Good day, ladies and gentlemen, and welcome to our fourth quarter 2011 Mettler-Toledo International earnings conference call. (Operator Instructions) I would now like to turn our presentation over to your hostess for today's call, Ms. Mary Finnegan.

Good day, everyone. I'm Mary Finnegan, Treasurer and responsible for Investor Relations at Mettler-Toledo, and I'm happy to welcome you to the call. I am joined by Olivier Filliol, our CEO; and Bill Donnelly, our CFO. I want to cover just a couple of administrative matters. This call is being webcast and is available for replay on our website at www.mt.com. A copy of the press release and the presentation that we will refer to on today's call is also available on our website. Let me summarize the Safe Harbor language, which is outlined on Page 1 of the presentation. Statements in this presentation, which are not historical facts, constitute forward-looking statements within the meaning of the U.S. Securities Act of 1933 and the U.S. Securities Exchange Act of 1934. These statements involve risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements. For a discussion of these risks and uncertainties, please see the discussion in our recent Form 8-K. All of the forward-looking statements are qualified in their entirety by reference to the factors discussed under the caption "Factors Affecting Our Future Operating Results" and in the "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of our Form 10-K. One other item. On today's call, we may use non-GAAP financial measures. More detailed information with respect to the use of and differences between the non-GAAP financial measure and the most directly comparable GAAP measure is provided in the 8-K. Let me now turn the call over to Olivier.

Thank you, Mary, and good evening, everyone. I am pleased to welcome you to the call. I will start with a summary of the quarter, and then Bill will provide details on our financial results and our updated guidance. I will then discuss our end-markets and outlook for 2012. As always, we will have time for Q&A at the end. We are very pleased with the results for the fourth quarter. The highlights for the quarter are on Page 2 of the presentation. Local currency sales growth of 8% was very strong, better than expected in almost all regions. Asia and particularly China, continues to be very robust. Despite challenging currency headwinds, we achieved a 5% increase in adjusted operating profit. Adjusted EPS was up 13% in the quarter, as the impact of a lower effective tax rate helps to offset negative currency headwind. We are pleased with the lower tax rate, which we will further comment on in a moment. We are very pleased with our full year results. With local currency sales up 13%, operating profit up 13% and adjusted EPS up 20%. These exceptional results for the full year were driven by healthy end-markets and diligent execution. The lower tax rate for the full year did not completely offset currency headwinds. While we are cautious for 2012, given the uncertainty in the economy, we believe we can continue to grow and we are well-positioned to grow faster than our underlying markets and capture share. Let me now turn it to Bill to provide more details on the fourth quarter results as well as guidance.

Thanks, Olivier, and hello, everybody. Let me start with additional details on sales, which were $648.4 million in the quarter, an increase of 8% in local currency, a level as Olivier already said we're very pleased with. On a U.S. dollar basis, sales increased by 9% in the quarter, which included a positive 1% impact from currency. Turning to Page 3 of the presentation, we outlined sales by geography. In the quarter, local currency sales increased by 6% in Europe, 5% in the Americas, 16% in Asia/Rest of World. Net acquisitions had no impact on our overall sales level, but did add 1% to Europe sales growth in the quarter. The next slide shows our full year local currency sales growth, which amounted to 13%. For the year sales increased by 11% in Europe, 9% in the Americas and 20% in Asia/Rest of World. Acquisitions contributed 1% to overall sales growth for the year and 1% to Europe's growth. On Slide 5 of the presentation, we outlined our sales by product area for the quarter. Laboratory sales increased by 5%, industrial sales increased by 14% and food retailing increased by 2%. Acquisitions contributed 3% to industrial growth in the quarter, while divestitures reduced food retailing by 5% in the quarter. The next slide provides our full year results. Laboratory sales increased by 9%. Industrial was up 19% and food retailing was up 1%. For the year, acquisitions increased industrial sales by 3% and divestitures reduced food retailing sales by 6%. Now turning to Slide 7 of the presentation, we show the P&L. Let me walk you through the key items. Gross margins, profit margins were 53.4% in the quarter, consistent with the prior year. We benefited from pricing in the quarter; however, offsetting this was higher raw material cost and…

Thank you, Bill. Let me start with summary comments on business conditions. We are pleased with the solid 5% sales growth in laboratory in the quarter, particularly given the exceptional sales levels in the prior-year period when organic sales were up 15%. And analytical instruments, automated chemistry and processed analytics had particular good results while pipettes have their strongest quarter for the year. For 2011, lab sales increased 9% which reflects the benefit of our Spinnaker marketing programs, allow a strong product offering. We feel very good about our competitive position and believe we have strengthened it over the last few years. Industrial had excellent growth in the fourth quarter and for the full year. In core industrial, we had good market conditions as we benefited throughout 2011 from the pent-up demand in the Americas and Europe. Core industrial growth in Asia, particularly China continues to exceed our expectation. As a reminder, our industrial market is more heavily weighted toward emerging markets particularly China. In fact, China always present approximately one-third of our total core industrial business. Product Inspection also had been very well in the quarter and for the full year. Our solid leadership position, comprehensive product offering and a favorable market dynamics are driving these very strong results for Product Inspection. Finally our food retailing was up mid-single digit in the quarter and full year on an organic basis. We have discussed in the past, we continue to focus this business on a breaking profit growth, rather than sales growth. In terms of sales by geography, both the Americas and Europe had solid growth in the quarter and excellent growth for the full year. Market conditions remains solid in both areas but are better in North America was Europe which is impacted by a great level of uncertainty…

(Operator Instructions) Your first question comes from the line of Paul Knight, CLSA.

Bill, could you go over the margin just a little bit in terms of the impacts that you're seeing on it?

Just to be clear, Paul, I guess you're asking me about gross profit margin?

Well, op margin year-over-year, EBITDA.

So we had some currency headwinds. And if you're just for currency headwinds, they were relatively flat in terms of operating margins. That was something we kind of pointed to a little bit on the last call when we said we expected to have some Blue Ocean excess costs in the quarter we went live in China. And then as well, we also made a few investments in terms of front-end topics in the fourth quarter, especially in emerging markets. With regard to gross profit margin, we in the quarter had good price increases. I think we mentioned to you guys on a previous call, we started to push through some extra price increases in the middle of the year, so kind of a midyear price increase. So we did have some acceleration. We did get more than 200 bps of price increases during the course of 2011. And that was one of the better items. We did have some material cost increases, but the impact of that on gross profit margin was less than the benefits that we had of price increases. In terms of currency, the currency for the full year brought down margins by about 1% and about 25 bps in the quarter.

And then lastly, Olivier, could you highlight some of the industrial products that are key behind this growth we're seeing in that product area?

When we talk about industrial, we have about 30% coming from core industrial and 15% coming from product inspection. Core industrial is skewed towards emerging markets, particularly China. We had tremendous growth in these areas, but we actually also experienced a very solid growth for core industrial in Europe as well as in Americas. So it was a broad-based across all the regions. In the West, meaning Europe and Americas, we certainly had some pent-up effect that was helping us. But I would say also the end user industries were in a solid stage with good momentum. When we talk about product inspection here, experienced very good growth, excellent growth also in West. This has been ongoing for quite a while. It's not dependent on that pent-up demand. I think that very solid growth is coming from an excellent market position. We are clearly the leader in terms of market share, in terms of having an excellent sales and service network, having leading products. And what certainly also plays in product inspection, you still have a good growth in a market that comes from expanded demand and not all product lines are today already equipped with all the necessary product inspection technology. We have also new technologies like x-ray vision inspection that have accelerated growth. So slightly a different drivers for the growth, core industrial 30% of our business and product inspection 15%.

Your next question comes from Jon Wood from Jefferies.

So, Olivier, you kind of talked about some sales and marketing headcount additions in your prepared remarks. Can you go into a bit more detail in terms of the magnitude there? And I'm specifically interested geographically and how you're thinking about headcount adds there?

See it's a program that we started last summer. And we did is, we analyzed where we had growth opportunities really across the globe. When we look at business lines, we focused on the business lines with the best profitability. Then, we looked at across the globe, analyze different territories, looked at how many leads we were generating by sales people into different territories and looked at penetration as well. So it was very targeted. But at the end of the day, most of the additions came into emerging markets and were driven also by the underlying market growth that we see in the countries like Brazil, India, China also Eastern Europe, were all good examples where we added people. When it comes to the West, we added also people, but then it was very targeted to business lines where we have very good growth momentum and good profitability, for example, Process Analytics, Product Inspection. But also for example, analytical instruments like titration, where we felt we could gain extra market share by having additional field people.

A lot of figures we added in the course of last year, we added about 800 people, more than 500 were in emerging markets, and about 400 of the 500 were in China. And as Olivier said, the western adds were very technical in nature, key product categories, some IT guys because of Blue Ocean and some R&D guys in a couple of critical areas.

And then, Bill, when I look at the local currency incremental margins, this quarter they looked to be about 20% or so. How much was kind of extraneous in Blue Ocean and you mentioned front-end investments, I'm not sure of what that means, but I'd love some color on that?

In terms of Blue Ocean related topics, if we kind of pulled out so, we have extra people in back-office areas and things like that. And most of those people are actually or for many of those people are being pulled out even by the time you see our first quarter numbers. But the impact of what's I think you'd push too, high 20%s, almost 30% just for Blue Ocean. And then some of the front-end people that, Olivier, is talking about that we added is sales guys, it usually takes about four quarters for them to get productive. And I guess maybe putting that additional amount and you're talking a number of incremental margins in local or on a constant currency basis somewhere in the low to mid-30s I guess.

Did you guys give the China growth, if not would you? And also talk about if you're expectation there for 2012 has changed at all?

I maybe start with that, our expectations have not changed. We grew by 20% in the fourth quarter. That was the most modest growth of 2011, kind of as we had guided you guys too. We do expect the overall growth rate for emerging markets to be, let's call it low double-digit, kind of rate somewhere between 10% and 15% with maybe China being a little higher than the group on average. We're guessing in particular, the Eastern European guys are probably going to have more modest growth next year, because we expect lower growth in Europe as well and that will be impacted by that.

And, Jon, we are trying to wrap out eight quarters in a row, where we had growth of more than 20%. You have heard me saying that, now for quite a while as I say, we do not expect that we can just maintain these kind of growth rates. Also for the last quarter, I did not expect that China would again reach this kind of growth rate. We're very, very happy about that result. But ultimately, China will deliver more kind of mid-teens growth and we have just exception circumstances. And I would also say that the GDP forecast for China a little bit more modest than what the actual results was for 2011. So I think they are different reasons why the forecast that, Bill, was just sharing before reflects really our thinking of today.

Your next question comes from John Groberg from Macquarie Capital.

On the free cash flow, I know you went through it in some detail, but obviously one of the weaker conversions here than you've had. Can you maybe just talk a bit more detail, again, about exactly what happened there and what you would expect from that a conversion standpoint in 2012?

So we would expect free cash flow for 2012 to be in the range of, let's say at the low-end probably 225 and maybe if things went a little better than expected, it could reach close to 250. But I think that that's kind of the range, as you know sometimes timing on cash flow can be a little bit more fluctuating than let's say earnings frankly. Now in terms of the conversion rate, I think our conversion rate as we look at it was like 78%. I think if I kind of lookout over the next couple of years, I think our conversion rate will improve from that level. I think that in 2011, we certainly continued to invest in inventory in an effort to reduce risk associated with Blue Ocean, Go Live, to give you a feeling over the last, I don't know, 18 months or so about 50% of our manufacturing now maybe even 60% is up on Blue Ocean. And you guys have heard of many companies that have struggled with SAP or similar Oracle implementations. And one of our things was Mettler does, we have sticky customers and we are reluctant to give any excuse for them to try other people's products. And we felt that that was a prudent investment. And in the details within what I can see in the fourth quarter, I can see already, for example, our inventory levels in China starting to reduce. So I think the working capital impacts that we saw in 2011 will certainly improve in terms of 2012. Now, with our investments in Blue Ocean, we certainly are going to have more CapEx than amortization and depreciation for the next couple of years. I think that's just the nature of the build-up of that program. We are certainly doing it, because we believe we can extract value from this investment. But the nature of these type of project is maybe the payback a little bit slower. So at some point we're going to cross over the hill and our conversion rate should move north of a 100. But to be honest we have at least three more years to get the project up to that level of completion, where we can expect that. In terms of maybe the last topic would be tax rates. We've provided guidance here based on 24.5% tax rate. I think that that could be a tax rate now for the next few years. Our cash tax rate should be in the area of let's say 20% or so over that medium term, maybe slightly up or slightly down depending on the year. But that's what I would estimate as the mid-term one. So conversion rates will improve, but I think the only thing maybe that won't be as good is this ratio of CapEx to depreciation and amortization.

And just following up on that. It seems like your buybacks are a little bit lower in the fourth quarter now as well. Was any of it tied to just some of the investment that was going there from a cash standpoint or any other reasons why the buyback's full?

We target our free cash flow plus action proceeds. You're correct, John, that we had a little bit less. I think that that was kind of we're truing up a little bit and frankly we took down inventory faster in the fourth quarter than I had projected. And so you can assume that we're buying toward that free cash flow level plus the action proceeds for 2012.

Olivier, if I can, just one last one. Would you mind kind of talking one of the things that continues to mystify a lot of people, given everything that we hear out of Europe? Is the business there still seems to be doing pretty well? and maybe just talk about some of the different geographies and what you're seeing in Europe currently over the last couple of months?

When you were reading the newspapers in last two, three quarters, you definitely could get depressed. And repeatedly I was mentioning on these calls that we didn't see this in our numbers. And our Q4 was definitely a lot of such example, where we had very good results. Nevertheless, I don't want to pretend that we're immune to what's going there. I ultimately think that we got to see lower growth rates, this is certainly also reflected in our guidance that we expect of about a low single-digit growth out of Europe. And what's also important to say, Europe represents about 37% of our revenue. But if I look at the weakest countries like Italy, Spain, Portugal, Ireland and Greece, these countries together represent only about 5% of our sales. And that certainly is one of the reasons, why our growth rates have been still reasonable last year, and why I'm not that concerned for this year. But I'm certainly going to expect that Americas will do better than Europe for us.

And maybe one other interesting thing that you might see, I was just looking at our kind of forecast by country for Q1. And as Olivier mentioned, we're looking at kind of flat low single-digit growth in Europe is built into our guidance. And it's tough to see really much of a pattern, on one hand Spain looks like it will do okay in the first quarter, while Italy looks relatively weaker. Germany versus Austria there's not necessarily, I think on average we're going to have certainly less growth in Europe in the first part of 2012 than what we saw here in the fourth quarter. But it's tough to pick a pattern as it relates to maybe this famous PIIGS countries versus Northern Europe at this stage.

Your next question comes from Tycho Peterson, JPMorgan.

Just wondering relative to kind of your commentary coming out of the third quarter where you saw the biggest delta in the fourth quarter relative to your own expectations. Was it all Asia and industrial or were there other pockets of strength that you had really anticipated?

I think we were positively surprised across the globe. And I would say we were mostly positively surprised about the December results. When we entered the quarter, we had seen that October was actually strong. We felt good about November. But December, we were kind of nervous, because we knew that in the previous year we had an exceptional results. We had a lot of budget flush benefit and we were not so sure how this would turn out in Q4 this year. So that was actually the positive surprise. It was more the months than the businesses, again all of regions actually outperformed and I would say all businesses more or less outperformed our expectations.

And then you were talking at third quarter about the replacement cycle in the U.S. and Europe. I mean does that still have legs, you're still seeing that pickup?

I would phrase it may be differently. I think what we were talking about was that we saw some pent-up demand, particular at the beginning of the year. We still benefited from that. The recycle business seems to be quite stable one.

And then as we think about Blue Ocean, I mean you've gone live in China now. I mean how do we think about starting to see some of the benefits, I mean you mentioned inventory management procurement pricing, do we start to see some of these benefits to be captured in the first half of the year?

I think in the details, we get to see some in a place like China. The hard part for you guys is of course we're still in the half-fragment stage of the project with Go Live cost in our U.S. operations and then in '13 in our German operations. Those are the two final really big roll-ins we have. After that, it goes into smaller countries with probably less upfront cost on them, and I think then you'll start to see. So we would point already to some benefits in certain areas that we started to see here in the fourth quarter. And we definitely expect some in our existing operations in Switzerland and China in 2012, but probably from at the level you guys see the numbers will see some masking, because of the startup cost in the U.S. and Germany.

And then just lastly on the cost piece. I mean you've talked about kind of trying to move more cost out of Switzerland. Can you just remind us how you are thinking about that process over the next couple of years and where you hope to be eventually?

As mentioned we want to look at the Swiss franc has become an expensive currency over the last couple of years. We're looking at in terms of our supplier base, many of our lab suppliers are Swiss bank based we're moving over the next couple of years away from some of them and trying to reduce that cost. And that could be over a several year period, lets say $3 to $5 million in terms of savings. There are certain functions that we think we can do more cost effectively outside that, hit some of the lower value functions that we performed and that one we could get maybe again $3 million to $5 million probably this year in that area and more that that over the medium term. I think the point there is we want to be depending on how the growth environment evolves. Anytime you have those transition costs I think or transition activities, there are some operation risk associated with it. We're careful and how we're dealing with that particularly if volumes continue to be at the levels that we've seen recently. We expect them to moderate, so that we will be able to implement over the original plan and if things got worse we could accelerate some of those as well.

Your next question comes from the Isaac Ro, Goldman Sachs.

On the business specific, I wondered if you could comment on the pipette business this quarter, how do you feel about the performance there and than maybe if we look at the full year. Would you care to sort of offer some growth kind of ballpark on how products inspection did for the year?

In terms of our products inspection business, we grew organically that business in the mid-teens and as mentioned we are quite happy with that. The growth rate was a little bit less in the quarter, as comp started to get up. But that's a business now that's put up in '10 and '11 mid-teens type of growth rates. So we're quite pleased with that organically. On top of that we've made some good growth from acquisitions. In terms of the pipette business, I'm happy to report that we did. And this is something that we had expected and told you guys about, we did see the best growth of the year here in the fourth quarter. I wish some of that had been maybe in our U.S. franchise, but I think as expected with NIH funding, government spending that was not as good a growth as we'd like to see in the U.S. But we did have a modest growth for the full year and almost, but just short of mid-single digits in terms of the fourth quarter growth for pipette.

And then for India, I know you guys have had some changes in management there recently. Maybe you'd update on the performance there and what's in your key goals out for 2012 in that region?

We had some changes in management early last year and we have the new team complete. I'm very happy how that is evolving. Actually, the person is or the General Manager that we have is very much focused on building up a long-term oriented franchise. Great work on people development and working on customer satisfaction, and building up the regions, going very, very well. In terms of results, we have very good results in India. I think some of the stuff that we're investing and focusing on will take more time to fully materialize.

India grew for us more than 20%, between 20% and 25% for the full year. A little bit less than the fourth quarter and again kind of reflecting the global economic cycle but we're happy with the growth rates there overall. And that's now a couple of years in a row of this mid-20s kind of growth rates. And so that's where we're quite pleased.

Your next question comes from the line of Richard Eastman, Robert W. Baird.

Olivier, could you just mention again from a pricing perspective, what you're expecting for '12, we stay at kind of 2 point of price capture?

Let's quickly talk about 2011. We had 2011 the normal annual price increase and then we did a second one mid-year. And of course, the mid-year price increase will also benefit us into 2012. And then we execute more normalized January price increase that in the order of magnitude we had in previous year.

So we'll still benefit from the mid-year '11 and then we bump prices a little bit here again in January '12. And does that result in maybe 1 point of price capture or 2 point potentially for '12?

We'd like to get the 2 by the end of the year. I think that that just put that up again on top of this what might be a bit of stress target, but we certainly will get more than 150.

And then, I just want to circle back for a second, given what we've seen with the China PMI kind of hovering at least above 50, and certainly what we've seen out of Eurozone is dropping well below 50. All of that really has occurred kind of late in the year, fourth quarterish of '11. And so when I look at those PMIs and I look at the industrial business, I would think your industrial business would lag that would be typical. And so as you gave kind of LC growth guidance for '12, you kind of picked up the low-end, just a point, I mean this is kind of marginal. But are there any expectations within the three major geographies that have moved around? You referenced Europe plus low single-digits, is that down? And Asia/Rest of World up a little bit to offset or are we kind of waiting and seeing what occurs here?

Yes, and maybe give you a couple of numbers. So of course we gave guidance as you've correctly said in November last year. And it's interesting I happen to have global PMI numbers in front of me. And if I look at the U.S., the U.S. has gone from in November 52.7% to 53.9% and then 54.1%, now is the January number. China has gone from 49% in November to 50.3% in the December to 50.5% in January. Even the Eurozone went from 46.4% to 46.9% to 48.8%. So I think that the positive comment would be maybe PMI in the last few months started to do a little bit better. And as we mentioned here, we think that certainly we ourselves track manufacturing GDP and therefore PMI tends to be a good indicator from it. At the same time, Rich, we're on the same page that the business is not immune to economic downturns. We do tend to be a little late cycled. If I compare our guidance right now, we probably feel a little worst about Europe and maybe a little bit better about the rest of the world.

And then I just had question on the Product Inspection business, given the gains you've seen there, that's the one business where it's probably easy as to at least identify maybe an extension of the product line inorganically at least x-ray, but also on the vision side. And when you see business coming in the door today, are you seeing a benefit competitively from being able to deliver a seamless system. And everything from the check weighing all the way through to vision, and if so, are you seeing your order size there improve, because of that?

Clearly a value to our customer base to have the combination of the different technologies and it is of a value to the customer from different angles. It can be user interface, it can be seamless integration of the material handling part. But I would say even most of more important it's probably the sales relationship and marketing topic and having a trusted partner over the long term. It's not so often that the customer is buying all the technologies at the same time. So that's actually the reason why I would not pretend that the average transaction value is going up in a very significant way just because we're having the technology. But the synergy is still very much here. And we clearly benefit from a competitor standpoint to have all these different technologies. Now I want also mainly to stress the point here that there are limits to how many new technologies we would add to this portfolio. And we feel that with the addition of vision inspection, we have now one that we added at the right time. It's an emerging technology, but it's also maturing in terms of the applications that we have in the market. And it's not that we are eager to add that many new additional technologies to the franchise in the coming years.

And one other thing I might to add to what Olivier has said is that this is a service-intensive business. These gangs don't want their lines down and need their inspection technology up and running. And a big benefit to our customers is we have huge advantages in particularly Western markets about the number of service technicians, the density of our service technicians. And therefore, they're trying to service as compared to competition, especially if you talk broadly. Of course it's possible for competitors to locate the service technician in highly dense areas. But if you think about the food industry, which is a large part of product inspection, as you know, Rick, it's relatively well spread out and we have a little advantage there by just having so much of this larger business that we can get service technicians there much closer, and our service technicians know the products quite well too.

Your next question comes from Derik de Bruin from Bank of America-Merrill Lynch.

It's been about a year since they put the Food Safety Modernization Act into play. People were certainly expecting to see a little bit of a boost to companies that sell into the food inspection market. And here we are a year into it, have you actually seen any tailwinds that you're going to actually attribute to this new legislation?

We have an indirect benefit. What's important is the legislation does not specify that our type of instruments needs to be used, but the legislation defines or makes it even more costly if a producer needs to do a product recall. And so there is an increased awareness for the benefits of doing end offline packaging controls, and that benefit we clearly see. That's one of the reasons why the underlying market dynamics front products inspection remains very favorable. And I would not just reduce our focused at on the U.S. markets. We are clearly seeing also that this regulation and this awareness for food inspection is a global phenomena.

And I love the fact that you referred to 20% growth is moderating in China. Forgive me this has been asked, but I guess what's your target for the percentage of sales that you're going to be manufacturing in emerging market locations? Do you have that where this currently we are targeted like that? I guess what's the implied cost savings given that, I think in the old days you said, you got maybe a 35% savings if you move something from Switzerland to emerging markets. And clearly there has been wage inflation. So I guess you told about, what's your incremental is in terms of seeing moving additional product to emerging market lower cost manufacturing area?

Yes. So I think there are two numbers of relevance here. The first one is how much we produce in particular in our case its China. Today, it's 37% of our worldwide product sales that we produce in China. And the second number that is of relevance is how much of our sourcing is done in local country. This is today roughly 40%. And I definitely expect both numbers to go up. Now the first number will go up, because we continue to increase our sales in emerging markets. And when we sell to emerging markets, more of the products are sourced from China than what is, it's the case in the Western market. But just from that fact, this percentage will go up. And we do still have product transfers to China. But we're talking at, we'd say a little bit less and big numbers then we had in the past. We have one that is still taking effect that is in the product inspection area, where we have a product transfer going on. But it's again less than what we had seen in the past. Where I am getting to is, I expect that at year we have maybe few points where that's going to go up. When it comes to the sourcing then I would say 2012 should experience again step-up. We talked about Switzerland, where we are trying to find a more supply as outside of the Swiss franc. And a part of that is going to go to low cost countries.

And maybe to add one thing. We probably would say the next few years the bigger impact is we think we can get even more productive than in China. And I would put that two and three years. We were running eight different factory ERP systems in China until we went on to Blue Ocean. Now we're on a single platform. It's allowed us to consolidate our supply chain activities and areas like procurement. And we're a lot more focused on lean topics in China. So we really think our Chinese operations over the next couple of years are going to make a big step forward in the productivity level. A few of you have visited our Chinese plants, they are not the typical Chinese plants. They were already quite modern in that sense. But we think we can make another breakthrough there in terms of productivity levels. And that might be a bigger impact than what we do in terms of transfer over the next couple of years.

Your next question comes from Dan Arias from UBS.

Just two quick ones. Bill or Olivier following up on the question on pipettes, back in August you talked about improving the position of the reigning business outside the U.S. I guess where your share isn't this high as it is in U.S. Is that something that you think could impact the growth rate of the lab business in the near term?

It's certainly not a negative. I'm not sure if that basis is big enough to move the needle in a meaningful way. It just to give you a feeling certainly our growth rates in pipette business was better outside the United States and it was inside the United States. And we would expect that to continue, but in terms of moving the needle for the whole lab businesses that won't be meaningful.

And then just quickly on M&A. At this point how are you viewing the role of inorganic growth in '12 and are you seeing any assets at this point that are interesting for you guys?

It's going to be very similar to what you have seen us doing in the last two, three years. We continued to be very focused on Bolton acquisitions where we have good synergies and where it's close to our core business. We have systematic screening approach. We have always on our radar a couple of dozens companies that we are observing. And we always hope one or the other becomes available. And we stay very disciplined about what we're going to offer for the opportunities. And yes, I think the pipeline looks similar as it did in the last two, three years. And let's hope that one or the other will material us.

Your next question comes from the Sung Ji Nam from Cantor Fitzgerald.

I just had one question. As for the lab business particularly in the emerging markets, I think you had previously talked about potentially the lab business really driving the growth there at longer term, given that in the emerging market especially in China lab business is weighted towards the industrial side of things. Do you expect any of that to play out in the near-term? And particularly given that you're expanding into some of the second tier cities in China as well?

The strategy, it's still very valid and I do expect that this is going to happen. What we had last year, we had such a good growth in our industrial business that the mix didn't change towards a lot. But that was really because the industrial business did exceptionally well. But ultimately the fundamental drivers are more favorable for our lab business. The number of scientists for example joining the workforce is one of this macro trends that is very, very favorable for us. And I do expect that the lab business will ultimately outperformed industrial business, but of course when we have big opportunities like last year to enjoy this great growth in industrial wins we take it.

We certainly saw this in 2011 that the lab business grew faster than the core industrial business and the other one we often talked about in the long-term growth prospects is our product inspection business in emerging markets. And that also had a faster growth rate than the core industrial business in that part of the world, again off a small base like last but the pattern that you described at the beginning of your question, I think we expect to carry forward.

Your last question comes from Greg Halter from Great Lakes Review.

I wonder if you could breakout your business between products and then service parts as a percentage of sales and what they each may have been up either for the quarter or for the year.

Our product business and service business, you can imagine when we have a little bit outsized growth, Greg, that usually need that their product business is growing faster. So for the full year our product business grew mid-teen while our service business grew more mid single-digits. In the fourth quarter, the growth rate for service was stable with what we saw in the first three quarters of years. So that's mid-single digit kind of growth rate. And the product business grew more like 9%. In terms of organic versus total, I would just knowing the businesses that are on the acquisition by the various products focus to. So probably the delta is even a little stronger. It would takeaway most of the acquisition impact from the product businesses.

And the service parts, is that still about a third of the total?

Service and consumables, because the product grew so fast, they're 27% of the total. I think that's down from like 29% last year.

You spoke about India a little earlier with the growth there. If you could do the same with Brazil and maybe you give a range of the size of each of those businesses for Mettler-Toledo.

Okay. So Brazil and India, I think they're both about $40 million.

Yes, they're kind of in the 2% range of our total revenue.

And in terms of the growth rate for Brazil, Brazil grew north of 20% for the year for us.

We talked about India also being 20-plus. So actually both countries are about 20-plus, both countries about the same order of magnitude in terms of size. I think the difference that we have is in India we have the full product portfolio and we have a very good network of regional offices. When it comes to Brazil, we started with a strong nucleus a couple of years ago in purchase analytics and then added different product lines over the years. One of the last product lines that we added to Brazil actually last year was product inspection. In the previous year, we added the RAININ business. So it has some expansion activities in Brazil that is different to India, but again, very good growth momentum, strong teams in both countries and I'm actually really happy also with kind of the sizes that they are and the good base to grow further.

So India is a little more than 40 and Brazil is a little less than 40.

Your capital spending was up about $25 million. Obviously, Blue Ocean had an impact there. Two things: wondering, number one, how much Blue Ocean was of the total; and then also how much FX may have impacted that CapEx number?

The full year impact on CapEx I think is $10 million, $12 million. And the impact of let's call it in a typical year for us IT spend usually represents about 50% of the total. That's not just Blue Ocean, but total IT spend.

What are your expectations for 2012 given your currency comments as well in terms of spending?

In terms of CapEx spending, it'll be a little less than what we spent in 2011 at today's exchange rates.

So like $95 million area?

Yes, it looks like between $90 million and $95 million.

How many shares that you repurchased in the quarter are maybe for the full year?

For the full year, we repurchased $1.285 million.

There are no further questions. I'll turn the call back over to the presenters.

Thanks everyone for joining us tonight. As always, if you have any questions, please don't hesitate to give us a call. Goodnight.