting.
Oh.
And a call back.
Hello.
[noise] Hey, thanks for joining US Tonight. We appreciate you being on the call. If you have any questions or any follow up please don't hesitate to reach out take care Bye bye.
[noise], Okay today's conference call Thank California.
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