Q3 2025 Danone SA Earnings Call

Speaker #1: Good day and thank you for standing by . Welcome to the DANONE Third quarter 2025 Sales Conference Call and webcast . At this time , all participants are in a listen only mode .

Speaker #1: After the speakers presentation , there will be a question and answer session . To ask a question during the session , please press star one and one on your telephone .

Speaker #1: You will then hear a non-automated message advising, "Your hand is raised. To withdraw your question, please press star one and one again."

Speaker #1: Please note that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mathilde Rodie, Head of Investor Relations of Danone.

Speaker #1: Please go ahead .

Speaker #2: Good morning everyone . Mathilde Rodie speaking . Thank you for being with us this morning for DANONE 2025 . Q3 sales Call . I'm here with our CFO , Juergen Esser , who will go through some prepared remarks before taking your questions .

Speaker #2: And before we start, I draw your attention to the disclaimer on slide 21 of the presentation related to forward-looking statements and the definition of financial indicators that we will refer to during the presentation.

Speaker #2: And with that, let me hand it over to Juergen.

Speaker #3: Thank you, Mathilde. And good morning. Thank you all for joining our quarterly call. This is a great occasion to share with you our latest sales performance and to discuss the progress on our mid-term ambition.

Speaker #3: So let's begin by looking at our headline results for the quarter , starting with slide number two . As highlighted in our press release this morning , we are announcing a strong set of numbers with like for like sales growth of as much as 4.8% , a growth that is driven mainly by volume mix of plus 3.2% .

Speaker #3: Building on the momentum from the first six months of this year, this represents another quarter of consistent quality growth in what remains a volatile and uncertain environment.

Speaker #3: Our portfolio continues to deliver with resilience . We are increasingly leveraging two important elements . First , a unique portfolio focused on health and well-being , rooted in categories that grow faster than the average of the food and beverage industry .

Speaker #3: And secondly, a quality of execution that is progressively increasing, even if we still have areas of improvement. Let's break down this performance by region on the next slide.

Speaker #3: Slide number three , the strong momentum we see in Q3 reflects broad based growth across the regions . Europe continued its consistent path of step by step improvement with a solid delivery across all categories .

Speaker #3: In fact, Europe has now delivered eight consecutive quarters of positive volume mix, a testament to the effectiveness of the ongoing transformation in North America.

Speaker #3: We saw this quarter a mixed performance with, on one hand, high protein yogurts continuing to outperform in a very dynamic growth space.

Speaker #3: And despite major capacity constraints , while coffee creamers are progressively rebuilding its distribution , we have more work to do to bring plant based break back to sustainable growth .

Speaker #3: The standout also in this Q3 is the China , North Asia and Oceania Zone . The team around Bruno delivered again exceptional growth in this part of the world , with all subregions contributing strongly from China to Japan to Oceania and in the emerging markets of Latin America , as well as Asia , Middle East and Africa .

Speaker #3: We saw strong growth overall, with our dairy and specialized nutrition portfolio being the key drivers. Having discussed the regional picture, let's now turn to our performance by category on slide number four.

Speaker #3: Our like for like sales performance reflects quality growth with a solid contribution from volume mix and positive price . Actually in each of our categories demonstrating the underlying demand for our science based and value added portfolio in EDP , we delivered like for like sales growth of 3.5% with volume mix up plus 1.7 and price of plus 1.8% .

Speaker #3: Our global high protein platform with brands like Oikos and Yopo continues to grow strong double digit with no sign of any slowdown . We are constantly fueling this growth by rolling out what has proven to work , but also by launching next generation innovations into this dynamic space .

Speaker #3: In parallel , we see increasingly strong demand for other functional dairy innovations . For example , kefir or skia in plant based alpro continues to thrive .

Speaker #3: While we know that we have more to do in the U.S. with our silk brands in specialized nutrition, we posted like-for-like sales growth of 8.3%, with volume mix up plus 6.5% and price up plus 1.8%.

Speaker #3: This comes on the back of a strong Q2 and reflects not only the exceptional demand in China, but also in other geographies.

Speaker #3: Our premium platform grew at global level . Again , double digit winning , broad based market shares . Demand for our medical nutrition segment remained also very high across all geographies , with brands such as 40 ML and Neocate achieving again double digit growth in waters .

Speaker #3: Sales were up plus 2.3% , with volume mix up plus 1.3 and price of plus 0.9 . We saw solid execution and delivery across Europe with strong demand for our recently launched Vitamin Water under the brand and continued solid performance of our Avion brand , including in the US .

Speaker #3: At the same moment , we are continuing to post very solid performance for our Myzone brand in China , completing another successful summer season to put those like for like numbers into context , I suggest we review now our sales bridge for the quarter on slide number five .

Speaker #3: In addition to the plus 4.8% like for like growth previously discussed , we experienced an adverse currency impact of -5.1% resulting from the appreciation of the euro against most currencies over the past six months .

Speaker #3: Importantly, though, for the first time in a long time, we report a positive scope effect which contributed to this +0.7% in Q3.

Speaker #3: This is reflecting primarily the recent acquisition of Kate Farms , a first contribution to our compounding ambition . This ambition means to grow our company not only in like for like , but also in Euro terms .

Speaker #3: After an initial period of portfolio pruning and divestments, for Q3, it results in a reported growth of our net sales of plus 0.7%, with sales in absolute terms reaching €6.9 billion.

Speaker #3: Now let's take a closer look at each of our regions and their contribution to the like . For like performance , starting with Europe on slide number six .

Speaker #3: Europe delivered solid like for like sales growth of plus 2.6% in this quarter . Driven by plus 2.1% contribution from volume mix and a positive contribution from price .

Speaker #3: As you can see from the chart on the bottom left, this means a further step up in the performance that Pablo and the European team delivered since the journey started some three years ago.

Speaker #3: In EDP, we are seeing double-digit growth in Yotpo, our high-protein platform. We are also experiencing growth in our newly launched innovations, such as Activia, kefir, and Danone Sekiya.

Speaker #3: This is an encouraging sign for our future growth ambitions, knowing that we still have many regional white spaces for rolling those successful innovations out.

Speaker #3: Our Alpro plant based products , particularly yogurts , continue to win . Share in the market . The brand is now consistently posting quality growth in an overall category that is back on track in specialized nutrition .

Speaker #3: Let me highlight particularly our medical nutrition platform that delivered again a strong performance with $40 million, growing double digits and expanding progressively. Its reach to patients across Europe and in waters.

Speaker #3: We posted solid growth , notably driven by the Evian , Volvic and Badhwar brands . So overall , another strong quarter in Europe , supported by all categories .

Speaker #3: Let me suggest that we move on to North America on slide number seven . In North America we saw like for like growth of plus 1.5% with 0.3 percent volume mix and a plus 1.2% price contribution .

Speaker #3: In EDP . We saw continued strong demand for our high protein range with the oikos brand going from strength to strength . Innovation in this space continues , and in Q3 , we launched oikos Fusion , a high protein product enriched with probiotic fibers .

Speaker #3: Very suitable for those consumers looking to manage their weight or taking GLP-1-like medication. As you know, we are, like all the industry, managing a saturated production capacity for the year of the category, and Q3 has been particularly tense.

Speaker #3: We will benefit over the coming quarters from more capacity coming online, which will release some of the current supply constraints in some other areas of the EDP portfolio.

Speaker #3: The performance is not where we want it to be . We have been progressively recovering distribution in coffee creamers , and this is obviously a journey which takes time as the space we left on the shelf has been taken over by competitors beyond the distribution rebuild , you will leverage the moment to further innovate in this category , addressing the emerging trend of naturalness and clean label .

Speaker #3: The U.S. team is actively working on solutions to bring this business back to where it belongs. And lastly, on EDP, we are progressing with our ambient protein shake exploration.

Speaker #3: We are encouraged by the early results, and as we speak, we are selectively expanding our distribution. We are therefore continuing with this soft launch approach and are awaiting robust data on repeat purchases in order to decide on the level of acceleration and investment allocation for the year 2026.

Speaker #3: Next to EDP , we saw this factory performance in specialized nutrition driven by our medical nutrition platform worth here to mention that outside of the like for like performance , we see a strong double digit growth momentum of the Kate Farms company , which we are currently combining with our existing US medical platform .

Speaker #3: Let's now move on to the CNO zone on slide number eight. Q3 is another outstanding quarter in the China, North Asia, and Oceania region, with like-for-like sales growth of 13.8%, driven entirely by a 15% increase in volume and mix.

Speaker #3: This reflects both strong underlying demand for all categories where we operate, together with a further step up in competitiveness in EDP in Japan. Both Activia and Oikos are continuing their stellar performance, illustrating our strategy in action and bringing added value propositions into one of the largest dairy markets in the world.

Speaker #3: That allows us to premiumize and win market share through functional differentiation in specialized nutrition. The Chinese business was again firing on all cylinders.

Speaker #3: Demand for our infant milk formula and medical portfolio remains very strong in IMF. The category is in a solid, dynamic, growing position, particularly in the online and social media channels.

Speaker #3: We are continuing to win market share thanks to our superior digital business model, as well as thanks to our Aptamil Essence's innovation, launched some two years ago, with further expansion opportunities in front of us beyond China and Japan.

Speaker #3: Let me highlight the strong performance of our specialized nutrition portfolio in Oceania. We are reporting an increasingly meaningful contribution to the zone performance, with growth across the segments.

Speaker #3: Worth mentioning here , especially the great momentum of the Souvenaid brand addressing symptoms of mild memory and cognitive impairments . And finally , in waters , Mason has successfully delivered also the 2025 summer season , expanding its reach with the fastest growing segment of the category , namely the Healthy hydration segment .

Speaker #3: Moving on to Latin America on slide number nine , in Latin America , we delivered like for like sales growth of 4.3% in quarter three with volume mix of -2.3 and price of plus 6.6% .

Speaker #3: We have a solid momentum in EDP where we are winning with oikos , Yopo and the DANONE brand as the market moves increasingly towards value added , dairy products in specialized nutrition , we continue to win .

Speaker #3: Share with Aptamil, which is growing double digits. We are expanding in parallel our medical nutrition reach across our pediatric and adult ranges. In waters, the beverage market remains challenging due to weather and adverse economic conditions, especially in Mexico and the U.S.

Speaker #3: And here, especially in the U.S., from the home segment. And finally, looking at the Africa, Middle East, and Asia zone on slide number ten.

Speaker #3: The Amazon saw a clear acceleration in Q3 with sales growth of 6.8%, with a solid contribution from volume mix at 2.6% and price at 4.2%.

Speaker #3: In EDP, we continue to report strong growth, particularly in Africa, with both the Danone and activewear brands in specialized nutrition.

Speaker #3: The region continues to deliver strong competitive growth , underpinned by our focus on science led innovation and market execution . In particular , we continue to see a strong growth momentum of the Aptamil brand in expansion markets such as Vietnam , India and the Middle East .

Speaker #3: Beyond Aptamil , we are pleased with the successful rollout of our patented iron Biotics engine in regional early life nutrition brand platforms and finally in waters , we are reporting a solid performance , including in Indonesia in a very competitive market environment .

Speaker #3: Let me conclude the regional review, a review which proves the breadth and resilience of our portfolio in delivering on our ambition. Let's move on to slide number 11, recapping our key takeaways and priorities as we look ahead.

Speaker #3: We have delivered over those first nine months of the year strong performance with consistent quality growth led by volume mix. This reflects continued demand for our products across a well-geographical footprint.

Speaker #3: We have several platforms delivering exceptional growth across the different categories, and at the same time, there are some areas that require further progress, which we will translate into future growth opportunities.

Speaker #3: As you did . Certainly expect . We reconfirmed today with confidence our guidance of 3 to 5% . Like for like sales growth and recurring operating income growing faster than sales .

Speaker #3: That's probably a good moment to to stop and hold . Thank you once again for listening . Looking forward to your questions . And with that , Mathilde , back to you .

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Speaker #2: Thank you for listening. So the first question is going to be from Guillaume Delmas, UBS. First question from Guillaume, UBS.

Speaker #4: Thank you very much and good morning . Jurgen and Mathilde , two questions for me , please . So the first one on specialized nutrition in the now region , because that third consecutive quarter of double digit like for like sales growth and accelerating every single quarter .

Speaker #4: So, Juergen, can you maybe help us unpack this performance in the quarter? As in, what kind of category growth are you seeing at the moment?

Speaker #4: What's your market share development and any selling sell out discrepancy ? We should be aware of . And I guess looking ahead , how long do you think you can maintain this kind of double digit run rate ?

Speaker #4: So when would you expect a marked deceleration? Or maybe it's just going to be about a very soft landing because you've got this upcoming new tourist rollout, which could be a key driver of growth going forward for Cnio.

Speaker #4: And then my second question is on North America , EDP , I think the 1.5% like for like reported in Q3 is the weakest quarterly print since the end of 2019 .

Speaker #4: So that's nearly six years ago. Comps are not getting easier in the fourth quarter, so I'm just wondering here if these trends are a negative surprise to you.

Speaker #4: I mean, even worrying to you, particularly from a market share point of view. And are you still confident you can stabilize within this?

Speaker #4: Your coffee creamer business? I think the ambition at the start of the year was to, by the end of 2025, grow coffee creamers in line with category growth.

Speaker #4: Do you still think you are on track to achieve this? Thank you very much.

Speaker #3: Good morning. Thank you for your questions. Obviously, the narrow zone is delivering exceptional growth, and particularly China is again firing on all cylinders, as you say.

Speaker #3: So let me double click on it . Early life nutrition . The category is actually progressing as we expected and as we have been discussing over the last few quarters , we see very moderate segment growth started in stage one .

Speaker #3: Thanks to the birth rates of the year 2024, we're moving progressively into stage two. So, there’s no surprise on that front. It translates to overall very moderate growth of the category.

Speaker #3: And in in that growth of the category , what we are seeing is that there is a shift from offline channels to more online channels to social media channels , which is not a surprise when you look at the overall shopping trends of the Chinese consumer in this category .

Speaker #3: We continue to outperform and win market share . Clearly , the shift to online channels actually allows us to leverage what the team has built over the last ten years , which is a unique digital business model , which is a truly a competitive edge and secondly , and there's absolutely no change in this message , is that the census platform is winning market share across across China .

Speaker #3: The innovation we launched , not some two years ago , has become quite sizable . Platform . And we see further growth , opportunities on on this front and in parallel , as you say , we are preparing the tourists has been soft launched in in Hong Kong and we will bring it to mainland China at the right moment when we see that we have a positioned essences in the right way .

Speaker #3: And that we have a solid print there when it comes to China, medical nutrition. Obviously, different dynamics because there's an underlying strong demand from a category perspective.

Speaker #3: And this spend actually spans all segments, starting from special pediatrics, which posted a stellar performance. Especially our allergy formula under the Neocate brand.

Speaker #3: As we discussed a good one year ago , it has a lot to do with the fact that there's more and more babies , rightly diagnosed , and therefore they are getting the right medical nutrition .

Speaker #3: And we that reflected . But we are seeing also very strong demand on our adult medical nutrition business , benefiting with no surprise from strong demographics .

Speaker #3: So, here we are pushing the distribution of our tube feeding solutions, as we have been discussing. We invested significantly in our medical sales force, and that is starting to pay back.

Speaker #3: And at the same moment, we are building the future of this category with the oral nutrition segment. So looking forward, yes, China has been firing on all cylinders.

Speaker #3: Let's be careful not to extrapolate that for all the coming quarters. However, we have good reasons to believe that China will deliver significantly to our growth in the coming quarters.

Speaker #3: When it comes to North America . Let me step back for a minute . This is an important it's an important question . It's not a question of comms .

Speaker #3: Let me be very clear on this one. When we look at the performance over the last two quarters, we cannot be satisfied, as we missed some important growth opportunities.

Speaker #3: But there are a few reasons—probably three plus one reason—why we are confident that North America will progressively go back to where it belongs.

Speaker #3: First , high protein . They continue to fly . The demand is extremely high . We are quite seriously kept by production capacity .

Speaker #3: Finally , we have new capacity coming online , starting from Q4 , and that will go into 2026 , which will release some of the of the pressure we had and Q3 Q3 was particularly tense on this on this part .

Speaker #3: That will allow us not only to continue pushing high protein yogurts , but also to finally , again activate the rest of the yogurt portfolio where we have been particularly shy because there was no there was no capacity available .

Speaker #3: And you will see Danimals coming with a relaunch in Q4, which is important for us because it's a big brand and the kid segment is very strategic to us on coffee creamers.

Speaker #3: Let's be very clear here . Yes , we have been progressively recovering distribution , but yes , this is also a journey which takes time as the space on the shelf has been occupied by competitors .

Speaker #3: And as you can imagine , we are doubling down on our efforts to get our space back . But what we are also doing , and that's important , is that we are leveraging that moment to bring our product portfolio closer to the emerging trend of clean label and naturalness , which will help us to bring our international Delight brand back to where it has been .

Speaker #3: The third element I would like to mention here, and I mentioned actually also in the prepared remarks, is medical nutrition.

Speaker #3: Now with Kate Farms, for the first time, we have a sizable platform in the U.S. that will help us accelerate in this very important category.

Speaker #3: Moving forward . We want that to become really a powerhouse of growth for for North America . And lastly , there's a leadership factor .

Speaker #3: As you can imagine, Henry Brussel, who is the newly appointed President of Americas as of January 1st, is already bringing a fresh perspective to the different categories.

Speaker #3: It's bringing back both. I would say an obsession with superior consumer experience, but also a renewed sense of urgency. There are so many reasons why we believe that North America will again play a very important role in our growth momentum in the future.

Speaker #3: And I have not even talked about the protein shakes.

Speaker #4: Thank you very much .

Speaker #2: Thank you, Guillaume. So we're going to take the next question from Warren Ackerman, Barclays.

Speaker #5: Yeah . Good morning , Jürgen . It's Warren here from Barclays . Two from me as well . First one is on Europe .

Speaker #5: Jürgen very pleasing performance in Europe . Could you maybe double click a little bit on European EDP ? Where are you on the rollout of some of the more valorized ranges on , on SCA kefir , high protein .

Speaker #5: What kind of weight are they now in Europe ? Are we at a tipping point where it's offsetting the kind of more kind of more , more , you know , general ranges ?

Speaker #5: And then can you maybe sort of outline what kind of growth you're seeing in the out-of-home channels in Europe that we don't see in the scanner data?

Speaker #5: So if you can double click on , on , on European EDP and what you're seeing in terms of market shares and the trends , that's the first one .

Speaker #5: And just on the guidance , you're running , I think at 4.4% organic at the nine month stage , your guidance is 3 to 5 .

Speaker #5: So you're clearly tracking at the top end of that. The guidance range. You haven't today changed your guidance to the top end, but you're tracking at that level.

Speaker #5: Is there anything we should think about for the final quarter of the year ? Is there any kind of sort of conservatism built into the into the guide , any moving parts that you want to call out for the final quarter of the year ?

Speaker #5: Thank you. That would be helpful.

Speaker #3: Good morning . Yeah . As you say , Europe progressing pretty well in its transformation . It's getting better quarter by by quarter .

Speaker #3: I think it's now six consecutive quarters where we see the growth accelerating . And this is including in in EDP and as you as you say , this is thanks to the fact that our more differentiated portfolio becomes more important in terms of weight , percentage of of the portfolio , quarter by quarter , all the innovations are working extremely well .

Speaker #3: High protein . We have been discussing for quite some time Activia back to growth . And Activia , especially on fibers and what we are doing with the kefir progressing very well .

Speaker #3: Skier is also doing very well. However, all of those elements have only been launched in the last two years, so we are still early in that journey.

Speaker #3: But this is exactly where the opportunity is, because when you take products like kefir, we have not yet even rolled them out all across Europe.

Speaker #3: And this is where where we see the opportunity and you will see us going for that in a very in a very speedy manner .

Speaker #3: To your point , we continue to outperform outside of large retail . This is also part of our strategy . This is where we have been underrepresented for for decades .

Speaker #3: But this is also where we have been intentionally innovating for the majority of our innovations . Is drinkable formats . Sweet , suitable for away from home point of sale and on the go consumption .

Speaker #3: And that means that we continue to grow . 2 to 3 times faster in away from home than in large retail . That is what a strategy and a priority moving forward , which will stay top of the table when it comes to the to the guidance .

Speaker #3: Obviously , we are very happy with the first nine months of the of the year . You can imagine that we are not giving quarterly guidance , neither by category , neither by region .

Speaker #3: As you know , there is no particular message actually for for Q4 to to pass here . Overall , what is important for us is that we want to demonstrate that our portfolio focused on health is a superior portfolio and that this is also translating into a faster growth vis a vis the industry .

Speaker #3: We feel good with our 3% to 5% guidance for the year 2025, but also beyond, and we are now consistently delivering in that corridor.

Speaker #3: And , you know , in a way , while our ambition is to grow sustainably as fast as possible , there's always something in business which doesn't go well .

Speaker #3: And we have had two softer quarters in North America. This is why we feel good about this guidance.

Speaker #5: Thank you .

Speaker #2: Thank you. So the next question from Telco HSBC.

Speaker #6: Hi . Thanks for taking the questions . So just a couple of things from me . So the first one is if you could talk a bit about Latin America , we've had some quite mixed things from other companies in the region .

Speaker #6: So we could talk about how you're seeing the conditions in the various markets . You compete . And the second one is could you talk a little bit more about the rollout of the high protein ?

Speaker #6: So why also confident that the category is going to carry on these very high rates , where you think the big the next sort of big rollout opportunities are and perhaps a bit more detail on the kind of the scale of the capacity expansions you've got coming on in the coming quarters .

Speaker #6: Thanks .

Speaker #3: Yeah. Good morning, Jeremy. In Latin America, we see what everybody is seeing, especially in Mexico, where consumer sentiment is pretty muted.

Speaker #3: That's one of the drivers . Why our waters performance in this year has not been satisfactory beyond the weather conditions , which have been quite awful during all the all the seasons .

Speaker #3: Actually , we don't take that as as an excuse . We we focus on those elements where we have value added propositions and where we can grow .

Speaker #3: And you saw that quite nicely in Q3 , which is particularly about specialized nutrition , which is now growing at consistently at a very good speed , particularly in Brazil .

Speaker #3: But it spans all across the region to , to Argentina , actually . And this is on both early life nutrition and medical nutrition on both categories , but also on dairy , which is doing well , and dairy is doing well across the region thanks to iQOS and and the Greek yogurt and high protein yogurts , which are showing the same dynamic as everywhere else in the world .

Speaker #3: So thanks to our other core brands , including the Danone brand , which is doing which is doing very well . So overall , I would say satisfactory performance and let me use that moment to to say that when you look at our specialized , the nutrition business across emerging markets and I put it together , Latin America , plus our Amazon , you see that this is a €700 million platform as large as China , growing at high single digit .

Speaker #3: So, this is becoming more and more important for us. A key growth engine moving forward, especially with Aptamil growing very, very strongly across the board, but also in medical nutrition, which we are building.

Speaker #3: The second element , and to your second question on on high protein yogurt , we see we see still a massive trend from a consumer perspective on health and well-being .

Speaker #3: Yogurt actually is a very powerful , efficient and convenient source of proteins and other goodies . And this is better and better understood .

Speaker #3: The consumption of yogurt is different region by region , but when you take the US , the US per capita consumption is one third of the consumption of Europe , which gives you an idea of the of the size of the opportunity in front of us .

Speaker #3: And the protein trend continues. Clearly, there has been a recent study published in the U.S. stating that 71% of American consumers want to add more quality proteins to their diet.

Speaker #3: So, there are many reasons to believe that this growth continues on our side. We are actually innovating in that space so that we go from quantity of protein to quality of protein and other ingredients.

Speaker #3: We launched what we call oikos Fusion , which is a patented blend of whey protein , amino acids and prebiotic fibers , which help to build or maintain muscles during a weight management journey so it becomes more and more functional more and more science based .

Speaker #3: And I think that's that will help to keep the momentum of the of the category moving forward . And then this capacity coming online for us , especially in the US , it will also release some of the pressures we have seen , particularly in Q3 .

Speaker #2: Thank you, Jeremy. Next question from Celine Pannuti, JP Morgan.

Speaker #7: Good morning Jürgen and Mathilde . So I would like to come back first on the US . If you could , a bit help to understand some of the moving parts .

Speaker #7: So , Jurgen , you said that comp is not an issue and you have a tougher competition in the fourth quarter , but at the same time you're talking about this capacity coming online .

Speaker #7: Are we therefore expecting to see a sequential improvement in volume mix in Noram ? And if you could , as well try to , you know , go a bit deeper in understanding , you know , the sequence of actions and potential improvement in coffee creamers as we look into the next quarters and , you know as well , give us a bit more details on plant based , because it seems that it has been several times you've tried to prop up that performance and has not yet happened .

Speaker #7: And maybe lastly on that, you briefly mentioned the Oikos High Protein. I know you were launching it in Costco. Can you give us a bit more details on that launch?

Speaker #7: And its potential contribution going forward ? My second question will be so shorter . It's on the overall guidance . You mentioned the top line , but if I think about the profit growth and the fact that specialized nutrition is growing much faster this year , and obviously you're more category from a gross margin and a bit margin standpoint , can we think about how you how do you think about potential uplift to gross margin between putting that to the bottom line and reinvestment , and if so , if there are more reinvestment , where about are you putting this in the second half of the year ?

Speaker #7: Thank you .

Speaker #3: Yes . Good morning . Good morning . Look on North America . I think I probably said it . I said almost all two softer quarters , but there's nothing structural here .

Speaker #3: We are pretty confident in the ability of the North American business to again deliver a very solid contribution to the growth of our company.

Speaker #3: And this is because we we we are not dependent on one single growth engine , high protein yogurts . We will get a release on the constraints , which were really tense in Q3 as capacity comes online in the course of of Q4 .

Speaker #3: That will definitely help in the category , which continues to to fly . And this is releasing , as I said , not only the constraint on high protein , but also on the rest of the yogurts , coffee creamers .

Speaker #3: We are we are fighting back our products on the shelf . That's the journey . As I said , and actually gives us the opportunity to to innovate at the same moment , to make our products more on trend of naturalness and clean label .

Speaker #3: And I think that's an important one , actually , to get international delight back to where it belongs . We have been winning share and let's not forget that for two consecutive years on coffee creamers , 2025 is now more challenged year because of , let's say , the supply chain issues we had at the beginning of the year .

Speaker #3: But structurally , we believe that this brand is a very powerful brand in a continuously growing category . Plant based , I think this is actually coming now to North America .

Speaker #3: Will bring a lot of the goods , best practices . They have been executing on Alpro in Europe with him . That will that will help .

Speaker #3: And you will see that in the in the not so far future . Translating into the way we are relaunching a silk in the US .

Speaker #3: So, we continue to be optimistic that this will play a role in our growth trajectory in North America on both sides of milk.

Speaker #3: But also on plant based yogurts , something we have not been talking about so much over the last one year . And you know , that plant based yogurts play already a very sizable role in Europe .

Speaker #3: Not yet in the US . There's a wide space for us . And finally , on protein shakes , actually , protein shakes , we continue to receive very positive feedback from from consumers .

Speaker #3: We are still not having robust repurchase data. That takes some time, as usual, but we are not standing still and just waiting.

Speaker #3: We have decided to selectively expand to retailers in in the US to build more awareness , and then once we have data , sufficient data , we are going to decide on the level of acceleration for 2026 .

Speaker #3: And finally, Kate Farms is not to be underestimated. I believe it is an amazing business. The traction we are getting on the ground is amazing.

Speaker #3: And finally, we have a $500 million platform of medical infusion in the U.S., something we never had before, which we believe can also build and get us a sizable contribution.

Speaker #3: There . So overall , I would say many reasons to be confident in the in the growth prospects of this , of this region when it comes to the guidance .

Speaker #3: Look , I think top line is very clear . Bottom line , we are we are sticking with what we always said for us , what is important that the quality growth translates into operating leverage so that we can do both , expanding our margins progressively and reinvesting into our business .

Speaker #3: And I think this year, 2025, demonstrates again that the portfolio routed into science is a superior portfolio, growing faster than the industry.

Speaker #3: So you will see us doubling down on science , on brand investments . You saw probably that two weeks ago . We we opened a research center in Saclay , particularly on gut health , particularly on one one biome , in order to make sure that we stay pioneer in science for gut health for the years to come .

Speaker #3: And so we will progressively increase our margins at the right speed. And any upsides, and we have been saying that I think consistently, any upside which goes beyond, we will invest back into the business in order to solidify our growth momentum for the years to come.

Speaker #7: Juergen Esser: I just wanted to follow up on the U.S. answer you gave. I mean, how much visibility do you have on the short term?

Speaker #7: I mean , clearly you made the point about the potential in the coming quarters . Just because I know that Q4 is a tougher comp , is this something that we should think about as we think the final quarter in that region , or all the positive you mentioned , including the capacity , means that your volume will remain positive ?

Speaker #3: Yeah, yeah, I think there are two elements to say again. I now know a particular message to pass on comps. Neither for Q4, and on the other side, we are not guiding by quarter or by region.

Speaker #3: So, we will probably pack it down.

Speaker #7: Thank you .

Speaker #2: Thank you, Celine. The next question is from John Cox, Kepler.

Speaker #1: Yeah .

Speaker #8: Good morning, guys. It's John from Kepler here. I have a couple of questions for you. I'm just really following up a little bit on that North America; you call out that the plant-based segment has been responsible for this slowdown.

Speaker #8: But plant based is a relatively small part of the overall pie . Just wonder if you could say , well , you know , this overall slowdown half is maybe the plant based and half is caused by , you know , the cream is still coming back less capacity and protein .

Speaker #8: Just to give us a bit of an idea , because otherwise you'd think , well , the the plant based has just fallen off a cliff because it's a relatively small , smaller part of the business compared to the creamers .

Speaker #8: And the protein . And all of those type of things . Secondly , just on Europe , and obviously that's a different story as things get better , can you just give us a bit of a rough idea on the split in the European yogurt market , particularly with regards to your own portfolio ?

Speaker #8: Because I think in North America , protein is over half of yogurt , but in in Europe it's probably , you know , a lot smaller just to give us a bit of an idea of , you know , when can we see or expect this ongoing acceleration , you know , it seems to be more driven by mix .

Speaker #8: You know , where are you as part of that journey in towards the sort of value added and maybe just a follow up question from Warren's actually on the guidance for the year .

Speaker #8: You seem to be saying , you know , North America , you've got the capacity coming on in protein . You're confident in , you know , some of that plant based improving ambient protein , doing better in North America , in Europe , things moving ahead .

Speaker #8: And obviously a lot of momentum in China. You know, why should we assume there will be a slowdown from Q3 in Q4?

Speaker #8: Thank you .

Speaker #3: Yeah . Good morning . Good morning John . First question . You're absolutely right . Plant based in a way when you look at the size within the North American portfolio , is is not sizable enough in order to explain meaningful acceleration or meaningful acceleration .

Speaker #3: And this is not the message we have passed . There's two elements which are important for North America . And the first one is really that capacity constraints have been heavy in Q3 on yogurt , which forced us to make important choices that will be getting better over the coming quarters , starting in the course of Q4 .

Speaker #3: And that that will definitely help for the quarters to come in North America . And on the other side , we are fighting back on coffee creamers .

Speaker #3: As we said , to get back the the product on the shelf . And this is really the two , I would say key priorities for North America for the quarters to to come for Europe .

Speaker #3: We are, as you say, very happy with the EDP. The portfolio setup is very different for dairy in the U.S. versus Europe.

Speaker #3: You say it in the US , half of the portfolio is is Greek yogurt . And most of that is high protein . It's still a minor part in in Europe .

Speaker #3: But building very , very fast because it's growing at a very fast speed , high protein Greek skiers , it's getting more space on the shelf .

Speaker #3: Retailers are willing to open more space . The 20 year 2026 and the negotiations to come will be a great opportunity to also negotiate more space for this high growth segments .

Speaker #3: And so it will get more and more weight . And so in that sense , you are right . It's a quite I would say , fairly balanced contribution from both volume .

Speaker #3: On one side , because we have more and more consumers discovering and rediscovering the yogurt and mix because we are going to more premium value added value added propositions .

Speaker #3: And then on Q4 , you know , there are some things in Q4 which will go better and some things in Q4 which may not go that well , I mean , China now , to quarters firing on all cylinders , which is really exceptional .

Speaker #3: And on some other elements , we have things where we can see acceleration in business is never a linear journey . And so this is why we don't give any kind of guidance for Q4 , neither for other quarters .

Speaker #8: I want to just to follow up on the creamers . Are they when does the comp get easier , because you've now had , what , three quarters of the incident ?

Speaker #8: I think it was you who were removed from some shelves, and maybe there was a capacity problem as well. I guess that will roll off in Q1 or Q2 next year.

Speaker #3: I , I recall it well , I think it was on the back end of Q1 that we , we were having some supply issues .

Speaker #3: So, that's probably the moment it will roll over.

Speaker #8: Okay . Great . Thank you .

Speaker #2: Thank you, John. The next question is from Charlie Hicks, Redburn.

Speaker #9: Hey Juergen Esser . You both well , sorry , it's another one on coffee creamers in the US . Please . Are you able to quantify roughly how much shelf space you've lost and what the ambition is to get back to ?

Speaker #9: Because I think you won quite a lot of shelf space because of the main competitor had issues. So just whether you think you can actually get back to what it was previously and then just a bigger picture on creamers. Coffee prices in the U.S. are soaring at the moment.

Speaker #9: It could pressure coffee and away from home channel . Do you think creamers could be a beneficiary of high coffee prices in the at home channel ?

Speaker #9: Or do you think they're more of a discretionary item that could see pressure, along with the whole coffee category? And then my second question is on water, please.

Speaker #9: I just wonder if you could speak a bit more about my zone, which slowed a little bit quarter on quarter, but is still very solid.

Speaker #9: What are your plans there to keep the momentum going? And could you also just touch a bit on Indonesia and Aqua, and what you're seeing in that market, please.

Speaker #9: Thank you .

Speaker #3: Yeah. Good morning, Charlie. Let me start from your second question on what I would say is solid print for the water category in Q3.

Speaker #3: Europe is doing well across many brands, including Avion in China. Myzone has completed another successful season. When you look at the numbers in terms of net sales, we are growing.

Speaker #3: I think 5.6% in that Q3 what it is hiding is that the underlying volume growth is high , single digit . Again , we are investing into distribution .

Speaker #3: We're investing into getting more space with distributors and point of sale in order to prepare already for 2026 season in a in an overall beverage category , which is growing at a at a low single digit pace , we see that healthy beverages are outperforming .

Speaker #3: And this is exactly where Myzone is positioned . And this is where we see that we have the opportunity . And this is why we are pushing hard on on distribution here .

Speaker #3: So I would say that that's on track. Indonesia also had a better quarter. You know that Q2 was pretty muted. We're not happy with the weather there.

Speaker #3: Q3 definitely was a bit back to normal in that sense. It's a very competitive market all across, I would say, in food and beverages.

Speaker #3: We have a very strong brand with Aqua Leader in the market, a local brand, and we are investing to ensure that we stay ahead of the competition there.

Speaker #3: But it's a very competitive space when it comes to coffee creamers . You know , in a way , what's happening there is that we had our supply chain issues in Q1 shares and distribution was was falling down quite significantly .

Speaker #3: You can see that from data . Market shares have stabilized in Q2 . And since then have been recovering as distribution has . That's a journey again , because it's door by store to get to get it back .

Speaker #3: Overall , you know , this is a space which in a way continues to grow because people prepare more and more coffee at home , because that's the more common economic standpoint , more affordable way to have your coffee experience .

Speaker #3: And the category is benefiting from it, as people are looking for more healthy propositions. It's important that we, with our international offer, provide the right product.

Speaker #3: And this is why I was saying you can expect us to innovate and renovate towards naturalness and clean label in order to play a leading role in this , in this category , which continues to show a solid , solid growth momentum .

Speaker #9: Thank you very much .

Speaker #2: Thank you, Charlie. Next question from Tom Sykes, Deutsche Bank.

Speaker #10: Yeah . Morning . Thank you . Morning , again . Just on your pricing , when you look at your country category average , obviously group pricing and the pricing by category , where would you say is the biggest difference for yourselves versus competition ?

Speaker #10: I think you were kind of asked it earlier where you where were you investing the efficiency gains the most . And would you be able to offer kind of an aggregate the degree to which your below market pricing at all , please ?

Speaker #10: Obviously , driven by your efficiency gains and then just on the high protein in North America , could you maybe give a view on how much of the consumption is is first time consumption and how much is repeat users ?

Speaker #10: What occasions are growing most quickly? And when you say you're now focused on quality, that sounds a bit like you're trying to get existing users to trade up.

Speaker #10: That doesn't sound like volume. So, just wondering, is that a pivot a bit in the strategy? And is it high protein at all?

Speaker #10: Please .

Speaker #3: Yeah . Well good morning . Good morning Tom . Look you saw that pricing has been played a minor role in our growth dynamic already for many quarters .

Speaker #3: And that's our strategy actually we are obsessed I can say about volume mix growth . And for us pricing is something we do when we need to do it for the for the differential between inflation and internal productivity , we have been discussing at a few occasions that we are delivering productivity on our cost of goods sold ahead of the industry and the operations teams are doing a fantastic job here , which is limiting the necessity to take pricing .

Speaker #3: Now , the way we take price or the way we invest into price is , is very strategic . On one side , it's consumer driven .

Speaker #3: So, we price where there is high demand on high-protein yogurts, for example, especially with the price of protein rising over the last 12 months.

Speaker #3: And on the other side , we are investing into price where it makes sense . I was discussing earlier about , for example , Myzone in China , but there's also other categories in other regions where we intentionally invest into price , not to lower the price on the shelf , because that's not our game .

Speaker #3: But in order to win distribution points for our products, and this is probably what you will also see moving forward into the year 2026.

Speaker #3: North America and the demand on protein . There is more and more consumers consuming more often our high protein yoghurts . And this is , I would say , an encouraging sign and trend , which means there's plenty of opportunity in front of us .

Speaker #3: And as I was saying, in Europe, the U.S. consumption of yogurt is only one third of that in Europe. So there's a lot of headroom.

Speaker #3: Having said that , people understand better and better the difference between the the the difference between proteins , the source of the protein , but also how to absorb the protein in the best way .

Speaker #3: And that means you need to have certain prebiotics and probiotics consumed at the same moment. So we are going from quantity of protein to real benefit.

Speaker #3: And this is why we have been launching Oikos Fusion, which is exactly enriched with these additional ingredients to make sure that you get the best benefit for your body.

Speaker #3: And well-being. So it means that we are looking, we are expecting further volume growth, but we see also mixed opportunity by differentiating versus what competition is having in this space.

Speaker #10: Okay . Thank you .

Speaker #2: Thank you Tom . Next question from David Roux Morgan Stanley . And I think it's going to be the last question . David , who ?

Speaker #11: Morning team. Sorry about that. I'd like to just go back to infant milk formula in CnA for a moment. I've got a couple of questions there.

Speaker #11: My first question is, can you give us a sense of what the likes for China infant milk formula were or how that compares to the 17% growth for specialized nutrition?

Speaker #11: And now and then, just building on from this, you spoke about market growth across the stages earlier, but perhaps you can quantify Dannon's growth across the infant milk stages.

Speaker #11: Once again , perhaps relative to the 17% for for SN in the in the region . Thank you .

Speaker #3: Yeah . Good morning David . Look very good performance not only in Q3 on early life nutrition in in China . The team has really built over those last years and particularly those last two years , something where we have a true competitive edge .

Speaker #3: And I was talking about the two areas where I think we are ahead of competition . One is our truly digital business model and the other one is on the platform , which is standing out at shelf , because here , again , it's not ingredient LED , but benefit LED .

Speaker #3: This is helping us to win share quarter by quarter over many quarters, and we still see headroom—further headroom to grow our market shares with new tourists.

Speaker #3: The innovation which we only soft launched in Hong Kong is still to come to mainland China. So, I would say I am very confident.

Speaker #3: And our ability to win in that category in China, when it comes to the category itself, what we are seeing is that the category has been overall stabilizing in 2020.

Speaker #3: At the back end of 2020 , four , has been growing into into a growth momentum in stage one , first , thanks to the birth rates , stage one is from a weight perspective a bit smaller than stage two and stage three , which is normal because in stage one you have still mothers breastfeeding and then moving progressively into mixed feeding .

Speaker #3: Now, stage two is in growth, and then it will go to the grown-up mix later on. So it's a progressive evolution of the growth trends through the different stages.

Speaker #3: Overall , what we see today is a category which is in moderate growth and obviously not easy to predict what the years to come will bring .

Speaker #3: It will depend a lot on on the birth rates moving forward . You know that the government is trying to give many incentives to to increase birth rates , and we will see how effective that that will be .

Speaker #3: What we do is we focus on what we control . And this is our initiatives . And growing our market shares in this very attractive category .

Speaker #11: Thank you very much . And just perhaps a quick follow up there , please . Can you remind me of the non revenue exposure to the infant milk stages in China ?

Speaker #11: Thank you .

Speaker #3: Yeah . As I was saying , overall we are pretty much in sync with what the category is having . So stage one is the smaller part of of this category .

Speaker #3: So stage two and what comes after has a bit more weight in the in the portfolio . So in that sense it's it's beneficial that that the growth moves .

Speaker #3: Now, on to later stages.

Speaker #11: Thanks .

Speaker #2: Thank you very much for that. That was the last question. Thank you for your time this morning.

Speaker #3: Thank you . Thank you to all of you . Thank you for listening this morning . Great results for for Q3 . And we look forward to engage with you over the coming weeks .

Speaker #3: Have a great day .

Speaker #1: This concludes today's conference call. Thank you all for participating. You may now disconnect your line. Thank you, and have a good rest of your day.

Speaker #2: Good morning everyone . Mathilde Rodie speaking . Thank you for being with us this morning for DANONE 2025 . Q3 sales call . I'm here with our CFO , Juergen Esser , who will go through some prepared remarks before taking your questions .

Speaker #2: And before we start, I draw your attention to the disclaimer on slide 21 of the presentation related to forward-looking statements and the definition of financial indicators that we will refer to during the presentation.

Speaker #2: And with that, let me hand it over to Juergen.

Speaker #3: Thank you, Mathilde Rodie, and good morning. Thank you all for joining our Q3 call. It's a great occasion to share with you our latest sales performance and to discuss the progress on our mid-term ambitions.

Speaker #3: Let's begin by looking at our headline results for the quarter , starting with slide number two . As highlighted in our press release , this morning , we are announcing a strong set of numbers with like for like sales growth of as much as 4.8% , a growth that is driven mainly by volume mix of plus 3.2% .

Speaker #3: Building on the momentum from the first six months of this year , this represents another quarter of consistent quality growth in what remains a volatile and uncertain environment .

Speaker #3: Our portfolio continues to deliver with resilience. We are increasingly leveraging two important elements. First, a unique portfolio focused on health and well-being rooted in categories that grow faster than the average of the food and beverage industry.

Speaker #3: And secondly, a quality of execution that is progressively increasing, even if we still have areas for improvement. Let's break down this performance by region on the next slide.

Speaker #3: Slide number three , the strong momentum we see in Q3 reflects broad based growth across the regions . Europe continued its consistent path of step by step improvement with a solid delivery across all categories .

Speaker #3: In fact, Europe has now delivered eight consecutive quarters of positive volume mix, a testament to the effectiveness of the ongoing transformation in North America.

Speaker #3: We saw this quarter a mixed performance with , on one hand , high protein yogurts continuing to outperform in a very dynamic growth space .

Speaker #3: And despite major capacity constraints, while coffee creamers are progressively rebuilding their distribution, we have more work to do to bring plant-based back to sustainable growth.

Speaker #3: The standout also in this Q3 is the China , North Asia and Oceania zone . The team around Bruno delivered again exceptional growth in this part of the world , with all subregions contributing strongly from China to Japan to Oceania and in the emerging markets of Latin America , as well as Asia , Middle East and Africa .

Speaker #3: We saw strong growth overall, with our dairy and specialized nutrition portfolio being the key drivers. Having discussed the regional picture, let's now turn to our performance by category on slide number four.

Speaker #3: Our like for like sales performance reflects quality growth with a solid contribution from volume mix and positive price . Actually in each of our categories demonstrating the underlying demand for our science based and value added portfolio in EDP , we delivered like for like sales growth of 3.5% with volume mix up plus 1.7 and price of plus 1.8% .

Speaker #3: Our global high protein platform with brands like Oikos and Yotpo continues to grow strong . Double digit with no sign of any slowdown .

Speaker #3: We are constantly fueling this growth by rolling out what has proven to work, but also by launching next-generation innovations into this dynamic space.

Speaker #3: In parallel , we see increasingly strong demand for other functional dairy innovations . For example , kefir or skia in plant based alpro continues to thrive .

Speaker #3: Whilst we know that we have more to do in the US with our silk brands in specialized nutrition , we posted like for like sales growth of 8.3% with volume mix up plus 6.5% and price of plus 1.8% .

Speaker #3: This comes on the back of a strong Q2 and reflects not only the exceptional demand in China , but also in other geographies .

Speaker #3: Our premium Aptamil platform grew at global level again , double digit winning , broad based market shares . Demand for our medical nutrition segment remained also very high across all geographies , with brands such as 40 ML and Neocate achieving again double digit growth in waters .

Speaker #3: Sales were up 2.3% , with volume mix up plus 1.3 and price of plus 0.9 . We saw solid execution and delivery across Europe with strong demand for our recently launched Vitamin Water under the brand , and continued solid performance of our Avon brand , including in the US .

Speaker #3: At the same moment , we are continuing to post very solid performance for our Myzone brand in China , completing another successful summer season to put those like for like numbers into context , I suggest we review now our sales pitch for the quarter on slide number five .

Speaker #3: In addition to the plus 4.8% like-for-like growth previously discussed, we experienced an adverse currency impact of minus 5.1% resulting from the appreciation of the euro against most currencies over the past six months.

Speaker #3: Importantly, though, for the first time in a long time, we reported a positive scope effect, which contributed to this plus 0.7% in Q3.

Speaker #3: This is reflecting primarily the recent acquisition of Kate Farms , a first contribution to our compounding ambition . This ambition means to grow our company not only in like for like , but also in Euro terms .

Speaker #3: After an initial period of portfolio pruning and divestments for Q3, it resulted in a reported growth of our net sales of plus 0.7%, with sales in absolute terms reaching €6.9 billion.

Speaker #3: Now , let's take a closer look at each of our regions and their contribution to the like . For like performance , starting with Europe on slide number six .

Speaker #3: Europe delivered solid like-for-like sales growth of +2.6% in this quarter, driven by a +2.1% contribution from volume mix and a positive contribution from price.

Speaker #3: As you can see from the chart on the bottom left, this means a further step up in the performance that Pablo and the European team delivered since the journey started.

Speaker #3: Some three years ago in EDP , we are seeing double digit growth in Yotpo . Our high protein platform , but also in our newly launched innovations such as Activia , Kefir and D'Annunzio .

Speaker #3: This is an encouraging sign for our future growth ambitions, knowing that we still have many regional-wide spaces for rolling those successful innovations out.

Speaker #3: Our Alpro plant based products , particularly yogurts , continue to win . Share in the market . The brand is now consistently posting quality growth in an overall category that is back on track in specialized nutrition .

Speaker #3: Let me highlight particularly our medical nutrition platform that delivered, again, a strong performance with 40 million growing double digits, expanding progressively its reach to patients across Europe and in waters.

Speaker #3: We posted solid growth, notably driven by the Evian, Volvic, and Vedova brands. So overall, it was another strong quarter in Europe, supported by all categories.

Speaker #3: Let me suggest that we move on to North America on slide number seven . In North America , we saw like for like growth of plus 1.5% with 0.3% volume mix and a plus 1.2% price contribution .

Speaker #3: In EDP . We saw continued strong demand for our high protein range with the oikos brand going from strength to strength . Innovation in this space continues , and in Q3 we launched oikos Fusion , a high protein product enriched with probiotic fibers .

Speaker #3: Very suitable for those consumers looking to manage their weight or taking GLP-1-like medication. As you know, we are, like all in the industry, managing accelerated production capacity for the yogurt category, and Q3 has been particularly tense.

Speaker #3: We will benefit over the coming quarters from more capacity coming online, which will release some of the current supply constraints in some other areas of the EDP portfolio.

Speaker #3: The performance is not where we want it to be. We have been progressively recovering distribution in coffee creamers, and this is obviously a journey that takes time, as the space we left on the shelf has been taken over by competitors. Beyond the distribution rebuild, we will leverage the moment to further innovate in this category.

Speaker #3: Addressing the emerging trend of naturalness and clean label, the U.S. team is actively working on solutions to bring this business back to where it belongs.

Speaker #3: And lastly, on EDP, we are progressing with our ambient protein shake exploration. We are encouraged by the early results, and as we speak, we are selectively expanding its distribution.

Speaker #3: We will continue with this soft launch approach and are awaiting robust data on repeat purchases in order to decide on the level of acceleration and investment allocation for 2026.

Speaker #3: Next to EDP , we saw satisfactory performance in specialized nutrition driven by our medical nutrition platform worth here to mention that outside of the like for like performance , we see a strong double digit growth momentum of the Kate Farms company , which we are currently combining with our existing US medical platform .

Speaker #3: Let's now move on to the . CNO zone on slide number eight . Q3 is another outstanding quarter in the China , North Asia and Oceania region with like for like sales growth of 13.8% , driven entirely by plus 15% volume and mix .

Speaker #3: This reflects both strong underlying demand for all categories where we operate, together with a further step up in competitiveness in EDP. In Japan, both Activia and Oikos are continuing their stellar performance, illustrating our strategy in action and bringing added value propositions into one of the largest dairy markets in the world.

Speaker #3: That allows us to premium size and win market share through functional differentiation in specialized nutrition. The Chinese business was again firing on all cylinders.

Speaker #3: Demand for our infant milk formula and medical portfolio remains very strong in IMF . The category is in a solid , dynamic , growing , particularly in the online and social media channels .

Speaker #3: We are continuing to win market share thanks to our superior digital business model, as well as thanks to our Aptamil licensees. Innovation.

Speaker #3: Launched some two years ago, with further expansion opportunities in front of us beyond China and Japan. Let me highlight the strong performance of our specialized nutrition portfolio in Oceania.

Speaker #3: We are reporting an increasingly meaningful contribution to the zone's performance, with growth across the segments. It's worth mentioning here, especially the great momentum of the Souvenaid brand addressing symptoms of mild memory and cognitive impairments.

Speaker #3: And finally , in waters , Myzone has successfully delivered also the 2025 summer season , expanding its reach with the fastest growing segment of the category , namely the healthy hydration segment .

Speaker #3: Moving on to Latin America on slide number nine , in Latin America , we delivered like for like sales growth of 4.3% in quarter three with volume mix of -2.3 and price of plus 6.6% with a solid momentum in EDP , where we are winning with oikos , Yopo and the Dannon brand .

Speaker #3: As the market moves increasingly towards value added , dairy products in specialized nutrition , we continue to win share with Aptamil , which is growing double digit .

Speaker #3: We are expanding in parallel our medical nutrition reach across our pediatric and adult ranges and in waters . The beverage market remains challenging due to weather and adverse economic conditions , especially in Mexico and here , especially in the away from home segment and finally , looking at the Africa middle East and Asia zone on slide number ten , the zone saw a clear acceleration in Q3 with sales growth of plus 6.8% , with a solid contribution from volume mix at plus 2.6 and price at plus 4.2% .

Speaker #3: In EDP, we continue to report strong growth, particularly in Africa, with both the Danone and activewear brands in specialized nutrition.

Speaker #3: The region continues to deliver strong competitive growth , underpinned by our focus on science led innovation and market execution . In particular , we continue to see strong growth momentum of the brand in expansion markets such as Vietnam , India and the Middle East .

Speaker #3: Beyond Aptamil, we are pleased with this successful rollout of our patented iron Biotics engine in regional early life nutrition brand platforms. Finally, in waters, we are reporting a solid performance, including in Indonesia, in a very competitive market environment.

Speaker #3: Let me conclude the regional review, a review which proves the breadth and resilience of our portfolio in delivering on our ambition.

Speaker #3: Let's move on to slide number 11, recapping our key takeaways and priorities as we look ahead. We have delivered, over those first nine months of the year, strong performance with consistent quality growth led by volume mix.

Speaker #3: This reflects continued demand for our products across a well balanced geographical footprint . We have several platforms delivering exceptional growth across the different categories and at the same time they are some areas that require further progress , which which we translate into future growth opportunities .

Speaker #3: As you did . Certainly expect . We reconfirmed today with confidence our guidance of 3 to 5% . Like for like sales growth and recurring operating income growing faster than sales .

Speaker #3: That's probably a good moment to to stop and hold . Thank you once again for listening . Looking forward to your questions . And with that , Mathilde , back to you .

Speaker #1: As a reminder, to ask a question, please press *11 on your telephone and wait for your name to be announced.

Speaker #1: To withdraw your question, please press star, one, and one again. Once again, please press star, one, one on your telephone and wait for your name to be announced.

Speaker #1: To withdraw your question, please press star one. And once again, thank you.

Speaker #2: Thank you for listening. So, the first question is going to be from Guillaume Delmas, UBS. The first question from Guillaume, UBS.

Speaker #4: Thank you very much and good morning . Jurgen . And Mathilde . Two questions for me , please . So the first one on specialized nutrition in the now region , because that third consecutive quarter of double digit like for like sales growth and accelerating every single quarter .

Speaker #4: So, Juergen, can you maybe help us unpack this performance in the quarter? Specifically, what kind of category growth are you seeing at the moment?

Speaker #4: What's your market share development and any selling sell out discrepancy ? We should be aware of . And I guess looking ahead , how long do you think you can maintain this kind of double digit run rate ?

Speaker #4: So, when would you expect a marked deceleration? Or maybe it's just going to be about a very soft landing, because you've got this upcoming new tourist rollout, which could be a key driver of growth going forward for now.

Speaker #4: And then my second question is on North America , EDP , I think the 1.5% like for like reported in Q3 is the weakest quarterly print since the end of 2019 .

Speaker #4: So that's nearly six years ago. Comps are not getting easier in the fourth quarter. So, just wondering here if these trends are a negative surprise to you.

Speaker #4: I mean, even worrying to you, particularly from a market share point of view. And are you still confident you can stabilize within this?

Speaker #4: Your coffee business? I think the ambition at the start of the year was to, by the end of 2025, grow coffee creamers in line with category growth.

Speaker #4: Do you still think you are on track to achieve this? Thank you very much.

Speaker #3: Good morning Guillaume , thank you for your questions . Obviously , the now zone is delivering exceptional growth and particularly China is again firing on all cylinders , as you say .

Speaker #3: So, let me double click on it. Early life nutrition. The category is actually progressing as we expected, and as we have been discussing over the last few quarters, we see very moderate segment growth starting in Stage One thanks to the birth rates of the year 2024.

Speaker #3: Moving progressively in Stage Two, so no surprise on that front. It translates to overall very moderate growth of the category.

Speaker #3: And in in that growth of the category , what we are seeing is that there is a shift from a offline channels to more online channels to social media channels , which is not a surprise when you look at the overall shopping trends of the Chinese consumer in this category .

Speaker #3: We continue to outperform and win market share . Clearly , the shift to online channels actually allows us to leverage what the team has built over the last ten years , which is a unique digital business model , which is a truly a competitive edge .

Speaker #3: And secondly, and there's absolutely no change in that message, is that the IS platform is winning market share across China.

Speaker #3: The innovation we launched now , some two years ago has become quite sizable platform . And we see further growth opportunities on on this front and in parallel , as you say , we are preparing the tourists has been soft launched in in Hong Kong and we will bring it to mainland China at the right moment when we see that we have a positioned essences in the right way .

Speaker #3: And that we have a solid print there. When it comes to China, medical nutrition obviously has different dynamics because there's an underlying strong demand from a category perspective.

Speaker #3: And this spend actually spans all segments, starting from special pediatrics, which is posting a stellar performance. Especially our allergy formula under the Neocate brand.

Speaker #3: As we discussed a good one year ago , it has a lot to do with the fact that there's more and more babies , rightly diagnosed , and therefore they are getting the right medical nutrition .

Speaker #3: And we are seeing that reflected. But we are also seeing very strong demand in our adult medical nutrition business, benefiting, with no surprise, from strong demographics.

Speaker #3: So, here we are pushing distribution of our tube feeding solutions, as we have been discussing. We invested in a medical sales force quite significantly, and that starts to pay back.

Speaker #3: And at the same moment, we are building the future of this category with the oral nutrition segment. So looking forward, yes, China has been firing on all cylinders.

Speaker #3: Let's be careful not to extrapolate that for all the coming quarters. However, we have good reasons to believe that China will deliver significantly to our growth in the coming quarters.

Speaker #3: When it comes to North America . Let me step back for a minute . This is an important it's an important question . It's not a question of comms .

Speaker #3: Let me be very clear on this one. When we look at the performance of the last two quarters, we cannot be satisfied, as we missed some important growth opportunities.

Speaker #3: But there are a few reasons—probably three plus one reasons—why we are confident that North America will progressively go back to where it belongs.

Speaker #3: First , high protein yogurts . They continue to fly . The demand is extremely high . We are quite seriously kept by production capacity .

Speaker #3: Finally , we have new capacity coming online , starting from Q4 , and that will go into 2026 , which will release some of the of the pressure we had and Q3 Q3 was particularly tense on this , on this part that will allow us not only to continue pushing high protein yogurts , but also to finally , again activate the rest of the yogurt portfolio where we have been particularly shy because there was no there was no capacity available .

Speaker #3: And you will see animals coming with a relaunch in Q4, which is important for us because it's a big brand, and the kid segment is very strategic to us.

Speaker #3: On coffee creamers . Let's be very clear here . Yes , we have been progressively recovering distribution , but yes , this is also a journey which takes time as this space on the shelf has been occupied by competitors .

Speaker #3: And as you can imagine , we are doubling down on our efforts to get our space back . But what we are also doing , and that's important , is that we are leveraging that moment to bring our product to you closer to the emerging trend of clean label and naturalness , which will help us to bring our international Delight brand back to where it has been .

Speaker #3: The third element I would like to mention here, and I mentioned actually also in the prepared remarks, is medical nutrition.

Speaker #3: Now with Kate Farms. This is the first time we have a sizable platform in the U.S. that will help us accelerate on this very important initiative.

Speaker #3: Category . Moving forward . We want that to become really a powerhouse of growth for for North America . And lastly , there's a leadership factor .

Speaker #3: As you can imagine, Henry Brussel, who is the newly appointed President of the Americas as of January 1st, is already bringing a fresh perspective to the different categories, bringing back both, I would say, an obsession about superior consumer experience, but also a renewed sense of urgency.

Speaker #3: So many reasons why we believe that North America will again play a very important role for our growth momentum in the future.

Speaker #3: And I have not even talked about the protein shakes.

Speaker #4: Thank you very much .

Speaker #2: Thank you, Guillaume. So, we're going to take the next question from Warren Ackerman, Barclays.

Speaker #5: Yeah . Good morning , Jürgen . Mathilde , it's Warren here from Barclays to from me as well . First one is on Europe .

Speaker #5: Jürgen very pleased performance in Europe . Could you maybe double click a little bit on European EDP ? Where are you on the rollout of some of the more valorized ranges on , on skier kefir , high protein .

Speaker #5: What kind of weight are they now in Europe ? Are we at a tipping point where it's offsetting the kind of more kind of more , more , you know , general ranges ?

Speaker #5: And then, can you maybe sort of outline what kind of growth you're seeing in the out-of-home channels in Europe that we don't see in the scanner data?

Speaker #5: So sort of if you can double click on , on , on European EDP and what you're seeing in terms of market shares and the trends , that's the first one .

Speaker #5: And then secondly , just on the guidance you're running , I think at 4.4% organic at the nine month stage , your guidance is 3 to 5 .

Speaker #5: So you're clearly tracking at the top end of that. The guidance range. You haven't today changed your guidance to the top end, but you're tracking at that level.

Speaker #5: Is there anything we should think about for the final quarter of the year ? Is there any kind of sort of conservatism built into the into the guide , any moving parts that you want to call out for the final quarter of the year ?

Speaker #5: That would be helpful. Thank you.

Speaker #3: Good morning . Yeah . As you say , Europe progressing pretty well in its transformation . It's getting better quarter by by quarter .

Speaker #3: I think it's now six consecutive quarters where we see the growth accelerating . And this is including in in EDP and as you as you say , this is thanks to the fact that our more differentiated portfolio becomes more important in terms of weight , percentage of of the portfolio , quarter by quarter , all the innovations are working extremely well .

Speaker #3: High protein. We have been discussing for quite some time Activia back to growth and Activia, especially on fibers and what we are doing with the kefir, progressing very well.

Speaker #3: We're also doing very well, but all of those elements we have been launching only two years ago, so we are still early in that journey.

Speaker #3: But this is exactly where the opportunity is, because when you take products like kefir, we have not yet even rolled them out all across Europe.

Speaker #3: And this is where where we see the opportunity and you will see us going for that in a very in a very speedy manner to your point , we continue to outperform outside of large retail .

Speaker #3: This is also part of our strategy. This is where we have been underrepresented for decades. But this is also where we have been intentionally innovating for the majority of our innovations.

Speaker #3: Is drinkable formats suitable , suitable for away from home . Point of sales and on the go consumption . And that means that we continue to grow .

Speaker #3: 2 to 3 times faster in away from home than in large retail . That is what strategy and a priority moving forward , which will stay a top of the table when it comes to the to the guidance .

Speaker #3: Obviously we are very happy with the first nine months of the of the year . You can imagine that we are not giving quarterly guidance , neither by category , neither by region .

Speaker #3: As you know , there is no particular message actually for for Q4 to to pass here . Overall , what is important for us is that we want to demonstrate that our portfolio focused on health is a superior portfolio and that this is also translating into a faster growth vis a vis the industry .

Speaker #3: We feel good with our 3% to 5% guidance for the year 2025, but also beyond, and we are now consistently delivering in that corridor.

Speaker #3: And , you know , in a way , while our ambition is to grow sustainably as fast as possible , there's always something in business which doesn't go well .

Speaker #3: And we have not had too soft quarters in North America. This is why we feel good about this guidance.

Speaker #5: Thank you .

Speaker #2: Thank you. So the next question is from Gelco, HSBC.

Speaker #6: Hi . Thanks for taking the questions . So just a couple of things from me . So the first one is if you could talk a bit about Latin America , we've had some quite mixed things from other companies in the region .

Speaker #6: So, could we talk about how you're seeing the conditions in the various markets you compete in? And the second one is, could you talk a little bit more about the rollout of the high protein?

Speaker #6: So why are you so confident that the category is going to carry on at these very high rates? Where do you think the next big rollout opportunities are? And perhaps a bit more detail on the kind of scale of the capacity expansions you've got coming on in the coming quarters.

Speaker #6: Thanks .

Speaker #3: Yeah . Good morning Jeremy . In America , we see what everybody is seeing , especially in Mexico where consumer sentiment is pretty muted .

Speaker #3: That's one of the drivers . Why our waters performance in this year has not been satisfactory beyond the weather conditions , which have been quite awful during all the all the seasons .

Speaker #3: Actually , we don't take that as as an excuse . We , we focus on those elements where we have value added propositions and where we can grow .

Speaker #3: And you saw that quite nicely in Q3 , which is particularly about specialized nutrition , which is now growing at a consistently at a very good speed , particularly in Brazil .

Speaker #3: But it spans all across the region to , to Argentina , actually . And this is on both early life nutrition and medical nutrition , on both categories , but also on dairy , which is doing well .

Speaker #3: And dairy is doing well across the region thanks to . Oikos and the and the Greek yogurt and high protein yogurts , which are showing the same dynamic as everywhere else in the world .

Speaker #3: So thanks to our other core brands , including the DANONE brand , which is doing which is doing very well . So overall , I would say satisfactory performance and let me use that moment to to say that when you look at our specialized nutrition business across emerging markets , and I put it together , Latin America , plus our Amazon , you see that this is a €700 million platform as large as China , growing at high single digit .

Speaker #3: So this is becoming more and more critical for us. A key growth engine moving forward, especially with Aptamil growing very, very strongly across the board, but also in medical nutrition, which we are building.

Speaker #3: The second element , and to your second question on on high protein yogurts , we see we still a massive trend from a consumer perspective on health and well-being .

Speaker #3: Yoghurt actually is a very powerful , efficient and convenient source of proteins and other goodies . And this is better and better understood .

Speaker #3: The consumption of yogurt is different region by region , but when you take the US , the US per capita consumption is one third of the consumption of Europe , which gives you an idea of the of the size of the opportunity in front of us .

Speaker #3: And the property trend continues. Clearly, there has been a recent study published in the U.S. saying that 71% of American consumers want to add more quality proteins to their diet.

Speaker #3: So there are many reasons to believe that this growth will continue on our side. We are actually innovating in that space, so that we transition from quantity of protein to quality of protein and other ingredients.

Speaker #3: We launched what we call oikos Fusion, which is a patented blend of whey protein, amino acids, and prebiotic fibers that help to build or maintain muscles during a weight management journey. This product becomes more and more functional and more and more science-based.

Speaker #3: And I think that's that will help to keep the momentum of the capital of the category moving forward . And then this capacity coming online for us , especially in the US , it will also release some of the pressures we have seen , particularly in Q3 .

Speaker #2: Thank you, Jeremy. Next question from Celine Pannuti, JP Morgan.

Speaker #7: Good morning Jürgen and Mathilde . So I would like to come back first on the US . If you could , a bit help to understand some of the moving parts .

Speaker #7: So, Juergen, you said that comp is not an issue and you have a tougher comp in the fourth quarter. But at the same time, you're talking about this capacity coming online.

Speaker #7: Are we therefore expecting to see a sequential improvement in volume mix in Noram ? And if you could as well try to , you know , go a bit deeper in understanding , you know , the sequence of actions and potential improvement in coffee creamers as we look into the next quarters .

Speaker #7: And you know as well , give us a bit more details on plant based , because it seems that it has been several times you've tried to prop up that performance and has not yet happened , and maybe lastly on that , you briefly mentioned the Oikos High Protein .

Speaker #7: I know you were launching it in Costco. Can you give us a bit more details on that launch and its potential contribution going forward?

Speaker #7: My second question will be so shorter . It's on the overall guidance . You mentioned . The top line , but if I think about the profit growth and the fact that specialized nutrition is growing much faster this year , and obviously you're more profitable category from a gross margin and Ebit margin standpoint , can we think about how you how do you think about potential uplift , gross margin between putting that to the bottom line and reinvestment ?

Speaker #7: And if so, if there are more reinvestments, where about are you putting this in the second half of the year? Thank you.

Speaker #3: Yes . Good morning . Good morning Celine , look on North America . I think I probably said it . I said almost all two softer quarters , but there's nothing structural here .

Speaker #3: We are pretty confident in the ability of the North American business to again deliver a very solid contribution to the growth of our company.

Speaker #3: And this is because we , we we are not dependent on one single growth engine , high protein yogurts . We will get a release on the constraints , which will really tense in Q3 as capacity comes online in the course of of Q4 .

Speaker #3: That will definitely help in the category which continues to to fly . And this is releasing , as I said , not only the constraint on high protein , but also on the rest of the euros , coffee creamers .

Speaker #3: We are we are fighting back our products on the shelf . That's the journey . As I said , and actually gives us the opportunity to to innovate at the same moment , to make our products more on trend of naturalness and clean label .

Speaker #3: And I think that's an important one , actually , to get international delight back to where it belongs . We have been winning share and let's not forget that for two consecutive years on coffee creamers , 2025 is now more challenged year because of , let's say , the supply chain issues we had at the beginning of the year .

Speaker #3: But structurally , we believe that this brand is a very powerful brand in a continuously growing category . Plant based . I think this is actually coming now to North America , will bring a lot of the goods best practices .

Speaker #3: They have been executing on Alpro in Europe with him . That will that will help . And you will see that in the in the not so far future , translating into the way we are relaunching a silk in the US .

Speaker #3: So, we continue to be optimistic that this will play a role in our growth trajectory in North America on both sides on milk.

Speaker #3: But also on plant based yogurts , something we have not been talking about so much over the last one year . And you know , that plant based yogurts play already a very sizable role in Europe , not yet in the US .

Speaker #3: There is a wide space for us . And finally , on protein shakes , actually , protein shakes , we continue to receive very positive feedback from from consumers .

Speaker #3: We are still not having robust repurchase data. That takes some time as usual, but we are not standing still and just waiting.

Speaker #3: We have decided to selectively expand to retailers in in the US to build more awareness , and then once we have data , sufficient data , we are going to decide on the level of acceleration for 2026 .

Speaker #3: And finally, Kate Farms is not to be underestimated. I believe it is an amazing business. The traction we are getting on the ground is amazing.

Speaker #3: And finally , we have a $500 million platform of medical infusion in the US , something we never had before , which we believe can also be a get us a sizable contribution .

Speaker #3: There . So overall , I would say many reasons to be confident in the in the growth prospects of this , of this region when it comes to the guidance .

Speaker #3: Look , I think top line is very clear . Bottom line , we are we are sticking with what we always said . For us , what is important that the quality growth translates into operating leverage so that we can do both , expanding our margins progressively and reinvesting into our business .

Speaker #3: And I think this year, 2025, demonstrates again that the portfolio rooted in science is a superior portfolio, growing faster than the industry.

Speaker #3: So you will see us doubling down on science , on brand investments . You saw probably that two weeks ago . We we opened a research center in Saclay , particularly on gut health , particularly on one one biome , in order to make sure that we stay pioneer in science for gut health for the years to come .

Speaker #3: And so we will progressively increase our margins at the right speed . And any upside . And we have been saying that I think consistently any upside which goes beyond we will invest back into the business in order to solidify our growth momentum for the years to come .

Speaker #7: The again, if I may just follow up on the U.S. answer you gave. I mean, how much visibility do you have on the short term?

Speaker #7: I mean , clearly you made the point about the potential in the coming quarters . Just because I know that Q4 is a tough comp , is this something that we should think about as we think the final quarter in that region , or all the positive you mentioned , including the capacity , means that your volume will remain positive .

Speaker #3: Yeah , yeah , I think to to elements to say again , I know particular message to pass on comps , neither for Q4 and on the other side , we are not guiding by quarter by region .

Speaker #3: So, probably we'll pack it down.

Speaker #7: Thank you .

Speaker #2: Thank you. Celine, the next question from John Cox, Kepler.

Speaker #1: Yeah .

Speaker #8: Good morning, guys. It's John from Kepler here. I have a couple of questions for you. I'm just really following up a little bit on that North America.

Speaker #8: You call out that the plant-based segment has been responsible for this slowdown, but plant-based is a relatively small part of the overall pie.

Speaker #8: I just wonder if you could say , well , you know , this overall slowdown half is maybe the plant based and half is caused by , you know , the cream is still coming back less capacity and protein .

Speaker #8: Just to give us a bit of an idea , because otherwise you'd think , well , the the plant based has just fallen off a cliff because it's a relatively small , smaller part of the business compared to the creamers .

Speaker #8: And the protein and all of those type of things . Secondly , just on Europe , and obviously that's a different story as things get better , can you just give us a bit of a rough idea on the split in the European yogurt market , particularly with regards to your own portfolio ?

Speaker #8: Because I think in North America , protein is over half of yogurt , but in in Europe it's probably , you know , a lot smaller .

Speaker #8: Just to give us a bit of an idea of , you know , when can we see or expect this ongoing acceleration , you know , it seems to be more driven by mix , you know , where are you as part of that journey and towards the the sort of value added and maybe just a follow up question from Warren's actually on the guidance for the year .

Speaker #8: You seem to be saying , you know , North America , you've got the capacity coming on in protein . You're confident in , you know , some of that plant based improving ambient protein , doing better in North America , in Europe , things moving ahead .

Speaker #8: And obviously, a lot of momentum in China. You know, why should we assume there will be a slowdown from Q3 in Q4?

Speaker #8: Thank you .

Speaker #3: Yeah . Good morning . Good morning John . First question . You're absolutely right . Plant based in a way when you look at the size within the North American portfolio , is is not sizable enough in order to .

Speaker #3: Explain meaningful acceleration or meaningful acceleration. And this is not the message we have passed. There are two elements which are important for North America.

Speaker #3: And the first one is really that capacity constraints have been heavy in Q3 on yogurt, which forced us to make important choices that will be getting better over the coming quarters, starting in the course of Q4.

Speaker #3: And that that will definitely help for the quarters to come in North America . And on the other side , we are fighting back on coffee creamers .

Speaker #3: As we said , to get back the the product on the shelf . And this is really the two , I would say key priorities for North America , for the quarters to to come for Europe .

Speaker #3: We are actually, as you say, very happy with the EDP. The portfolio setup is very different for dairy in the U.S. versus Europe.

Speaker #3: You say it in the US , half of the portfolio is is Greek yogurt . And most of that is high protein . It's still a minor part in in Europe .

Speaker #3: But building very , very fast because it's growing at a very fast speed , high protein Greek skiers , it's getting more space on the shelf .

Speaker #3: Retailers are willing to open more space. The year 2026 and the negotiations to come will be a great opportunity to also negotiate more space for these high-growth segments.

Speaker #3: And so it will get more and more weight . And so in that sense , you are right . It's a quite I would say , fairly balanced contribution from both volume .

Speaker #3: On one side , because we have more and more consumers discovering and rediscovering the yogurt category . And mix because we are going to more premium value added , value added propositions .

Speaker #3: And then in Q4, you know, there are some things in Q4 that will go better and some things in Q4 that may not go that well.

Speaker #3: I mean, China not two quarters firing on all cylinders, which is really exceptional. And on some other elements, we have things where we can see acceleration in business is never a linear journey.

Speaker #3: And so this is why we don't give any kind of guidance for Q4, neither for other quarters.

Speaker #8: I want to just to follow up on the creamers . Are they when does the comp get easier , because you've now had , what , three quarters of the incident ?

Speaker #8: I think it was you who were removed from some shelves, and maybe there was a capacity problem as well. I guess that will roll off in what Q1 or Q2 next year.

Speaker #12: I .

Speaker #3: Recall it well; I think it was on the back end of Q1 that we were having some supply issues. So that's probably the moment that we roll over.

Speaker #8: Okay, great. Thank you.

Speaker #2: Thank you, John. The next question is from Charlie Hicks, Redburn.

Speaker #9: Hey , Juergen . Let's hope you're both well . Sorry . It's another one on coffee creamers in the US . Please . Are you able to quantify roughly how much shelf space you've lost and what the ambition is to get back to ?

Speaker #9: Because I think you won quite a lot of shelf space since the main competitor had issues. So just whether you think you can actually get back to what it was previously, and then just a bigger picture on creamers. Coffee prices in the U.S. are soaring at the moment.

Speaker #9: It could pressure coffee and away from home . Channel . Do you think creamers could be a beneficiary of high coffee prices in the at home channel ?

Speaker #9: Or do you think they're more of a discretionary item that could see pressure, along with the whole coffee category? And then my second question is on water, please.

Speaker #9: I just wonder if you could speak a bit more about Myzone, which slowed a little bit quarter on quarter, but is still very solid.

Speaker #9: What are your plans there to keep the momentum going? And could you also just touch a bit on Indonesia and Aqua and what you're seeing in that market?

Speaker #9: Please . Thank you .

Speaker #3: Yeah. Good morning, Charlie. Let me start from your second question on what I would say is solid print for the water category in Q3.

Speaker #3: Europe is doing well across many brands, including Evian in China. Myzone has completed another successful season. When you look at the numbers in terms of net sales, we are growing.

Speaker #3: I think 5.6% in that Q3 what it is hiding is that the underlying volume growth is high , single digit . Again , we are investing into distribution .

Speaker #3: We are investing into getting more space with distributors and on point of sale in order to prepare . Already for 2026 season in a in an overall beverage category , which is growing at a at a low single digit pace , we see that healthy beverages are outperforming .

Speaker #3: And this is exactly where my zone is positioned. And this is where we see that we have the opportunity. And this is why we are pushing hard on distribution here.

Speaker #3: So I would say that that's on track. Indonesia also had a better quarter. You know that Q2 was pretty muted. We're not happy with the weather there.

Speaker #3: Q3 definitely was a bit back to normal in that in that sense , it's a very competitive market all across . I would say food and beverages .

Speaker #3: We have a very strong brand with Aqua, a leader in the market. It is a local brand, and we are investing to ensure that we stay ahead of the competition there.

Speaker #3: But it's a very competitive space when it comes to coffee creamers . You know , in a way , what's happening there is that we had our supply chain issues in Q1 shares and distribution was was falling down quite significantly .

Speaker #3: You can see that from scanner data. Market shares have stabilized in Q2, and since then, they have been recovering as the distribution has.

Speaker #3: That's a journey again , because it's store by store to get to get it back . Overall , you know , this is a space which in a way continues to grow because people prepare more and more coffee at home , because that's the more from an economic standpoint , more affordable way to have your coffee experience .

Speaker #3: And the category is benefiting from it, as people are looking for more healthy propositions. It's important that we, with Internationally Light, offer the right product.

Speaker #3: And this is why I was saying you can expect us to innovate and renovate towards naturalness and clean label in order to play a leading role in this , in this category , which continues to show a solid , solid growth momentum .

Speaker #9: Thank you very much .

Speaker #2: Thank you, Charlie. Next question from Tom Sykes, Dutch Bank.

Speaker #10: Yeah . Morning . Thank you . Morning , again . Just on your pricing , when you or you look at your country category average , obviously group pricing and the pricing by category , where would you say is the biggest difference for yourselves versus competition ?

Speaker #10: I think you were kind of asked it earlier where you where were you investing the efficiency gains the most . And would you be able to offer kind of an aggregate the degree to which your below market pricing at all , please ?

Speaker #10: Obviously , driven by your efficiency gains and then just on the high protein in North America , could you maybe give a view on how much of the consumption is is first time consumption and how much is repeat users ?

Speaker #10: What occasions are growing most quickly? And when you're saying you're now focused on quality, that sounds a bit like you're trying to get existing users to trade up.

Speaker #10: That doesn't sound like volume. So, just wondering, is that a pivot bit in the strategy in U.S. high protein at all?

Speaker #10: Please .

Speaker #3: Yeah . Well , good morning . Good morning Tom . Look you saw that pricing has been play a minor role in our growth dynamic already from many quarters .

Speaker #3: And that's our strategy actually we are obsessed . I can say about volume mix growth . And for us , pricing is something we do when we need to do it for the for the differential between inflation and internal productivity .

Speaker #3: We have discussed on a few occasions that we are delivering productivity on our cost of goods sold ahead of the industry, and the operations teams are doing a fantastic job here, which is limiting the necessity to take pricing.

Speaker #3: Now , the way we take price or the way we invest into price , is , is very strategic . On one side , it's consumer driven , so we price where there is high demand on high protein yogurts , for example , especially with the price of protein rising over the last 12 months .

Speaker #3: And on the other side , we are investing into price where it makes sense . I was discussing earlier about , for example , my zone in China , but there's also other categories in other regions where we intentionally invest into price , not to lower the price on the shelf , because that's not our game .

Speaker #3: But in order to win distribution points for our products, and this is probably what you will also see moving forward into the year 2026.

Speaker #3: North America and the demand on protein . There is more and more consumers consuming more often our high protein yogurt . And this is , I would say , an encouraging sign and trend , which means there's plenty of opportunity in front of us .

Speaker #3: And as I was saying, in Europe, the US consumption of yogurt is only one third of that of Europe. So there's a lot of headroom.

Speaker #3: Having said that , people understand better and better the difference between the the the difference between proteins , the source of the protein , but also how to absorb the protein in the best way .

Speaker #3: And that means you need to have certain prebiotics and probiotics consumed at the same moment. So we are going from the quantity of protein to real benefit.

Speaker #3: And this is why we have been launching oikos Fusion, which is exactly enriched with these additional ingredients to make sure that you get the best benefit for your body.

Speaker #3: And well-being. So it means that we are looking; we are expecting further volume growth, but we see also mix opportunity by differentiating versus what competition is having in this space.

Speaker #10: Okay . Thank you .

Speaker #2: Thank you Tom . Next question from David Roux Morgan Stanley . And I think it's going to be the last question . David , who ?

Speaker #11: Morning , team . Sorry about that . I'd like to just go back to infant milk formula in for a moment . I've got a couple questions there .

Speaker #11: My first one is can you give us a sense of what like for likes for China , infant milk formula was , or how does that compare to the 17% for specialized nutrition and cnao .

Speaker #11: And then just building on from this , you spoke about market growth across the stages earlier , but perhaps you can quantify Danone's growth across the infant milk stages once again , perhaps relative to the 17% for for SN in the in the region .

Speaker #11: Thank you .

Speaker #12: Yeah .

Speaker #3: Good morning David . Look very good performance . Not only in Q3 on early life nutrition in in China . The team has really built over those last years in particularly those last two years , something where we have a true competitive edge .

Speaker #3: And I was talking about the two areas where I think we are ahead of competition . One is our truly digital business model and the other one is on the platform , which is standing out at shelf , because here , again , it's not ingredient LED , but benefit LED .

Speaker #3: This is helping us to win share quarter by quarter over many quarters . And we still see headroom , further headroom to grow our market shares with a new tourist .

Speaker #3: The innovation, which we only soft-launched in Hong Kong, is still to come to mainland China. So, I would say I am very confident in our ability to win in that category in China. When it comes to the category itself, what we are seeing is that the category has been overall stabilizing in 2020.

Speaker #3: At the back end of 2024 , has been growing into , into a growth momentum in stage one . First , thanks to the birth rate , stage one is from a weight perspective , a bit smaller than stage two and stage three , which is normal because in stage one you have still mothers breastfeeding and then moving progressively into mixed feeding .

Speaker #3: Now stage two is in growth and then it will go to to grown up milks later on . So it's a progressive evolution of the growth trends through through the different stages .

Speaker #3: Overall, what we see today is a category that is in moderate growth, and it is obviously not easy to predict what the years to come will bring.

Speaker #3: It will depend a lot on on the birth rates moving forward . You know that the government is trying to give many incentives to to increase birth rates , and we will see how effective that that will be .

Speaker #3: What we do is we focus on what we control . And this is our initiatives . And growing our market shares in this very attractive category .

Speaker #11: Thank you very much . And just perhaps a quick follow up there , please , can you remind me of the non revenue exposure to the infant milk stages in China ?

Speaker #11: Thank you .

Speaker #12: Yeah .

Speaker #3: As I was saying, overall, we are pretty much in sync with what the category is having. So, stage one is the smaller part of this category.

Speaker #3: So stage two and what comes after has a bit more weight in the in the portfolio . So in that sense it's , it's beneficial that that the growth moves .

Speaker #3: Now on to larger stages.

Speaker #11: Thanks .

Speaker #2: Thank you very much. So, that was the last question. Thank you for your time this morning.

Speaker #3: Thank you . Thank you to all of you . Thank you for listening this morning . Great results for for Q3 . And we look forward to engage with you over the coming weeks .