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

Good afternoon. Welcome day 3 here of the UBS Healthcare Conference. Dan Brennan, life science tools and diagnostics and pharma services analyst. And really pleased to be joined with me here on the virtual stage at noon with management of Mettler-Toledo. We have Shawn Vadala, the Chief Financial Officer. We also have Mary Finnegan, who runs IR and, I believe, is also Treasurer. I believe I didn't check that Mary. So again, welcome, Shawn and Mary, and thank you for participating.

Yes. Thanks, Dan. We're very happy to be here today, and thanks for hosting us.

For sure. Maybe a couple of high-level questions, Shawn, to kind of kick it off. Maybe the first one would just be with Olivier stepping down April 1 after a very long and successful career at Mettler, and you have Patrick Kaltenbach onboard. The message has been pretty clear. Listen, he's stepping into a role in a business that's running extremely well. And his incentives and motivations are well aligned. But nevertheless, I'm just wondering what -- how should we think about Patrick stepping into the seat, potential impact he could have? Just kind of any thoughts on this important CEO change for Mettler?

Yes. I think the change has gone extremely well. I mean, maybe before I talk about Patrick, I think it's good to start off by also acknowledging Olivier. Under Olivier's leadership, we built some really important foundational programs like Spinnaker, Stern Drive and Blue Ocean, just to name a few. And these programs are really well ingrained in the organization, and they still have tremendous traction and I would say opportunity. And so that's kind of the situation that Patrick is coming into. Now if you look at Patrick, Patrick brings really tremendous experience in terms of life sciences and analytical instruments. He has over 30 years of experience. Patrick also brings a very broad set of functional experiences. So if you think about like the CEO role, it's a very unique role, a very unique skill set. And so -- but Patrick, he has been involved with a lot of experience in product development and innovation. He's had sales and marketing experience. He's run global organizations, very sizable global organizations. He's actually ran a service business before, and he has a great history of talent development. And then when you layer on his personal attributes, he's a very strong cultural fit for Mettler-Toledo. And I know some people think like, "Hey, going from the outside, how can that be possible." But it really is. I think the Board really spent a lot of energy to make sure that they found a person that did have a strong cultural fit because it's such an important part of our company and important part of our success. And I would say Patrick's been off to a really great start here with the organization. Olivier did a really nice job with the transition plan, and he's been just really received as a great addition of the team. And I think this combination of these foundational programs with his experience really sets us up to continue the journey that we're on. And that's the whole idea. He didn't come in to fix anything or do anything transformational. It's really who's the right leader to continue this journey of continuous improvement, and we feel really positive about having him on our team.

Excellent. Excellent. That's great. Maybe another high-level question. Obviously, not obviously -- but during COVID, you've been highlighting on previous conference calls like this kind of the learnings that you achieved via COVID being more virtual digital. And I think you've talked about maybe some of the benefits after the crew going forward for Mettler. Just maybe give us a sense of kind of framing what's happened during COVID? And how maybe some of the initiatives you've taken might have some more of a lasting effect, if it's possible? I don't know if you can quantify it or just more of a qualitative aspect that it's hard to maybe see transparently numbers. So we'd love to hear your thoughts on that.

Yes. Yes, sure. So like as we come out of COVID, we really feel like we're coming out a stronger company. And I think the markets that we serve are coming out stronger, like with all the focus on health and safety around the world. I think our end markets are going to come out stronger, whether it be life sciences or food. I think there's a lot of focus on -- more focus on automation and digitalization and connectivity, that plays really well for our portfolio also. And then like if you just look at our geographic footprint, I mean, I think China has very strong long-term growth dynamics here that we're very excited and optimistic about. And then if you look inside Mettler, like what do we learn about our own company, we had been investing for many years on various programs, like Blue Ocean is a good example, right? We've been in Blue Ocean for over 10 years. And one of the things that Blue Ocean provides us is information and data. And around Blue Ocean, we've been able to develop a lot of different tools over the years. And the agility that we saw during COVID to react to changing business crisis is, I think, was really, really impressive from my perspective. Like I feel like we've always prided ourselves in terms of agility, But we really felt like we had that and that culture, but that's also the fact that we had our fingers on information that we might have not had in the past. And then when you kind of take it to the next level, and you look at sales and marketing, I feel like this is an area where the investments we were making in terms of digital marketing really showcased a lot of positive benefits in the year. And I felt like in the end, we were accelerating market share gains. And when you look forward, I think that positions us very well. Because at the end of the day, we're still serving very highly fragmented markets. And so even though we're maybe the global leader 75% of the time, we're still 25% or so market share. And so there's a lot of fragmentation out there. So we just need a little bit of market share to gain each year. And just to stay on this one for a second. Like these analytics that we've talked about in the past, they've helped us really deliberately guide the sales force towards more attractive market segments, but also to specific opportunities. We're looking at data points outside of the organization, through the Internet and other sources. But we're also looking at data sources inside the company, whether it be our CRM systems and things like that. And based on these data sources, we can develop individual profiles for the sales force. And then those profiles literally go through a process, where they get -- where we look at them from a quality perspective, but then we ultimately give them to the sales force. And then the sales force really has a very tangible description of what the opportunity is with the combination of the analytics, qualitative analysis, value selling guides, all kinds of stuff. So then they become -- and then we enhance that with digital tools in our digital library whether it be cross-selling guys or value selling guys or all kinds of reference materials, and that helps them to become much more successful in front of the customer. And what we've seen is an increase in our conversion rates over the past year. And so for us, we get kind of excited about that. We think that, that's a trend that we can kind of continue to see post COVID. It's hard to quantify these things as you kind of say in your question, but we feel like we have -- we do have really good traction. So the combination of serving really positive end markets that are coming out stronger as well as the things that we're doing, we feel good about that. Plus, I think we also enhanced our brand during COVID. Like the ability to serve and support customers during such a difficult year became a differentiator. It allowed us to also win some new customers and then also increase loyalty with existing customers.

Great. And here's a question I didn't have down, but it's just another high-level question just because you simulated the thoughts. So some companies have talked about maybe being a faster grower coming out of COVID. Thermo has talked about that, Danaher has talked about that, just giving some of the hope. I think Hologic as well undercover just given some of the instrument placements and investments they've been able to benefit from, given the cash flows from COVID. So maybe just speak to Mettler kind of, obviously, there's never a normal year. Depending what the economy is doing, sometimes you're growing a lot faster than what you expect to be your normal growth or sometimes slower. But what is that normal growth rate? And given what you just described to some of the benefits that you see, is that -- would you expect the normal growth rate to tick up post-COVID, if we ever hit that normal world level?

I feel like we're going to come out of this stronger, and I feel really good about our momentum. I don't think we're in a position yet to try to make a call on what the future growth rates are going to be yet. But we feel good about what we can control and our execution in the programs. But at this point, I wouldn't want to like try to imply that, make a commitment that we're going to be a faster growth company top line coming out of this. But we feel very good about the things that we're doing. And I think it's also important to kind of, frankly, get on the other side of COVID, right? Like there's so much -- there's just been dynamics over the past year. And I think we need to kind of like let the dust settle a little bit here, see what it looks like when the economies are all back up and running, when government stimulus has settled down, and then we can kind of look at the situation probably with a clearer lens next year.

Got it. Okay. That makes sense. I tried. So maybe just parsing through some of the quarterly stuff here, and then we'll kind of zoom it back out as well. But -- so I believe this question was asked on the call, but I just wanted to -- just in the action -- the first quarter was a really strong one for Mettler. Just how much of it could have been allocated or benefited from a catch-up from the pressure you saw in 2020.

Yes. I mean, certainly, there was an element of catch-up. If you look around the world, I mean, clearly, we saw end markets like chemical really come back in the quarter, but we also started to see recoveries in other areas like academia, too. And I wouldn't characterize academia is fully back But we certainly saw a lot of improvement. If you look just beyond those two, a lot of broad-based improvement. And so I'm sure there was an element of pent-up there. I think if you look at it from a geographic perspective, you certainly saw that in the West, but also in China. And China, to me, was particularly interesting because we already had kind of a local pent-up topic already back in Q3. But in Q1, I felt like we had the benefit of a global pent-up. I think the Chinese domestic economy was also benefiting from the global recovery. But of course, it's difficult to quantify these things. I think there was also an element of stimulus in different parts of the world. China being an example as well. And then you have some of the things we just talked about previously. I think we are taking a little bit of share more than we normally do. And then when you add that up, you get to 18% growth for Q1, but it's hard to break down the exact pieces. But kind of -- I think maybe the other safe way to look at it, too, Dan, is like we do feel good about -- despite the pent-up, we felt good about our Q2 guide, right? Like so -- I mean, to guide 19% to 21%, I'm pretty sure that's our all-time record for guidance. And we felt good about it. We had the month of April behind us. When we provided that guidance, we had good momentum coming into the quarter. So for the first half of the year, we feel really good. It's always more difficult to look beyond the current quarter to the second half of the year. And I think we'll see how the second quarter plays out, and then we'll kind of update things as we kind of give guidance at the end of July. But right now, we were kind of just thinking more normalized multiyear growth rates for the second half.

Got it. Got it. Right. So our next question gets back to this love of the sell-side or investors look at stack comps. And obviously, Mettler -- Mary and I have talked about, maybe look at 3-year stack comps, 4-year stacked comps, so who knows what. So we might fool ourselves into thinking that it's really such a blunt tool. But nonetheless, that Q2 '19 to '21 still kind of implies like a stable year-over-year stack in Q2. So a record number, but you're up against a minus 4% comp. So I guess the way to ask it is like with the economy improving, vaccination rates still kind of improving, cases kind of coming down, I would think there still might be even more momentum heading into Q2. Just is stack comp not the right way to look at it, because it look stable kind of quarter-to-quarter.

Yes. I mean I think stack comps are good analytics. We look at them, too. And we get our 2, 3 and 4 as well. I think sometimes Mary even shows me 5. But of course, it's -- like anything, it's a data point, right? And there's a lot going on at the moment. But when you look at Q2 versus Q1, I think it is a pretty similar 2-year stack, and we would probably view that similarly. But of course, the pieces going in and out of it are not exactly the same. I think Q1 would have a little bit more pent-up in it. Q2 might have a little bit more recovery in certain other industries in it, but we'll see how it kind of -- we'll see how it shakes out. But I think, to me, the key is that we saw a really nice recovery in many industries in Q1 that we felt had really good momentum coming into the second quarter. And when you look at the first half of the year, we're almost 20% growth. We feel really good about that. And what's nice is that it's just so broad-based at the moment. And like these are pretty big numbers. And when you combine big numbers with a very broad performance, it gets to some pretty powerful numbers. So we feel very good about that and, of course, for us, we look at that as an opportunity to also reinvest in the business. And so we kind of also communicated on the call that we'd like to start making some additional incremental investments here that we'll probably start to see more so in the second half of the year and recognizing that we're going to start hitting more difficult comparisons, but it's just the right thing to do for the business and we'll pace it appropriately. But I just feel like there's really good growth dynamics here, and we want to make sure that we're taking advantage of those opportunities. And all the things we talked about with like digital marketing, keep in mind, those also create opportunities that we need to pursue. And so we definitely want to invest in the front end of the business.

Interesting That's helpful, Shawn. Lab, terrific growth on a 1-year, 2-year basis. Many peers are seeing similarly strong growth. But nonetheless, it does feel like maybe this business is at a higher level on a normalized basis than it's been. So just kind of I know -- can you just unpack what's going on with Lab? And is your position today very different than where it was a few years ago?

Yes. I mean we're very happy with the business. We -- coming into COVID, we just had such a great portfolio. We also had the benefit of Spinnaker. The Lab business has always benefited well from Spinnaker and we've always disproportionately invested in it, just given the growth dynamics and the returns. If you look at like maybe like what you referred to as like kind of like the recent performance, I think one thing to keep in mind, too, is that they also have the benefit of some of these COVID tailwinds. So specific to our pipetting business, with COVID testing, that was about 2% for the overall group in terms of a tailwind for Q1. So if you kind of translate that to Lab, that would be about a 4% benefit in the quarter. So we'll start to see that start to come down here a little bit in Q2 and then certainly in the second half of the year because we already started to receive some of those benefits in Q2 of last year. But we also get benefits like in other parts too like bioprocessing, like our pipette -- I mean, I'm sorry, our Process Analytics business is doing very well and has a nice exposure there. And then the other businesses also, I think, kind of had the benefit of good -- the recovery that we talked about in some of the other segments. But I feel like, in general, we're executing well. I think like I said earlier, I think our end markets here are going to come out more favorable out of COVID as well. And then when you think about trends in the lab around automation, more automation, productivity, digitalization, those types of things, I think we also benefit from that, especially like with our LabX software, which has the ability to connect up to 40 -- we saw up to 40% of the instruments on a typical laboratory bench, and many of them are connected with our LabX software, which then helps companies automate their workflows.

Great. Agilent actually talked about last night, that the underlying pharma demand is just stronger and it's been strong through COVID. So maybe to stay on lab for a moment. So just kind of remind us like, again, going back to the kind of normalized growth basis, like how would you characterize like on a steady-state basis like your lab business, like what type of level of growth do you think is all like a range of growth, do you think is kind of reasonable for that segment?

Yes. I mean, it's like -- that's probably historically been a mid- to high single-digit business, and I wouldn't expect it. Right now, I'm not sure I would say we should make any assumptions that it's going to be different. But I -- but it's similar to what I said before. I feel like we're coming out of it stronger. The end markets are strong. There's certainly a lot of growth opportunity in China. And as we see more focus in a country like that with tremendous amount of investment, I definitely think we're going to benefit from it.

Got it. And maybe it's a good point to discuss on the PendoTECH deal, just in terms the contribution -- like how much of that benefit within your lab business from -- I mean, are there favorable kind of synergies, rev synergies from the channel? Just kind of walk through that deal a little bit. And then as a follow-up, I know it was really a unique deal because it's just checked all the boxes. But I know the company, I think, you said, listen, don't expect us to be more aggressive now in M&A, but maybe just any comment on what the pipeline looks like?

Yes, sure. So yes, PendoTECH, we feel like it was a great fit for the company. I mean we talk a lot about the fact that we're an organic story, but we always feel like we're a good platform for bolt-on M&A. We feel like, like you said, PendoTECH checks a lot of those boxes in terms of why it's a good fit. If you look at how it fits into the organization, our Process Analytics business is a very attractive business. It's a business that we've been in for many, many years. It's about 10% of our global business. We have a market leadership positions and a lot of real-time measurement control parameters. But if you look at like where our strengths are, like in bioprocessing, like more than half of the business is in bioproduction -- bioprocessing. And we serve a lot of the applications, both upstream and downstream. We also have a lot of pure water applications in addition to our analytical process parameters that we're measuring. But our strength is more upstream bioprocessing. And if you look at PendoTECH, PendoTECH's strength is more downstream bioprocessing. So we feel like there's -- that's one of the synergies is a little bit of cross-selling between upstream and downstream. PendoTECH's strength also is in single-use sensors. And so we have single-use applications as well, but our strength is much more on the reusable sensors. And so we feel there's a lot of know-how around single-use technology that we're going to benefit from PendoTECH. And then you also look at from a geographic perspective, about 70% of PendoTECH's business is in the Americas, and out of the other 30%, most of that's in Europe. So they only sell probably 2% to 3% in Asia Pacific. So there's a tremendous opportunity for us to help bring them internationally, especially in a country like China and the rest of Asia Pacific. So for us, we're -- it's serving a market that we find very attractive. It's highly complementary to our existing business. And we think like there's some really nice front-end synergies with the business going forward. So in terms of like M&A, this is a great example of the kind of acquisition we like to do. And I think for us, it's always a question of availability of assets. And we tend to be very patient on that. And this asset became available and we jumped on it. And I would think that in this environment, there's just a lot more M&A activity. There's a lot more availability of assets in general. And so hopefully, we'll start to see other opportunities. But at this point, there's nothing like right behind it. So I wouldn't want to read in too much into my comments. But hopefully, the overall environment presents itself that we can continue to do some more bolt-ons going forward. But in the end, we're going to be patient and we're going to be highly focused on strategic fit. And we also feel like In the end, we have such a strong organic growth story, and that's why we also feel like we can be patient back to like we're serving very highly fragmented markets, and we have great programs to keep on taking a little bit of share each year.

Great. Maybe move over product inspection. You sounded more optimistic on the last call about the budding recovery there. I still don't think you're really baking much in the way of guidance. Like it grew mid-single in the quarter. Comps are really easy. And I think it's just been -- packaged food companies under COVID have been shut. Maybe not making the regular updates that they would normally do. So where do we stand with the recovery in that business? What's the way to think about it for the rest of this year? And is it fair to think like when this thing gets going again, are you going to snap back to north of 10%. I think this was a high single-digit grower pre-COVID. So just give us some flavor on what's happening? What the outlook is? And where we go?

Yes. I mean, in terms of that business, as you know, it's about 70% exposed to packaged food companies. And so that market has been clearly more challenged operationally by COVID over the past year. I always felt like we really did need to get on the other side of COVID to really start to see these companies reengage, reinvest, start to be more open to having visitors on site and work on projects together because it's a little bit more involved. I think as we see vaccines here really do well in the United States, we start to see some more activity with customers, starting to see more quotation activity and just more customer interaction in general. So that's kind of like in the earlier part of the pipeline, we're starting to feel like there's some positive trends there. But there's a longer sales cycle here, and I never would want to overreact to early activity. We've seen things in the past there and then it kind of things then got put on hold later in the cycle, just given some of the pressures that, that industry was in pre-COVID. But I -- But we are more optimistic. I don't think we built anything too particular in terms of our guidance for the pent-up opportunity that we see out there. The timing of it is still to be determined. I would certainly hope it can translate into some upside for our second half of the year guidance. But right now, it's still too early to tell that, and -- but it's -- but from our perspective, we feel like it's a matter of time. And when we start to see that, I think we will start to see some certainly above-average growth there. And it's a question of duration at that point in time. I don't think it's necessarily going to all come back in one quarter. Given this business, I think, we'll start to see some acceleration in growth. And then hopefully, we have a period of whether it's a year or 2 years of higher-than-normal growth rates in that business, that's kind of the situation I would probably anticipate. But we do feel like we're well prepared for it. We think we are -- we're positioned extremely well with the breadth of our portfolio service, also tends to be a differentiator in this business in terms of the ability to support customers. And you've heard me mention many times in the past, I'm sure like our service business in the United States is 7x larger than the next nearest competitor. And that's an incredible value proposition for a food company. And so I think we're well positioned. It's just a question of timing, and we'll see how it plays out.

Got it. Okay. Yes, makes sense. So just kind of going through just kind of Core Industrial and Food, then we can give some high-level stuff in the -- we still have a little bit of time in this left. Of course, a lot of questions on the last call in Core Industrial. Obviously, this is like the tail that we have to get off sometimes, right? Although the business has become less cyclical as Mary has helped us kind of think through. But the 1Q growth had the best 2-year stack, dating as far back as our model goes. So just what -- maybe just kind of walk-through within that segment. Like what is driving that really strong recovery right now? And how do we think about kind of the durability of the growth that you are seeing?

Yes. I mean there's a lot of things going on in Core Industrial, especially in Q1, but if you look at the big picture, I mean, we've been performing very well in this business relative to market conditions now for over a couple of years. And probably it's about 2.5 years, where I felt like we had a really inflection point. And so we're really pleased with the business, and I think there's really great execution going on internally. I mean if you look at the first quarter, of course, it was a softer comparison with China. But despite that, like you said, we still had really strong 2-year stack comps there. I feel like there was a benefit generally from the global recovery that we saw in Q1. I kind of mentioned this earlier in the call here. But I felt like in China, we had a bit of a local pent-up opportunity in Q3 of last year. But in Q1, we really felt like we started to see the benefits of the global recovery. And so even Chinese companies were, I think, very much benefiting from strong results around the world. And I think part of it might be also supply chain related. Like as consumer demand started to surge around the world, people had to look for places to go, and I think China benefited from some of that. But if you look at, for example, like in our Chinese industrial business, I mean, it grew over 60% in the first quarter, and we had probably like mid- to -- low to mid-teens growth in Europe and the Americas. So really, really strong growth in different regions, but especially in China. One of the things that we started to hear more over this past quarter is that companies are increasingly similar to labs. They're starting -- they're increasingly focusing more on automation, and they're also focusing increasingly more on connectivity and digitalization. And we feel like those trends are really good for our portfolio. We're well-positioned there. And I think we're able to take advantage of those opportunities. I think there's also maybe a smaller antidote there in terms of just the ability to supply and support customers. Like we -- a lot of supply chains around the world are challenged these days and the fact that our supply chain continues to be able to keep up with customer demand has been really impressive, not that we don't have our own challenges, but I think it's certainly allowed us to win new customers along the way, too. So when -- so that's -- I think that's part -- that's one big part of it. And then the other big part of it is that -- and this starts to go back to this trend I talked about over the last 2.5 years is these digital marketing strategies. If you think about all those tools that I described earlier, our industrial business arguably -- our Core Industrial business arguably benefits the most. And it's because of the very high degree of diversity and fragmentation in that business. And so we've been able to use these tools to really focus that organization on the more attractive market segments, but then really helping to push them to specific opportunities. And in a lot of cases, too, we've even used analytics to redesign sales territories as well. And so there's been a really a lot of change in the front-end approach to that business. And just given all that fragmentation, I think we've really been able to push the organization towards faster growth segments. And so I think that's a trend we can also continue to see there. So we feel very good about it.

Yes. Really interesting. I mean, is it possible Shawn, just as a quick follow-up there. When you look at PMIs and where the global economy is in recovery, is it possible like lining up with Core Industrial and say, I know there was a thought maybe there's a late cycle, early cycle, but as you line up the benefit you're seeing, you've got a lot of fundamental drivers propelling it. China, you mentioned was clearly one. But like -- have we seen like, is -- if PMI is slow, will -- can Core keep going? Or just how tightly correlated do you think Core is with PMIs?

Yes. I mean, out of all of our business, historically, this was the one that was the most correlated to PMIs. I'd say over the last couple of years, it's been less correlated, but that doesn't mean that we're immune to the economy. And I think we certainly benefit when PMIs get improved. And it does -- and I'm sure we feel pressure when PMIs go down, but there's probably also like a tolerable range. It's not like so sensitive that when it goes up by 1, like that drives growth out of something like that. And like at times, too, like when PMI start to get north of 55, I don't know if that necessarily means we grow exponentially higher either. So there's some tolerability, I think, within those statistics. But I do think that we -- we're not immune to the economy, but we're less susceptible than we were, say, 5 years ago. And I think it's because we're able to use some of these digital marketing strategies within the Spinnaker umbrella to gain a little bit more market share than we have in the past.

Good. No, that's helpful. Maybe just instruments. Just can you walk us through like customer behavior on instrument replacement cycles? Like how much of that was caused? How much are you seeing a benefit from that? Maybe just give us a sense of your exposure to like replacement, which, I think, you talk a lot about and you guys are really smart and adept at knowing when it needs to be replaced. I think in [indiscernible] we have a much lower price point. So I get the whole Mettler like you guys come to the right bench-top scientists. You know the person individually. So it's lesser really considered instrument play. But nonetheless, we've seen really strong instrument growth from some of your peers who sell more expensive instruments. So how much are you benefiting from that trend, I guess?

Yes. I mean when you look at our business historically, we'd say most of our business in the West, Europe and the Americas is replacement. And when I say most, it's probably, I don't know if had to guess, 90%, typically. So there's a very big -- it's a very big part of our business there. You've heard us say in the past that we just say the economy needs to be good enough for people to stick to replacement cycles. Clearly, the economy is good enough for people to stick to replacement. So it's kind of hard to tell how much of is replacement going on versus pent-up and some of these other dynamics. But I would say that I feel like there's also a little bit more new investment going on than we've seen in the past. Probably the best example of that is China. And so within China, we certainly see all kinds of investments going on, whether it's within the 5-year plan or whether it's the focus on life sciences or even if it's some focus on reshoring certain activities in the country. And so I think all those things play towards new investment and we're seeing a little bit more there than we've seen in the past. I'd say historically, China and other emerging markets also have a large replacement business, but we're probably seeing a little bit more new investment than we've seen in the past. But for us, what we try to focus on is maybe 2 things: One is like just keeping a good cadence of new product introductions. And so I feel really good about our cadence. I don't think it's changed at all during COVID and coming out of COVID. And then we use analytics like you described in terms of like really understanding our installed base of instruments. And so like we have approximately a $15 billion installed base of instruments. And based on that installed base, we're familiar with the age of the instrument and the application, and the service history and a bunch of other key attributes. And based on that, we can then tailor our marketing activities towards whether we're going to go after and try to replace an old product or whether we're going to sell a service contract, et cetera. And so we continue to do those types of things as well, too. But I wouldn't want to -- when I kind of like look at the first quarter, I mean that -- I wouldn't highlight that as like something that was the driver of Q1. I think it was much more some of the other things that we've talked about here on the call.

Great. Maybe one on China then. You've come up a couple of times, and you guys are synonymous with China. You've been there for a long time, a big part of your business, what it grew like north of the 40% in the first quarter.

Yes.

So I think when we talk maybe on the follow-up, you talked about the maybe high-teens growth for the year. Just maybe give us a little bit more flavor of -- you've already teased out some of the comments on what's going on there. Seems like you're in a really good spot. It seems like the economy is recovering. Maybe there's a little bit of unique progress, but just give us a little bit of color about 2021. And also we used to hear about China 2030, maybe be more localized, stuff like that. Just where do we go even beyond '21 in China from that point?

Yes, we're very optimistic about China. I mean, it's pretty amazing to do 44% growth in the quarter when it's almost 20% of your business. Now they were down 13% last year, but still that's a pretty strong number. And then to be able to then guide to, what was it, like mid-20s for Q2 here and then high teens for the full year on top of actually 7% growth last year. So we feel like there's really good momentum there. We feel like there's just so many positive things that we're benefiting from, whether it's the country's focus on life sciences that I already mentioned, whether it's elements of the 5-year plan, which emphasizes health and safety, whether it's maybe some stimulus that's also going into economic development and developing the economic zone going out to the West. Whether it's the country maturing in terms of accelerating the embracement of automation and digitalization, which plays well for our portfolio, whether it's penetration opportunities and product inspection, which we've talked a lot about in the past being an area where we felt like there was never a lot of focus on -- is much focus, I should say, on physical contaminants as we have seen in some of the other western countries. I think that's a longer-term trend that we've talked about in the past that we'll start to see improve as GDP per capita starts to increase over time. So we feel like there's a lot of positive things there at the moment. But also longer term, we have such a strong team. We've been there for over 30 years. Pretty much everybody on our executive team there of, like if you look at like the top 15 or 20 people from a leadership perspective in China, they're all Chinese nationals with one exception, which is Head of R&D. And we just have a lot of long tenure in the company, too. And the culture there is just very strong. They're very agile and we always talk in Mettler about our ability to pivot towards growth opportunities and just observing our organization there and what they've done over the last year, let alone the last 5 years, it's really impressive. And they're really good at like getting into that second and third level of detail to look at something, whether it's lithium batteries or whether it's looking at the food supply chain in the country and looking at some specific opportunities or maybe microelectronics. And that's -- those are like things that are just in addition to all favorable trends we see going on in broader life science investments. So we feel very optimistic here for the long term. We're certainly increasing our level of investment in the country when we talk about investment in field turbos. This is certainly top of our list, and we're working with the team locally on some longer-term growth plans and making sure that we're investing accordingly.

Excellent. Well, maybe with that, Shawn, we're just about done. We have a minute left, but that's a good way to end it on a high note with China. So thank you and Mary for participating. Appreciate you guys here at the conference and hopefully you have good set of meetings, and we'll look forward to, I guess, catching you certainly on the next conference call.

Great. Thanks a lot, Dan. Good to see you. Thank you. Bye-bye.

Thank you.