Q3 2023 Danone SA Earnings Call

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Okay.

Operator: Good Day, and thank you for standing by.

Good day, and thank you for standing by welcome to the tenant that quota towards 23 sales conference call and webcast. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press star one on one on your telephone.

Operator: Welcome to the Danone Third Quarter 2023 Sales Conference School on Webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message that buys in your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference has been recorded.

You will then have an automated message that plays in your hand, there's ways to withdraw your question. Please press star. One again, please be advised that today's conference is being recorded I would now like to hand, the conference over to your first speaker today, My two Dolce <unk> head of Investor Relations and financial communication. Please go ahead.

Operator: I would now like to hand the conference over to your first speaker today.

Mathilde Rodie: Mathilde Rodie, head of investor relations and financial communication. Please go ahead. Thank you.

Thank you good morning, everyone. Thank you for being with US. This morning for our Q3 results cool I'm.

Juergen Esser: Good morning, everyone. Thank you for being with us this morning for all Q3 results call. I'm with Jürgen Esser, the CFO, who will go through some prepared remarks before taking your questions in the second step. Before we start, I'd really like to introduce you on our disclaimer page 22. Please pay attention to that. And with that, let me hand it over to Jürgen. Thank you, Mathilde and good morning, everyone. I hope you all are well.

With yoga and assess our CFO, who will go through some prepared remarks before taking your questions in a second step before.

Before we start I draw your attention I know this came up page 22, please pay attention to that and with that let me hand, it over to yoga.

Thank you, Mike and good morning, everyone I hope, you're all well and thank you for being with US This morning to discuss our third quarter sales.

Juergen Esser: And thank you for dealing with us this morning to discuss our third quarter sales. I propose that we go straight into it starting with page number two. We have been closing this third quarter with joint results. It's like for like sales up that 6.2% compared to last year. Beyond the quantum, we are particularly pleased with the quality of the growth, as it starts to show that our renewed dawn on initiatives are paying off using results exactly in line with our expectations.

I propose that we go straight into it starting with page number two we have been closing this third quarter with solid results like for like sales up plus six.

<unk>, 2% compared to last year.

Beyond our control, we are particularly pleased with the quality of the growth.

Just to show that <unk> done on initiatives are paying off using.

Using results exactly in line with our expectations.

Juergen Esser: Crising reached plus 6.6% is quarter, sequentially accelerating from the high single digit levels you saw in previous quarter. This normalization has been risen by all geographies with North America unsurprisingly, the zone where prices are normalizing the fastest. Most importantly, as price contributions start to go down, we are able to sequentially improve the dynamics of our volume techniques, which are only slightly down with minus 0.3% in this third quarter. The clear improvement versus the first semester is down around minus 1%.

<unk> reached plus six 6% this quarter sequentially the accelerating from the highest single digit levels. We saw in previous quarters. This normalization is being driven by all geographies with North America Unsurprisingly, the zone, where prices are normalizing the fastest.

Most importantly as.

If price contribution start to go down.

Ebix to sequentially improve the dynamics of our volumes and mix.

Only slightly down with minus <unk>, 3% in the third quarter.

Clear improvements versus the first semester was down minus 1%.

Juergen Esser: This dynamic is very encouraging and is giving us confidence to further improve the trend in the last quarter of the year. In other words, and let me be very clear right away, we are confident that the fourth quarter of this year will see a positive contribution from volume and mix. The key milestone, as you know, in our renewed dawn on journey. Let us look first at our performance through the lens of our categories on page number three.

This dynamic is very encouraging and is giving us confidence to further improve the trend in the last quarter of the year.

Other words, let me, let me be very clear that the way we are.

<unk> ended the fourth quarter of this year, we see a positive contribution from volume and mix a key milestone as you know in our renewable Andre.

Let's look first at our performance through the lens of our categories on page number three.

Juergen Esser: While we continue to deliver solid and consistent growth across EDP specialised in friction and water, with all three categories growing above 5% in this quarter, they are also reporting an improved underlying volume mix dynamic. This is most visible in EDP, the volume mix significantly improved only down minus 0.8% this quarter, compared to around minus 3% in the first semester of this year and compared to as much as minus 6% and looking back into the second semester of last year.

While we continue to deliver solid and consistent growth across edp specialized nutrition in water.

All three categories growing above 5% in this quarter.

Reporting an improved underlying volume mix dynamic.

Most visibly in Edp, where volume mix significantly improved only down minus <unk>, 8% this quarter.

Impaired to around minus 3% in the first semester of this year and compared to as much as minus 6% and looking back into the second semester of last year.

Juergen Esser: These results do not come by coincidence. They rather reflect the hard work of our teams of the last 18 months, very consistently executed against our strategic agenda, than we actively stepped up the performance of our portfolio, of our core assets, of our underperformers and our winners, which is well illustrated on the next page, page number four. In EDP Europe, our teams have over the last few quarters taken both actions to restore variation after many years of underperformance.

These results do not come by coincidence, they rather reflect the hard work of our teams of the last 18 months very consistently executed against our strategic agenda.

Debbie actively stepped up the performance of our portfolio of our core assets or Underperformers in our Venus, which.

Which is well illustrated on the next page page number four.

In Edp Europe, our teams have over the last few quarters taken bold actions to restore value creation of the many years of underperformance.

Juergen Esser: After having clarified the swim lanes of our brands, we refocus our ranges, which has led to the rest of the realization of roughly 20% of the least value-creative SKUs in dairy. This first step allowed us to give more clarity to our value propositions within each brand, but also to ease what I would call the shoppability of ourselves. And combined with improved execution and higher investments, the transformation of EDP starts delivering results.

After having clarified the swim lanes of our brands, we refocused our ranges, which has led to the best utilization of roughly 20% of the least value creative skus in dairy.

This first step allowed us to give more clarity to our value proposition within each brand, but also too is what I would call the shop ability of our shelf and.

And combined with improved execution and higher investments the transformation of Edp starts delivering results.

Juergen Esser: As an example in the UK, we are merging from the transformation phase not only with a stronger portfolio, recently complemented by the rollout of our high protein range, but also with higher distribution and share of shelf levels. Those are measurable successes and I'm convinced that this will secretly translate into stronger growth and competitiveness. Next to EDP in Europe, they've also been active in turning around my zone. After a deep root cause analysis, the team has been deploying the renewed my zone proposition for the last quarter.

As an example in the UK, we are emerging from the transformation phase not only with a stronger portfolio recently complemented by the rollout of our HIFU events.

Also with higher distribution and shelf shelf levels.

Those are measurable successes that I'm convinced that this was sequentially calculate into stronger growth and competitiveness.

Next to ETP in Europe.

<unk> also been active in turning around the laser.

<unk> deep root cause analyses and team has been deploying the renewed Michael proposition for the last quarters and we are pleased with the results.

Juergen Esser: And we are pleased with the results. Now that the first season is behind us, my zone has been growing plus 13.9% in the beginning of the year, mostly driven by Volumenix. Importantly, this growth translated into higher market share. After years of slowdown, we can say that my zone is reconnecting with value creation, which goes well for the resilience of our model in China and for the performance of our water scabbling away.

Now that the first season is behind us.

<unk> has been growing plus 13, 9% at the beginning of the year, mostly driven by volume and mix.

Importantly, this growth translated into higher market share after.

After years of slowdown, we can say that milestone is reconnecting with value creation, which bodes well for the resilience of our model in China and for the performance of our water category.

Juergen Esser: Last but not least, we have seen us actively and intentionally boost the winners of our portfolio. This is for example the case of medical nutrition, the business that has been consistently growing in double digit territory. Since the beginning of the year, we have made several investments to increase production capacity in Europe and we are actively expanding the reach of our portfolio, for example, in China in the diet nutrition. There we continue to leave the enteral nutrition space where we are now expanding beyond hospitals, introducing our oral nutrition solutions, the key steps in expanding our presence from hospitals to post discharge moments.

Last but not least you have seen us actively and intentionally boost the winners of our portfolio business. For example, the case of medical nutrition.

This has been consistently growing in double digit territory.

Since the beginning of the year, we have made several investments to increase production capacity in Europe.

And we are in parallel actively expanding the reach of our portfolio for example in China in the documentation.

Well, we continue to lead the Antero nutrition space.

While we are now expanding beyond hospitals, introducing our nutrition solutions, a key step in expanding our presence from hospital to post discharge modes.

Juergen Esser: You remember that delivering strong and balanced growth fits at the heart of the RenewDunnel business model. I will conclude this brief introduction by reiterating that the efforts of the last 18 months are starting to pay off. As our sector is shifting away from priceless growth, we are confident that moving forward, we can demonstrate that we have categories, brands and capabilities, deliver more balanced growth with volume, mix and price contributing. Let me now move to page number five for our traditional sales version.

You remember is delivering strong and balanced growth.

Part of the business model.

We concluded brief introduction by reiterating that effort over the last 18 months are starting to pay off.

And as our sector is shifting away from price led growth we are confident that moving forward.

<unk> demonstrated we have categories brands and capabilities to deliver a more balanced growth with volume mix and price contributing.

Let me now move to page number five for our traditional sales, which have already been commenting our like for like sales growth of plus six 2%.

Juergen Esser: We have already been commenting our like for like sales growth of plus 6.2% on top of that we see this quarter a negative impact from 4X of minus 7.4% reflecting the depreciation of the majority of guarantees against the euro, while the scope was negative as minus 6.2% mainly resizing from the decontrination of our EDP Russia and Waters Argentinian business from our period. Let's now look at the performance of our zones moving to page number six.

On top of that we see this quarter a negative impact from Forex of minus seven 4%, reflecting the depreciation of the majority of currencies against the euro.

Scope was negative at minus six 2%, mainly resulting from the deconsolidation of our Edp, Russia, and Argentina business from our elevator.

Let's now look at the performance of our zones moving to page number six.

Juergen Esser: This quarter, again, all our geographies have been contributing to the growth. To be efficient, I would even suggest to be moving immediately forward to the next page to page number seven, to go deeper into the performance of each zone starting with Europe. Europe delivered solid growth of plus 5.1% in the third quarter with all categories contributing. Pricing started to progressively normalize yet still being up plus 9.2% thanks to significant carry over from last year.

This quarter again, all our geographies have been contributing to the growth to be efficient I would even suggest to be move immediately forward to the next page two.

To page number seven.

Deeper into the performance of each zone, starting with Europe.

Europe delivered solid growth of plus five 1% in the third quarter with all categories contributing pricing started to progressively normalized yet still being up plus nine 2%, 2%. Thanks.

Thanks to significant carryover from last year at the same moment volume mix was down minus four 1%.

Juergen Esser: At the same moment, volume mix was down minus 4.1%, with a weaker volume performance in our water business, where volume mix was significantly downer, while EDP on the other side experienced a tangible sequential improvement as expected. On EDP, as I commented already, our teams have made good progress in the transformation of our portfolio. We are starting to deliver results with a sequential improvement in the volume mix dynamics. The quality of our delivery and our competitiveness are both improving month by month, let this quarter by strong performances of our dairy brands like Actimele, Danone, or Europe, all of them growing double digits.

With weaker volume performance in our water business.

Volume mix was significantly down while edp on the other side experienced a tangible sequential improvement as expected.

On Edp is incremented already our teams have made good progress in the transformation of our portfolio. We are starting to deliver results with a sequential improvement in volume mix dynamics.

The quality of our delivery and our competitiveness are both improving month by month.

Let this quarter by strong performances of our dairy brands like <unk> done on audio pool, all of them growing double digit, but also of our <unk> brand and plant based which delivered high single digit growth.

Juergen Esser: But also of our high pro brand in plant-based, which delivered high single digit growth. Specialized nutrition posted another quarter of within growth, while water through the gistored further market share gain, in a category which was at the beginning of the quarter penalized by very poor weather conditions. And maybe a last comment on our European performance, when looking through the length of our distribution channels away from home business was the fastest growing channel this quarter, benefiting from an enhanced focus on price pack architecture across categories from berries to plant based and water and supported by increased investment.

Life nutrition posted another quarter of resilient growth, while voters registered further market share gains.

In a category, which was at the beginning of the quarter panelized by very poor weather conditions.

And maybe a last comment on our European performance.

When looking through the lens of our distribution channels our away from home business was the fastest growing channel this quarter.

Fitting from an enhanced focus on price pack architecture across categories from dairy to plant based on water and supported by increased investments.

Okay.

Juergen Esser: Let's move now on to North America on page number 8. North America delivered plus 3.9% like collect growth in Q3 with a pricing that is normalizing and limousine expectations up plus 4%. Volume mix was again very resilient this quarter ending broadly flat. Decide an elevated base driven as you will remember by our contribution towards resting the IMF formula shortage in US last year. The performance in North America was led by our coffee creation range that posted again double digits close this quarter.

Let's move now onto North America on page number eight.

North America delivered plus three 9% like for like growth in Q3, the pricing that is normalizing in line with our expectations up plus 12%.

Volume mix was again very decision this quarter ending broadly flat.

Despite an elevated base resin attributed remember by our contribution to addressing the IMF formula shortage in the U S last year.

The performance in North America was led by our coffee creation ranged it posted again double digit growth. This quarter here, let me highlight the international delight and store brands that continue to drive growth and market share gains.

Juergen Esser: Here, let me highlight the international delight and stock brand that continues to drive growth and market share gain. Beyond coffee creations, our Europe business also delivered a solid quarter with our high cost brand, registering another quarter of CWBG. On plant based, we started taking corrective action to restore short and competitiveness, which seemed to yield further results. And parallel, we are working on a more structured plan to restate our portfolio and increase its relevance to consumers.

Beyond coffee creations, our yogurt business also delivered a solid quarter with our <unk> cost per energy swing another quarter of steep double digit growth.

On plant based we started taking corrective actions to restore short term competitiveness, which seem to use will result in parallel we are working on the most structural plant restage of our portfolio and increase relevance to consumers.

Juergen Esser: So overall, another solid quarter in North America, benefiting from a well-positioned and resilient portfolio. Saison. Moving to the next page, which is page number nine for our China North Asia and North Yarnia zone. Zone register plus 8.4% like for excess growth in the third quarter, mainly driven by volume nicks, plus 7.3%. Starting with China and zooming into our infant mix from year, absolutely delivered another quarter of solid growth with continued market share gains.

So overall, another solid quarter in North America, benefiting from a well positioned and resilient portfolio and results.

Moving to the next page, which is page number nine our China, and North Asia and Oceania.

Zoom digital plus eight 4% like for like sales growth in the third quarter was mainly driven by volume mix up plus seven 3%.

I think that China is zooming into our infant mix from <unk>.

<unk> delivered another quarter of solid growth with continued market share gains.

Juergen Esser: The uniqueness of our business model in China is indeed a great asset, particularly in this moment where the category is shifting from old to newly registered refugees. We are carefully navigating this transition period, focusing on keeping side control on inventory and price levels, while introducing in a staged manner our newly registered innovation in this space. Next to IMF, our medical nutrition portfolio poses another strong quarter building on the strength of our entire YouTube feeling business, which deliver double digital growth.

Uniqueness of our business model in China is indeed, a great asset, particularly in this moment, where the category is shifting from OLED two newly registered equity.

We are carefully navigating this transition period, focusing on keeping tight control on inventory and price levels, while introducing in a staged manner our newly registered innovation in this space.

Next to IMF, our medical nutrition portfolio posted another strong quarter building on the strength of our entered to feeding business, which delivered double digit growth. We are very pleased that we can meaningfully expand our portfolio in the coming quarters.

Juergen Esser: We are very pleased that we can now meaningfully expand our portfolio in the coming quarter. Thanks to the recent introduction of our oral product in China, I have recommended earlier the presentation. The key milestone to strengthen our presence in this fast-going segment. In water, my zone is living another strong quarter of competitive growth with the team of focusing on further enhancing our execution and methods to solidify the turnaround with the next season to come.

The recent introduction of our oral product in China as I commented earlier in the presentation.

A key milestone to strengthen our presence in this fast growing segment.

In water milestone of delivering another strong quarter of competitive growth with the teams are focusing on further enhancing our execution in buses.

To solidify the turnaround with the next season to come and finally beyond China.

Juergen Esser: And finally, beyond China, our business in Japan poses again a strong double digital growth led by our functionality range and notably the Eiffel Spreads. Let's move on to the Latum zone on page number 10. Latum registered sales growth of plus 8.2% in Q3 and a like for like basis, the price of plus 10 and what you mix down minus 1.8%. The focus of this zone is to restore a resilient profitable growth model to streamline its portfolio and to optimize its business models.

Our business in Japan posted again strong double digit growth led by a function of dairy range and notably the Iqos brand.

Let's now move on to the Latam on page number 10.

<unk> sales growth of plus eight 2% in Q3 on a like for like basis. This price of plus 10 and volume mix down minus one 8%.

The focus of this zone to restore a resilient profitable growth model to streamline its portfolio to optimize its business model.

Juergen Esser: Our teams are making good progress on this agenda across the different countries and categories. There's been discontinuing our resetting a number of activities, including our liquid business in Brazil, which is sequentially visible in the result. While doing so, the focus is to drive the winner in the zone with brands like Yopro, Bonafon, and Apermila, all of them going profitably also in this quarter at very fast pace. Finally, moving on to the rest of the world's zone, which is page number 11.

Our teams are making good progress on this agenda across the different countries and categories.

The discontinuing of resetting a number of activities, including our liquid egg business in Brazil, which is sequentially visible in the results.

By doing so the focus is to drive the winners in this zone with brands like <unk> and <unk> all of them growing profitably also in this quarter at very fast pace.

Finally, moving on to the rest of the World Zone, which is page number 11.

Juergen Esser: The zone posted sales growth of plus 9.7% on a like for like basis, this quarter with a balanced contribution of price of plus 7.7% and volume mixed up plus 1.9%. Let me here particularly highlight the continuous solid performance of our specialized intuition categories in Southeast Asia, but also in India, which has posted another quarter of double digits growth. It continues to win market shares across the region with a strong focus on our superior absolute portfolio, but also with our unique local brands like SGM in Indonesia.

The zone posted sales growth of plus nine 7% on a like for like basis. This quarter with a balanced contribution of price plus seven 7% and volume mix up plus one 9% linear, particularly highlight the continued solid performance of our specialized nutrition category.

Southeast Asia, but also in India, which is posted another quarter of double digit growth.

We continue to win market share across the region with a strong focus on our superior utterly portfolio.

But also with our unique local brands like S. Jim in Indonesia.

Juergen Esser: On EDP, we are making further progress on the portfolio transformation of our dairy business in Africa. The clear mandate to reconnect with a profitable growth algorithm in this region, our teams are laser focused on getting into that very creation journey with results visible quarter by quarter. Carter.

On Edp, we are making further progress on the portfolio transformation of our dairy business in Africa, the clear mandate to reconnect with our profitable growth algorithm in that region.

Our teams are laser focused on getting into that value creation journey with results visible quarter by quarter.

Juergen Esser: Let me now conclude this presentation with an update on the Fulia Outlook, which is page number 12. Reflecting our solid delivery over the first nine months of this year and the momentum of our business across geography is ecstatic with. We are today raising our guidance for like-for-like sales growth. We are now expecting like-for-like sales growth between six and seven percent. We at the same moment confirming our Fulia guidance for the current operating margin, delivering a moderate margin increase with its previous year.

Let me now.

Through this presentation with an update on our full year outlook, which is page number 12.

Reflecting our solid delivery over the first nine months of this year and the momentum of our business across geographies and categories.

Today, raising our guidance for like for like sales growth. We now expect like for like sales growth between six and 7%.

At the same moment, confirming our full year guidance for recurring operating margin.

Delivering a moderate margin increase versus previous year tier more specifically and as you already observed in the first semester of this year.

Juergen Esser: Here most specifically, and as you already observed in the first semester of the year, expect our Fulia operating margin to be led by the expansion of our gross margin, where you will continue to make significant reinvestments in AMP product security and capabilities.

We expect our full year operating margin to be led by the expansion of our gross margin. While we continue to make significant investments in A&P product superiority and capabilities.

Mathilde Rodie: And with that, let me end it back to Mathilde to start the Q&A session. Thank you, Yogan.

And with that.

We ended back to Martin to start the Q&A session.

Thank you again, so we will now open the Q&A with the first question from Guillaume Delmas UBS.

Guillaume Delmas: So we will now open the Q&A with the first question from Guillaume Delmas, UBS. QMATilde and good morning, Yogan. A couple of questions for me please. The first one is on pricing. I would be interested to hear what you're seeing on the pricing and promotional front at the moment. In particular, if there are some regions or product categories where you're seeing a pickup in promo activities or maybe more pushback from retailers.

Yeah.

<unk>.

Good morning.

Okay.

Couple of questions from me. Please the first one is on pricing.

It'd be interesting to hear.

What youre seeing on the pricing and promotional front.

At the moment in particular, if there are some regions or product categories, where you're seeing a pickup in promo activities or maybe more.

Pushed back from retailers.

Guillaume Delmas: And then-like I appreciate it is very early days, but how do you think 2024 will play out from a pricing point of I.e., do you expect some additional pricing actions on your part, some rollback or, you know, overall some stability. So any color on this would be very helpful. And then my second question is on specialized nutrition in Europe, because I think Q3 is your third consecutive quarter in the low single digit territory.

And then I.

Appreciate it is very early days, but how do you think 2024 will play out from a pricing point of view I E do.

Do you expect some additional pricing actions on your part some rollback or overall some much stability any color on this would be very helpful.

And then my second question is on the specialized nutrition in Europe, because I think Q3 is your start consecutive quarter in the low single digit territory I would assume this is made of a strong pricing and some negative volume development.

Guillaume Delmas: I would assume this is made of strong pricing and some negative volume development. So I don't think this is an area where you've had much SKU pruning. So my question is, how should we think about SN in Europe going forward? Is it realistic to assume better than flat to low single digit organic sales growth? Given that, I would think you've got very limited volume growth in terms of from a category standpoint. Thank you very much.

So.

I don't think this is an area where <unk> had much extra you pruning.

My question is how should we think about it.

In Europe going forward is it realistic to assume better than flat to low single digit organic sales growth given that.

<unk> got very limited volume growth in terms of.

From a category standpoint, thank you very much.

Juergen Esser: Yeah, good morning. Let me try to work on the different points. When it comes to pricing and promotional activities, you're right to say that pricing is coming down quarter by quarter, at a different pace depending on the vision. And depending on when we start to take a pricing, so unsurprisingly North America is first normalizing and you will see that Europe will normalize in the coming quarter. And this is indeed combined with the fact that we are sequentially increasing our promotional activities.

Yes. Good morning, let me try to clarify on the on the different points when it comes to pricing and promotion.

The activities you are right to say that pricing is coming down quarter by quarter at a different pace depending on the region.

Joining us when we started to take pricing. So unsurprisingly North America is normalizing a liquid Cds.

Normalized in the in the coming quarters.

As indeed combined with the fact that we are sequentially, increasing our promotional activity is what we said six months ago has developed which is that by the end of this year, we will be back to the level of promotional activities before COVID-19.

Juergen Esser: What we said some six months ago is very which is that by the end of this year will be back to the level of promotional activities we had before in the coming quarter, who is probably a fair level of promotion moving forward. We obviously in very close collaboration with our retailers organizing these promotions because these promotions have one single objective which is to bring the consumer back to the chefs. So very targeted promotions making sure that promotions get us back to the magic price points because this is what drives impact and rotation on the chefs.

Which is probably a fair level of promotion.

Moving forward, we obviously.

In very close collaboration with our retailers organizing these promotions because these promotions at one single objective, which is to bring the consumer back.

To the to the ships or very targeted promotion.

Sure it promotions get us back to the magic price points. Because this is what the price impact in rotation on the shelf.

Juergen Esser: How does it look going into next year, 2024? Over all of course, 2024 we want to reconnect and to connect to our desires, growth models with the contribution from volume and price, all of them positives but more importantly than that the level of pricing will depend on the level of inflation and what we are seeing is that inflation is coming down quarter by quarter exactly in line with our expectation but the expectations will take positive as a result of the fact that we will leak with milk and a number of markets is still very higher than it was 12 months ago and the result of the fact that cost of labor is increasing and also a few other ingredients like sugar that means that we will probably go away from what we have seen over the last 12-18 months which was broad-based pricing to something which is more targeted pricing depending on the categories and depending on the countries.

How does it look going into next year 2024.

Overall of course, 2024, I want to reconnect and to connect to our desired growth model with contribution from volume and price all of them positive, but more importantly than that the level of pricing will depend on the level of inflation and what we are seeing is that inflation is coming down quarter by quarter exactly.

In line with our expectations, but we expect inflation to stay positive.

As a result of the fact that Malik with Mig and a number of markets.

Way higher than it was 12 months ago as a result of the fact that cost of labor is increasing and also a few other ingredients like.

Sure.

That.

It will probably go away from what we have seen over the last 12 to 18 months, which was broad based price into something which is more targeted pricing depending on the category and depending on the country.

Juergen Esser: Overall, we expect pricing to remain positive also moving into year 2024. On your last point on specialised situation in Europe, I would say resilience resilience performance. In IFF, we managed to deliver a competitive performance in a currently more soft category while in medical nutrition, we benefit from obvious underlying segment growth and we are investing as you could see of the last weeks in production capacities like in an important to fully serve today with those two more demands in a very dynamic space. Thank you very much.

Overall, we expect pricing towards remained positive also moving into year 2024.

On your last point on specialized nutrition in Europe, I would say is resilient.

Within performance.

In IMS, we managed to deliver competitive performance in the currently more soft category.

While in medical nutrition, we benefit from the obvious underlying segment growth in RBR investing as you could see over the last weeks in production capacities.

Like in the important to fully serve today's and Tomorrow's demand in a very dynamic space.

Thank you very much next week.

Jon Cox: Next question from John Cox Kepler. Yes, good morning, John Cox from Kepler. Congrats on the decent print there. I have a couple of questions. Just on China, I wanted to talk through what's going on in China with a bit more detail on the IMF front. We've seen some of your competitors actually posing down production of international brands because of the softness in that China market. I want to, you know, what you're seeing there is it really expanding the domestic talkers through that.

Thank you Jim next question from Jon Cox Kepler.

Yes, good morning, guys.

Jon Cox from Kepler congrats on the decent print that.

I have a couple of questions really one just on China I Wonder if you can talk through whats going on in China with a bit more detail on the IMS from.

We've seen some of your competitors actually.

Closing down production of international.

Brands because of the softness in that China market I'm wondering what youre seeing there is really expanding the domestic took us through that also on the medical nutrition expansion I'm. Just wondering when you think that would come on tap.

Jon Cox: Also on the medical nutrition expansion, which is only when you think that would come on tap into that region. And then just the last one on Europe, it seems pretty impressive when you're sort of reeling off a lot of stuff about double digit growth for this and that. I wanted to just talk a little bit more about the SKU rationalisation where you are. Is that pretty much done? When will we roll over in terms of the cons? And when can we start modelling maybe more growth for elements into Europe dairy in terms of volume mix going forward? Thank you.

Into that region.

And then just the last one on Europe. It seems pretty impressive when you sort of reeling off a lot of stuff about double digit growth for this and that.

Im wondering if you could just talk a little bit more about the <unk>.

SKU rationalization, where you are.

That pretty much done when we rollout.

In terms of the comps and when can we start modeling maybe move groups elements into Europe dairy in terms of volume mix going forward. Thank you.

Juergen Esser: Good morning, Jon. Look on China IMF, the team is doing a stellar job, as you can see, quarter by quarter, increasing our market share in a category which is transitioning, and transitioning I would say without any surprise there's a little bit of volatility which is impacting some players. Because of our very unique business model which gives us strong control on stocks and price, we are navigating through that I think in the next and very way.

Hey, good morning, good morning, John.

Look on China IMS the team is doing a stellar job.

As you can see quarter by quarter, increasing our market share in the.

Category, which is.

Transitioning and transitioning I would say without any surprised us a little bit of volatility which is impacting some players.

And because of our very unique business model, which gives us total control of the stock price. We are navigating through that I think in an exemplary way.

Juergen Esser: That's transitioning the expect to finish towards the end of the year or the next year when all the stocks will be completed. So in that sense we don't look at it differently than the way we look at it six months ago. What both well is that as we speak, we are introducing in a staged manner our first innovation. You may remember what we presented in the month of May in the Paris Sackley event that we have a number of innovations now kicking in into our portfolio, which is meaningfully expanding our portfolio in the more premium part of the category.

That transition, we expect to finish towards the end of the year early next year when all the oil stocks will be completed so in that sense. We don't look at it differently than the way we look at it six months ago, what bodes well is that as we speak we are introducing in a staged manner. Our first innovation you may remember what we presented.

In the month of May and the police suddenly.

But we have a number of innovations now kicking in into our portfolio, which is meaningfully expanding our portfolio into more in the more premium part of the.

Of the category and so this is happening.

Juergen Esser: And so this is happening as we speak. Other element I can give you is the fact that what we are calling our controls is uncontrolled channels. So the diegoons, the friends that are very distressed, the diegoons continue to decrease. Which means our control channels represent more than 90% of our business in China which is also a very important element to navigate through the next quarter and last but not least. If you're good in fact about our operating model is an efficient mix between global and local manufacturing capacity.

We speak.

<unk>.

As the element I can I can give you is the fact that what we are calling our controls business uncontrolled channels.

The diagnose the friends <unk> family. This guidance represents continued to decrease in our controlled channels represent more than 90% of our business in China, which is also a very important element to navigators, who the next quarters and last but not least if you. Good in fact about our operating model with an efficient mix between glue.

Mobile and local manufacturing capacity.

Juergen Esser: This recipe is developed as you know in our local R&D center in China and we're just learning both our global science and also our local expertise. When it comes to the medical part of it, we are pretty happy with the performance of our died portfolio in China is growing consistently double digit. But you know that today our presence is mostly an entire prescribed and reimbursed category which where we are reaching today are already 90% of top tier hospitals.

Sep's developed as you know in our local R&D center in China, and we just levering both our global sites etcetera.

Expertise.

When it comes to the medical part of it.

We are pretty happy with the performance of all of our debt portfolio and China's growing consistently.

Double digit but not it.

Today, our presence is mostly an integral prescribed and reimbursed.

Kathy will be rich.

Where we are reaching today around 90% of top tier hospitals.

Juergen Esser: We are now in a moment that we can first time really expand our portfolio beyond the entire space, these two ranges in fact. Which will allow us to go from mainly hospital focus to more post discharge moments when people patients have left the hospital and so there's two elements we are introducing. One is our nutrition powder which is something of which we received a drug license and which means it will also go through prescription and reimbursement.

Yes, no and the moment that we can first time, we expand our portfolio beyond the enteric space with two ranges in FIC.

Which will allow us to go from mainly hospital focus to more.

Post.

Discharge moments will keep in patients had left the hospital and so there is two elements here introducing one is our new trees on powder.

Which is something of which we received a draft license and which means it will also go through prescription and reimbursements and on.

Juergen Esser: And on top of that we are introducing our 40 mil range with oral nutritional products what we are calling ASSNT which is a self-paid not reimbursed product format which is going through recommendations from key opinion leaders and then so through pharmacies. So overall I would say it goes well for the future dynamic of that part of the business.

On top of that we are introducing our <unk> range with already.

Nutrition.

<unk> products.

SMT.

This is a self paced so not reimbursed product format, which is going for recommendation from key opinion leaders and then flows through pharmacies.

So overall I would say it bodes well for the future dynamic of that part of the business.

Juergen Esser: On your last question, which was on Europe, look, I mean, we started the transformation of our EDP, hopefully, some 12 months ago, and as expected, as you could see, volume epidemic start to sequentially and generally it proved, we have cut something like 20% of SKUs, which as you could see, of the last quarter, it's shortened to some pressure on our volume performance. However, we are now emerging stronger from this reset because we have a more optimized segmentation, we have a better build-up of our portfolio, and we start to re-invest behind it, and so it starts to shoot concretely in the key metrics of our business.

On your last question, which was on Europe.

Look I mean, we started the transformation of our Edp portfolios. Some 12 months ago and as expected could see volume mix dynamics start to sequentially and tend to be Uber, if cut something like 20% of.

Can use which as you could see over the last quarter is that short term to some pressure on our volume performance.

However, we are now emerging stronger from this research.

We have a more optimized segmentation, we have a better bid up.

And we start to reinvest behind it and so it starts to show concretely in the key metrics of our business and so that's why I was using the UK example.

Juergen Esser: And so this is why I was using the UK example, where we have first, I would say, successfully agrees with a number of key retailers to implement a new planogram for our dairy chef, this is a much clearer segmentation by benefits for health and protein-based, it's about across many supermarkets, which is helping the category because it's attracting more consumer, but also it means that our distribution numbers are going up, our share of shares is going up, and we will see sequentially translating that into volumes and market shares. And so we are seeing that kind of progress in the UK, like in the UK, across the board, it happens obviously at different speeds of implementation depending on the local reality, but net net, what it means is that you will not hear as any more talking in a very prominent way about portfolio transformation in Europe, as you will now sequentially shift the gears towards better execution and re-investment.

Where we are first I would say successfully.

Agreed there is a number of key retailers to implement a new plan O grams the reshape.

As a much clearer segmentation by benefit for health and putting in base you've talked about.

Many supermarket, which is helping the category because it's attracting more consumers, but also it means that our disciplined distribution numbers are going up our share of shelf is going up and.

And we will see sequentially translating that into volumes and market share and so we are seeing that that kind of progress in the UK and the U K across the board obviously at different speeds.

Of implementation, depending on the local reality, but net net what it means that <unk> given out here is any more talking in a very prominent way about portfolio transformation in Europe.

As you will know sequentially shift the gears towards better execution and reinvestment.

Juergen Esser: Thank you. Thank you, Jean.

Thank you. Thank you John Thank you Jen. So next question from Wallach Aman Barclays.

Warren Ackerman: So, next question from Warnekermann, Backless. Yeah, morning, everybody. So, we're in here at Backless. Hi, Jürgen. Hi, Matilda. So, yeah, just back on EDP, Jürgen, you talked about tangible progress, and in the last question you mentioned a couple of things, but can you maybe walk us through what you're most pleased about in EDP and where there is still work to do? And that's a question for EDP, US, and Europe, it's not just a Europe question, and then within EDP Europe or within EDP Europe, we can see the light for light went from 5.8 to 6.6. I think it was from Q2 to Q3.

Yes, good morning, everybody, if I were inherent Barclays Hi, Ken Hi, Methode.

So just back on.

Edp.

Can you talk about tangible progress in the last question you mentioned you mentioned.

Couple of things, but can you maybe walk us through what you're most pleased about at Edp and where there is still work to do.

And Thats a question for ADP U S and Europe is not just a Europe question and then within Edp Europe.

Within <unk>, we can see with like for like went from five eight to $6. Six I think it was from Q2 to Q3.

Juergen Esser: Are you able to actually break that out for us in terms of volume versus pricing just to understand the kind of sequential volume mixed performance in EDP that would be super helpful? And then the second one is really around the kind of water's business. You've told us a little bit about obviously my zone and you're sounding, you know, bullish about that. But can you looking at the Europe volume overall, which was down 4%.

So actually break that out for us in terms of volume.

Is pricing just to understand the kind of sequential volume mix performance.

In in ADP that would be that would be super helpful. And then the second one is really around the kind of <unk> business.

You've told us in the op outs.

Obviously mine zone.

Thanks.

About that but can you looking at the Europe volume overall, which was down 4%, but how much was water volumes down.

Juergen Esser: How much was water volumes down in the quarter? I guess there was a big summit impact given for weather. And then maybe can you just outline what's happening to the performance in waters in your other big EMs of Mexico and Indonesia? I'm just trying to get a sense of how we should be thinking about the water's growth going into the final quarter and in the next year. Thank you. Good morning, Warren Ackerman.

In the quarter looks like I guess, there was a big.

Impact given poor weather.

And then maybe can you just outline what's happening to the performance in waters.

On your other big <unk> of Mexico.

And in Indonesia, I'm, just trying to get a sense of how we should be thinking about the waters growth going into the final quarter and into next year. Thank you.

Yes. Good morning, Good morning, let me start with.

Juergen Esser: Let me start with the water start, which is two on one side. You saw in three very anchor edging with us in China, with my own, which is, I would say, really going along it's turn of one plan, market share wins in a category, which is twice as dynamic for that going well. In Europe, in water, the start of the water has been tough, especially in the month of July, very slow weather condition, the country will be double digit down.

The water spot, which drew a one on one side we saw in <unk>.

Encouraging because in China with by zone.

Let's stay with you.

Growing.

Telephone plan market share win in the category, which is quite dynamic.

Well in Europe.

In water the start of the quarter.

Actually in the month of July very.

Very poor weather conditions that category double digit down.

Juergen Esser: And so despite the fact that we have been winning market share, especially with the easier brand of, we have been suffering quite a bit in that sort of, so volume is significantly down in the third quarter, which unfortunately is hiding some of the good progress we are doing in Europe on EGP. That will not be the, I would say, that will not be so much the case anymore in Q4, because Q4 will be out of the season in water Europe.

And so despite the fact that we have been winning market share, especially if your brand building.

Swing quite a bit in the quarter, so volume is significantly down.

In the third quarter, which unfortunately is hiding here some of the good progress we are doing in Europe.

Edp.

That will not be the I would say that will be somewhat indicated any more in Q4, because Q4 will be out of the season in Europe, we can expect.

Juergen Esser: We can expect a normalized growth rate, whether it's not playing such a big role there. It will also make the, I would say, EGP progress for the more visible moving forward. We are not yet happy with everything in EGP Europe, that is very clear. I think that we have done very good progress on a number of elements. I think the portfolio transformation is really using the resides. Now it's about execution and reinvestment.

Life.

Whether it's not play such a such a big order, which we also make the same.

Progress will be more visible moving forward, we are not the Apache with everything in Edp Europe that directly I think that we have done very good progress on a number of elements I think that the portfolio transformation is really using the reside now it's about execution and reinvestment.

Juergen Esser: On some brands, we are seeing that the transformation plus the replacement is already showing good traction on others to this less. What we're not going to make sure is that all of our larger brands are getting into the right dynamic. We are talking a lot about dairy, but let me also make a comment on Flambees because Flambees should provide good dynamic also in the third quarter. I progress, I think a digit, where we are refocusing on clear occasion moments with breakfast and coffee, where we are refocusing on the fundamentals of that category.

On some brands we are seeing that.

Sure.

The transformation plus <unk> is already showing good traction on other a bit less.

To make sure that all of our larger brands.

Getting into the right.

<unk>.

We're talking a lot about dairy, but let me also make a comment on plant based because plant based.

Quite good dynamic.

Third quarter.

All growing high single high single digit where we are focusing on.

Clear occasion moments with breakfast and coffee, where we are refocusing on the fundamentals of the category.

Juergen Esser: When you go not to the UK today and you go in one of the four largest coffee chains in the UK, you will see everywhere. That was not the sector. We are going back really to the fundamentals of managing a category as a category we've done. We are doing the same in dairy. So, more to come quarter by quarter, but we are confident. I just want to why we are saying that the first quarter, for the company, the positive volume mix and GDP will contribute a fair share to it.

When you've gone out to UK today, and one of the four largest coffee changes you can't you can see that was not the sector. So we are going back to the fundamentals of managing a category as a category. If you don't get them independent so more to come quarter by quarter, but yes.

We're confident that that's why we are saying that.

The fourth quarter for the company.

Positive volume mix.

ETP will contribute its fair share.

Juergen Esser: And you have associated to press you, but on the ADP numbers, are you actually able to break out what the volume mix was in Europe, just in the quarter versus the last quarter, so we can understand that sequential improvements? Yeah, no, we are not, look, we're not, we don't give guidance, not the whole length of clarity, but very tangibly progress on volume mix in the GDP quarter by quarter, so very, very significant.

And yes, yes, sorry to press you on the ADP numbers are you actually able to breakout what the volume mix was in Europe, just in the quarter since the last quarter. So we can understand the sequential improvements.

No we're not.

We will give guidance not deposits are linked as a priority, but very tangible progress on volume mix in the quarter by quarter, So very very significant.

Okay. Thanks.

Thank you Brian the next question from Pascal.

Hi can you hear me.

Juergen Esser: Okay, thanks. Thank you, Yes, hi, Pascal. Perfect. So hi, everyone. So two questions from my side. On specialized nutrition in China, the situation with your local competitors. I mean, we have seen a couple of months ago the profit warning of one of your largest competitors. And when I look at your results, I think Danone is doing quite well. So what's really the difference, what you see regarding versus your competitors. And then on my zone, I appreciate that you today, you are applied for like 13.9%.

Yes, Hi, Pascal perfect Hi, everyone.

So two questions from my side on specialized nutrition in China the situation with.

Your local competitors I mean, we have seen a couple of months ago profit warning of one of your largest competitors and when I look at your results I think danone is doing quite well so what.

What's really the difference what you see regarding.

Versus your competitors and then.

Mike.

I appreciate that year to date, you're up like for like 13, 9%, where do we stand.

Harrison to pre pandemic levels that Mike. Thank you.

Yeah. Good morning look on specialized nutrition, indeed, as Anders mentioned seamlessly.

Juergen Esser: Where do we stand in comparison to pre-pandemic levels at my zone? Thank you. Here I go. Look on specialized nutrition. Indeed, as I was mentioning, the team is doing a stellar job, because we are increasing our market shares quarter by quarter since many, many quarters. Why are we able to do that in a moment? We are some others of suffering. First, because we are committed to that category. It means we are intentionally investing.

Stellar drop.

We are increasing our market share.

<unk> by quarter since in many many quarters why are we able to do that in a moment, where some others are suffering first because we are committed to this category. It means we are intentionally investing we have today a portfolio.

Juergen Esser: We have to be a portfolio with a brand that after me is very narrow portfolio, but very powerful portfolio. There is a brand that actually is extremely strong in China as a synonym of immunity. So that's one which is very important. The second one which is very important is that this is a business which has been started 10 years ago as an entirely digital business, e-commerce business, which means that comparing to many others playing in that category, we don't have thousands of safe people on the ground, but we have a unique and appropriate area, B2B to see e-commerce platforms, which means that we can control stocks and prices down to the point of sense.

Brenda up damages that endeavour portfolio, but are very powerful powerful portfolio.

The brand equity is extremely strong in China.

Immunity.

One which is very important.

Second one which is very important is that this is a business which has been there.

Started 10 years ago as an entirely digital e-commerce business.

That compared to many other players.

Yes.

Don't have thousands of salespeople on the ground, but we have a unique and pocket adhere to.

B to C.

Ecommerce platform.

Which means that we can control stocks and prices down to the point of sale and this gives us an asset which very few players.

Juergen Esser: And this gives us an asset which very few players have. We have been able to re-register all of our SKUs and on top of that, and is what I mentioned earlier, we have been registering a number of breakthrough innovations which will hit the market over the next six to 12 months, so that I think makes us confident also in terms of resilience of this portfolio moving forward. For my zone look, we are happy with the growth rate, but what makes us more happy is in which the market share turn out, because two of us, my zone has been suffering for a number of years, for market share loss, because we lost with the edge of the brand and the marketing mix.

We have been able to register all of our Skus and on top of that is what I mentioned earlier, we have been registering a number of our breakthrough innovations, which will hit the market over the next six months.

Within 12 months.

I think it makes us confident.

In terms of the resilience of this portfolio moving forward.

Look we are we are happy with the growth rate, but what makes us more happy as the market shifts tunnel because to your point <unk> has been suffering for a number of years.

For market share losses, because we love the edge of the brand and the marketing mix.

Juergen Esser: The team has been doing really when very deep to understand why that happened to us and has been addressing the market mix. You may remember what we said last quarter is that we have been also here transforming the portfolio, cutting a lot of SKUs which we are not rotating and refocusing on the top four SKUs, and this is paying our big time to modernize the marketing mix, and so we are not only benefiting from the COVID-19 pandemic, but also winning in a competitive world.

Been doing really.

When very deep to understand why that was an additive adjusting the market mix. It may remember, what we said.

Juergen Esser: Thank you, but for our future. Quickly, just quickly on that. I mean, prioritizing on the top four SKUs, but what does that mean going forward? I mean, where are the growth levers here? Yeah, my zone is very important. My zone is on the good consumption for the actor and is going through the refrigerator. It means that the more focus you have when you are on the refrigerator, the more you make sure that the flavors and the variants, the consumer is looking for are available in the fridge, the more you win.

Last quarter is that we have been also here transforming the portfolio cutting a lot of.

A lot of testing and refocusing on the top four skus and this is paying out.

This time, the modernized marketing mix and so we.

Not only benefiting from I would say post COVID-19 dynamic.

In America, but also winning in a competitive way.

And the follow up here.

Go ahead go ahead, sorry quickly just quickly on that I mean.

Touching on the top four skus at what does that mean going forward I mean, where are the growth levers here.

Yes.

Okay.

Zone is very important even on the go consumption.

The Doctor and is going through.

Refrigerators.

Means that the more focus you have when you're in a refrigerator.

You make sure that.

Flavors in the very end the consumer is looking for are available in the switch more you win and this was one of the one of the learnings that because where we ended up a couple of years ago.

Juergen Esser: And this was one of the learnings yet because where we ended up a couple of years ago is that we have the SKUs in the fridge which were not rotating while the ones which were left were out of stock. So going back to the fundamentals, putting hero escalators in the shape and advertising around them is an important element. We have been complementing our range with a range of higher level of electrolytes, spot onto the needs of the consumer to be innovating, but this impact, and this is paying off very fast.

Skus in the switch which were not hotel deal.

Those ones, which were announced we are out of stock so going back to the fundamentals, putting here that the shape and advertising around them.

As an important element we have been.

Complementing our range.

Of a higher level of electrolyte.

But onto the need of the consumer innovating, but this impact.

And this is paying off well for us.

Thank you.

Juergen Esser: Thank you. Thank you, Pascal. Next question from Bruno Montaigne, Domstein. Oh, sorry, I broke out here on my side. Sorry for that. Now, two questions for me. Clearly, I think everybody is hoping and waiting for the EVP turnaround. And I luckily have quite some different performances around the world. And if I think about the US performance, you turned around the brands years ago, you're happy with the positioning about the US. And if I looked at pricing has normalized back to 4% in the US, but you still have negative volumes despite kind of the turnaround having been done and pricing normalizing.

Thank you next question from Guillaume obtain lampkin.

Yes.

Good morning.

Yes.

Oh, sorry, the line broke out here on my side sorry for that.

Now two questions from me.

Clearly.

I think everybody is hoping and waiting for the edp turnaround and Luckily at quite some different performances.

Around the world and as I think about the U S performance your turnaround the brand's years ago, you're happy with the positioning about the U S and never looked at pricing as normalized back to 4% in the U S. But you still have negative volumes, despite Canada turnaround, having being done in pricing normalizing and that kind of volume is a lot worse than it was a few years ago. When you do that.

Juergen Esser: And that kind of volumes a lot worse than it was a few years ago when you were around 4% pricing. So, what should we expect in the US as like a normalized kind of growth rate and volume? What are you aiming for? And the second one is I'm sort of coming back to the European volumes of minus 4.1%. You indicated when you'd expect positive group volumes, which is next quarter. You know, how much time should there be before Europe finally getting to positive volumes?

4% pricing. So what are you what should we expect in the U S.

Normalized kind of growth rate in volume, whether you're aiming for and the second one is I'm sort of coming back to the European volumes of minus four 1%.

You indicated when you would expect positive group volumes, which is next quarter.

How much time should it be before Europe. Finally gets into positive volumes is that a few quarters away is it a year ago a year away can you give us any indication on that please.

Juergen Esser: Is that a few quarters away? Is it a year ago? A year away? Can you give us any indication of that? When you look at North America, really qualifying that as a resilient performance, because when you exclude the impact of the fly formula high base of last year, volume mixed is not America is actually growing. And it's growing because people are doing a pretty good job, especially on the part of the portfolio.

Good morning, Luke when you look at North America.

Really qualifying that as a resilient performance because when you exclude the impact of the fly Formula High base of last volume mix in North America is actually growing.

And it's growing because tmall teams are doing a pretty good drop, especially on part of the portfolio.

Juergen Esser: Copy creamers with internationally light and stock are growing at very far space. I caught in especially everything which is about high quality and fully differentiated with sell-off performance and market shares are holding in a good way. So, we are pretty happy with it. I think we are really earning the food of the restaging chain and the team did. And you say, we know of the last two to three years. We are very clear that in plan this, we are not yet where we want to be.

Coffee Creamers intellectually light in stock.

At very fast pace by causing these basically everything which is both high quality and it's a truly differentiated with.

Stellar performance and market shares are holding in a good way. So we're pretty happy with it I think we are really earning the fruits of the restaging Shane and the team did.

You said, we know over the last two to three years.

We are very clear that implant they are not yet where we want to be methods of use straight on this we have been probably going a bit too far on price.

Juergen Esser: Let's also be straight on this. We have been probably going a bit too far on price. We are of course correcting that as we speak with more intentional commercial activities. And this is starting to yield the first result. We are introducing small formats at entry price levels, which you also believe will have to create a stronger dynamic. So we are looking at this confidence into that path. When it comes to European Royal Mix.

Cost correcting as we speak.

This is more.

Pension of commercial activities and this is starting to use it first with press resides we are introducing small formats at entry price level.

Please go ahead to create a stronger dynamics. So we are looking we are looking as confidence into into the pot.

When it comes to European volume mix.

When you remember I think it was at the end of Q1 that we showed you this famous.

We are showing.

The expectation for the next quarter canola.

Very clearly in our trajectory of sequential volume mix improvement quarter by quarter.

As they pleased to give you a guidance on when the <unk> plant based yogurt, one where it was.

What kind of volume mix, but what we are very clear.

Juergen Esser: Stammkoetter. This is the fact that EDP, what you make needs to be and will be a key competitor for the company to turn into positive, what you make is just because of its pure size and importance in the portfolio. So this is obviously a critical component when you look at the underlying numbers, fundamental numbers, what I was saying in terms of distribution levels, market shares. It will also translate into what you make so we are very confident on this side. Thank you.

Fact that edp body mix needs to be and will be a key contributor for the company to turn into positive volume mix, just because of pure size and importance in the portfolio.

Obviously, a critical component and you look at the underlying numbers fundamental numbers, what I was saying in terms of distribution level.

Market share is there.

It also translates into a remix of the eidetic confident on this site.

Thank you.

Celine Pannuti: Thank you Bruno, and last question from Celine Pannuti, G.P. Morgan. I think that's for me, Celine Pannuti, G.P. Morgan, your line brook. So good morning, my dear, good morning, Juergen. My two questions, so first I want you to understand the European context in EDP. So it seems that you are pleased with the renewment and working, but I just want to understand in an environment where people are a bit more cautious about the macro economic in Europe, Germany, including how you see the positioning of some of your high price portfolio doing in that context.

Thank you Brenda and last question from Citibank Jpmorgan.

I think thats, Amit and thank you to Jpmorgan. Your line dropped so good morning, Matt you've been running yoga.

Celine Pannuti: And if you can talk as well about contrasting your value portfolio versus the performance of the high end portfolio, and how the promotion activity may help or not for you to fend off market share losses from market share wins from private level. So that's the first one on the context in Europe. Second one is on the overall a top line and bottom line equation, and you are raising your guide on top line today.

Mike two questions. So first I want you to understand.

European context.

In Edp. So it seems that you are.

When you then working but I just wanted to understand.

Xyrem and.

People are a bit more cautious about the macroeconomic king in Europe, Germany, including and wood.

How do you see the positioning on some of your high tight spot for you.

Do you mean in that context, and if you can talk as well about <unk> and <unk>.

Contrasting namely value portfolio has the performance of the high end portfolio.

And how the promotion and activity may add on ops.

Just kind of market share.

Losses from them.

Market share.

From then private label so that's the first one.

<unk> second one is on them.

Then overall topline and bottom line accretion.

And you are raising your guidance on top line.

Today.

Celine Pannuti: So coming a bit higher than expected, you said that costs are easing probably as expected if I noted what you said. But how should we think about, you know, that extra top line performance, I think, you know, as well, the mix should be quite good because SN has been doing well to bottom line and the margin delivery for the year. Thank you. Good morning, Celine. Look, you're right to see that the consumer in the current environment is more intentional and sometimes more careful in spending its money.

So coming a bit higher than expected you said that the costs are easing.

As expected the final thing like you said, that's and how should we think about.

That extra top line performance.

Thank you and one last one the mix should be quite good it was in new England.

The top line and margin delivery for the year. Thank you.

Good morning.

Celine Pannuti: What we see, how we see that translating is that the consumer is deploying more and more what I would call a smart shopping practice on one side consumer preferring more discount of chains, club stores in the US. And this is clearly reflected in our growth numbers where we are going fast in those kind of channels. But interestingly, the consumer is not compromising on activities and lifestyle, with all sub-channels, addressing that, so within the broader way from home universe, although to e-commerce, outperforming.

Luke.

Yeah.

Right.

Consumer in the current environment is more intentional and sometimes we're careful in spending its length.

What we see how we see that translating is the consumer's deploying more and more what I would call a smart shopping practice.

So on one side consumer.

Preferring more discount exchange club stores in the U S.

And this is clearly reflected in our gross numbers, where we are growing fast in those kind of tenants, but interestingly the.

The consumer is not compromising.

On.

On activities and lifestyle.

With all subtenant addressing that so within the broader away from home universe, but also e-commerce outperforming and so it's not by coincidence that in Europe and by the way in Edp also be away from home channel is the fastest growing channel. We added that obviously also a consequence of what we have been doing.

Celine Pannuti: And so, it's not by coincidence that in Europe, and by the way, in EDP Europe also, the way from home channels, the fastest growing channel we are in, that obviously also consequence of what we have been doing, because we have been very early refocusing and reallocating our resources on this counter and away from home, knowing that we are going away from home goals for us, probably in the past, not so much a priority channel, but I think that has been very clearly identified. And for us, it builds well, because this is the place where we can position, especially our more premium ranges in EDP.

India, because we are in very early refocusing and reallocating our resources on on discount us and away from home away from home growth for us probably in the past not so much a priority channel, but I think that has been very clearly identified and.

And for us that bodes well because it is the place where we can position, especially our more premium ranges in EP, you think about our output in ranges, particularly when you think about drinkable yogurt proposition, but you also think about the premium ranges.

Celine Pannuti: You think about your high-porting ranges, particularly, or you think about drinkable, you go for positions, but you also think about the premium ranges in Horeka. So, it's definitely something we want to push further, and we see good opportunities, which also means that we can very well manage the mix, the product mix in our portfolio, between the essential dairy products, for essential daily needs for the consumer and their families, and this is where Danone is playing today, and is playing very successful.

<unk> is definitely.

Something we want to push resident BBC.

Good opportunities, which also means that we can very well manage the mix the product mix in our portfolio between the essential dairy products for essential.

Daily needs for the consumer and their families and as we have done on displaying today and it's been very successful.

Celine Pannuti: We have been talking about that last quarter with the example of spend, and on the other side, the more premium ranges, with your poor high-profile, but also with optimal, which is a pro-storming, extremely well. When it goes to the guidance, so yes, we are upgrading the guidance for the fully as a result of the good momentum, overall, including on volume mix. How does it translate into the bottom line? We confirm moderate margin improvements, because we are speaking to what we have now consistently been saying over the year, which is that any good news we would have from inflation or the elements, we are going to reinvest into the business.

<unk> been talking about that last quarter with the example of space and on the other side the more premium ranges.

Your core hypo, but also with <unk> extremely extremely well.

When it goes to the guidance. So yes, we are upgrading the guidance for the full year as a result of the good momentum.

Overall, including on volume mix.

This translate into the bottom line, we confirm moderate margin improvement because we are sticking to what we have now consistently been saying over the year, which is that any good news we would hear from inflation. All the elements, we are going to reinvest into the business and this is important as you see because the more we are investing in an optimized portfolio is good.

Celine Pannuti: And this is important, as you see, because the moment we are reinvesting on an optimized portfolio is yielding results. And so you can expect us to come with a good, large margin expansion also out of the second semester, but there is also a very significant reinvestment into brands, capabilities, and product superiority. Thank you. May I just add one last one, because I think it's very topical. Could you share your views on what you think the impact on GLT1 medicine would have on your portfolio, please?

<unk> results and so you can expect us to come with a good gross margin expansion also out of the second semester, but is also a very significant reinvestment into brands capabilities and product superiority.

Thank you.

One last one quick question.

Turkey call could you share your views on what you think the impact on G&P won many teams would have on your portfolio.

Celine Pannuti: Yeah, look, look at it. If anything, it will benefit our business. People focusing on weight loss prefer obviously healthy. They are looking for products with high protein and low fat content. And guess what is exactly what we are proposing, not only in North American base, but especially there. And as you know, this is an area where we are further developing and innovating in exactly that space in sync with our strategic to provide healthy food.

Yes look it looks like if anything it will benefit our business.

People focusing on weight loss prefer obviously they.

They are looking for products with high protein and low fat content and guess what is exactly what we are proposing a not only in the north American baseband, especially Dell and as you know this is an area, where we are further developing and innovating in that space in sync with our strategy to provide healthy food.

Celine Pannuti: There's a relevant science backbone. So we are looking obviously positive into that dynamic, monitoring the situation since the beginning of it is obviously difficult to predict even how fast it could scale and how it would impact consumption. Thank you. Thank you, Sidine. So this was the last question. Thank you, everyone, for your attention. Yes, thank you, guys. Thank you for your support. So you see we are being confident that third quarter and going this confidence into the last and so talk soon, guys.

Relevant science backbone. So we are looking obviously positive into the dynamic Mani.

Celine Pannuti: Have a good day. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. . [inaudible] you very much, thank you very much,[inaudible] Stammkoetter, Sarah, a clear improvement versus the first semester with a downer on minus one percent. This dynamic is very encouraging and is giving us confidence to further improve the trend in the last quarter of the year. In other words, and let me be very clear right away, we are confident that the fourth quarter of this year will see a positive contribution from volume index.

Monitoring the situation since the beginning of it obviously difficult to predict given how fast it could scale and how it would impact consumption.

Thank you.

Thank you Sydney.

The last question. Thank you everyone for your attention.

Yes. Thank you guys. Thank you for your support so Youll CVR.

We are leading confident that third quarter and going with confidence into the last and so talk some guys have a good day.

Hi.

Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.

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Good morning, everyone. Thank you for being with US. This morning for our Q3 results call I'm with yoga and SaaS as CFO, who will go through some prepared remarks before taking your questions in a second step.

Before we start I draw your attention on the disclaimer page 22, please pay attention to that and with that let me hand, it over to Yogesh.

Thank you Martin and good morning, everyone. I Hope you are well and thank you for being with US This morning to discuss our third quarter sales.

I propose that we go straight into it starting with page number two we have been closing this third quarter with solid results with like for like sales up six 2% compared to last year.

Beyond the control, we are particularly pleased with the quality of the growth as it starts to show that our video done on initiatives are paying off.

Using results exactly in line with our expectations.

<unk> reached plus six 6% this quarter sequentially the accelerating from the high single digit levels, we saw in previous quarters.

This normalization has been driven by all geographies with North America Unsurprisingly, the zone, where prices are normalizing the fastest.

Most importantly as.

If price contributions start to go down we are able.

Ebix to sequentially improve the dynamics of our volumes and mix.

Only slightly down with minus <unk>, 3% in the third quarter.

Clear improvements versus the first semester, we were down minus 1%.

This dynamic is very encouraging and is giving us confidence to further improve the trend in the last quarter of the year in.

In other words, the let me let me be very clear that the way we are confident that the fourth quarter of this year, we see a positive contribution from volume and mix.

Celine Pannuti: The key milestone, as you know, in our renewdown on journey. Let us look first at our performance through the lens of our categories on page number three. While we continue to deliver solid and consistent growth across EDP specialised in tuition and water, it's all three categories growing above five percent in the quarter. They are also reporting an improved underlying volume index. This is most visible in EDP where volume index significantly improved only down minus 0.8 percent this quarter.

Key milestone as you know in our venue done on drilling.

Let's look first at our performance through the lens of our categories on page number three.

While we continue to deliver solid and consistent growth across edp specialized nutrition and waters, it's all three categories growing above 5% in this quarter.

So reporting an improved underlying volume mix dynamic.

This is most visible in edp, where volume mix significantly improved only down minus <unk>, 8% this quarter compared to around minus 3% in the first semester of this year and compared to as much as minus 6% and looking back into the second semester of last year.

Celine Pannuti: Compared to around minus 3 percent in the first semester of this year and compared to as much as minus 6 percent and looking back into the second semester of last year. These results do not come by coincidence. They rather reflect the hard work of our teams of the last 18 months, where we consistently executed against our strategic agenda. And then we actively stepped up the performance of our portfolio, of our core assets, our underperformance and our winners, which is well illustrated on the next page, page number four.

These results do not come by coincidence, they rather reflect the hard work of our teams over the last 18 months very consistently executed against our strategic agenda.

W actively stepped up the performance of our portfolio of our core assets, our underperformers and our Venus, which.

It is well illustrated on the next page page number four.

Celine Pannuti: In EDP Europe, our teams have over the last few quarter taken both actions to restore variation of the many years of underperformance. After having clarified the swim length of our brands, we refocus our ranges, which has led to the rest implementation of roughly 20 percent of the least very creative SKUs in dairy. This first step allowed us to give more clarity to our value propositions with each friend, but also to ease what I would call the shop ability of ourselves and combined with improved execution and high investments, the transformation of EDP starts delivering results.

In Edp you about in half over the last few quarters taken bold actions to restore value creation of the many years of underperformance after.

After having clarified the swim lanes of our brands, we refocused our ranges, which has led to divest utilization of roughly 20% of the least value creative skus in dairy.

Discuss step allowed us to give more clarity to our value proposition within each brand.

Answer to is what I would call the shop ability of our shelf.

And combined with improved execution and higher investments the transformation of Edp start delivering results.

Celine Pannuti: As an example in the UK, we are merging from the transformation phase, not only with a stronger portfolio, recently complemented by the rollout of our high protein range. But also with higher distribution and share of shape levels. Those are measurable successes and I'm convinced that this will sequentially translate into stronger growth and competitiveness. Next to EDP in Europe, they've also been active in turning around my zone. After a deep root cause analysis, the team has been deploying the renewed my zone proposition for the last quarter.

As an example in the UK, we are emerging from the transformation phase not only with a stronger portfolio recently complemented by the rollout of our HIFU events.

Also with higher distribution and shelf shelf levels.

Those are measurable successes that I'm convinced that this is sequentially calculate into stronger growth and competitiveness.

Next to ETP in Europe.

<unk> also been active in turning around Amazon.

Deep root cause analyses the team has been deploying the renewed Michael composition for the last quarters and we are pleased with the results now.

Celine Pannuti: And we have pleased with the results, now that the first season is behind us. My zone has been growing plus 13.9 percent in the beginning of the year, mostly driven by Volumenix. Importantly, this growth translated into higher market share. After years of slow down, we can say that my zone is reconnecting with value creation, which goes well for the resilience of our model in China and for the performance of our water schedule.

Now that the first season is behind us.

<unk> has been growing plus 13, 9% at the beginning of the year, mostly driven by volume and mix.

Importantly, this growth translated into higher market share.

After years of slowdown we can pay that milestone is reconnecting with value creation, which bodes well for the resilience of our model in China and for the performance of our water category.

Celine Pannuti: Dewey. Last but not least, you have seen us actively and intentionally boost the winners of our portfolio. This is for example the case of medical nutrition. The business that has been consistently growing in double digit territory. Since the beginning of the year, we have made several investments to increase production capacity in Europe. And we are in parallel actively expanding the reach of our portfolio, for example, in China in the diet nutrition.

Last but not least you have seen us actively and intentionally boosts the winners of our portfolio business. For example, the case of medical nutrition.

That has been consistently growing in double digit territory.

Since the beginning of the year, we have made several investments to increase production capacity in Europe.

And the unparalleled actively expanding the reach of our portfolio for example in China in the degradation.

Celine Pannuti: There, we continue to lead the entire nutrition space. While we are now expanding beyond hospitals, introducing our oral nutrition solutions, the key steps in expanding our presence from hospitals to post discharge moments. You remember that delivering strong and balanced growth sits at the heart of the Renew Donald business model. I will conclude this brief introduction by reiterating that the efforts of the last 18 months are starting to pay off. And as our sector is shifting away from price, let's growth.

There we continue to lead the Antero nutrition space.

While we are now expanding beyond hospital, introducing our nutrition solutions, a key step in expanding our presence from hospital to post discharge moments.

You'll remember is delivering strong and balanced growth.

Half of the venue business model.

We concluded brief introduction by reiterating that the efforts of the last 18 months are starting to pay off.

And as our sector is shifting away from price led growth we are confident that moving forward.

Celine Pannuti: We are confident at moving forward. We can demonstrate that we have categories, brands and capabilities, deliver more balanced growth with volume, mix and price contributing. Let me now move to page number five for our traditional sales version. We have already been commenting our like for like sales growth of plus 6.2 percent. On top of that, we see this quarter and negative impacts from 4X of minus 7.4 percent reflecting the depreciation of the majority of guarantees against the euro.

Can demonstrate that we have categories brands and capabilities to deliver a more balanced growth with volume mix and price contributing.

Let me now move to page number five for our traditional sales of which have already been commenting our like for like sales growth of plus six 2% on top of that we see this quarter a negative impact from Forex of minus seven 4%, reflecting the depreciation of the majority of currencies against the Euro where it is.

Celine Pannuti: While scope was negative at minus 6.2 percent mainly resizing from the decontribution of our EDP Russia and water's Argentina business from our perimeter. Let's now look at the performance of our zones moving to page number six. This quarter again, all our geographies have been contributing to the growth to be efficient. I would even suggest to be moved immediately forward to the next page. To page number seven to be put into the performance of each zone starting with Europe.

Growth was negative at minus six 2%, mainly resulting from the deconsolidation of our Edp, Russia, and Argentina business from our Telemundo.

Let's now look at the performance of our zones moving to page number six.

This quarter again, all our geographies have been contributing to the growth to be efficient I would even suggest to be move immediately forward to the next page two.

To page number seven.

Deeper into the performance of each zone, starting with Europe.

Celine Pannuti: Europe delivered solid growth of plus 5.1 percent in this third quarter with all categories contributing pricing started to progressively normalize yet still being up to 9.2 percent. Thanks to significant carry on work from last year. At the same moment, volume mix was down minus 4.1 percent with a week of volume performance in our water business where volume mix was significantly down while EDP on the other side experienced a tangible sequential improvement as expected.

Europe delivered solid growth of plus five 1% in the third quarter with all categories contributing pricing started to progressively normalized yet to being up plus nine 2% and 2%.

Thanks to significant carryover from last year at the same moment volume mix was down minus four 1%.

With a weaker volume performance in our water business.

Volume mix was significantly down while ETP on the other side experienced a tangible sequential improvement as expected.

Celine Pannuti: On EDP, as I commented already, our team has made good progress in the transformation of our portfolio. We are starting to deliver results with a sequential improvement in the volume mix dynamics. The quality of our delivery and our competitiveness are both improving month by month. Let this quarter by strong performances of our very brand like Actimele, Dunon or Upro, all of them growing double digits. But also of our I pro brand in plant based which delivered high single digit growth.

On Edp is incremented already our teams have made good progress in the transformation of our portfolio. We are starting to deliver results with a sequential improvement in volume mix dynamic.

The quality of our delivery and our competitiveness, both improving month by month.

Led this quarter by strong performances of our dairy brands like <unk> done on all your pool all of them growing double digit, but also of our <unk> brand and plant based which delivered high single digit growth.

Celine Pannuti: Specialized nutrition posted another quarter of within growth while water to the gist of further market share gain in a category which was at the beginning of the quarter penalized by very poor weather conditions, and maybe a last comment on our European performance when looking through the lens of our distribution channels, our way from home business was the fastest-growing channel in this water, benefiting from an enhanced focus on price-peck architecture across categories from deris to plant-based and water and supported by increased investment. Let's move on to North America on page number 8.

Life nutrition posted another quarter of resilient growth, while volatile registered further market share gain.

In a category, which was at the beginning of the quarter panelized by very poor weather conditions.

And maybe a last comment on our European performance.

When looking through the lens of our distribution channels our away from home business was the fastest growing channel this quarter.

Benefiting from an enhanced focus on price pack architecture across categories from dairy to plant based on water and supported by increased investments.

Okay.

Let's move now onto North America on page number eight.

Celine Pannuti: North America delivered 3.9% like for like growth in Q3, the pricing that is normalizing and limousine expectations up plus 4%. Volumix was again very resilient in this water, ending broadly flat, defied and elevated base, driven as you will remember by our contribution to addressing the IMF formula shortage in US last year. The performance in North America was led by our coffee creation range that poses again double-digit growth in this water. Here let me highlight the international delights and stock brands that continue to drive growth and marketer gains.

North America delivered plus three 9% like for like growth in Q3 that the pricing that is normalizing in line with our expectations up plus 12%.

Volume mix was again very decision this quarter ending broadly flat.

Despite an elevated base resin if you remember by our contribution to addressing the IMF formula shortage in U S last year.

The performance in North America was led by our coffee creation ranged it posted again double digit growth this quarter.

Let me highlight the international delight and top brands that continue to drive growth and market share gains.

Celine Pannuti: Beyond coffee creations, our Euro business also delivered a solid quarter with our high-cost brands registering another quarter of CWDG growth. On plant-based, we started taking corrective actions to restore short-term competitiveness which seemed to yield threat results, and parallel we are working on a more structural plan to restate our portfolio and increase its relevance to consumers. So overall, another solid quarter in North America benefiting from a well-positioned and resilient portfolio in this water.

Beyond coffee creations, our yogurt business also delivered a solid quarter with our Iqos brand registering another quarter of steep double digit growth.

On plant based we started taking corrective action to restore short term competitiveness, which seemed to us that result in parallel we are working on a more structured plan to restage of our portfolio and increase relevance to consumers.

So overall, another solid quarter in North America, benefiting from a well positioned and resilient portfolio.

Celine Pannuti: Moving to the next page, which is page number 9 for our China, North Asia and North Yarnia zone. The zone register plus 8.4% like for like growth in the third quarter mainly driven by volume nix up plus 7.3%. Starting with China and zooming into our infinite mix from here, optimally delivered another quarter of solid growth with continued market share gains. The uniqueness of our business model in China is indeed a great asset, particularly in this moment where the category is shifting from old to newly registered refugees.

Moving to the next page, which is page number nine for our China, and North Asia and Oceania.

The <unk> plus eight 4% like for like that growth in the third quarter was mainly driven by volume mix up plus seven 3%.

Starting with China, and zooming into our infant mix from here.

<unk> delivered another quarter of solid growth with continued market share gains.

Unit growth of our business model in China is indeed, a great asset.

Similarly in this moment, where the category is shifting from OLED two newly registered equity.

Celine Pannuti: We are carefully navigating this transition period, focusing on keeping tight control on inventory and price levels while introducing in a staged manner our newly registered innovation in this space. Next to IMF, our medical nutrition portfolio poses another strong quarter, building on the strength of our entire tube feeding business, which delivered double digitals. We are very pleased that we can now meaningfully expand our portfolio in the coming quarters. Thanks to the recent introduction of our oral products in China, I have recommended earlier on the presentation, the key milestone to strengthen our presence in this fast-growing segment.

We are carefully navigating this transition period.

Closing on keeping tight control on inventory and price levels, while introducing in a staged manner, our newly reduced innovation in this space.

Next to IMF, our medical nutrition portfolio posted another strong quarter building on the strength of our entered two filling business, which delivered double digit growth. We are very pleased that we can meaningfully expand our portfolio in the coming quarters.

Thanks to the recent introduction of our oral product in China as I commented earlier in the presentation. The key milestone to strengthen our presence in this fast growing segment.

Celine Pannuti: In water, my zone is living another strong quarter of competitive growth with the team of focusing on further enhancing our executioner matters to solidify the turnaround with the next season to come. And finally, beyond China, our business in Japan poses again a strong double digital growth led by our functional dairy range and notably the Eiffel Spreads. Let's move on to the Latum zone on stage number 10. Latumregister says growth of plus 8.2% in Q3 in a like for like basis.

In water main zone, delivering another strong quarter of competitive growth with the teams are focusing on further enhancing our execution methods to solidify the turnaround with the next season to come and finally beyond China our.

Our business in Japan posted again Paul.

<unk> growth led by a function of dairy ranch and notably the Iqos brand.

Let's now move on to the Latam on page number 10.

Double digit sales growth of plus eight 2% in Q3 on a like for like basis. This price of plus 10 and volume mix down minus one 8%.

Celine Pannuti: This price of plus 10 and volume makes down minus 1.8% Vincent. The focus of this zone is to restore a resilience profitable growth model to streamline its portfolio and to optimize its business model. Our teams are making good progress on this agenda across the different countries and categories. There's been discontinuing our resetting a number of activities, including our liquid-naked business in Brazil, which is sequentially visible in the result. Why doing so?

The focus of this zone to restore a resilient profitable growth model to streamline its portfolio to optimize its business model.

Our teams are making good progress on this agenda across the different countries and categories.

The discontinuing of resetting a number of activities, including our liquid egg business in Brazil, which is sequentially visible in the results.

By doing so the focus is to drive the winner in the zone with brands like <unk> and <unk> all of them growing profitably also in this quarter at very fast pace.

Celine Pannuti: The focus is to drive the winner in the zone with brands like Yopro, Bonafont, and Aptamila, all of them going profitably also in this quarter at very fast pace. Finally, moving on to the rest of the world's zone, which is page number 11, the zone posted says growth of plus 9.7% on a like-for-like basis. This quarter with a balanced contribution of price, up plus 7.7% and volume mixed up plus 1.9%. Let me here particularly highlight the continuous solid performance of our specializing fishing categories in Southeast Asia, but also in India, which has posted another quarter of double digits growth.

Finally, moving on to the rest of the zone, which is page number 11.

The zone posted sales growth of plus nine 7% on a like for like basis. This quarter with a balanced contribution of price up plus seven 7% and volume mix up plus one 9% linear, particularly highlight the continued solid performance of our specialized nutrition category.

Southeast Asia, but also in India, which is posted another quarter of double digit growth.

Celine Pannuti: We continue to win market shares across the region with a strong focus on our superior Aptamila portfolio, but also with our unique local brands like SGM in Indonesia. On EDP, we are making further progress on the portfolio transformation of our dairy business in Africa, the clear mandate to reconnect with a profitable growth algorithm in this region, our teams are laser focused on getting into that very creation journey with results visible quarter by quarter.

We continue to win market share across the region with a strong focus on our superior utterly portfolio.

But also with our unique local brands like S. Jim in Indonesia.

On Edp, we are making further progress on the portfolio transformation of our dairy business in Africa with a clear mandate to reconnect with our profitable growth algorithm. In this region. Our teams are laser focused on getting into that value creation journey with results visible quarter by quarter.

Celine Pannuti: Let me now conclude this presentation with an update on the full-year outlook, which is page number 12. We're reflecting our solid delivery over the first nine months of this year, and the momentum of our business across geography, we are today raising our guidance for like-for-like sales growth. We are now expect-like for like sales growth between six and seven percent. We at the same moment confirming our full-year guidance for the current operating margin, delivering a moderate margin increase with its previous year.

Let me now.

Through this presentation with an update on your full year outlook, which is page number 12.

Reflecting our solid delivery over the first nine months of this year and the momentum of our business across geographies and categories.

Today, raising our guidance for like for like sales growth. We now expect like for like sales growth between six and 7%.

At the same moment, confirming our full year guidance for recurring operating margin delivery.

Delivering a moderate margin increase versus previous year, TMO, specifically and as you already observed in the first semester of this year.

Celine Pannuti: Here most specifically, and as you already observed in the first semester of the year, expect our full-year operating margin to be led by the expansion of our growth margin, where you will continue to make significant green investments in AMP, productivity, product security, and capability. And with that, let me hand it back to Mattil to start the Q&A session. Thank you, Jorgan. So we will now open the Q&A with the first question from Guillaume Delmas, UBS.

Expect our full year operating margin to be led by the expansion of our gross margin. While we continue to make significant investments in A&P product superiority and capabilities.

And with that.

We ended two material to start the Q&A session.

Thank you again, so we will now open the Q&A with the first question from Guillaume Delmas UBS.

Celine Pannuti: Qmatils and good morning, Jorgan. A couple of questions for me please. The first one is on pricing. I would be interested to hear what you're seeing on the pricing and promotional front at the moment. In particular, if there are some regions or product categories, where you're seeing a pickup in promo activities or maybe more pushback from retailers, and then like I appreciate it is very early days, but how do you think 2024 will play out from a pricing point of view?

<unk> good.

Good morning.

Okay.

Couple of questions from me. Please the first one is on pricing.

I'd be interested to hear.

What youre seeing on the pricing and promotional front.

At the moment in particular, if there are some regions or product categories, where you're seeing a pickup in promo activities or maybe more.

Louis back from re tenants.

And then Nick I. Appreciate it is very early days, but how do you think 2024 will play out from a pricing point of view I E.

Celine Pannuti: I do expect some additional pricing actions on your part, some rollback, or you know, overall some stability. So any color on this would be very helpful, and then my second question is on specialized nutrition in Europe, because I think Q3 is your third consecutive quarter in the low single digit territory, I would assume this is made of strong pricing and some negative volume development, so I don't think this is an area where you've had much SKU pruning, so my question is how should we think about SN in Europe going forward, is it realistic to assume better than flat to low single digit organic sales growth, given that I would think you've got very limited volume growth in terms of from a category standpoint, thank you very much.

Do you expect some additional pricing actions on your part some rollback or overall some batch stability any color on this would be very helpful.

And then my second question is on the specialized nutrition in Europe, because I think Q3 as you start to consecutive quarter in the low single digit territory.

I would assume this is made of a strong pricing and some negative volume development.

So I.

I don't think this is an area where you've had much extra you pruning.

My question is how should we think about <unk> and <unk>.

In Europe going forward.

Is it realistic to assume better than flat to low single digit organic sales growth given that I.

<unk> got very limited volume growth in terms of.

From a category standpoint, thank you very much.

Celine Pannuti: Good morning, you let me try to help you on the different points, and it comes to pricing and promotional activities, you're right to say that pricing is coming down quarter by quarter, and the different case depending on the region, and depending also when we start to take pricing, so unsurprisingly North America is first normalizing and we will see that Europe will normalize in the coming quarter. This is indeed combined with the fact that we are sequentially increasing our promotion activities, what we said some six months ago is that at the end of the year, we'll be back to the level of promotion activities we had before COVID, which is probably a fair level of promotion moving forward.

Yeah. Good morning, let me try to help you on the on the different points when it comes to pricing and promotion.

You are right to say that pricing is coming down.

So by quarter is a different case, depending on the region.

Depending on when they started to take pricing. So unsurprisingly North America is normalizing and you will see this year.

Normalized.

In the coming quarters.

This is indeed, a combined with the fact that we are <unk>.

Sequentially, increasing our promotional activity is what we said there are some six months ago with developed which is that by the end of this year, we will be back to the level of promotional activities net before COVID-19.

Which is probably a fair level of promotion moving forward, we obviously.

Celine Pannuti: We obviously in very close collaboration with our retailers organizing this promotion, because this promotion has one single objective which is to bring the consumer back to the to the chef, so very targeted promotion, making sure that promotions get us back to the magic price points, because this is what drives impact and rotation on the chef. How does it look going into next year 2024 over all of course 2024 we want to reconnect on and to connect to our desired growth model with contribution from volume and price, all of them positives, but more importantly than that, the level of pricing will depend on the level of inflation, and what we are seeing is that inflation is coming down quarter by quarter exactly in line with our expectation.

In very close collaboration with our retailers organizing these promotions because these promotions at one single objective, which is to bring the consumer back.

To the to the SaaS, so very targeted promotion.

I'm sure that promotions get us back to the magic price points. Because this is what the price impact in rotation on the shelf.

How does it look.

Into next year 2024.

Overall of course, 2024, I want to reconnect and to connect to our desire to a growth model with contribution from volume and price all of them are positive, but more importantly than that the level of pricing will depend on the level of inflation and what we're seeing is that inflation is coming down quarter by quarter exactly.

In line with our expectations, but we expect inflation to stay positive.

Celine Pannuti: But we expect inflation to take positive as a result of the fact that we may leak with milk and a number of markets is still very higher than it was 12 months ago as a result of the fact that cost of labor is increasing and also a few other ingredients like sugar. That means that we will probably go away from what we have seen over the last 12, 18 months, which was broad based pricing to something which is more targeted pricing, depending on the category.

As a result of the fact that liquid Mig and a number of markets.

Way higher than it was 12 months ago as a result of the fact that cost of labor is increasing and also a few other ingredients like like sugar that means that we will.

It will probably go away from what we have seen over the last 12 to 18 months, which was broad based pricing to something which is more targeted pricing depending on the category and depending on the country.

Celine Pannuti: And depending on the country overall we expect by seem to remain positive also moving into year 2024 on your last point on specialised situation in Europe, I would say resilient within performance. In IFF we manage to deliver a competitive performance in a currently more soft category, while in medical nutrition we benefit from obvious underlying segment growth and are we are investing as you could see of the last weeks in production capacities like in an important to fully serve today for those tomorrow's demand in a very dynamic state.

Overall, we expect pricing to remain positive also moving into year 2024.

On your last point on specialized nutrition in Europe, I would say is resilient.

Within performance.

In <unk>, we managed to deliver competitive performance in the currently more soft category.

While in medical nutrition, we benefit from the obvious underlying segment growth and we're investing as you could see over the last week in production capacities.

Like in an important to fully serve today's with US two mortgage demand in a very dynamic space.

Celine Pannuti: Thank you very much. Thank you, Jim. Next question from John Cox, Kepler. Yes, good morning, guys. Jon Cox from Kepler, congrats on the decent print there. I have a couple of questions, really. Just on China, one of you can talk through what's going on in China with a bit more detail on the IMS front. You know, we've seen some of your competitors actually posing down production of international brands because of the softness in that China market.

Thank you very much next week.

Thank you Jim next question from Jon Cox Kepler.

Yes, good morning, guys.

Jon Cox from from capital Congrats on the decent print that.

I have a couple of questions really one just on China I Wonder if you can talk through whats going on in China with a bit more detail on the IMF from.

We've seen some of your competitors actually.

Closing down production of international.

Brands because of the softness in the China market I'm wondering what youre seeing there is really expanding the domestic talk us through that also on the medical nutrition expansion I'm. Just wondering when you think that would come on tap.

Celine Pannuti: I wonder, you know, what you're seeing there is it really expanding the domestic talkers through that. Also on the medical nutrition expansion, just when you think that would come on tap into that region. And then just the last one on Europe, it seems pretty impressive when you're sort of reeling off a lot of stuff about, you know, double digit growth for this and that. I wonder if you can just talk a little bit more about the SKU rationalization where you are.

Into that region.

And then just the last one on Europe. It seems pretty impressive when you sort of reeling off a lot of stuff about double digit growth for this and that.

I'm wondering if you could just talk a little bit more about the SKU.

SKU rationalization, where you are.

Celine Pannuti: Is that pretty much done? When will we roll over in terms of the the cons? And when can we start modeling maybe more growth elements into Europe dairy in terms of volume mix going forward? Thank you. Yeah, good morning. Good morning, Jon. Look on China, IMS, the team is doing a stellar job. As you can see, quarter by quarter, increasing our market share in category, which is transitioning and transitioning, I would say without any surprise, there's a little bit of volatility, which is impacting some players.

That pretty much done when we roll over in terms of the comps and when can we start modeling maybe more groups elements into Europe dairy in terms of volume mix going forward. Thank you.

Hey, good morning, good morning, John.

Look on China IMS the team is doing a stellar job.

As you can see quarter by quarter.

Creasing, our market share in the <unk>.

Category, which is.

Transitioning and transitioning I would say without any surprise with a little bit of volatility which is impacting some players.

Celine Pannuti: Because of our very unique business model, which gives us strong control on stocks and price, we are navigating through that, I think, in a in an exemplary way. That's transition, the expect to finish towards the end of the year or the next year when all the stocks will be completed. So in that sense, we don't look at it differently than the way we look at it six months ago. What both well is that as we speak, we are introducing in a staged manner or first innovation.

Because of our very unique business model, which gives us full control on stocks and price we're navigating through that I think in an exemplary way.

That transition, we expect to finish towards the end of the year early next year and already oil stocks will be completed during that time, we don't look at it differently than the way we looked at it six months ago, what bodes well is that as we speak we are introducing in a staged manner. Our first innovation you may remember what <unk> presented.

Celine Pannuti: You may remember what three presented in the month of May in the Paris Sackley event that we have a number of innovations now kicking in into our portfolio, which is meaningfully expanding our portfolio in the more premium part of the category. And so this is happening as we speak. Other element I can give you is the fact that what we are calling, our control is the uncontrolled channel. So the diagram is different.

In the months of May and the recently.

Rent that we have a number of innovations now kicking in into our portfolio, which is meaningfully expanding our portfolio into more in the more premium part of the.

Of the category and so newness happening F.

As we speak.

<unk>.

Other element I can I can give you is the fact that what we are calling our controls business and control channels.

The diagnosis the fed's activities the diagnosis rate.

Celine Pannuti: The diagram is continued to decrease, which means our control channel is more than 90% of our business in China, which is also a very important element to navigate through the next quarter. And last but not least, we feel good in fact about our operating model with an efficient mix between global and local manufacturing capacity. This recipe is developed as you know in our local R&D center in China, and we're just learning both our global science and local expertise.

The decrease in our.

Our controlled channels represent more than 90% of our business in China, which is also a very important element to navigators, who the next quarters and last but not least if you're good and think about our operating model with an efficient mix between global and local manufacturing capacity.

With recipes developed as you know in our local R&D Center in China, and we just levering both our global sites, except for those who are local expertise.

Celine Pannuti: When it comes to the medical part of it, we are pretty happy with the performance of our diet portfolio in China, growing consistently double digits. But you know that today our presence is mostly an inter-real pre-squat and re-embeurred. Kathy Rovey, which where we are reaching today are already 90% of top tier hospitals. We are now in a moment that we can first time really expand our portfolio beyond the entire space, there's two ranges, in fact, which will allow us to go from mainly hospital focus to more post discharge moments when people and patients have left the hospitals.

When it comes to the medical part of it.

We are pretty happy with the performance of all of our debt portfolio in China is growing consistently.

Double digit but not at.

Today, our presence is mostly an integral prescribed and reimbursed.

Kept year over year, which.

Where we are reaching today around 90% of top tier hospitals.

Yes, no and the moment that we can first time, we expand our portfolio beyond the enteric space with two ranges in FIC.

Which will allow us to go from mainly hospital focus to more.

Most.

Discharge moments when people patients had left the hospital and so there is two elements. We're introducing one is our new trees on powder.

Celine Pannuti: And so there's two elements we are introducing. One is our neutral zone powder, which is something of which we received a drug license and which means that we ought to go through prescription and reimbursement. And on top of that, we are introducing our 40 mil range with oral nutritional products, what we are calling ASSNT, which is a self-paid, not reimbursement product format, which is going through recommendations from key opinion leaders and then through pharmacies.

<unk> is something of which we received a direct license and which means it will also go through prescription reimbursement.

<unk>.

On top of that we are introducing our <unk> range with the Ora.

Nutrition.

Our <unk> products.

S&P.

This is a self paced so not reimbursed product format, which is going for recommendation from key opinion leaders and then third through pharmacies.

Celine Pannuti: So overall, I would say both dwell for the future dynamic of their part of the business. On your last question, which was on Europe, look, I mean, we started the transformation of our EDP portfolio some 12 months ago and as expected, HQC Volumix dynamic start to sequentially and generally improve. We have cut something like 20% of SKUs, which as you could see over the last quarter, has shortened to some pressure on our volume performance.

So overall I would say it bodes well for the future dynamic of their part of the business.

On your last question, which was on <unk>.

Look I mean, we started the transformation of our Edp portfolio, some 12 months ago and as expected it could see volume mix dynamics start to sequentially are intended to be Uber, if cut something like 20% of.

Can use which as you could see over the last quarter is that short term to some pressure on our volume performance.

Celine Pannuti: However, we are now emerging stronger from this reset because we have a more optimized segmentation, we have a better build up of our portfolio and we start to reinvest behind it. And so it starts to shock concretely in the key metrics of our business. And so this is why I was using the UK example. Where we have first, I would say, successfully agrees with the number of key retailers to implement a new plan of ground for their chefs.

However, we are now emerging stronger from this reset.

We have a more optimized segmentation, we have a better a bit above our portfolio and we start to we invest behind it and so it starts to show concretely in the key metrics of our business and so this is why I was using the UK example.

First I would say successfully.

Agreed there is a number of key retailers to implement a new plan O gram for dairy shape.

Celine Pannuti: This is a much clearer segmentation by benefits for health and protein bait. It's about across many supermarkets, which is helping the category because it's distracting more consumer, but also it means that our distribution numbers are going up, our share of chefs is going up and we will see sequentially translating that into volumes and market share. And so we are seeing that that kind of progress in the UK, like in the UK across the board, it happens obviously at different speeds of implementation depending on the local reality, but net net what it means that is to give you not here as any more talking in a very prominent way about portfolio transformation in Europe. If you will now sequentially shift the gears towards better execution and reinvestment. Thank you. Thank you, John.

Much clearer segmentation by benefits for health and putting in base you talked about.

Many supermarket, which is helping the category because it's attracting more consumers, but also it means that our disciplined distribution numbers are going up our share of shelf is going up and.

And we will see sequentially translating that into volumes and market share and so we are seeing that kind of progress in the UK and UK across the board obviously at different speeds.

Of implementation, depending on the local reality, but net net what it means that <unk> given out here is any more talking in a very prominent way about portfolio transformation.

As you will know sequentially shift the gears towards better execution and the investments.

Thank you. Thank you John Thank you John So next question from Wallach Aman Barclays.

Juergen Esser: So next question from Warren Akerman, Backlays. Yeah, morning, everybody. So we're in here at Backlays. Hi, Jürgen. Hi, Matilda. So yeah, just back on EDP, Jürgen, you talked about tangible progress. And in the last question, you mentioned a couple of things, but can you maybe walk us through what you're most pleased about in EDP and where there is still work to do. And that's a question for EDP, US and Europe. It's not just a Europe question. And then within EDP Europe or within EDP Europe, we can see the light for light went from 5.8 to 6.6. I think it was in Q2 to Q3.

Yes, good morning, everybody, a sidebar inherent Barclays Hi, Ken Hi, Methode.

Yes, just back on <unk>.

Can you talk about tangible progress and.

Last question you mentioned you mentioned a couple of things, but can you maybe walk us through what you're most pleased about at Edp and where there is still work to do.

And Thats a question for ADP U S and Europe is not just a Europe question and then within Edp Europe.

Within <unk>, we can see with like for like from five eight to $6. Six I think it was from Q2 to Q3 are you able to actually break that out for us in terms of volume.

Warren Ackerman: Are you able to actually break that out for us in terms of volume versus pricing just to understand the kind of sequential volume mixed performance in EDP that would be super helpful. And then the second one is really around the kind of water business. You've told us a little bit about obviously my zone and you're sounding you know, bullish about that. But can you looking at the Europe volume overall, which was down 4%.

Versus pricing just to understand the kind of.

<unk> volume mix performance.

In in ADP that would be that would be super helpful.

And then the second one is really around the kind of <unk> business.

You've told us in the op.

Now.

Obviously mine zone.

<unk>.

Bullish about that but can you looking at the Europe volume overall, which was down 4%, but how much was water volume is down.

Warren Ackerman: How much was water volumes down in the quarter? Because I guess there was a big summit impact given poor weather. And then maybe can you just outline what's happening to the performance in waters in your other big EMs of Mexico and Indonesia. I'm just trying to get a sense of how we should be thinking about the waters growth going into the final quarter and into next year.

So it looks like I guess, there was a big.

Impacts given poor weather.

And then maybe can you just outline what's happening to the performance in waters.

On your other big <unk> of Mexico.

And in Indonesia, I'm, just trying to get a sense of how we should be thinking about the waters growth going into the final quarter and into next year. Thank you.

Juergen Esser: Thank Good morning, Warren Ackerman. Let me start with the water start, which is two on one side, we saw in February, anchor aging with the China, with my zone, which is, I would say, really, going along it's turn of on plan, market share winds, in a category which is twice as a mix of that going well. In Europe, in water, the start of the water has been tough, especially in the month of July, very poor weather conditions, they catch a really double digit down, and so despite the fact that we have been winning market share, especially with the easier brand, we have been suffering quite a bit in that water, so volume is significantly down, in the first water, which unfortunately is hiding some of the good progress we are doing in Europe on PVP, that will not be the, I would say, that will not be so much the case anymore in Q4, because Q4 will be out of the season in water Europe, we can expect a normalised growth rate whether it's not playing such a big role there, which will also make the, I would say, PVP progress will be more visible moving forward.

Yes. Good morning, Good morning, let me start with.

The water spud, which drew a one on one side we saw in Q3.

Encouraging results in China with by Zone.

Savory.

Growing our turnaround.

Telephone plan market share win in the category, which is quite difficult.

Disagreeing with.

Europe.

In water the start of the quarter.

In the month of July very poor weather conditions that category double digit down.

And so despite the fact that DSD is winning market share, especially with the <unk> brand.

He is suffering quite a bit in the quarter. So volume is significantly down.

In the third quarter, which unfortunately is high there are some of the good progress we are doing in Europe.

<unk>.

Yes.

That will not be the I would say that will be somewhat indicated anymore. In Q4, because Q4 will be out of the season in Europe.

Can you expect normalized.

Both ways, whether it's not play such a such a big order.

Also make that I would say.

Progress will be more visible moving forward, we are not the Apache with everything in Edp OIBDA directly I think that we have done very good progress on a number of elements I think that the portfolio transformation is really.

Juergen Esser: We are not yet happy with everything in EDP Europe, that is very clear, I think that we have done very good progress on a number of elements, I think the portfolio transformation is really easing the resides, now it's about execution and reinvestment. On some brands, we are seeing that the transformation plus the investment is already showing good traction on others to be less, but we now need to make sure that all of our larger brands are getting into the right dynamic.

Using the reside now it's about execution and reinvestment.

On some brands we are seeing that.

Transformation, plus <unk> is already showing good traction on other a bit less but we want to make sure that all of our larger brands.

Getting into the right dynamic.

Juergen Esser: We are talking a lot about dairy, but let me also make a comment on flambat because flambat should be quite good dynamic also in the third quarter. I am for growing, I think a digit where we are refocusing on clear occasion moments with breakfast and coffee, where we are refocusing on the fundamentals of that coffee. When you go to the UK today and you go in one of the four largest coffee chains in the UK, you will see everywhere, that was not the sector.

We are talking a lot about dairy, but let me also make a comment on the unplanned days it is plant based.

Quite good.

Good dynamic.

In the third quarter.

We're growing high single high single digit where we are refocusing on.

Clear occasion moments with breakfast and coffee, where we are focusing on the fundamentals of the category.

When you've gone out to the UK today are doing one of the four largest coffee changes you can't give us the IPO everywhere that was not detected multiple so we are going back to the fundamentals.

Juergen Esser: So we are going back really to the fundamentals of managing a category as a category we've done, we are doing the same in dairy. So most come quarter by quarter, but we are confident and we want to why we are saying that the fourth quarter for the company with the positive value mix and PVP will contribute it's fair share to it. And yeah, sorry to press you, but on the ADP numbers, are you actually able to break out what the volume mix was in Europe just in the quarter versus the last quarter so we can understand that sequential improvements?

Managing a category as a category leader and yet to be determined so more to come quarter by quarter, but yes.

Didn't ended up to why we are saying that.

The fourth quarter.

The company is.

Positive volume mix and Edp.

It's their shattered.

Yes, I'm sorry to press you on the ADP numbers are you actually able to breakout what the volume mix was in Europe, just in the course of since the last quarter. So we can understand the sequential improvements.

Juergen Esser: Yeah, no, we are not, look, we do not, we do not give guidance, not be put in all the details of reality, but very tangible progress on what you mix in the GDP quarter by quarter, so very, very significant. Okay, thanks.

Yes, no we are not.

We will give guidance what deposits are linked as a priority, but very tangible progress on volume mix in the quarter by quarter, So very very significant.

Okay. Thanks.

Warren Ackerman: Thank you, Warren.

Thank you Brian The next question comes Pascal barrel.

Pascal Boll: So next question from Pascal Ball. Do you hear me? Yes, hi Pascal. Oh, perfect. So hi everyone. So two questions, from my side, on specialized nutrition in China, the situation with your local competitors. I mean, we have seen a couple of months ago, the profit warning of one of your largest competitors. And when I look at your result, I think Danone is doing quite well. So, what's really the difference, what you see regarding versus your competitors. And then on my zone, I appreciate that you today, you are up like for like 13.9 percent. Where do we stand in comparison to pre pandemic levels at my zone? Thank you.

Can you hear me.

Yes, Hi, Pascal perfect No hi, everyone.

Two questions from my side on specialized nutrition in China. The situation with your local competitors I mean, we have seen a couple of months ago.

Warming one of your largest competitors and when I look at your results I think danone is doing quite well so what whats related the difference what you see regarding.

Versus your competitors and then.

On my phone.

I appreciate that year to date, you're up like for like 13, 9%, where do we stand.

In comparison to pre pandemic levels have Marshall. Thank you.

Have a look on the on specialized nutrition, indeed, as Anders mentioned seamlessly.

Juergen Esser: Look on a specialized nutrition, indeed, as I was mentioning, the team is doing a stellar job because we are increasing our market shares quarter by quarter since many, many quarters. Why are we able to do that in a moment? We have some other suffering. First, because we are committed to that category, it means we are intentionally investing. We have to pay a portfolio. The brand after me is very narrow portfolio, but very powerful portfolio.

<unk> dropped.

We are increasing our market share.

Quarter by quarter since in many many quarters why are we able to do that in a moment, where some others are suffering first because we are committed to this category. It means we are intentionally investing we have today a portfolio.

R&D up Tammy and Gary Neville portfolio about the very powerful powerful portfolio.

Juergen Esser: There is a brand that is extremely strong and rich in China is a synonym of immunity. So that's one which is very important. The second one which is very important is that this is a business which has been started 10 years ago as an entirely digital business, e-commerce business, which means that comparing to many other playing in that category, we don't have thousands of sales people on the ground. But we have a unique and appropriate area, B2B2C e-commerce platform, which means that we can control stocks and prices down to the point of sales, and this gives us an asset which very few players have.

The brand equity is extremely strong in China.

Of immunity, so that one which is very important the second one which is very important is that this is a business which has been there.

10 years ago, as an entirely digital e-commerce business.

Which means that compared to many other playing in that category.

We don't have thousands of <unk>.

Salespeople on the ground.

<unk> unique and cockpit b to B to C.

E Commerce platform.

Is that we can control stocks and prices down to the point of sale and this gives us an asset which very few players.

Juergen Esser: We have been able to re-register all of our SKUs and on top of that, and is what I mentioned earlier, we have been registering a number of breakthrough innovations which will hit the market of the next 6-12-12 months, so that I think it takes us confidence also in terms of resilience of this portfolio moving forward. For my zone look, we are happy with the growth rate, but what makes us more happy is indeed the market share turn-off because two-year points, my zone has been suffering for a number of years, for market share loss, because we lost the edge of the brand and the marketing mix.

We have been able to register all of our Skus and on top of that is what I mentioned earlier, we have been registering a number of our breakthrough innovations, which will hit the market over the next six to 12 months. So that I think makes us confident in terms of the.

Zillions of this portfolio moving forward.

Oh My God look we are we are happy with the growth rate, but what makes us more happy is indeed, the market shift tunnel because to your point <unk> has been suffering for a number of years.

For market share losses, because we love the edge of the brand and the marketing mix.

Juergen Esser: The team has been doing really, when very deep to understand why that happened to us and has been addressing the marketing mix, you may remember what we said last quarter is that we have been also here transforming the portfolio, cutting a lot of SKUs which we are not rotating and refocusing on the top four SKUs, and this is paying our big time to modernize marketing mix. And so, we are not only benefiting from gravity, post-COVID, dynamic of the country, but also being in a competitive world.

It has been doing really well.

Very easy to understand why that happened to us.

Adjusting the market mix you may remember, what we said.

Last quarter is that we have been also here transforming the portfolio cutting a lot of escape develop rotating and refocusing on the top four fsrus and this is paying out big time.

Modernized market mix and so we're not only benefiting from I would say post COVID-19.

Dynamic of the country, but also winning in a competitive way.

Juergen Esser: Thank you, Bethair. Go ahead, Bethair. Just quickly on that, I mean prioritizing on the top four SKUs, but what does that mean going forward? I mean, where are the growth? Cleaver's here. Yeah, my zone, that's very important. My zone is an on-the-go consumption for the actor and it's going through the refrigerator, which means that the more focused you have when you are the refrigerator, the more you make sure that the flavours and the variants the consumer is looking for are available in the fridge, the more you win.

And thank you for the follow up here.

Go ahead go ahead, sorry quickly just quickly on that I mean prioritizing on the top four skus.

I mean going forward I mean, we're.

Market growth lever SKU.

Yes.

Okay.

And then very importantly, even on the go consumption.

Doctor Anthony going through refrigerators.

Means that the more focus you have when you on a refrigerator.

You make sure that the <unk>.

Flavors in the very end of the consumer is looking for are available in the switch the more you win and this was one of the one of the learnings that because where we ended up a couple of years ago.

Juergen Esser: And this was one of the learnings yet, because where we ended up a couple of years ago is that we have the SKUs in the fridge which were not rotating while those ones which were not were out of stock. So going back to the fundamentals, putting hero-esque in the shaft and advertising around them is an important element. We have been complementing our range with a range of a higher level of electrolyte, spot onto the needs of the consumer to be innovating, but this impact and this is paying off well for us.

Using the switch, which we're not we're taking a while those ones, which were announced we are out of stock so going back to the fundamentals putting here will escape the shape and advertising around them is an important element we have been.

Complementing our range with a range of a higher level of electrolyte.

Got onto the need of the consumer innovating, but this impact.

And this is this is paying off well for us.

Juergen Esser: Thank you. Thank you, Pascal. Next question from Bruno Montain, Dan Schien. Oh, sorry, I broke out here on my side, sorry for that. Now two questions for me. Clearly, I think everybody is hoping and waiting for the EDP turnaround, and luckily you have quite some different performances around the world. And if I think about the US performance, you turned around the brands years ago, you're happy with the positioning about the US.

Thank you.

Thank you Pascal.

Question from Guillaume obtain danskin.

Good morning.

Sorry, the line broke out here on my side sorry for that.

Now two questions from me.

Clearly.

I think everybody is hoping and waiting for the edp turnaround Luckily have quite some different performances.

Round, the world and as I think about the U S performance your turnaround the brand's years ago, you're happy with the positioning about the U S.

Juergen Esser: And if I look there, pricing has normalized back to 4% in the US, but you still have negative volumes, despite the kind of the turnaround having been done and pricing normalizing, and that kind of volumes a lot worse than it was a few years ago when you were around 4% pricing. So what should we expect in the US as like a normalized kind of growth rate and volume, what are you aiming for?

I never looked at pricing as normalized back to 4%.

But you still have negative volumes, despite canada turnaround, having being done in pricing normalizing and that kind of volume is a lot worse than it was a few years ago. When you were around 4% pricing. So what are you what should we expect in the U S is like a normalized kind of growth rate in volume, whether you're aiming for and the second one is I'm sort of coming back to the European volume.

Juergen Esser: And the second one is I'm sort of coming back to the European volumes of minus 4.1%. You indicated when you'd expect positive group volumes, which was next quarter. You know, how much time should it be before Europe finally get into positive volumes? Is that a few quarters away? Is it a year ago? A year away? Can you give us any indication on that, please?

<unk> of minus four 1%.

You indicated when you would expect positive group volumes, which is next quarter and at Walmart.

Each time should it be before Europe finally get into positive volumes is that a few quarters away as a year ago, a year away can you give us any indication on that please.

Juergen Esser: Good morning, Bruno. When you look at North America, really qualifying that as a resilient performance, because when you exclude the impact of the fly formula high base of last year, volume mixed in North America is actually glowing. And it's growing because people are doing a pretty good group, especially on the part of the portfolio. Coffee creamers with international idli and stock are growing at a very fast pace, high-cost and especially everything which is about high-quality and completely differentiated with stellar performance and market shares are holding in a good way.

We were running with our local when you look at North America.

Really qualifying that as a resilient performance because when you exclude the impact of the fly Formula High base of last year volume mix in North America is actually growing.

And it is growing because we're doing a pretty good drop, especially on part of the portfolio.

Coffee creamers.

Actually light in stock.

At very fast pace by causing these basically everything which is both high quality and it's a truly differentiate us with.

Stellar performance and market shares are holding in a good way. So we're pretty happy with it I think we are really earning the fruits of the Restaging Shane and the team did as you said, we know over the last two to three years. We are very clear that in plant based we are not yet where we want to be and methods of use straight on this.

Juergen Esser: So we are pretty happy with it. I think we are really earning the food of the restaging, Shane and the team did. As you said, we know, over the last two to three years. We are very clear that in plan this, we are not yet where we want to be. Let's also be straight on this. We have been probably going a bit too far on price. We are cost-correcting that as we speak with more intentional emotional activities, and this is starting to yield the first result. We are introducing small formats at entry price levels, which you also believe will help to create a stronger dynamic. So we are looking at this confidence into that part.

We have been probably growing a bit too far on price.

Correcting the error.

Speak.

This is more.

Intention of promotional activities and this is starting to yield. The first press results were introducing small format at entry price level, which we believe will help to create a stronger dynamics. So we are looking we are looking with confidence into into the pot.

Bruno Monteyne: When it comes to European volume mix, Higgs. When you remember, I think at what at the end of Q1, when we showed you this famous curve, where we were showing you the expectations for the next quarter of commerce, we are very clearly now the trajectory of sequential volume mixed with quarter by quarter. But don't ask me please to give you a guidance on when they re-Europe and when planned this Europe and what of Europe will have what kind of volume mix but what we are very clear we know is the fact that EDP volume mix needs to be and will be a key competitor for the company to turn into positive volume mix just because of its pure size and importance in the portfolio.

When it comes to the European volume mix.

When you remember I think it was at the end of Q1 that we showed you this famous.

Where we are.

Assuming that the expectation for the next quarter color.

Very clearly now the trajectory of sequential volume mix improvement quarter by quarter.

Don't ask me pleased to give you a guidance on when <unk> plant based durable water view left what kind of volume mix, but what we are very clear is the fact that edp, while unique needs to be and will be a key contributor for the company to turn into positive volume mix, just because of its size and importance in.

The portfolio. So this is obviously a critical component and you look at the underlying numbers fundamental numbers, what I was saying in terms of distribution level.

Bruno Monteyne: So this is obviously a critical component. When you look at the underlying numbers, fundamental numbers, what I was saying in terms of distribution levels, market shares, it will also translate into what you make to be a very confident on this side. Thank you. Thank you, Bruno.

Market share is there.

It also translates into volume mix that we are very comfortable with that.

Thank you.

Thank you Brenda and last question from Citibank Jpmorgan.

Celine Pannuti: And last question from Selin Panitil, GP Morgan. I think that's for me. Selin Panitil, GP Morgan, your line, Brock. So good morning. My till, good morning, Yorgan. My two questions. So first I wanted to understand the European context in EDP. So it seems that you are pleased with the really then working. But I just want to understand in an environment where people are a bit more cautious about the macroeconomic in Europe, Germany, including how you see the positioning on some of your high price portfolio doing in that context.

Yeah.

I think Thats from me, saying, thank you to Jpmorgan. Your line dropped so good morning, Matt you've been running yoga.

Mike two questions. So first I wanted to understand the European context.

Celine Pannuti: And if you can talk as well about, you know, like contrasting maybe your value portfolio versus the performance of the high end portfolio and how the promotion activity may help or not for you to fend off market share losses from, or market share with Selin from private label. So that's the first one on the context in Europe. Second one is on them. The overall a top line and bottom line equation. And you are raising your guide on top line today.

In Edp. So it seems that you are pleased with that.

When you then working but I just wanted to understand.

Xyrem and our.

People are more cautious about the macroeconomic ing in Europe, Germany, including and whether and how do you see the positioning on some of your high tide pods for you.

Do you mean in that context, and if you can talk as well about and like.

Trusting Nagy.

Value portfolio the performance of the high end portfolio.

And how the promotion and activity may add on up to ask how you just kind of market share.

Losses from then.

Market share, we shine from than private label. So that's the first one on <unk>.

<unk> second one is on them.

Then overall topline and bottom line accretion.

And you are raising your guidance on top line.

Today, it's still coming a bit higher than expected you said that SAP costs easing.

Celine Pannuti: So coming a bit higher than expected, you said that costs are easing probably as expected if I noted what you said. But how should we think about, you know, that extra top line performance. I think, you know, well, the mix should be quite good because SN has been doing well to the bottom line and the margin delivery for the year. Thank you.

As expected the final take what you said, but how should we think about.

That extra top line performance.

Thank you Nolan with what the mix should be quite good.

And England.

Bottom line the margin delivery for the year. Thank you.

Juergen Esser: Good morning, Selin. Look, you are absolutely right to see that the consumer in the current environment is more intentional and sometimes more careful in spending its money. What we see, how we see that translating is that the consumer is deploying more and more what I would call a smart shopping practice on one side consumer preferring more discount options, club stores in the US. And this is clearly reflected in our gross numbers where we are going fast in those kinds of channels.

Good morning Lynn.

Look.

Yeah.

We arrived.

Consumer in the current environment is more intentional and sometimes we're careful in spending its length.

What we see how we see that translating is the consumer's deploying more and more what I would call a smart shopping practice.

So on one side consumer.

Preferring more discount exchange club stores in the U S.

And this is clearly reflected in our growth numbers, where we are growing fast in those kind of tenants, but interestingly.

Juergen Esser: But interestingly, the consumer is not compromising on activities and lifestyle, with all sub-channels, addressing that so within the broader, away from home universe, but also e-commerce, outperforming, and so it's not by coincidence that in Europe, and by the way, in EDP Europe also, be away from home channels, the fastest growing channels we are in, that obviously also consequence of what we have been doing, because we have been very early refocusing and reallocating our resources on this counter and away from home. Knowing that away from home was for us probably in the past, not so much a priority channel, but I think that has been very clearly identified, and for us it both well, because this is the place where we can position, especially our more premium ranges in EDP, you think about your output in ranges, particularly, or you think about drinkable, you both for positions, but you also think about the premium ranges in Horeka, so it's definitely something we want to push further and we see good opportunities, which also means that we can very well manage the mix, the product mix in our portfolio, between the essential dairy products, for essential daily needs for the consumer and their families, and this is where Danone is playing today, and is playing very successful.

The consumer is not compromising.

On the on activities and lifestyle.

With all substandard addressing that within the broader away from home universe, but also e-commerce outperforming and so.

Not by coincidence that in Europe, and by the way in Edp.

The work from home trend is the fastest growing channel. We added that obviously also a consequence of what we have been doing it because we are in very early refocusing and reallocating our resources on on discounters and away from home.

I can get away from all of those for us probably in the past not so much a priority channel, but I think that has been very clearly identified and.

And for us that bodes well because it is the place where we can position, especially our more premium ranges in EP, you think about our output in ranges, particularly when you think about a drinkable yogurt proposition, but you also think about the premium ranges in.

<unk> is definitely.

Something we want to push resident BBC.

Good opportunities, which also means that we can very well manage the mix the product mix in our portfolio between the essential dairy products for essential.

Daily needs for the consumer and their families and as we have done on display today and it's been very successful.

Juergen Esser: We have been talking about that last quarter of the example of spend, and on the other side, the more premium ranges, with your poor high-profile, but also with optimal, which is the pro-sorming extremely well. When it goes to the guidance, so yes, we are upgrading the guidance for the fully as a result of the good momentum, overall, including on volume mix. How does it translate into the bottom line? And we confirm moderate margin improvements, because we are sticking to what we have now consistently been saying over the year, which is that any good news we would have from inflation or the elements, we are going to reinvest into the business, and this is important as you see, because the moment we are reinvesting on an optimized portfolio is yearly results. And so you can expect us to come with a good, large margin expansion also out of the second semester, but there is also a very significant reinvestment into brands, capabilities, and product superiority. Thank you.

<unk> been talking about that last quarter with the example of spend and on the other side the more premium ranges.

Your core high pool, but also with <unk> extremely extremely well.

When it goes to the guidance. So yes, we are upgrading the guidance for the full year as a result of the good momentum.

Overall, including on volume mix, how does it translate into the bottom line, we confirm moderate margin improvement because we are sticking to what we have now consistently been saying over the year, which is that any good news we would hear from inflation. All the elements, we are going to reinvest into the business and this is important as you see because the most via reinvest.

On an optimized portfolio is yielding results and so you can expect us to come with a good gross margin expansion also out of the second semester, but is also a very significant reinvestment into brands capabilities and product superiority.

Thank you.

Juergen Esser: When I just add one last one, because I think it's very topical, could you share your views on what you think the impact on GLP1 medicine will have on your portfolio, please? Look, look at it. If anything, it will benefit our business. People focusing on weight loss, prefer obviously healthy. They are looking for products with high protein and low fat content. And guess what is exactly what we are proposing, not only on our North American base, but especially there.

One last one quick question very topical could you share your views on what you think the impact on G&P, one mid teens would have on your portfolio.

Yes look it looks like if anything it will benefit our business.

People focusing on weight loss prefer obviously healthy they are looking for products with high protein and low fat content and guess what is exactly what we are proposing not only in north American baseband, especially Dell and as you know this is an area, where we are further developing and innovating in that space in sync with.

Juergen Esser: And as you know, this is an area where we are further developing and innovating exactly that space in sync with our strategic to provide healthy food. There's a relevant science backbone, so we are looking obviously positive into that dynamic monitoring the situation since the beginning. Obviously, it's difficult to predict even how fast it could scale and how it would impact consumption at it. Thank you. Thank you, Sarah.

Our strategy to provide healthy food this is ellen.

<unk> science backbone. So we are looking obviously positive into that dynamic.

Monitoring the situation since the beginning of the obviously difficult to predict given how fast it could scale and how it would impact consumption.

Thank you.

Thank you sit in this was the last question. Thank you everyone for your attention.

Operator: This was the last question. Thank you everyone for your attention. Yes, thank you guys. Thank you for your support. So you see we are leading confidence at the third quarter and going this confidence into the last. And so talk soon, guys. Have a good day. Good day, bye.

So thank you guys. Thank you for your support so youll CVR via leading confident that third quarter and going with confidence into the last and so talk soon guys.

Thank you goodbye.