METTLER TOLEDO INTERNATIONAL INC/ (MTD) FY 2025 MD&A
This page reproduces the company's own Item 7 MD&A text from the linked SEC filing. It is filer text, not grepcent analysis, scoring, or investment advice.
Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements.
Changes in local currencies exclude the effect of currency exchange rate fluctuations. Local currency amounts are determined by translating current and previous year consolidated financial information at an index utilizing historical currency exchange rates. We believe local currency information provides a helpful assessment of business performance and a useful measure of results between periods. We do not, nor do we suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. We present non-GAAP financial measures in reporting our financial results to provide investors with an additional analytical tool to evaluate our operating results.
We also include in the discussion below disclosures of immaterial qualitative factors that are not quantified. Although the impact of such factors is not considered material, we believe these disclosures can be useful in evaluating our operating results.
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Overview
We operate a global business with sales that are diversified by geographic region, product range, and customer. We hold leading positions worldwide in many of our markets and attribute this leadership to several factors, including the strength of our brand name and reputation, our comprehensive offering of innovative instruments and solutions, our Spinnaker sales and marketing program, and the breadth and quality of our global sales and service network.
Net sales in U.S. dollars increased 4% in 2025 and 2% in 2024. Excluding the effect of currency exchange rate fluctuations, or in local currencies, net sales increased 3% in both 2025 and 2024. We estimate local currency net sales increased 4% in 2025 and were flat in 2024 excluding the impact of previously disclosed delayed shipments in 2023 and acquisitions.
We faced a difficult environment in 2025 due to global trade disputes/tariffs, governmental policies and geopolitics that increased uncertainty in our end markets and the global economy, while having a negative impact on customer behavior and our import costs. Our team's resilience and agility, and our pricing, supply chain, productivity and cost savings initiatives, were critical to our ability to mitigate these challenges. We also continue to benefit from our strong global leadership positions, diversified customer base, innovative product offering, investment in emerging markets, significant installed base, and the impact of our sophisticated global sales and marketing programs. Over the past few years, we also accelerated our digital capabilities to identify and pursue growth opportunities, while increasing the effectiveness of our global sales organization. We also have continued to increase engagement with our customers with our Go-to-Market and digital approaches. Our market-leading solutions and ability to leverage our innovative portfolio have also allowed us to quickly capitalize on our customers' demand for automation and digitalization solutions and faster growing segments. We are well positioned and have continued to make investments to further strengthen our portfolio and capture future growth opportunities. Our service business also delivered strong results in 2025 as we have been able to support our customers’ ability to maintain uptime, improve productivity, and comply with regulatory requirements.
As we enter 2026, we expect to continue to benefit from market trends toward automation and digitalization. We also anticipate future opportunities with customer replacement cycles and investments in on/near-shoring activities. However, timing remains unclear and many of our end-markets, including pharma/biopharmaceutical, food, and chemical, remain challenged and continue to face uncertainty.
Our laboratory sales grew modestly in 2025 including improved bioprocessing market conditions, while biotech research and academia market conditions were softer. We believe we will benefit from favorable pharma/biopharma market trends in the future. We also believe we will continue to benefit from increased customer demand for automation, digitalization, and safety; new facility investments; and continued focus on regulatory compliance including data integrity requirements. Overall, we believe we are well positioned to continue to capture growth and gain market share in our laboratory business.
Our industrial sales had good growth in 2025 with increases in both product inspection and core industrial. We continue to benefit from our strong product offering and focus on the more attractive, faster-growing segments of the market and strong execution of our growth initiatives in each region. We also continue to benefit from market trends in automation and digitalization and also expect to benefit from customer on/near-shoring activities in the future. Our core industrial-related products are also especially sensitive to changes in economic growth. China and emerging market economies have historically been an important source of growth based upon the expansion of their domestic economies, and we expect this to also be a source of long-term growth. Product inspection experienced strong growth in 2025, and we expect our product inspection end-market to continue to benefit from our customers’ focus on brand protection, food safety, and productivity.
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Our food retailing sales improved during 2025 primarily due to increased project activity, especially in the Americas. Traditionally, the spending levels in this sector have experienced more volatility than our other end-markets due to the timing of customer project activity and new regulations.
In 2026, we will continue to pursue the overall business growth strategies which we have followed in recent years:
Gaining Market Share. Innovation is essential to gaining market share and is fundamental in all aspects of our business including sales and marketing and technology leadership. Our global sales and marketing initiative, Spinnaker, continues to be an important growth strategy. We aim to gain market share by implementing sophisticated sales and marketing programs, leveraging our extensive customer databases, product offering, and installed base. While this initiative is broad-based, efforts to improve these processes include the use of digitalization and advanced data analytics to identify, prioritize, and pursue growth opportunities; the implementation of effective pricing related to value-based selling strategies and processes; improved sales force guidance, training, and effectiveness; cross-selling; increased segment marketing; and leads generation and nurturing activities. We also have added resources to pursue under-penetrated market opportunities and continue to adapt our Go-to-Market approaches with additional inside and telesales resources, while also increasing digital customer interaction. We continue to benefit from digitalization tools to gain efficiencies and increase the effectiveness of our field sales force.
In addition, our comprehensive service offerings, and our initiatives to globalize and harmonize these offerings, help us further penetrate developed markets. We estimate that we have the largest installed base of weighing instruments in the world, and we continue to leverage advanced data analytics and invest in sales and marketing activities to increase the proportion of our installed base that is under service contract, or sell new products that replace old products in our installed base. In addition to traditional repair and maintenance, our service offerings continue to expand into value-added services for a range of market needs, including regulatory compliance. We have also improved our service model to incorporate remote service, depot drop-off/pickup, and other approaches.
Faster-Growing Markets. Emerging markets, comprising Asia (excluding Japan), Eastern Europe, Latin America, the Middle East, and Africa, account for approximately 33% of our total net sales of which 16% relates to China. We have a two-pronged strategy in emerging markets: first, to capitalize on long-term growth opportunities in these markets, and second, to leverage our low-cost manufacturing operations in China which was recently designated a Lighthouse site by the World Economic Forum's Global Lighthouse Network. We have a nearly 40-year track record in China, and our sales in Asia have grown more than 10% on a compound annual growth basis in local currencies since 2000. Over the years, we also have broadened our product offering to the Asian markets. India has also been a source of emerging market sales growth in past years due to increased life science research activities. Overall, versus the prior year, we experienced a 3% increase in emerging market local currency sales by destination during 2025, which included a local currency sales increase of 1% in China and 5% in other emerging markets, respectively. Going forward, we continue to redeploy resources and sales and marketing efforts to pharma/biopharmaceutical, food manufacturing, chemical, and new energy. We believe the long-term growth of these segments will be favorably impacted by the Chinese government’s emphasis on science, high-value industries, product quality, and food safety. We expect both our laboratory and industrial businesses to benefit from our focus on these segments. We also continue to pursue growth in under-penetrated emerging markets. However, emerging market sales can be volatile as we experienced in China over the past several years. China has historically been volatile, and market conditions may change unfavorably due to various factors. In addition to China and emerging markets, we also pursue other faster-growth vertical markets. While rather small, these markets present outsized growth potential. Segments include semiconductors, advanced materials, and new energy. The
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components of these faster-growing segments will change as various markets develop, and we will continue to leverage the breadth and scope of our product offering as new opportunities emerge.
Extending Our Technology Lead. We continue to focus on product innovation. In the last three years, we spent a total of $574 million on research and development, reflecting approximately 5% of net sales. We seek to improve our product offerings and their capabilities with additional integrated technologies and software, which we believe supports our pricing differentiation and accelerates product replacement cycles. In addition, we aim to create value for our customers by having thorough knowledge of their processes via our significant installed product base.
Expanding Our Margins. We continue to strive to improve our margins by enhancing our value proposition via innovation, more effectively pricing our products and services, optimizing our cost structure, and improving our mix in higher-margin businesses such as service. For example, sophisticated digital tools to provide us new insights to further refine our price strategies and processes. We have also implemented productivity and cost savings initiatives over recent years to mitigate our reduced volume, while also focusing on reallocating resources to better align our cost structure to support our investments in market penetration initiatives, higher-growth/profitable areas, and opportunities for margin improvement.
We also have implemented global procurement and supply chain management programs over the last several years aimed at lowering costs and have increased our focus on these programs with our SternDrive initiative. SternDrive is our global operational excellence program for continuous improvement efforts within our supply chain, manufacturing, and back-office operations. Blue Ocean is also an important enabler of our various margin expansion initiatives. Our move to standardized business processes, systems, and data structures throughout our global organization provides greater data transparency and faster access to real-time data while enabling our various digital strategies. Our cost leadership and productivity initiatives are also focused on continuously improving our invested capital efficiency, such as reducing our working capital levels, improving our order to cash cycle, and ensuring appropriate returns on our expenditures.
Pursuing Strategic Acquisitions. We seek to pursue "bolt-on" acquisitions that may leverage our global sales and service network, respected brand, extensive distribution channels, and technological leadership. We have identified life sciences and distribution channels as key areas for acquisitions. For example, in 2025, we acquired several North American distributors that increased our direct market access while expanding our service business, as well as an extension of our life science equipment offering and other acquisitions.
Results of Operations — Consolidated
Global trade disputes/tariffs
In 2025, the U.S. government enacted incremental tariff rates on U.S. imports from certain foreign countries. In response to the U.S. tariffs, the Chinese government implemented an additional tariff on imports from the U.S. We estimate that we incurred costs before mitigation actions from the 2025 incremental tariffs of approximately $50 million in 2025, and have implemented various actions to fully offset the effect of the current incremental tariffs in 2026. Incremental tariffs rates are currently 15% on imports from Switzerland, 25% on non-USMCA imports from Mexico, 30% on imports from China, 15% on imports from the European Union and 10% on imports from the United Kingdom. The U.S. government has indicated it may make further changes to tariff rates in the future that may adversely impact our financial results in future periods.
The recent escalation in global trade disputes/tariffs has increased economic uncertainty in our end markets and the global economic environment, including increasing the risk of recession in many
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countries, and market conditions may change quickly. Although we have implemented various actions to mitigate the effect of current tariffs, they could adversely impact our financial results and could have a greater impact on our operating results in future periods.
Net sales
Net sales were $4.0 billion for the year ended December 31, 2025, compared to $3.9 billion in 2024 and $3.8 billion in 2023. This represents increases of 4% in 2025 and 2% in 2024 in U.S. dollars and increases of 3% in both 2025 and 2024 in local currencies. We estimate local currency net sales increased 4% in 2025 and were flat in 2024 excluding the impact of the previously disclosed delayed shipments in 2023 and acquisitions. In 2025, we experienced soft market demand in our end markets. We continue to benefit from the execution of our global sales and marketing programs, our innovative product portfolio, and investments in our field organization, particularly surrounding digital tools and techniques. However, there continues to be uncertainty in our end-markets and the economic environment related to global trade/tariffs, governmental policies, the geopolitical environment, the conflict in Ukraine, and continuing instability in the Middle East and market conditions may change quickly.
In 2025, our net sales by geographic destination increased in U.S. dollars compared to 2024 by 5% in the Americas, 6% in Europe, and 2% in Asia/Rest of World. In local currencies, our net sales by geographic destination increased in 2025 by 5% in the Americas, 1% in Europe and 2% in Asia/Rest of World, with 1% in China. Excluding the impact of the previously disclosed delayed shipments in 2023 and acquisitions, we estimate local currency net sales in 2025 increased by 4% in the Americas, 3% in Europe and 3% in Asia/Rest of World, with 1% in China. A discussion of sales by operating segment is included below.
As described in Note 3 to our consolidated financial statements, our net sales comprise product sales of precision instruments and related services. Service revenues are primarily derived from repair and other services, including regulatory compliance qualification, calibration, certification, preventative maintenance, and spare parts.
Net sales of products increased 3% in U.S. dollars and 1% in local currencies during 2025 and 1% in both U.S. dollars and local currencies in 2024. Service revenue (including spare parts) increased 8% in U.S. dollars and 7% in local currencies in 2025, and increased 7% in both U.S. dollars and local currencies in 2024. Service revenue benefited approximately 1% from acquisitions in 2025.
Net sales of our laboratory products and services, which represented approximately 56% of our total net sales in 2025, increased 3% in U.S. dollars and 1% in local currencies during 2025.We estimate laboratory local currency net sales increased 3% in 2025 excluding the impact of the previously disclosed delayed shipments in 2023. The local currency increase in net sales of our laboratory-related products during 2025 includes growth in most product categories, especially process analytics.
Net sales of our industrial products and services, which represented approximately 39% of our total net sales in 2025, increased 6% in U.S. dollars and 5% in local currencies during 2025. We estimate industrial local currency net sales increased 5% in 2025 excluding the impact of the previously disclosed delayed shipments in 2023 and acquisitions. The local currency increase in net sales of our industrial-related products during 2025 includes strong growth in product inspection, and modest growth in core-industrial.
Net sales of our food retailing products and services, which represented approximately 5% of our total net sales in 2025, increased 5% in U.S. dollars and 3% in local currencies during 2025.We estimate food retailing local currency net sales increased 5% in 2025 excluding the impact of the previously disclosed delayed shipments in 2023. The local currency increase in net sales of our food retailing products during 2025 includes increased project activity in the Americas.
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Gross profit
Gross profit as a percentage of net sales was 59.4% for 2025, 60.1% for 2024, and 59.2% for 2023.
Gross profit as a percentage of net sales for products was 61.1% for 2025, compared to 62.1% for 2024 and 60.6% for 2023. Gross profit as a percentage of net sales for services (including spare parts) was 54.4% for 2025, compared to 53.7% for 2024 and 54.3% for 2023.
The decrease in gross profit as a percentage of net sales for 2025 primarily reflects increased tariff costs, lower sales volume related to the recovery of shipping delays in the prior year, and unfavorable business mix, partially offset by favorable price realization and benefits from our SternDrive program.
Additional changes in global trade disputes/tariffs may negatively impact our gross margins in future periods. As previously mentioned, we have implemented various actions to mitigate the effect of the current tariffs.
Research and development and selling, general, and administrative expenses
Research and development expenses as a percentage of net sales were 5.0% for 2025, compared to 4.9% for both 2024 and 2023. Research and development expenses in U.S. dollars increased 6% in 2025 and 2% in 2024, and in local currencies increased 2% in both 2025 and 2024.
Selling, general, and administrative expenses as a percentage of net sales were 24.8% for 2025, compared to 24.2% for 2024 and 23.9% for 2023. Selling, general, and administrative expenses increased 7% in U.S. dollars and 5% in local currencies in 2025 and increased 4% in both U.S. dollars and local currencies in 2024. The increase during 2025 primarily includes sales and marketing investments, offset in part by savings from our cost savings initiatives.
Amortization expense
Amortization expense was $74.5 million in 2025, compared to $72.9 million and $72.2 million in 2024 and 2023, respectively.
Restructuring charges
During the past few years, we initiated various cost reduction measures. Restructuring charges were $17.9 million in 2025, compared to $19.8 million and $32.7 million in 2024 and 2023, respectively. Restructuring expenses are primarily comprised of employee-related costs.
Other charges (income), net
Other charges (income), net consisted of net income of $16.8 million, $4.6 million, and $4.1 million in 2025, 2024, and 2023, respectively. Other charges (income), net includes non-service pension costs (benefits), net (gains) losses from foreign currency transactions and hedging activities, interest income, and other items. Non-service pension benefits were $13.6 million, $7.7 million, and $7.6 million in 2025, 2024, and 2023, respectively. Other charges (income), net also includes acquisition transaction costs of $2.2 million in 2025 and $0.3 million in 2024. For the year ended December 31, 2025, it also includes a net benefit of $4.4 million related to contingent consideration associated with previous acquisitions.
Interest expense and taxes
Interest expense was $68.5 million in 2025, compared to $74.6 million in 2024 and $77.4 million in 2023. The decrease in interest expense is primarily related to lower interest rates throughout the year.
Our reported tax rate was 17% in 2025, compared to 17% and 19% in 2024 and 2023, respectively. The reported tax rate in 2025 and 2024 includes a non-cash discrete current tax benefit of $13.7 million and $23.0 million, respectively, resulting from the reduction of uncertain tax position liabilities related to
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the settlement of a tax audit. The reported rate in 2025 also includes a non-cash discrete deferred tax benefit of $5.8 million resulting from the reduction of a valuation allowance related to the settlement of a tax audit.
On July 4, 2025, the United States enacted new tax legislation into law. The legislation did not have a material impact on our annual income tax rate or consolidated financial statements.
Results of Operations — by Operating Segment
The following is a discussion of the financial results of our operating segments. We currently have five reportable segments: U.S. Operations, Swiss Operations, Western European Operations, Chinese Operations, and Other Operations. A more detailed description of these segments is outlined in Note 18 to our consolidated financial statements.
U.S. Operations (amounts in thousands)
| 2025 | 2024 | 2023 | Increase (Decrease) in % 2025 vs. 2024 | Increase (Decrease) in % 2024 vs. 2023 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net sales to external customers | $ | 1,496,202 | $ | 1,429,502 | $ | 1,403,919 | 5% | 2% | |||||||
| Net sales to other segments | 152,955 | 153,759 | 137,192 | (1)% | 12% | ||||||||||
| Segment net sales | 1,649,157 | 1,583,261 | 1,541,111 | 4% | 3% | ||||||||||
| Segment cost of sales | 735,302 | 690,498 | 689,004 | 6% | —% | ||||||||||
| Segment period expense | 538,495 | 499,698 | 487,055 | 8% | 3% | ||||||||||
| Segment profit | $ | 375,360 | $ | 393,065 | $ | 365,052 | (5)% | 8% |
Segment net sales increased 4% in 2025 and 3% in 2024 and net sales to external customers increased 5% in 2025 and 2% in 2024. Net sales to external customers and segment net sales benefited 1% from acquisitions in 2025. The growth in net sales to external customers during 2025 was reduced approximately 1% from the previously disclosed shipping delays, which benefited 2024 net sales to external customers by approximately 2%. Net sales to external customers for 2025 includes particularly strong growth in process analytics, food retail and product inspection.
Segment profit decreased $17.7 million in our U.S. Operations segment during 2025, compared to an increase of $28.0 million during 2024. The segment profit decline in 2025 includes higher tariff costs and lower sales volume related to the previously disclosed shipping delay recovery in the prior year, offset in part by pricing.
Swiss Operations (amounts in thousands)
| 2025 | 2024 | 2023 | Increase (Decrease) in % (1) 2025 vs. 2024 | Increase (Decrease) in % (1) 2024 vs. 2023 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net sales to external customers | $ | 210,858 | $ | 218,580 | $ | 188,679 | (4)% | 16% | |||||||
| Net sales to other segments | 836,217 | 801,749 | 761,114 | 4% | 5% | ||||||||||
| Segment net sales | 1,047,075 | 1,020,329 | 949,793 | 3% | 7% | ||||||||||
| Segment cost of sales | 509,333 | 498,505 | 436,494 | 2% | 14% | ||||||||||
| Segment period expense | 254,028 | 241,178 | 231,818 | 5% | 4% | ||||||||||
| Segment profit | $ | 283,714 | $ | 280,646 | $ | 281,481 | 1% | —% |
(1)Represents U.S. dollar growth (decline).
Segment net sales in U.S. dollars increased 3% in 2025 and 7% in 2024, and in local currencies decreased 3% in 2025 and increased 5% in 2024. Net sales to external customers in U.S. dollars decreased 4% in 2025 and increased 16% in 2024, and in local currencies decreased 7% in 2025 and increased 14%
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in 2024. The decrease in net sales to external customers includes a decline of approximately 3% during 2025 from the previously disclosed shipping delays, which benefited net sales to external customers by approximately 7% in 2024. Local currency net sales to external customers during 2025 includes declines in most product categories.
Segment profit increased $3.1 million in our Swiss Operations segment during 2025, compared to a decrease of $0.8 million during 2024. Segment profit increased in 2025 primarily due to higher net sales to other segments, offset in part by unfavorable foreign currency translation.
Western European Operations (amounts in thousands)
| 2025 | 2024 | 2023 | Increase (Decrease) in % (1) 2025 vs. 2024 | Increase (Decrease) in % (1) 2024 vs. 2023 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net sales to external customers | $ | 895,971 | $ | 858,002 | $ | 792,907 | 4% | 8% | |||||||
| Net sales to other segments | 202,552 | 185,321 | 188,963 | 9% | (2)% | ||||||||||
| Segment net sales | 1,098,523 | 1,043,323 | 981,870 | 5% | 6% | ||||||||||
| Segment cost of sales | 497,294 | 486,823 | 455,596 | 2% | 7% | ||||||||||
| Segment period expense | 374,558 | 350,199 | 347,601 | 7% | 1% | ||||||||||
| Segment profit | $ | 226,671 | $ | 206,301 | $ | 178,673 | 10% | 15% |
(1)Represents U.S. dollar growth (decline).
Segment net sales in U.S. dollars increased 5% in 2025 and 6% in 2024, and in local currencies increased 1% in 2025 and 6% in 2024. Net sales to external customers in U.S. dollars increased 4% in 2025 and 8% in 2024, and in local currencies were flat in 2025 and increased 8% in 2024. The growth in net sales to external customers during 2025 was reduced approximately 2% from the previously disclosed shipping delays, which benefited 2024 net sales to external customers by approximately 5%. Local currency net sales to external customers during 2025 includes strong growth in core industrial and retail products.
Segment profit increased $20.4 million in our Western European Operations segment during 2025, compared to an increase of $27.6 million in 2024. The segment profit increase reflects increased net sales and benefits from our margin expansion initiatives, as well as favorable foreign currency translation.
Chinese Operations (amounts in thousands)
| 2025 | 2024 | 2023 | Increase (Decrease) in % (1) 2025 vs. 2024 | Increase (Decrease) in % (1) 2024 vs. 2023 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net sales to external customers | $ | 634,833 | $ | 628,447 | $ | 718,818 | 1% | (13)% | |||||||
| Net sales to other segments | 329,690 | 320,196 | 278,027 | 3% | 15% | ||||||||||
| Segment net sales | 964,523 | 948,643 | 996,845 | 2% | (5)% | ||||||||||
| Segment cost of sales | 437,368 | 422,130 | 448,341 | 4% | (6)% | ||||||||||
| Segment period expense | 182,245 | 180,713 | 181,410 | 1% | —% | ||||||||||
| Segment profit | $ | 344,910 | $ | 345,800 | $ | 367,094 | —% | (6)% |
(1)Represents U.S. dollar growth (decline).
Segment net sales in U.S. dollars increased 2% in 2025 and decreased 5% in 2024, and in local currencies increased 2% in 2025 and decreased 3% in 2024. Net sales to external customers in U.S. dollars increased 1% in 2025 and decreased 13% in 2024, and in local currencies increased 1% in 2025 and decreased 11% in 2024. The growth in net sales to external customers during 2025 was reduced approximately 1% from the previously disclosed shipping delays, which benefited 2024 net sales to
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external customers by approximately 1%. The increase in local currency net sales to external customers during 2025 reflects modest growth in both laboratory and industrial products.
Segment profit decreased $0.9 million in our Chinese Operations segment during 2025, compared to a decrease of $21.3 million in 2024. The decrease in segment profit during 2025 primarily reflects increased tariff costs, offset in part by benefits from increased sales and our margin expansion initiatives.
Other Operations (amounts in thousands)
| 2025 | 2024 | 2023 | Increase (Decrease) in % (1) 2025 vs. 2024 | Increase (Decrease) in % (1) 2024 vs. 2023 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net sales to external customers | $ | 788,535 | $ | 737,830 | $ | 683,986 | 7% | 8% | |||||||
| Net sales to other segments | 40,862 | 21,738 | 20,600 | 88% | 6% | ||||||||||
| Segment net sales | 829,397 | 759,568 | 704,586 | 9% | 8% | ||||||||||
| Segment cost of sales | 452,584 | 421,489 | 400,634 | 7% | 5% | ||||||||||
| Segment period expense | 235,111 | 213,895 | 197,714 | 10% | 8% | ||||||||||
| Segment profit | $ | 141,702 | $ | 124,184 | $ | 106,238 | 14% | 17% |
(1)Represents U.S. dollar growth (decline).
Other Operations includes reporting units in Southeast Asia, Latin America, Eastern Europe, and other countries. Segment net sales in U.S. dollars increased 9% in 2025 and 8% in 2024, and in local currencies increased 9% in 2025 and 10% in 2024. Net sales to external customers in U.S. dollars increased 7% in 2025 and 8% in 2024, and in local currencies increased 7% in 2025 and 10% in 2024. Other Operations net sales to external customers and segment net sales in 2025 benefited approximately 2% from acquisitions. The growth in net sales to external customers during 2025 was reduced approximately 2% from the previously disclosed shipping delays, which benefited 2024 net sales by approximately 4%. The increase in local currency growth in net sales to external customers during 2025 includes strong growth in most product categories, particularly process analytics.
Segment profit increased $17.5 million in our Other Operations segment during 2025, compared to an increase of $17.9 million during 2024. The increase in segment profit during 2025 primarily related to increased segment net sales and benefits from our margin expansion initiatives.
Liquidity, Capital Resources, and Future Cash Requirements
Liquidity is our ability to generate sufficient cash to meet our obligations and commitments. Sources of liquidity include cash flows from operating activities, available borrowings under our Credit Agreement, the ability to obtain appropriate financing, and our cash and cash equivalent balances. Currently, our financing requirements are primarily driven by working capital requirements, capital expenditures, share repurchases, and acquisitions. Global market conditions can be uncertain, and our ability to generate cash flows could be reduced by a deterioration in global markets.
We currently believe that cash flows from operating activities, together with liquidity available under our Credit Agreement, local working capital facilities, and cash balances, will be sufficient to fund currently anticipated working capital needs and spending requirements for at least the foreseeable future.
Cash provided by operating activities totaled $955.8 million in 2025, compared to $968.3 million in 2024 and $965.9 million in 2023. The decrease in 2025 includes higher cash incentive payments of approximately $36 million related to prior year performance, offset in part by lower tax payments.
Capital expenditures are made primarily for investments in information systems and technology, machinery, equipment, and the purchase and expansion of facilities. Our capital expenditures totaled $107.1 million in 2025, $103.9 million in 2024, and $105.3 million in 2023. Capital expenditures in 2026
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are expected to approximate $130 million subject to business and economic conditions and foreign currency fluctuations.
We continue to explore potential acquisitions. In connection with any acquisition, we may incur additional indebtedness. During 2025, we made several acquisitions related to our North America distribution, an extension of our life science equipment offering, and other acquisitions. The cumulative initial cash payments were $93.8 million and we may be required to pay additional consideration of up to $35.5 million. Goodwill recorded in connection with the acquisitions totaled $56.0 million. We also recorded $38.9 million of identified intangibles primarily pertaining to customer relationships in connection with the acquisitions, which will be amortized on a straight-line basis over 5 to 10 years. For additional information related to these acquisitions, refer to Note 4 to the consolidated financial statements. In 2024 and 2023, we incurred acquisition payments of $10.1 million and $5.8 million, respectively. In addition, we made the final contingent consideration payment of $10.0 million relating to the PendoTECH acquisition in 2023, of which $5.6 million is included in financing activities for the amount accrued at the acquisition date and $4.4 million is included in operating activities for the amount not accrued at the acquisition date on the Consolidated Statement of Cash Flows in accordance with U.S. GAAP.
Cash flows used in financing activities during 2025 primarily comprised share repurchases. In accordance with our share repurchase program, we spent $800 million in 2025 and $850 million and $900 million in 2024 and 2023, respectively, on the repurchase of 646,608 shares, 645,139 shares, and 691,913 shares, respectively. Our share repurchase program does not obligate us to acquire any specific number of shares; however, in 2026, we intend to spend in the range of $825 million to $875 million on the repurchase of shares, subject to business and economic conditions.
On July 4, 2025, the United States enacted new tax legislation into law. We reflected the impact of the legislation, which was not material, in 2025. We do not expect the legislation to have a material impact on our projected annual income tax rate or consolidated financial statements.
We plan to continue to repatriate earnings from China, Switzerland, Germany, the United Kingdom, and certain other countries in future years and expect the only additional cost associated with the repatriation of such foreign earnings will be withholding taxes. All other undistributed earnings are considered to be permanently reinvested. We believe the ongoing tax impact associated with repatriating our undistributed foreign earnings will not have a material effect on our liquidity.
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Senior Notes and Credit Facility Agreement
Our short-term borrowings and long-term debt consisted of the following at December 31, 2025:
| U.S. Dollar | Other Principal Trading Currencies | Total | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 3.91% $75 million 10-year Senior Notes due June 25, 2029 | 75,000 | — | 75,000 | |||||||
| 5.45% $150 million 10-year Senior Notes due March 1, 2033 | 150,000 | — | 150,000 | |||||||
| 2.83% $125 million 12-year Senior Notes due July 22, 2033 | 125,000 | — | 125,000 | |||||||
| 3.19% $50 million 15-year Senior Notes due January 24, 2035 | 50,000 | — | 50,000 | |||||||
| 2.81% $150 million 15-year Senior Notes due March 17, 2037 | 150,000 | — | 150,000 | |||||||
| 2.91% $150 million 15-year Senior Notes due September 1, 2037 | 150,000 | — | 150,000 | |||||||
| 1.47% EUR 125 million 15-year Senior Notes due June 17, 2030 | — | 146,753 | 146,753 | |||||||
| 1.30% EUR 135 million 15-year Senior Notes due November 6, 2034 | — | 158,493 | 158,493 | |||||||
| 1.06% EUR 125 million 15-year Senior Notes due March 19, 2036 | — | 146,753 | 146,753 | |||||||
| 3.80% EUR 100 million 10 1/2-year Senior Notes due July 9, 2035 | — | 117,402 | 117,402 | |||||||
| Senior Notes debt issuance costs, net | (2,076) | (1,757) | (3,833) | |||||||
| Total Senior Notes | 697,924 | 567,644 | 1,265,568 | |||||||
| $1.35 billion Credit Agreement, interest at benchmark plus 87.5 basis points(1)(2) | 416,762 | 392,453 | 809,215 | |||||||
| Other local arrangements | 18,558 | 58,831 | 77,389 | |||||||
| Total debt | 1,133,244 | 1,018,928 | 2,152,172 | |||||||
| Less: current portion | (5,528) | (58,403) | (63,931) | |||||||
| Total long-term debt | $ | 1,127,716 | $ | 960,525 | $ | 2,088,241 |
(1) See Note 6 and Note 7 for additional disclosures on the financial instruments associated with the Credit Agreement.
(2) The benchmark interest rate is determined by the borrowing currency. The benchmark rates by borrowing currency are as follows: SOFR for U.S. dollars (plus a 10 basis points spread adjustment), SARON for Swiss franc, EURIBOR for euro and SONIA for Great British pounds.
As of December 31, 2025, approximately $536.3 million of additional borrowings were available under our Credit Agreement and we maintained $66.9 million of cash and cash equivalents. At December 31, 2025, the interest payments associated with 71% of our debt are fixed obligations. We expect to make interest payments of approximately $71.0 million during 2026 associated with our debt outstanding as of December 31, 2025.
Changes in exchange rates between the currencies in which we generate cash flow and the currencies in which our borrowings are denominated affect our liquidity. In addition, because we borrow in a variety of currencies, our debt balances fluctuate due to changes in exchange rates. Further, we do not have any downgrade triggers from rating agencies that would accelerate the maturity dates of our debt. We were in compliance with our debt covenants as of December 31, 2025.
Senior Notes
The Senior Notes listed above are senior unsecured obligations and interest is payable semi-annually. The Senior Notes each contain customary affirmative and negative covenants as further described in Note 10 to our consolidated financial statements.
In January 2025, we entered into an agreement to issue and sell EUR 100 million 10 1/2-year Senior Notes with a fixed interest rate of 3.80% (3.8% Euro Senior Notes) in a private placement, which will
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mature in July 2035. We used the proceeds from the sale of the notes to refinance existing indebtedness and for other general corporate purposes.
In December 2022, we entered into an agreement to issue and sell $150 million 10-year Senior Notes in a private placement. We issued $150 million with a fixed interest rate of 5.45% (5.45% Senior Notes) in March 2023, which will mature in March 2033. We used the proceeds from the sale of the notes to refinance existing indebtedness and for other general corporate purposes.
Credit Agreement
On May 30, 2024, we entered into a $1.35 billion Credit Agreement (the Credit Agreement), which amended our $1.25 billion Amended and Restated Credit Agreement (the Prior Credit Agreement), which is further described in Note 10 to our consolidated financial statements.
Other Local Arrangements
In April 2018, two of our non-U.S. pension plans issued loans totaling $48 million (Swiss franc 38 million) to a wholly-owned subsidiary of the Company. The loans have the same terms and conditions, which include an interest rate of SARON plus 87.5 basis points. The loans were renewed for one year in April 2025.
Share Repurchase Program
In November 2025, the Company’s Board of Directors authorized an additional $2.75 billion to the share repurchase program, which had $3.7 billion of remaining availability as of December 31, 2025. The share repurchases are expected to be funded from cash generated from operating activities, borrowings, and cash balances. Repurchases will be made through open market transactions, and the amount and timing of purchases will depend on business and market conditions, the stock price, trading restrictions, the level of acquisition activity, and other factors.
We have purchased 33.0 million common shares since the inception of the program in 2004 through December 31, 2025, at a total cost of $10.6 billion and average price per share of $320.91. During the years ended December 31, 2025 and 2024, we spent $800 million and $850 million on the repurchase of 646,608 shares and 645,139 shares at an average price per share of $1,237.18 and $1,317.52, respectively. We reissued 56,500 shares and 68,428 shares held in treasury for the exercise of stock options and restricted stock units during 2025 and 2024, respectively. In addition, we incurred $7.4 million and $7.8 million of excise tax during the years ended December 31, 2025 and 2024, respectively, related to the Inflation Reduction Act which is reflected as a reduction in shareholders' equity in our consolidated financial statements.
Effect of Currency on Results of Operations
Our earnings are affected by changing exchange rates. We are particularly sensitive to changes in the exchange rates between the Swiss franc, euro, Chinese renminbi, and U.S. dollar. We have more Swiss franc expenses than we do Swiss franc sales because we develop and manufacture products in Switzerland that we sell globally and have a number of corporate functions located in Switzerland. When the Swiss franc strengthens against our other trading currencies, particularly the U.S. dollar and euro, our earnings go down. We also have significantly more sales in the euro than we do expenses. When the euro weakens against the U.S. dollar and Swiss franc, our earnings also go down. We estimate a 1% strengthening of the Swiss franc against the euro would reduce our earnings before tax by approximately $2.8 million to $3.1 million annually.
We also conduct business throughout the world, including Asia Pacific, the United Kingdom, Eastern Europe, Latin America, and Canada. Fluctuations in these currency exchange rates against the U.S. dollar
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can also affect our operating results. The most significant of these currency exposures is the Chinese renminbi. The impact on our earnings before tax of the Chinese renminbi weakening 1% against the U.S. dollar is a reduction of approximately $2.2 million to $2.6 million annually.
In addition to the effects of exchange rate movements on operating profits, our debt levels can fluctuate due to changes in exchange rates, particularly between the U.S. dollar, the Swiss franc, and euro. Based on our outstanding debt at December 31, 2025, we estimate that a 5% weakening of the U.S. dollar against the currencies in which our debt is denominated would result in an increase of $53.7 million in the reported U.S. dollar value of our debt.
Taxes
We are subject to taxation in many jurisdictions throughout the world. Our effective tax rate and tax liability will be affected by a number of factors, such as changes in law, the amount of taxable income in particular jurisdictions, the tax rates in such jurisdictions, tax treaties between jurisdictions, the extent to which we transfer funds between jurisdictions, and earnings repatriations between jurisdictions. Generally, the tax liability for each taxpayer within the Mettler-Toledo International Inc. group of companies is determined either (i) on a non-consolidated/non-combined basis or (ii) on a consolidated/combined basis only with other eligible entities subject to tax in the same jurisdiction, in either case without regard to the taxable losses of non-consolidated/non-combined affiliated legal entities.
Environmental Matters
We are subject to environmental laws and regulations in the jurisdictions in which we operate. We own or lease a number of properties and manufacturing facilities around the world. Like many of our competitors, we have incurred, and will continue to incur, capital and operating expenditures and other costs in complying with such laws and regulations.
In addition, certain of our present and former facilities have or had been in operation for many decades and, over such time, some of these facilities may have used substances or generated and disposed of wastes which are or may be considered hazardous. It is possible that these sites, as well as disposal sites owned by third parties to which we have sent wastes, may in the future be identified and become the subject of remediation. Although we believe that we are in substantial compliance with applicable environmental requirements and, to date, we have not incurred material expenditures in connection with environmental matters, it is possible that we could become subject to additional environmental liabilities in the future that could have a material adverse effect on our financial condition, results of operations, or cash flows.
Inflation
Global inflation has recently moderated after rising sharply in 2022 and 2021 related to the COVID-19 economic recovery and associated disruptions in global demand, supply chains/logistics, and labor markets, the war in Ukraine and related significant increase in energy costs and the conflict in the Middle East. Inflation can affect the costs of goods and services that we use, including raw materials to manufacture our products, as well as transportation and logistical costs and other external costs and services. Inflation can also affect labor costs which are a significant element of our overall cost structure. Inflation can also lead to increased interest rates as country monetary policies combat inflation. This can result in reduced economic growth and recessionary conditions, as well as higher borrowing costs. Inflation presents several risks to our business as further described on page 21 in the Risk Factors section of this Form 10-K, and these inflationary conditions could have a greater impact on our operating results in future years.
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