Mettler-Toledo International Inc. (MTD) Earnings Call Transcript & Summary

Well, good afternoon, everyone. I'm Julia Qin from the life science team at JPMorgan, and it's my great pleasure to introduce you to our next company presentation today by Mettler-Toledo. Just as a reminder, if you would like to ask a question, you can submit it through the website. And with that, I will turn it over to Shawn.

Yes, hey, thank you, Julia. Happy new year and happy new year to everybody on the call today, really happy to be here today. We're going to refer to the presentation that's on the website here. Since I'm not sharing the screen, I'll just kind of refer to the different pages that we're on. Before we get started, I just want to remind everybody of our forward-looking statements, which is on Page 2 of the presentation. And with that, I'll jump into Page #3. So Page #3 is a chart that we update each year, and you can see it's familiar, I think, to many of you. And you can kind of see our very strong track record over many years of strong financial performance, which reflects a strong track record of execution. And overall, we continue to believe that we can deliver mid-single-digit sales growth with mid-teens EPS growth over the long term. As we reflect on this performance, though, I think it's always important to kind of take a step back and reflect on some of the ingredients of our secret sauce. The first thing I'd point out is that we have proven strategies that are well ingrained within the organization. While these strategies and underlying initiatives continue to evolve, such as the acceleration of our digital approaches during 2020, the overall foundation and the framework are very consistent from year-to-year. The second thing I'd point out is that we benefit from tremendous diversification. I mean we talk about the diversity in our business quite frequently with many of you. And that diversity goes over many different parts of the business, whether it's in terms of our customers -- our largest end customer in the world does not exceed 1% of our sales -- whether it's our products, whether it's the applications that we serve, whether it's our geographies or even also our competition. And then lastly, it's our culture. Our culture of continuous improvement and execution is, we felt like that shined particularly brightly here in 2020 as we responded to some of the most challenging conditions that we've seen in a decade. But overall, our culture really is something that we're very passionate about, and we really do think makes a difference. So now let's talk about the business and look at our products here. So now I'm on Page #4, and this is an overview of our laboratory business. So if you look at our lab business, it's a little bit more than half of our business nowadays. It's probably close to around 53%. In our lab business, we're mostly selling personal instruments with dedicated sales specialists used by chemists and scientists and research, quality control and also in testing labs. And that dynamic of having a dedicated application specialist selling directly to the end user is, I think, a very powerful proposition and something that we think also helps us in our pricing program. We're also selling instruments in scale-up like, for example, in our automated chemistry business as well as production and bioproduction like our process analytics business. So our instruments are often the most highly used instruments in a lab and include balances, pipettes, various analytical instruments as well as process analytics and automated chemistry, which I just mentioned. We enjoy strong leadership positions in all of these categories. And it's worth mentioning that our competition differs by product line and does not come close to providing the range of instruments and services that we provide. Our offering also represents up to 40% of the instruments on a typical laboratory bench, and we have many synergies with the breadth of our portfolio regarding cross-selling service, man-machine interfaces and our LabX instrument control software. LabX is also something that we talk frequently with many of you about, and it's increasingly important to our customers as it allows them to meet data integrity needs and also helps manage their workflows. But overall, we would expect our laboratory business to be growing faster than our corporate average over the medium to long term. I'm now turning to Page #5. And so this is an overview of our industrial business. So our industrial business represents about 40% of our sales. So we're no longer in the laboratory. We're now more in the manufacturing facility. This business, as many of you are aware, is split into 2 different pieces. The first piece is what we refer to as our core industrial business, which is about 60% of our industrial business. This covers a very broad range of customer needs in production. So we're selling a wide range of scales, terminals and software into a wide range of manufacturing environments. We're the leader in core industrial and our markets are very highly fragmented, even more fragmented than our other businesses with many local players in terms of competitors. Historically, this business has been more sensitive to the overall economy versus our other businesses, but it has a much better mix of business today than it has in the past and has benefited very much so from reallocating resources towards the more attractive segments of the market. Although I would point out that we're certainly still not immune to the economy. The second part of the industrial business is our product inspection business. So product inspection represents 40% of our industrial business, and this is largely sold to food manufacturers. So we would estimate that about 70% of this business is sold into food manufacturers. The rest of it would be sold largely to pharmaceutical companies as well as to a certain degree, cosmetic companies. Here, we're selling a broad range of products such as checkweighers, metal detectors, X-ray equipment and vision equipment. These instruments are largely helping to ensure our customers, to ensure that there's no physical contaminants in their packaged food, thereby helping them protect their own brand and their own image. Product inspection also helps our customers achieve improvements in productivity and uptime. We have a very strong market position in product inspection, and we believe no direct competitor has the breadth of the offering that we have in terms of the solutions that we have at the end of the line as well as our service network. We always like sharing the antidote (sic) [ anecdote ] that we would estimate that our service organization in the United States for product inspection is about 7x larger than the next nearest competitor. So when we look at our laboratory and our industrial business and we kind of try to break it down into pieces, internally, we organize our business in about 25 different strategic business units that have typically different competition from each other. So as a result, our competitors tend to be smaller and especially on the industrial side, tend to be much more regionally focused. So now I'm turning to Slide #6. This is an overview of our competitive advantages. So our competitive advantages are also part of the secret sauce that I talked about on the first slide when we were talking about the long-term strong performance in the organization. And they're very much part of our success story as well. So first and foremost, we're the market leader, and we would estimate that about 75% of the time we are the global market leader. But at the same time, we're in highly fragmented markets, and we would estimate that our market share is in the 25% type of a range. And as previously mentioned, we have a tremendous amount of diversity in our business in terms of customers, competitors, products, applications and geography. These highly fragmented markets provide a significant opportunity for us to grow organically. And it's one of the reasons why we are so passionate about our organic growth story. We capture this growth opportunity with our Spinnaker sales and marketing program, which we believe is unique compared to our direct competitors. We've been continuously improving Spinnaker for more than 15 years and the program is very well ingrained in our global organization. In addition, we feel like we have made somewhat of a leapfrog here with Spinnaker during COVID with the acceleration of our digital approaches, which I'll talk a little bit more about later in the presentation. We also support our customers with almost 3,000 service technicians around the world which is the most extensive in our industry. Our service technicians help our customers with uptime, productivity and compliance. And it also helps us stay close to the customer needs in terms of how they see value and what their expectations are. We also have a long history of innovation and are generally known as the technology leader in our industry. And finally, as I mentioned before, we have a strong culture of execution and agility. I'm now turning to Page #7. This is an overview of our different growth strategies. So I'll kind of quickly summarize these strategies on this slide. And then on the next slides, we'll spend a little bit more time going into a little bit more detail. So first, we use Spinnaker sales and marketing techniques to gain a little market share each year. Secondly, we capitalize on emerging markets, which represents about 1/3 of our overall business with China representing about 0.5% of our overall emerging market exposure. As I think many of you know, we've been in China for more than 30 years, and we have a very, very strong organization in China. Third, we continuously come to the market with new products that have a clear value proposition. This is especially important because it helps trigger replacement cycles in our customer base and it also helps us add new customers. Fourth, we have a broad mix of margin expansion initiatives, including pricing and Stern Drive productivity initiatives that I'll talk a little bit more about in the upcoming slides. And finally, you'll see us make niche acquisitions over time, but they'll tend to be smaller bolt-on acquisitions. While we feel very strongly about our organic growth story and can be selective in acquisitions, we also think we are a good platform for acquisitions when we can leverage our global distribution, infrastructure and our corporate programs. Okay. So now let's talk a little bit about our growth strategies. And when we talk about our sales and marketing initiatives, we often refer to them as our Spinnaker program. So this is now on Slide #9, and this is kind of an overview of the foundation of Spinnaker. So as many of you know, we have a very strong Spinnaker sales and marketing foundation that's well ingrained in the organization, and it's been built and continuously improved over for many years, as I mentioned before, over 15 years. Central to our sales and marketing strategies is capturing a small amount of share gains each year in our fragmented markets. We have highly fragmented customer base and our customers typically have many sites. In addition to this fragmentation, we also have an installed base of instruments that we would estimate at about $15 billion and a contact database of more than 5 million contacts. So it's that combination of fragmentation, large installed base and all these contacts as kind of the backdrop to Spinnaker, but then we pursue those opportunities with a direct front-end sales force of more than 2,500 colleagues. And the key is that we want to leverage these resources in the most efficient manner and we want to guide them to the best opportunities. So you can imagine during a year like 2020 when end markets were very challenging, this guidance, this ability to guide the sales force was really more important than it's ever been. We optimize our sales force by targeting these resources to the areas of greatest market potential. Our sales reps are key to sales growth, particularly converting noncustomers to customers. And so we want to increase the amount of time that they have to spend time on these accounts and prospects in which our instruments and services have the most value. We also want to increase the time with accounts that have the most penetration and cross-selling potential as well, which I'll talk a little bit more about on the next slide. And our goal is to increase the number of direct interactions with the right customers, which will ultimately lead to us growing our most attractive businesses. We're continually developing a variety of tools and initiatives to help us achieve this. And in 2020, we, again, we felt like we made some real leapfrog developments in our digitalization tools and our approaches that I'll cover here on the next slide. So now I'm on Slide #10, and this is kind of an overview of our digital sales and marketing approaches, which we've been talking to many of you about over the last couple of months. So in 2020, we accelerated our go-to-market transformation by leveraging our Spinnaker foundation and digital tools and techniques which helps us gain market share. And there's 3 elements to how we approach this. The first is that we use advanced analytics to identify and pursue opportunities. So this starts with identifying and targeting the most attractive segment. So you can imagine over the past year in a COVID situation, what we're doing is we're trying to look for segments of the market that we feel are the most COVID resilient and also positioned to have the best recovery to COVID. And once you target these segments, then what we do is we use these analytics and we're leveraging internal data sources as well as external data sources. And then we're using those analytics to identify opportunities, whether they're opportunities to identify new customers or cross-selling opportunities or simply the ability to penetrate an existing account. And once we identify these opportunities, we then deliberately guide our sales force and provide them detailed profiles regarding each individual opportunity. So they literally get a profile with all kinds of detailed information explaining and demonstrating the opportunity so that they are prepared and they know how to pursue the opportunity. The analytics that we have are based on machine learning, and we're continuously refining the algorithms and the level of sophistication. And we've been doing this for the last few years or so, and we've seen significant progress and improvement over this period of time. And we felt like during 2020, we saw, again, an acceleration in terms of not only the analytics, but also in terms of the results from the analytics with increased conversion rates in terms of the profiles and the opportunities. The second element to our digital marketing approach is the tools that we provide to the sales force. So in part one, we use analytics and we guide them to the opportunity. In part two, then we give them tools to support them and so that they're more effective and they're better prepared to convert the opportunity. So again, this is something that we had started well before COVID. We have an extensive library of digital tools. We refer to them as sales enablement tools. You can imagine there's a lot of materials out there in terms of value selling, cross-selling, all kinds of videos, presentation, training materials. And what we found over the past years at the organization, there was a lot of change management in a positive way. I think the organization had more time to spend trying to understand and learn these tools. And at the same time, I think our customers were also more open to these tools as well, too, like tools such as e-demos, which would have been a sales tool that we would have had prior to COVID, but probably not as used as we would have seen over the past year. And then the third thing I would say is, we've increased our customer engagement with our different digital approaches. So if you think about how do we go to the market, we had to adapt and adjust that approach during 2020. And what's been interesting over the past years is we've been able to significantly increase the number of touches and the engagement with our customers. And so over the last few years, and there's different pieces to this, so over the last few years, we've been investing a lot more on inside sales, in telesales. And this is one of those resource reallocation things that we've done to free up capacity in the field so that they could pursue all those opportunities we spoke about with analytics. But of course, having an inside sales force, that also gives us the opportunity to leverage them during a period such as COVID. And they can also do things like qualify some of those opportunities that we spoke about earlier. Other things that we've done in this area is we've, of course, increased our investments in digital marketing, and we continue to also leverage customer portals as well. But as mentioned, when you look at all of these things together, we feel like we've had excellent results, and we also do feel like that we've been able to take a little bit more market share than we do in a typical year. And given the highly fragmented nature of our business, these market share gains are relatively small but they're more than they've been in the past, but a very small amount of market share gain can really be meaningful when we look at our overall sales growth. So now looking at Slide #11, which is an overview of our service business. So service and consumables represents about 1/3 of our sales and is an excellent competitive advantage as it helps us to lock-in customers. Our service force can also offer important insight into our customers' instrument needs as they're frequently on-site. And with almost 3,000 service technicians throughout the world, we have the largest and we believe also the best trained field service organization amongst our direct competitors. Global customers are increasingly asking for services to be delivered in a unified, consistent manner around the world, and this is why having a global organization is also especially important. We also expect service revenue to outpace product revenue over the medium term, especially as we further penetrate this installed base of instruments of about $15 billion. And that installed base is not only important for looking at opportunities on the product business, but it's also very important on the service business because we can understand a customer's history in terms of services, whether they're under contract, not under contract, et cetera, and then we can run some targeted programs around service. I'm now turning to emerging markets. So let's skip to Slide #13. So as I mentioned before, about half of our emerging market exposure is to China. And so let's talk a little bit about China here. So we have an excellent management team and a very strong operation in China that I mentioned earlier in the presentation. If you look at our competitive advantages on this slide, they're actually very similar to the overall company. Our market leadership in China is also similar to the overall group average. But I would point out that we enjoy a higher relative market share in China compared to the rest of our business. We also feel like we're positioned very well to capture growth and the growth potential in China, which we view very positively over the long term. When you think about things like increasing GDP and GDP per capita, the government's focus on transforming the economy and putting more emphasis on life sciences, the number of new scientists graduating from universities each year, and the increased focus on quality, productivity and automation of the country are all very positive factors for our business. And while the long-term outlook is very strong, we acknowledge it won't always be a smooth trend line. China and emerging markets in general can always have a lot of volatility in the short term. Okay. I'm now switching to Slide #15, which is an overview of our technology leadership. We're generally recognized as the technology leader and are constantly introducing new products to support our share gains, accelerate replacement cycles and also support our price differentiation. Our R&D efforts are focused on areas highlighted on this slide. And you can see we continue to enhance our sensor technologies for greater precision as well as providing better productivity to our customers. We're also increasingly, our products have more common user interfaces that are intuitive with minimal training required. And then automation and software integration supports our platform strategies, which leads to greater customer efficiencies in terms of productivity and also data integrity. And finally, we are also driving R&D enhancements for our service offering. And our good weighing, good titrating and pipetting practices are just a few examples of value-added services that we can provide. But overall, we believe we will continue to lead the market with innovation, which we believe is also very important. So now let's talk about our margin enhancement initiatives which are summarized here on Slide #17. So the principal driver of our margin is our organic sales growth. We have growth strategies in place to drive organic sales growth in our highly fragmented markets, which we already talked about before with Spinnaker, which is key to our operating margin improvement. Pricing, as many of you are aware, is also a key driver of our margin improvement. Our pricing foundation is built on the strong brand and market leadership positions. And we also benefit from selling personal instruments with strong value propositions at relatively low price points directly to the end user. And as I mentioned before, we're selling it with a direct application expert directly to the end user. So you have someone that can articulate the value to someone who understands the value proposition. And therefore, I would have a higher willingness to pay given that level of appreciation. We continue to evolve and develop our pricing initiatives, and we've developed excellent analytical tools and processes around the program. The other important driver for margin growth is Stern Drive, which is our global program for continuous improvement in the supply chain, manufacturing and back-office functions. Similar to Spinnaker on the sales and marketing side, Stern Drive builds on how we improve our third-party material spend as well as how we improve labor productivity in both the shop floor as well as back-office operations. We have a continuous pipeline of projects and are confident that Stern Drive can drive annual savings and productivity improvements. Finally, our business mix also favorably impacts our margin as our faster-growing businesses also are our higher-margin businesses. So overall, we remain very confident in our ability to continue to drive margin improvement. And finally, I'm on the last slide here, which is the summary slide. And before we open up for questions, I just wanted to summarize a few key points in the presentation. First, Mettler-Toledo is a very strong franchise built on market-leading positions, global presence, an innovative product portfolio, good diversification and an experienced management team. Secondly, we have a proven track record on execution. And finally, we're well positioned to continue to capture growth in our highly fragmented markets through these well-proven strategies. And we believe we accelerated our share growth in 2020 largely due to the agility we demonstrated in sales and marketing and our ability to support customers and our strong execution. So that's it from my side, Julia. I'm now happy to open up for any Q&A that you may have.

Great. Thank you, Shawn. That was a great overview. And as you accurately predicted, I'm going to start by asking the most asked question about CEO transition. So can you talk a little bit about the background, how long has this been planned for? And why is now the right time? And looking forward, what can we expect in terms of any continuation or any changes in the strategy going forward?

Yes. Sure. So I think with any CEO of a public company, this is an ongoing discussion with their Board of Directors. As I think as most people know, Olivier has been our CEO for 13 years. And I think as he was having conversations with the Board, they felt like this was a very good timing. I know he was very, in particular, he really wanted to make sure that we were in a position where we had very strong momentum on all the different corporate programs that I referred to before. He wanted to make sure that they were truly well ingrained in the organization, that they'd be sustainable. And so these are things like whether it be Spinnaker or Stern Drive or pricing. Another consideration for him too was just the overall organization. I think he feels really proud and confident about the global organization. I mean the teams around the world are executing extremely well. We have a lot of wonderful people with a strong culture. And I think all the different leadership levels at the company, I think he feels very good about that. I know the Board does as well. And I think if you just look at 2020, as an example, the combination of these programs with the strong team around the world certainly delivered some really great results in the face of a very challenging environment. And so I think that they felt like the ingredients were there for continued success. I think it's also important to mention Olivier is very much going to stay involved with the company. So he's going to continue to be on our Board of Directors. And behind the scenes, he's also going to continue to help out on some of the marketing activities as well as other activities as well, too. So we're very happy to continue to have him stay involved. And then in terms of Patrick. Patrick brings fantastic experience to Mettler-Toledo. We're very excited to work with him. One of the things, a couple of things that were very important to the Board when they went through this process, one was they really wanted to make sure that we had a strong cultural fit. And that was something that despite having a lot of very qualified candidates during the process, that was the one thing that I think really resonated about Patrick is that they just felt very, very good about the cultural fit with him and Mettler-Toledo. And then the second thing that was important to the Board was that we continue this journey. They're not hiring Patrick to change anything particularly. They really like the strategy, and there was a lot of discussion about that. And there's complete alignment with Patrick in terms of continuing the journey that we're on. And so I think what you'll continue to see is this continuous improvement journey that we've always been on. And if you kind of even think back to my presentation, those 5 pillars, I mean, those 5 pillars were also the 5 categories back at our IPO in 1997. It's just that over the years, you continue to evolve along the journey with more sophistication. And I'm sure 20 years from now, I don't know if we'll have the same 5 pillars, but I'm sure there will be certainly more initiatives and more sophistication that's been added. And I think it's not only Patrick's responsibility, it's all of our responsibilities to kind of continuously improve and make progress on that journey year after year.

That's great. Turning to COVID tailwind, are you able to break out how much a tailwind have you seen on the testing side versus the vaccine and therapeutic side? And given the resurgence in cases in recent months, how much testing tailwind have you seen in 4Q and what's your expectations for 2021?

Yes, sure. So in the third quarter, we talked about our COVID tailwinds, and that was really in respect to our, in terms of the testing labs. And so as a reminder, it's overall not very -- it's very significant to our pipetting business, but it's not necessarily that significant overall to Mettler-Toledo. In the third quarter, we estimated we would have benefited between 1% to 2% in terms of sales in the third quarter. And so if you think about it, these are pipettes. These are liquid handling devices in the COVID testing labs and something that it's much easier for us also to measure in terms of like estimating this tailwind benefit. As we kind of look forward to 2021, I would expect we'll continue to see benefits during the first half of the year. During the second half of the year, we're going to start to lap some of the tailwinds that we had during the second half of 2020. And so I wouldn't expect there to be necessarily much of an incremental benefit and could even be a decremental benefit in the second half, but we'll see how that kind of plays out a little bit. And then the other part of COVID tailwinds is, and your question is vaccine production. And so the one business, so we have a few ways that we would benefit from that. But the way that we would, the product category that would benefit the most would be our process analytics business, which we have a wide variety of parameters with end-use process control, pH, CO2, turbidity, et cetera. And then we also have some pure water applications in bioproduction as well, too. And we're upstream as well as downstream applications. Our AutoChem business also has some smaller applications on the downstream side. And then even in our industrial business, there'd be maybe some benefit from like weigh modules with bioreactors and things like that. But overall, we would expect -- it's, of course, difficult to estimate what this benefit would be at this point in time. But when we kind of look at the size of our business, I would say that we're going to benefit, but it's probably likely to be less than what we saw on the testing benefit. And so overall, not that significant and probably likely to be less than 1%.

Got it. Can you talk about the latest recovery trends across the different end markets for your base business?

Yes, sure. So I think maybe I'll start with China. So in China, we clearly saw a strong recovery in the third quarter. With China, we grew 17% in Q3. China had double-digit growth on the laboratory business. We also had more than 20% growth in our industrial business, so very strong recovery. We felt like there was an element of pent-up demand in the quarter, much more of a V-shape than what we would have thought maybe earlier in the year. We also felt like we might have benefited a little bit from some stimulus from the government. And it wasn't, yes, there's the 5-year plan. There's different programs at the federal level, but we also felt like maybe at the local levels there were some projects that they were funding as well, which also makes it a little bit harder to quantify and get your arms around the continuation and sustainability of that. As we kind of look towards 2021 for China, we feel very good about the momentum in China. We feel very good about the momentum medium term to long term in China, which I also talked about in the presentation. I think we're extremely well positioned for those opportunities, especially as you kind of start to see nuances over the past year in terms of like the Chinese government starting to focus more on, a little bit more self-dependence in terms of production with some certain strategic end markets. I think that could create certainly some investment in the country and some areas where we could benefit from. Also, more focus on topics like automation and productivity, and they've been focusing on quality for a while. But when I hear antidotes (sic) [ anecdotes ] about LabX, our LabX software, which helps with data integrity being a real important differentiator in China, it's an indicator of how seriously they're taking their quality of monitoring their process as well as their data as well. So I think we're very well positioned there. Overall, China always has or any emerging market, as I mentioned in the presentation, can have volatility in the short term. We'll see how things play out there, but we still remain very, very optimistic about China. Probably the biggest thing on our mind when we provided guidance for 2021 was just like this very challenging comparison that we would have in terms of the third quarter with our industrial business. I mean that's going to be a very challenging comparison. So we're a little bit more cautious on how to think about that as we start the year from a comparative point of view. But in terms of the market, we feel very good. Maybe the second area I'd point out is Europe. Europe had a good third quarter with, I think it was 4% growth in the third quarter. This part of the business, we always like to say, benefits probably the most from our Spinnaker sales and marketing initiatives because we have the largest percentage of direct sales force in Europe versus other geographies in the world. And so I think you really can see it with some of our numbers, not only this year that we've put up in Europe, but if you kind of look over the last couple of years. And if you remember, when PMIs were moderating in Europe previous to COVID, you would see really a strong performance relative to that in our European organization. So we feel like very strong execution there and certainly benefiting from our Spinnaker sales and marketing programs. And as we kind of look towards 2021, we're kind of, our previous guidance for Europe was low to mid-single digit. And hey, we'll see how that kind of plays out with how markets recover to COVID. To me, there's still questions in terms of COVID's ultimate implication on the economy. And that's something that's kind of been in the back of our mind, and we'll see how the dust settles on that. And then in terms of the Americas, we had also with low double-digit growth in the third quarter. We had some mixed results there. On the laboratory side, we saw some very strong results, especially with these businesses that are benefiting from some of these COVID tailwinds. On the other side of that, we have our product inspection business, which has been, out of all of our businesses, the one business that has been maybe more challenged by COVID. And so we're very optimistic that this business will have a nice recovery in terms of on the other side of COVID once maybe a vaccine is more widely disseminated. But until then, as long as we have a high level of community spread with COVID, I can also imagine a situation where in the short term we might see different food manufacturers continue to be challenged with their own operations and maybe prioritizing on other topics to make sure that they take care of the health and safety of their own employees, but also just trying to keep up with their own demand with kind of the surge from a packaged food perspective.

Got it. That makes sense. Maybe in the last remaining minute, a final question. What percentage of your portfolio will benefit from increased demand in a post-COVID work regime, such as lab automation? And what about incremental opportunities for you on the service side?

Yes. That's a good question. I mean, of course, it's hard to be precise with what percentage, but I certainly think that a lot of our businesses have great opportunities. On the lab side, you mentioned there's going to be a lot of, I think a lot of opportunities in terms of like the new normal that they refer to in a lab, whether it be automation, data integration, data management. And so our lab business is more than half of our business. And I would think most of that would certainly benefit from some of those post-COVID trends. On the industrial side, too, there's a lot of opportunities, too. The same things, automation, data integration are also topics and key trends in industrial. I think there's maybe also some additional nuances for hygienic solutions in the industrial environment that might be even more important in a post-COVID than in a pre-COVID. And then in terms of the service business, I think we also learned how to do remote services a little bit better during COVID and how to be successful with that. And I think we made some good advancements in our abilities there. And I would imagine that, that will be a service that we can continue to provide and benefit from in a post-COVID world as well.

All right. Well, that's all the time we have. Thank you so much, Shawn, for a great overview and good luck with the rest of the conference, and I look forward to talking again soon.

Yes. Thank you very much, Julia. Good to see you and goodbye, everyone. Take care.

Take care. Goodbye.