Mettler Toledo: A Quiet Giant in Precision Instruments
Analyzing Mettler Toledo: Quality, Moat and Management
When people think of precision, Switzerland is what often comes to mind. Most of the time people think about high precision watches, but Switzerland is also the home of the worlds highest precision scales. Let’s dive into the history of Mettler Toledo and what makes it such a standout company.
Becoming Mettler Toledo
The history of Mettler Toledo goes back to 1901, when American Henry Theobald bought a company for automatic computing scales from inventor Allen DeVilbiss, who did not want to pursue commercialization of the product. Starting by adding weighing scales to cash registers for retailers the company quickly got hit by a patent infringement lawsuit and sold the cash register part of the business.
Now as Toledo Computing Scale Company the company started to expand and with a focus on high precision and honesty. The company grew and merged in 1957 with Reliance Electric.
Meanwhile in Switzerland, Dr. Erhard Mettler Rook ran a precision mechanics company (founded in 1945) and invented the single-pan balance capable of being produced in series. This new invention gradually replaced two-pan balances in laboratories. The business expanded and did several acquisitions to diversify the business with industrial and retail solutions until being sold to Ciba-Geigy AG, which would later become Novartis, in 1980. To this day old scales are still in use, for example my local Sauna has an old Toledo scale in use.
In 1989 Reliance Electric sold the Toledo scale division to Ciba-Geigy AG, which merged it with Mettler Instruments and then a few years later in 1992 incorporated as Mettler Toledo, Inc, after acquiring further competitors. A few years later the company went public on the NYSE. Despite being listed on the NYSE, the company is still headquartered in Greifensee, Switzerland.
Mettler Toledo today
The market for digital scales is estimated to be $3.72 billion in 2024 and expected to grow by 5.5% annually through 2034, according to market research future. Scales are the core market of Mettler Toledo, but they are also operating in adjacent industries and are helping to automate and improve the workflow of its customers.
While scales sound like a simple product, it is a very fragmented market with different use cases and sub markets like table top, platform, precision and pocket scales. MT is a global business with a diversified revenue mix. While Americas are the largest part, it is just 43% of sales with the rest equally split between Europe and Asia/ROW. Sales are also diversified into three verticals:
Laboratory (56% of sales)
Industrial (39% of sales)
Food Retail (5% of sales)
MT enjoys market leadership in most of its niches and is largely recognized as a high quality business. Let’s dive deeper and find out:
What sets them apart from its competition and how large the competitive advantage is
Why the precision scale market is so attractive
How well the company is managed