Mettler-Toledo International, Inc.

Good day, ladies and gentlemen, and welcome to the fourth quarter 2019 Mettler Toledo International Earnings Conference Call. My name is Chantal, and I will be your audio coordinator for today. At this time, all participants are in a listen-only mode. After the speaker's presentations, there will be a question-and-answer session. To ask a question during this session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to turn our presentation over to your hostess for today's call, Ms. Mary Finnegan. Please proceed, ma'am.

Thank you, and good evening, everyone. I'm Mary Finnegan, and responsible for investor relations at Mettler Toledo, and happy that you're joining us. I'm joined here today with Olivier Filio, our CEO, and Sean Videla, our chief financial officer. I want to cover just a couple of administrative matters. This call is being webcast and is available for replay on our website. A copy of the press release and the presentation is also available on the website. Let me summarize the Safe Harbor language, which is on page two of the presentation. Statements in this presentation, which are not historical facts, constitute forward-looking statements within the meaning of the US Securities Act of 1933 and the US Securities Exchange Act of 1934. These statements involve risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from those expressed or implied by any forward-looking statement. For discussion of these risks and uncertainties, please see our Form 10-K. All of the forward-looking statements are qualified in their entirety by reference to the factors discussed under the captions. Factors affecting our future operating results and in the business and management discussion and analysis of financial condition and results of operations in our Form 10-K. Well, another item on today's call, we may use non-GAAP financial measures. More detailed information with respect to the use of and the differences between the non-GAAP financial measure and the most directly comparable GAAP measure is provided in the 8-K. I will now turn the call over to Olivier.

Thank you, Marianne. Good evening, everyone. I will start with a summary of the quarter and then Sean will provide details on our financial results and updated guidance for 2020. I will then have some additional comments and we will open the lines for Q&A. The highlights for the quarter are on page three of the presentation. Sales growth in the quarter came in better than expected and was quite good given the excellent 8% growth in the prior year quarter. Total local currency sales growth in the quarter was 4%. Growth in the Americas and China was strong. We again faced meaningful headwinds in the quarter due to adverse currency and impact of tariffs. With the benefit of our productivity and margin initiatives, we were able to overcome these challenges and delivered strong growth in operating margins and EPS growth. For the full year 2019, we exceeded $3 billion in sales and achieved 5% growth in local currency. Food retail was down significantly in 2019. Excluding this business, we had 6% growth in local currency sales. We achieved a strong improvement in operating margins and a 12% increase in adjusted earnings per share. Given the material headwinds we faced in 2019, we are quite pleased with this performance. One final comment on full year 2019, we generated more than 530 million in free cash flow, a very strong level. Let me make some comments upfront on the coronavirus that is impacting China. To date, we have had no health impact to our employees in China, for which we are grateful. We're working with the team on contingency and backup plans due to travel and back-to-work restrictions that the government has imposed. Even before these actions were undertaken, we have taken steps such as eliminating our annual Salesforce meeting and non-critical travel to reduce the risk to our employees. We expect the coronavirus to significantly impact sales in China in the first quarter due to the loss of selling days. At this time, we would expect to recover these sales later in 2020 and therefore have made no adjustments for full year sales growth for the coronavirus. I wanted to mention this up front so that you can put it into perspective as you evaluate our results and updated guidance for 2020. In terms of the full year, our view on 2020 has not changed significantly since we last spoke. We continue to remain confident in our growth, margin and productivity initiatives. We believe we can continue to gain market share and drive earnings growth. Excluding food retail and the near-term impact of the coronavirus, demand in our markets remains solid, although we are cautious on the macroeconomic environment as uncertainty does exist and there are pockets of weakness in certain end markets. We will continue to invest for growth, but remain agile if market conditions change. Based on market conditions today, we believe we are well positioned to generate solid sales growth and strong earnings growth for 2020. Let me now turn it to Sean to cover the financials and guidance.