Mettler-Toledo International (MTD)

TOP CONTRIBUTORS

Isaac Middendorf

Mettler-Toldedo International develops precision instruments primarily for the life science industry (pharmaceutical and biotech companies, as well as independent research organizations); food and beverage producers; food retailers, and chemical, specialty chemicals and cosmetics companies. It focuses primarily on laboratory and industrial instruments. The company sells products primarily in Europe, the Americas, and Asia. Its global presence represents strong growth opportunities, however their markets can be unpredictable. Also due to the large capital expenditure of its instruments MTD's revenues experience seasonality and can fluctuate according to capital spending patterns of customers, tending to be larger in the fourth quarter of each year.^[1]

Business Growth

For 2010 the company reported net sales of $1,968 million, an increase of 14% over 2009. The increase in sales was attributed to improved global economic conditions and deferral of product replacements by customers during 2009.^[1]

Trends and Forces

Economic conditions in emerging markets represent growth opportunities, but can be unpredictable

Although the majority of MTD's sales are in developed countries it is quickly growing sales in emerging markets. For example, in 2010 sales in China accounted for just under $300 million of yearly sales. In addition to China the company has sales in other emerging markets of Asia, Latin America, and Eastern Europe. Though these countries represent strong growth opportunities they can be unpredictable and with varying amount of currency risk and local legal and regulatory requirements.^[1]

MTD's revenues can fluctuate according to capital spending patterns of customers

MTD's customers often stock up on lab consumables and equipment at the end of the year, when funding is abundant (for example, NIH funding is distributed to labs towards the end of the calendar year). MTD's revenues thus fluctuate throughout the year and are strongest in the last quarter of the calendar year. NIH funding is not completely stable, either - economic pressures may result in a stagnation of NIH funding, which has been growing at 2-3% in the past few years, but is not expected to increase in the near future. MTD's customers from academic and government research labs are directly affected by the limitations of NIH grant funding; a lack of funding results in fewer laboratory product and equipment purchases and adversely affects MTD's sales revenues.^[1]

Competition

• Waters Corp (WAT)
• Harvard Bioscience (HBIO)
• Bruker BioSciences (BRKR)
• Thermo Fisher Scientific (TMO)

References

1. ↑ ^{1.0 1.1 1.2 1.3} Mettler-Toledo International 2011 10k