Financial Data and Key Metrics Changes - Sales in Q4 were $1.1 billion, representing an increase of 5% in local currency or 8% on a reported basis [7][11] - Adjusted EPS for the quarter was $13.36, an 8% increase over the prior year, while reported EPS was $13.98 compared to $11.96 in the prior year [10][11] - Gross margin was 59.8%, a decrease of 140 basis points, impacted by unfavorable foreign currency and tariff costs [8][12] Business Line Data and Key Metrics Changes - Laboratory sales increased 3%, industrial sales increased 7%, and food retail sales grew 19% in the quarter [7][8] - Service revenue grew 8% in the quarter, including a 2% benefit from acquisitions [8] - For the full year, local currency sales increased 3%, with adjusted operating profit declining 1% and adjusted EPS increasing 4% [11][12] Market Data and Key Metrics Changes - Local currency sales in the Americas increased 7%, Europe increased 4%, and Asia increased 4% [7] - Local currency sales in China increased 3% during the quarter, with modest growth expected in 2026 [7][25] - Emerging markets outside of China accounted for 18% of sales in 2025 and grew above the company average [25] Company Strategy and Development Direction - The company is focused on driving growth through its Spinnaker sales and marketing program and innovative product portfolio [6] - Strategic initiatives include capitalizing on automation, digitalization, and onshoring investments globally [6][26] - The company aims to maintain its competitive advantage through continuous innovation and operational excellence [6][19] Management's Comments on Operating Environment and Future Outlook - Management noted that customers are expected to be cautious with investments at the start of the year due to geopolitical tensions and market uncertainties [14][31] - The company anticipates gradual improvements throughout the year, with a local currency sales growth forecast of approximately 4% for 2026 [15][16] - Management expressed confidence in their ability to execute growth initiatives and gain market share despite macroeconomic challenges [15][26] Other Important Information - Free cash flow for 2025 was $878 million, with a conversion ratio of 99% of adjusted net income [12] - The company expects total amortization for 2026 to be approximately $78 million and interest expense to be around $70 million [17][18] - Share repurchases are expected to be in the range of $825 million to $875 million [18] Q&A Session Summary Question: Customer caution in Q1 guidance - Management acknowledged that while there are positive headlines in pharma and life sciences, they expect customers to be cautious at the start of the year, which has been factored into their guidance [31][33] Question: Components of guidance regarding pricing and volume - Management indicated that pricing is expected to be around 3.5% for Q1, with a full-year expectation of 2.5% [34][36] Question: Food retail performance and outlook - Management noted that food retail is a lumpy business with project-based revenue, and while they are pleased with Q4 performance, they expect flat growth for the full year [55][56] Question: China market and pharmacopoeia opportunity - Management stated that while there is good engagement in China, the pharmacopoeia opportunity will support ongoing growth but is not expected to result in a significant step change [57][75] Question: Reshoring and onshoring opportunities - Management views reshoring as a longer-term opportunity, likely materializing in 2027 and beyond, as factories need to be built before orders can be realized [61][62] Question: European market performance - Management highlighted strong performance in Europe, particularly in product inspection, despite a softer economic backdrop [66][68] Question: Service business outlook - Management expects mid- to high-single-digit growth for the service business in 2026, with continued focus on penetrating the serviceable addressable market [71]

Financial Data and Key Metrics Changes - Sales in Q4 were $1.1 billion, representing an increase of 5% in local currency or 4% excluding acquisitions, and an 8% increase on a reported basis in US dollars [7] - Adjusted EPS for the quarter was $13.36, an 8% increase over the prior year, while reported EPS was $13.98 compared to $11.96 in the prior year [10][11] - Gross margin was 59.8%, a decrease of 140 basis points, impacted by unfavorable foreign currency and incremental gross tariff costs [8][9] - Adjusted operating profit amounted to $363 million, up 3% versus the prior year, with an adjusted operating margin of 32.1%, a decrease of 160 basis points [9][11] Business Line Data and Key Metrics Changes - Laboratory sales increased 3% in Q4, while industrial sales increased 7%, including a 3% benefit from acquisitions [7][8] - Food retail sales grew 19% in the quarter, and service revenue grew 8%, including a 2% benefit from acquisitions [8] - For the full year, local currency sales increased 3%, with adjusted operating profit declining 1% and adjusted EPS increasing 4% [11][12] Market Data and Key Metrics Changes - Local currency sales in the Americas increased 7%, Europe increased 4%, and Asia (rest of the world) also increased 4% [7] - Local currency sales in China increased 3% during the quarter, with modest growth expected in the lab and industrial segments [24][25] - Emerging markets outside of China accounted for 18% of sales in 2025 and grew above the company average due to dedicated resources and growth initiatives [25] Company Strategy and Development Direction - The company is focused on driving growth through the Spinnaker sales and marketing program and innovative product portfolio, capitalizing on automation, digitalization, and onshoring investments [6][19] - The company aims to maintain a strong culture of innovation and operational excellence to gain market share and deliver strong financial performance [6][26] - Future growth opportunities are anticipated from customer replacement cycles and investments in on- and nearshoring activities [26] Management's Comments on Operating Environment and Future Outlook - Management noted that while there have been favorable headlines in the pharma and life sciences markets, customers are expected to be cautious with investments at the start of the year [31][32] - The company does not anticipate significant improvement in market conditions in 2026 compared to the previous year, but remains confident in executing growth and productivity initiatives [14][15] - Management highlighted the importance of their innovative portfolio and strong global leadership positions in navigating ongoing market challenges [26] Other Important Information - Free cash flow for 2025 was $878 million, with a conversion ratio of 99% of adjusted net income [12] - Guidance for 2026 includes local currency sales growth forecast of approximately 4%, with adjusted EPS expected to be in the range of $46.05-$46.70, representing a growth rate of 8%-9% [15][18] Q&A Session Summary Question: Customer caution in pharma and life sciences - Management acknowledged that despite positive headlines, there is still uncertainty in the market leading to longer deal cycles and a cautious start to the year [31][32] Question: Components of guidance for pricing and volume - Management indicated that pricing is expected to start the year stronger due to mid-year pricing actions from the previous year, with a forecast of 3.5% for Q1 and 2.5% for the full year [34][35] Question: Growth in food retail - Management noted that food retail is a lumpy business with project-based revenue, and while they are pleased with Q4 performance, they expect flat growth for the full year 2026 due to tough comparisons [55][56] Question: Outlook for China and pharmacopoeia opportunity - Management stated that while there is good engagement in China, the pharmacopoeia opportunity will support ongoing growth but is not expected to result in a significant step change [57][75] Question: Reshoring and onshoring opportunities - Management views reshoring as a longer-term opportunity, likely materializing in 2027 and beyond, as factories need to be built before orders can be realized [61][62] Question: Performance in Europe - Management highlighted strong performance in Europe despite a softer economy, driven by effective sales strategies and innovation in product offerings [66][68] Question: Service business outlook - Management expects mid- to high-single-digit growth for the service business in 2026, with continued focus on penetrating the serviceable addressable market [70][71]

Financial Data and Key Metrics Changes - Sales in Q4 2025 were $1.1 billion, representing an 8% increase on a reported basis and a 5% increase in local currency, or 4% excluding acquisitions [6][10] - Adjusted EPS for the quarter was $13.36, an 8% increase over the prior year, while reported EPS was $13.98 compared to $11.96 in the prior year [9][10] - Gross margin was 59.8%, a decrease of 140 basis points, impacted by unfavorable foreign currency and tariff costs [7][11] Business Line Data and Key Metrics Changes - Laboratory sales increased 3%, industrial sales increased 7% (including a 3% benefit from acquisitions), and food retail sales grew 19% in the quarter [6][7] - Service revenue grew 8% in the quarter, including a 2% benefit from acquisitions [7] - For the full year 2025, local currency sales increased 3%, with adjusted operating profit declining 1% and adjusted EPS increasing 4% [10][11] Market Data and Key Metrics Changes - Local currency sales in the Americas increased 7%, Europe increased 4%, and Asia (rest of the world) increased 4% [6] - Local currency sales in China increased 3% during the quarter, with modest growth expected in 2026 [6][23] - Emerging markets outside of China accounted for 18% of sales in 2025 and grew above the company average [23] Company Strategy and Development Direction - The company is focused on driving growth through its Spinnaker sales and marketing program and innovative product portfolio, capitalizing on automation, digitalization, and onshoring investments [5][24] - The company aims to maintain a strong culture of innovation and operational excellence to gain market share and deliver strong financial performance [5][24] - Future growth opportunities are anticipated from customer replacement cycles and investments in on- and nearshoring activities [24] Management's Comments on Operating Environment and Future Outlook - Management noted that customers are expected to be cautious with investments at the start of the year due to ongoing geopolitical tensions and market uncertainties [12][28] - The company does not anticipate significant improvement in market conditions in 2026 compared to the previous year, but remains confident in its growth and productivity initiatives [12][13] - Management highlighted the importance of their innovative portfolio and strong global leadership positions in navigating market challenges [24] Other Important Information - Adjusted free cash flow for 2025 was $878 million, with a conversion ratio of 99% of adjusted net income [11] - Guidance for 2026 includes local currency sales growth of approximately 4%, adjusted EPS forecasted to be in the range of $46.05-$46.70, representing an 8%-9% growth rate [13][15] Q&A Session Summary Question: Customer caution in pharma and life sciences - Management acknowledged that while headlines have improved, there is still uncertainty leading to longer deal cycles, and customers are expected to start the year cautiously [28][30] Question: Components of guidance regarding pricing and volume - Management indicated that pricing is expected to start strong due to mid-year pricing actions from the previous year, with a forecast of 3.5% for Q1 and 2.5% for the full year [32][33] Question: Q1 guidance and market assumptions - Management provided insights into expected growth rates across different business lines, indicating a cautious outlook for Q1 compared to Q4 [40][41] Question: Food retail performance and outlook - Management noted that food retail is a lumpy business with project-based revenue, guiding for flat growth in 2026 after strong performance in 2025 [54][55] Question: China market and pharmacopoeia opportunity - Management expressed optimism about the ongoing growth in China, particularly in the pharmaceutical sector, but noted that significant changes are not expected immediately [56][74] Question: Reshoring and onshoring opportunities - Management sees reshoring as a longer-term opportunity, primarily beyond 2026, as factories need to be built before significant orders can be expected [60][62]