Mettler-Toledo International Inc. (NYSE:MTD) Q1 2017 Earnings Conference Call - Final Transcript
May 04, 2017 • 05:00 pm ET
So in the vehicle business, if we look at the steel decks we have, we're having higher costs for the decks. And remember, too, a big piece of our vehicle business is in China so steel prices in renminbi terms have gone up even more than we've talked about here in dollar, and so we passed on some of that.
So this 190 basis points has -- how we're doing versus beginning in the year guidance is a little misleading just to take those numbers one for one. But we're happy with the start to the year, and that 190 basis point price increase contributed to about an 80 basis points of the gross margin expansion that we had in the quarter.
Understood. And then maybe a little bit more hypothetical on capital use. Obviously, you guys have done well with the Troemner since the deal. But wondering if the funnel of deal activity has changed at all for the better or worse. Obviously, equity prices are quite high, but you have also a lot of flexibility in the balance sheet. So I'm just wondering if you could probably weight the likelihood of the acceleration in deal activity or, at least, characterize the nature of what you have on the radar.
I would say that the strategy remains very much the same. Acquisitions are part of the strategy. We pursue always many targets. We have an attractive radar. And we can't really time the opportunities to our own desire. It's often when a seller is willing. And many of our targets are privately owned companies, can have succession topics and so on. The financial metrics, the valuations play off in the smaller roles for the timing. But it's -- certainly, we are very focused on the topic, and you have seen us doing stuff in the last two, three years. And yes, I wouldn't mind if another opportunity like Troemner will materialize.
Tycho Peterson, JPMorgan.
Olivier, can you elaborate a little more on the lab strength? I think people are conditioned to thinking about the recovery in industrial, but you guys put up great numbers in lab. I know you had slightly easier comp. But can you talk a little bit about just the strength there and the sustainability?
Yes. Very pleased to say that lab was strong across the globe, across all the product lines. There were few ones that had tougher comparisons and that played a role. Like if you recall, automated chemistry had a very strong previous year. They still had good growth this year but maybe less than the average lab. The same was also true for pipettes in US where we had strong comparisons but still I'm very happy with it.
I would particularly also highlight Europe and China where we continue to have really good growth. I think it's a reflection also that lab serves many end-user markets. It's not just the life science. And many of these end-user markets start to be stronger,