Good afternoon, everyone. This is Rachel Vatnsdal from the Life Science Tools and Diagnostics team here at JPMorgan. I am joined by the Mettler-Toledo team up here. As a reminder, these are typically 40-minute sessions. Roughly the first half will be a prepared presentation, followed by roughly 20 minutes of Q&A, and with that, I will pass it off to Patrick.
Thank you, Rachel. And good afternoon, everyone here in the room and those joining us on the webcast. Thank you for being here today. Similar to the past, I'd like to start off by providing an overview of the business, our competitive advantages, an update on our growth strategies, and why we are well positioned to deliver excellent shareholder returns going forward. Before we get started, please note our disclosure regarding forward-looking statements in this slide. Well, to start off, for those of you who are not familiar with our company, Mettler-Toledo is a global market leader in precision measurement instruments used in laboratory and industrial applications around the world. We generate around $3.8 billion in revenue, and a significant majority of our sales are in segments in which we are the global market leader.
Our business is very diversified in terms of the products we sell throughout our customers' value chain, the end markets we serve, and the geography. And the fragmentation and diversity of our business provides significant opportunity for growth and market share expansion. We are well on track. We are well known for our track record of delivering excellent financial results, and we are very much focused on continuing to build on this track record going forward. We do this by leveraging our many competitive advantages, well-developed and proven growth strategies, and our unique culture of innovation, collaboration, focused execution, and continuous improvement. Over the past couple of years, we have also rolled out the next generation of several corporate programs, such as Spinnaker and SternDrive, while accelerating our pace of innovation that will help us to continue to deliver our long-term best-in-class financial performance.
Now, turning to our market exposure, we serve attractive end markets and estimate that about over 70% of our sales are to attractive growth markets of pharma and biopharma, food manufacturers, and specialty chemicals. Our business mix has improved over the years through expansion of our portfolio, and as our Spinnaker sales and marketing program has become even more sophisticated in guiding our sales teams to the most attractive opportunities we see across these markets. The markets that we target are also increasingly seeking solutions that can increase productivity, ensure compliance with ever more strict regulatory requirements and data integrity, as well as higher levels of accuracy and reproducibility. We have approximately 25 different strategic business units, each representing a major product category. We typically have different competition in each category.
The breadth of our products offering means that we can offer a wide range of solutions to help our customers across the entire value chain, from research and development to scale-up, quality control, and all the way through to production, final inspection at the end of the production line, and logistics. The significant diversity of our product offering and our exposure across our customers' entire value chain provides for significant resilience in our financial results, but also excellent growth opportunities. Now, let's briefly review our product offering, starting with our laboratory instruments, which represent more than 55% of our total sales. We provide scientists and chemists the most frequently used instruments in biopharma, chemical, and food labs for research and development and quality control applications. This slide highlights our laboratory offering that helps customers in R&D labs.
These customers require a high degree of precision and flexibility, which we support with pipettes, balances, Analytical Instruments, and automated chemistry solutions. We are well known for our innovation, quality, and deep application know-how. Our laboratory instruments are also used very important in QA and QC labs, and we provide these customers approximately 40% of the bench instruments that are typically found in an analytical quality control lab. We continue to expand our portfolio of instruments with automation features, which provide tangible productivity gains and better data management. Software has increasingly become a deciding factor for customers in choosing a supplier for benchtop instruments, and our LabX instrument control and data management software is unique in its ability to connect the majority of our broad portfolio of instruments in a highly compliant and audit-proof manner and can also automate workflows.
The last piece of our lab business is Process Analytics, which is the market leader in continuous in-line monitoring of process control parameters like pH, oxygen, CO2, and pressure sensors, as well as ultrapure water applications that are connected to our transmitters. Biopharma is a very important end market for this business, along with the chemical industry and semiconductors. This next slide is an overview of several of our industrial products and solutions, which represents about 40% of our total sales. The largest portion of industrial is our Core Industrial business, which represents approximately 25% of our total sales and represents our scales, weigh modules, terminals, and software that are used by our customers, for example, to control formulation, filling, and dosing in their production process.
Here, we provide weighing solutions that facilitate process control for many of the same customers as our lab products: pharma and biopharma, food, specialty chemical, and many others, but in their production environment. The mix of this business has shifted over time with approximately 60% of our sales to these more attractive end markets, but our product mix has shifted as well as customers increasingly adopt our automation solutions that integrate seamlessly into factory automation systems or provide enhanced operator guidance. The other portion of our industrial business is Product Inspection, which represents about 15% of our total sales. In this business, we sell a variety of instruments primarily to packaged food manufacturers, but also to customers in pharma and the cosmetic industry to help them detect physical contaminants or prevent over and underfilling of their products.
This is a critical end-of-line process that ensures brand protection, high quality, and increased productivity. In addition to our broad product offering, we have a comprehensive service offering that helps our customers maintain reliable readings from our instruments and maximize uptime in a production environment. Service represents approximately 25% of our total sales and above-average profitability, and it is an important competitive advantage, but also an important growth opportunity that I will expand on later. This slide details our competitive advantages and why we are so confident in our long-term growth perspectives. First, we are the market leader in a significant majority of our businesses, but many of our markets tend to be very diversified and highly fragmented. Our market share, on average, is only in the range of 25%, and our long history of innovation and strong product portfolio provides ample room for continued market share expansion.
Secondly, a significant majority of our sales are through our own sales force of over 3,000 employees. Our specialist sales force with deep application know-how and the ability to sell directly to the end user is a strong competitive advantage. Our customer base is also highly diversified, and no one end user is representing more than 1% of our sales. We reach this fragmented and diverse customer base through our internally developed sales and marketing excellence program called Spinnaker that I will provide more detail on in a few moments. We also have a very large installed base of over $16 billion of instruments in the field. This installed base is a source of steady replacement demand and also a large service opportunity, and we support this installed base with the largest global service organization of our direct competitors.
Our global supply chain and manufacturing presence are enabled by Blue Ocean, our process and system harmonization program. Blue Ocean's harmonized process and single-instance information technology infrastructure provides rich data and business insights, as well as significant productivity opportunities, and lastly, we have a unique culture at Mettler-Toledo that is squarely focused on our customers, on innovation, collaboration, continuous improvement, and agility. I like to say that who we are is why we win, and this is evident throughout the organization. Our culture of innovation and continuous improvement is well ingrained, and by leveraging our unique growth strategies and culture of execution, we have consistently driven incremental market share gains and robust earnings growth. Now we will move on to our growth strategies and how we leverage our strong competitive advantages to take market share and drive growth.
First, the diversity of our business and fragmented customers means we need sophisticated processes, tools, and analytics to identify the most attractive and profitable growth opportunities for our sales teams to pursue. Spinnaker is a collection of sales, service, and marketing initiatives and processes that we use to drive sales growth and improve profitability. A key element of the program is to ensure that our sales teams are focused on winning new potential customers and driving cross-selling within existing accounts. In addition to generating leads for our sales teams through our various marketing activities, our Top- K program generates tailored and actionable investment alerts about specific sales opportunities, especially in under-penetrated segments and hot segments in the market.
We utilize our own proprietary databases and external data sources combined with very sophisticated data analytics to generate these Top- K investment alerts, which are then dynamically qualified, prioritized, and fed into our CRM for our sales teams to act on. We also use Spinnaker data analytics to identify customer sites in which we have low cross-selling penetration, and then use our contacts and references to develop leads for other product categories, which have proven to be very effective. As part of our continuous improvement process, we periodically launch a new wave of Spinnaker that builds on the previous waves and initiatives. We are currently on the sixth wave of Spinnaker that encompasses a range of initiatives to further expand our digital capabilities and enhance our customer experience.
This wave is focused on implementing additional digitalization and an expanded big data analytics effort for our lead generation and sales force guidance programs. These initiatives also provide our customers new insights to their installed base and service certifications while improving their experience with advanced platforms, digital sales rooms, the ability to engage with technical application consultants in chat and online meetings, and expanded customer feedback loops to improve the customer experience and make it easier to do business with us. Another important driver for our long-term growth is to accelerate the growth of our service business. As a reminder, service represents approximately 25% of our total sales and is a key part of our solutions offering and is a very important competitive advantage as we support our customers' ability to maintain uptime, to improve productivity, and comply with regulatory requirements.
We aim to grow our service business faster than the company average over the medium term, and we are making dedicated investments in field technicians, in telesales, and data analytics resources to support these growth targets. Our largest opportunity to grow our service business is servicing a greater proportion of our installed base. Today, we have penetrated about one-third of a $3 billion total market opportunity within our installed base, and given the vast amount of data we possess about it, like when the instrument was sold, who is using it, in what application it is being used, we can generate targeted sales campaigns to service them specifically tailored to their needs based on our data. Our presence in China and other emerging markets is another important growth opportunity.
We have a strong local presence in China, which represents approximately 16% of our total sales, and we design and manufacture products for the local Chinese market. We are also well aligned with the central government's strategic goals of enhancing self-sufficiency in key industries such as biopharma, semiconductors, and many others. China is also an important part of our global supply chain, representing approximately 30% of our global manufacturing. However, we also continue to increase our global manufacturing flexibility with increased redundancy in different countries. We are also alert to potential tariffs, and while the magnitude and specifics remain unknown, we will strive to mitigate potential costs similar to our past approaches and leveraging our global footprint. As a reference, we currently export less than $100 million from China to the United States.
Additionally, our sales in other emerging markets are significant and comparable to the size of our operations in China. We have a direct sales and service network across Southeast Asia, Eastern Europe, and Central and South America. These are key competitive advantages that allow us to seize the promising long-term growth and prospects these regions represent. Underpinning our growth drivers is our technology leadership and our commitment to continuously enhance our industry-leading product offering. We are constantly coming out to market with new products and accelerated our rate of innovation over the past few years and introduced a new corporate program called JetStream to enhance our innovation process. Our solutions generate new insights, help improve our customers' workflows, make their results more precise and reliable, make the instruments easier to use for less experienced scientists, and support our customers' digitalization needs throughout the entire workflow.
New products also help stimulate replacement cycles, support market share gains, and enhance our value proposition that supports our pricing. On this slide, you will see a handful of examples of recent innovations across our lab and industrial portfolio, and there are many more that we have launched that we have not included on this slide. We continue to see increased demand for automation and digitalization, and we will have additional product launches this year that directly address our customers' needs in these areas, and while no one product launch is material to our results overall, given the significant diversity in our businesses combined, they are a powerful contributor to our market share and margin expansion strategy.
And while we are fundamentally focused on organic sales growth, we will also continue to look at inorganic growth opportunities through small and medium-sized bolt-on acquisitions that can help expand our technology leadership, product offering, and channel reach. We are typically looking to acquire businesses and technologies that are a good complement to our existing product offering, benefit from our global supply chain and manufacturing capabilities, and can leverage our direct sales force. Now let's turn to our margin expansion initiatives, where we also have a great track record. We remain confident in our ability to expand our operating margins by over 100 basis points per year. The main driver of margin expansion is organic sales growth, which we target at 6% or better on average over the medium term.
Our global pricing, SternDrive, and Blue Ocean programs are also important drivers and enablers of margin expansion, while business mix is also a tailwind as faster-growing businesses have higher margins. As previously mentioned, we have accelerated our pace of innovation that further enhances our value proposition, which is fundamental to our pricing program. We are also very focused on driving productivity and continuous improvement throughout the organization, helping fund our growth initiatives and driving margin expansion. SternDrive is our corporate program to drive productivity and cost reduction across our manufacturing organizations. We recently launched our third wave of SternDrive, which includes new initiatives targeted at reducing material cost and improving shop floor and back office productivity. Our value engineering efforts have helped optimize our existing product platforms, and we continue to look to enhance the cost of our purchase components and drive reductions in our material costs.
We are also looking to implement semi-automated and low-cost automation solutions like cobots in our production facilities to reduce our manufacturing cost and increase quality. SternDrive also leverages our digital capabilities and benefits from our advanced analytical capabilities to diagnose areas for improvement. I remain very confident that our growth initiatives and operational excellence programs I have shared with you today will continue to help us to build on our excellent long-term track record of strong financial performance. While industry growth over the last two years has been below average, we believe our markets are well on track to return to more normalized growth as we progress through 2025.
We moved very quickly in 2023 to adapt to the reduced level of market demand to protect our profitability, and over the past two years, we have also focused on sustaining dedicated investments to drive further future growth, including product innovation and service investments. We believe our balanced approach to protecting profitability and investing for the future will deliver tangible results going forward as our markets show gradual recovery over the coming year. So let me summarize the key points from my presentation today. First, we have a significant competitive advantage, including a very strong product portfolio, highly sophisticated go-to-market strategies, an excellent service organization, and a highly collaborative global team. Our culture of innovation, collaboration, agility, and continuous improvement makes a tremendous difference and is a key competitive differentiator. Secondly, our team is squarely focused on driving growth.
We continue to invest to support our innovation initiatives, growing our service business, enhancing our best-in-class corporate programs like Spinnaker to drive growth and capture market share, and also SternDrive to manage our cost effectively. And lastly, we remain fully confident delivering on our medium-term over-the-cycle financial targets. This includes 6% or better sales growth, driving over 100 basis points of margin expansion. We believe we have an excellent cash flow story and continue to aim to convert approximately 100% of our net income into free cash flow and return this to investors through our share repurchase program, contributing to mid-teens level of EPS growth. Now, that concludes my comments, and thanks everyone for joining us today.
Perfect. Thank you, Patrick. So I figured maybe just given your guys' portfolios, exposures, and some of the equipment exposures there, first question just on budget flush trends. I think that's a common theme that we've been hearing from some of your peers the last few days. So I appreciate we'll get full numbers in a few weeks here, but qualitatively, any comments on if you guys saw a budget flush throughout Q4?
Yeah, look, as you rightfully said, we'll update you, of course, on Q4 in a couple of weeks, so I will not comment on budget flush today, but having said that, if you look back also what we said in Q3, actually, we saw a pretty strong Q3. We saw positive growth. We saw especially strong results in Europe and also in our businesses with Analytical Instruments and Process Analytics, so I think we are quite happy with what we have seen in terms of first good signs of growth. We also have seen China coming back to growth. Europe was pretty strong, so as I said also in my notes, going forward for 2025, our guidance really reflects that the market conditions will continue to improve throughout the year, and we will give you a close update on the budget flush, etc., in our earnings call.
Yeah. Maybe digging into that last point on the recovery from an end market, can you unpack that for us a little bit as we look throughout 2025? Should we expect this to be a more linear recovery? Should it be more hockey sticked? I have a follow-up question on Q1 and some of the logistics, but maybe just from an end market perspective, walk us through the assumptions there.
Yeah. So if you kind of go back to our previous guidance, we certainly expected market conditions to gradually improve. If you kind of look at our sequential performance quarter to quarter in 2024 between Q1, Q2, and Q3, you saw that that was our guidance for Q4, and that's kind of how we expected the trend to be. So when you think about 2025, we expect the second half to be better than the first half. And then when we think about that, then by, you say end market, but maybe a better way for us to frame it is by our divisions. Like our laboratory division is the one area that we have a little bit more confidence in. If you look at our third quarter results, as Patrick was kind of mentioning, we grew 5% in lab business in the third quarter.
Then when we kind of unpack that number, you saw very strong growth in Analytical Instruments. You saw very strong growth in Process Analytics and generally broad growth throughout the portfolio. That kind of gave us some more; that was one of the things that gave us a little bit more confidence for our guidance for next year. On a reported basis, it would be like more low- to mid-single-digit, but we have this whole shipping delay topic that you mentioned, and I think we'll talk about in a second here. If you exclude the shipping delay topic, that we expect that business to grow more mid- to high-single-digit next year. On the other hand, our industrial business, we feel like is a little bit more exposed to some of the topics in China at the moment.
Just the more that I think we're less dependent on the economy than we were, but we still have an element of that. So if you kind of look at that business, we're a little bit more cautious. We're looking at a little bit more like low single digit on the Core Industrial side as well as low single digit on the Product Inspection side.
Helpful. Then my follow-up just related to this logistics issue. If we look back at JPMorgan last year, I think that dominated a lot of the airtime. Hopefully, this is kind of the last quarter that we're talking about it here. But walk us through, obviously, that becomes a headwind to growth and margins this quarter, as you guys explained. So walk us through some of the math there on how we should see that impacting both top line and margins in Q1. And then maybe if we just exclude that, again, the cadence from Q1 into Q2, kind of like you spoke about there.
Yeah. So I'll start with maybe the full year, and then I'll kind of talk a little bit about the first quarter. So for the full year, it's a 1.5% headwind to sales. So if you look at our sales growth of 3%, it would be 4.5% excluding the shipping delay. If you look at our operating margins, it's about a 60 to 70 basis point headwinds to our full year operating margins. And then to our EPS guidance, it's about a 4% headwind to our full year EPS guidance. So it would be 8 to 9% in terms of what we provided in Q3 on a full year basis. But it's all in Q1.
And so now if we kind of go back to my previous comments about the first half of the year being a little bit lower than the second half of the year in terms of growth. So take that 4.5%, make your own assumptions for second half versus first half. We'll provide a guidance update on Q1 in a few weeks. But once you do that, then in Q1, you have to subtract 6% in terms of the impact of the headwind for Q1 growth. And then in terms of operating margin, it's about a 250-300 basis point headwind to the operating margin. And then for EPS, it's a high teens headwind for EPS growth in the first quarter. But then once we get past Q1, we'll be into more normalized, we won't have this topic, and we'll be into more normalized growth expectations.
Great. That's helpful. Maybe just on pricing. So your guidance assumes 2% pricing contribution this year. Can you walk us through your pricing power across various products throughout the portfolio and kind of what gives you that resiliency and confidence that you're going to hit 2% pricing contribution in 2025?
Yeah. So we're 2% in the third quarter and year- to- date, Q2. We feel good about that for next year. That's a number that we're very comfortable with, kind of in that pre-COVID kind of range as well, too. I think one of the things we've been talking about, though, when you think about pricing, one of the things that's really neat about it is in the end, it's realizing the benefits of your value proposition. And I feel like, as Patrick's talked about a lot, we've really accelerated investments in innovation. And through that, we've enhanced our value proposition. And then I think the other thing is that the markets have been moving a little bit in our favor. As the markets move towards automated solutions and more digitalization, they play to the strength of our portfolio. So our value proposition has also been enhanced as well, too.
We kind of go into 2025 feeling good about our ability to realize price increases. Our ability generally is broad-based throughout the portfolio. We tend to do, in a typical year, we tend to do maybe a little bit better on the laboratory side of the portfolio. But generally, our results are very broad-based by product and also typically by geography.
Great. And then just talking about the equipment and instrumentation exposure here, obviously, spending has been soft from a CapEx budget standpoint throughout 2024. So can you spend a minute talking about if you've seen any green shoots in equipment and instrumentation spending recently? And then what are you really assuming for that part of your portfolio in terms of growth in 2025?
So yeah, the green shoots we have been seeing, and I'm referring here again to Q3, is we have seen this strong pickup in Analytical Instruments and also Process Analytics, which first and foremost is driven, of course, by our innovation and bringing that to the market and the acceptance of the customer, really taking up this innovation. We also have seen the pharma business coming back to growth. We have seen Europe pretty strong in Q3 as well. And I think what we would call green shoots actually give us a lot of confidence that we are, number one, very well positioned with our product portfolio, that we have the right go-to-market strategies to capture these opportunities, and that will also continue the momentum into 2025.
I mean, what we are hearing from our customers is really that they are now, that we have two years of, I would say, reduced replacement business. Remember, about 80% of our business is typically more like replacement business when it comes to instrumentation. So we're also pushing a bit of replacement cycle ahead of us.
That's helpful. Maybe shifting more towards your long-term outlook, your LRP assumes 6% local currency growth. Just given how volatile and kind of dynamic the last few years have been, can you talk about how are you still thinking about that 6% long-term growth rate? Is that still achievable? And really, what gives you the confidence to be able to hit that guide?
Yeah. Look, I mean, we say 6% or more growth long-term, and that means we expect an underlying market growth of, say, around 4%, and on top of that, we will see continued market share gains. I mentioned we have about 25% market share. I think we have plenty of opportunity to capture more market share given the strength of our product portfolio, given the investments we are making, given our unique go-to-market strategies, and when you look at the end markets of how they develop over time, that's a very reasonable assumption given our exposure to life science and automated industrial solutions market space that we play in. There's a strong demand for continued innovation around automation and digitalization, and we serve that with the broader part of our portfolio in industrial automation solutions.
But also when you look at the lab products, of how we roll out new solutions that are connected to our LabX portfolio, which is very unique in the portfolio. So LabX is the software that controls a lot of our Analytical Instruments, for example, and how they're connected in one software environment and making sure that the customer can reflect the entire workflow. I'm quite confident that the market will get back to the, let's say, 4% growth rate. And with that, we can achieve the 6% growth rate.
Yeah, and on top of all that, we're going to have benefits from reshoring and nearshoring throughout the world, which I think is a tremendous opportunity for us.
Yeah. Maybe alongside that, I think some of this opportunity on reshoring, onshoring could be as a result of tariffs as well. So maybe segue into the tariff exposure here. Can you walk us through your manufacturing exposure? I know you mentioned some of it in China on the presentation, but across China, Canada, Mexico, how are you guys exposed there? How is Mettler thinking about the potential impact from tariffs?
Yeah, sure. So I'll go first. So during the last Trump administration, our exports from China to the U.S. was about $100 million, and we currently pay a 25% tariff on that. And I think at that time, we were pretty successful in terms of how to mitigate those headwinds. Today, that exposure is lower. It's less than $100 million. Over the years, we've tried to increase flexibility in our manufacturing footprint. I think most companies, as you kind of say, everyone's kind of like talking about reshoring and nearshoring, and so we're no different. And so one of the things we did is we wanted to have more resilience in our supply chain, more flexibility in our supply chain. Mexico was an opportunity for us through an acquisition that we did probably about seven years ago or so.
And so we've been expanding a little bit in terms of our Mexican capabilities. Our exposure currently from Mexico to the U.S. is less than our China exposure. And it's very dynamic. We'll see how things unravel over the next year or so. But we're a very agile organization, and I think we're kind of ready for things that might be coming down the pipeline, and we're prepared, and we'll do our best to mitigate similar to what we've done in the past.
Perfect. Helpful color. Maybe just shifting over to China then. I think China also has been a very dynamic region that a lot of investors have questions on in the room. So just on the topic of China stimulus, can you walk us through how are you guys seeing Mettler impacted from China stimulus? Obviously, we have some of the equipment-specific stimulus that seems like it's a little more towards some of those higher dollar ticket items. We also have just broad economic stimulus as well. So walk me through what are the potential impacts to Mettler there.
Yeah. Excellent. And you phrased it correctly. I mean, the current stimulus that's in place is really targeted to our higher-end research instrumentation. And we participate a bit in that stimulus, but it's not really significant for us. It doesn't really move the needle. Our local sales team is out there with customers bundling solutions together to help them to get through over the threshold to qualify for the stimulus as well. But it's by no means as impactful as a broader fiscal stimulus that China also has done in the past. When you look at our modeling for next year for our growth in China, we say low single-digit growth because we do not expect a fundamental big stimulus at the moment. If there's something coming down the pipeline, great, we will definitely benefit from that as well.
But I think it needs a really broader fiscal stimulus that gives the broader industry more confidence to invest again to drive a higher growth than we currently anticipate for China.
Helpful. Maybe on that long-term China assumption, can you walk us through what are some of the drivers there? Also, alongside this, local competition gets brought up a lot for Mettler-Toledo, just given the vast magnitude of competitors that you have there. So has anything changed on the local competition front, or how are you guys thinking about that piece?
Yeah. Look, I mean, the local competition, given that we are very successful in the Chinese market, also selling our product at very good gross margins, it's, of course, attractive to local competitors to try to copy us as well. So that's why we are pushing also so hard on innovation. You always have to be one or two revisions ahead of the local competition to make sure that you can sell that value proposition to the customers. That said, we are really competing very effectively in China. We have a strong R&D team there, a strong manufacturing team. We source all the components for the product that we build for China in China so we can really effectively compete to them. We have a much higher volume than some of the local suppliers, which also gives us also more strength and also more competitive advantage.
We can tailor our solutions to the local market. So yes, there is a lot of dynamics in the market, and there is local competition, but I think local competition also drives a lot of innovation. Our benefit is really that we have a really strong team there that we have seen also from a local market perspective, more like a Chinese supplier. We have been in China for over 35 years. When it comes to buy made in China initiatives, these products are built in China, sourced in China. So we don't have issues at the moment with buy made in China policies because they're all made in China. So that gives me the confidence that we will continue to compete very effectively in the market that is huge. I mean, China is a huge market.
The long-term commitment of the government to invest into a safer environment, into research, in developing their biopharma capabilities, building out a semiconductor, et cetera, I think that is intact. What needs to happen in the market there is there needs to get a bit more confidence, a bit more stability, and then these investments will come back. And over the long term, we think that China will remain probably a mid- to high-single-digit growth opportunity.
Perfect. Then just in terms of new product launches, you mentioned that during your presentation prepared remarks as well. So can you walk us through some of the themes that you're prioritizing when it comes to R&D and innovation over the next one to three years and what we can expect from a pipeline perspective there?
Yeah, clearly, I mean, we continue to focus on the core market need, which is all around digitalization and automation, whether that's in the lab business or in the industrial business. All the solutions we're bringing out is really helping our customers to drive new insights, but also to simplify their workflows, to automate more workflows, and drive real value to customers. We have done this with the industrial solutions, the portfolio that we launched there, the new terminals that came out last year. There's more to come in the coming years. We do this in the lab space with automating more of our lab products, and that actually is front and center to what we see our customers really need moving forward.
Perfect. And with that, we are out of time. So thank you so much for joining us today and thank you.