Q1 2026 Danone SA Earnings Call

April 22, 2026

Speaker #1: Cool. I'm here with your CFO, Juergen Esser, who will go through some prepared remarks before taking your questions. And before we start, I draw your attention to the disclaimer on slide 20 of the presentation, related to forward-looking statements and the definition of financial indicators that will refer to during the presentation.

Speaker #1: And with that, let me hand it over to Juergen.

Speaker #2: Thank you, Mathilde, and good morning to all of you. Welcome to our Q1 2026 sales presentation. Thank you for taking the time to be with us.

Speaker #2: I suggest we go straight into it, as this is a busy day for all of you. Let's go to slide number 2. As you have seen from our press release this morning, we reported a solid set of numbers for the first quarter, a quarter which was far from business as usual.

Speaker #2: Firstly, the conflict in the Middle East. Most important is that all our colleagues who live and work in this region are safe and well.

Speaker #2: A big thank you for their commitment during these challenging times. As you all know, this conflict is having consequences on logistics and distribution flows in the region, a region that is representing around 2 to 3 percent of the sales of our company.

Speaker #2: Our start of the year was also impacted by the infant milk recalls that affected the industry in the EMEA zone. This has created shelf disruptions and out-of-stock situations across the region, with a particular challenge for the stock replenishment in the Middle East due to the before-mentioned conflict situation.

Speaker #2: Amid this challenging context, we are pleased that the numbers we published today demonstrate the resilience of our portfolio: the strength of our categories, and of our brands.

Speaker #2: And our objective is more than ever to come out of this environment stronger than before. Based on this confidence, we are accelerating on our strategic portfolio management, with assigning of two important transactions during the first quarter.

Operator: Good day, and thank you for standing by. Welcome to Danone's Q1 2026 Sales Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. Our speaker today will be Juergen Esser, Chief Financial Officer. Now I'd like to hand the conference over to Mathilde Rodier, Danone's Head of Investor Relations. Please go ahead.

Operator: Good day, and thank you for standing by. Welcome to Danone's Q1 2026 Sales Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. Our speaker today will be Juergen Esser, Chief Financial Officer. Now I'd like to hand the conference over to Mathilde Rodie, Danone's Head of Investor Relations. Please go ahead.

Speaker #1: Good day, thank you for standing by and welcome to DANONE's first quarter 2026 sales call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session.

Speaker #2: I suggest we move to the next page, page number 3. So I can give you more color on it. Both transactions that we signed during the quarter will further strengthen our unique health-driven portfolio and contribute to our industry-leading value creation ambitions.

Speaker #1: To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised.

Speaker #1: To withdraw your question, please press star 1 and 1 again. Please be advised that today's conference is being recorded. Our speaker today will be Juergen Esser, Chief Financial Officer.

Speaker #2: First, the acquisition of the Hewlett Company. Hewlett is a leader in complete nutritionally balanced meals with sizable business in Europe, and in the US.

Speaker #1: And now, I'd like to hand the conference over to Mathilde Rodie, DANONE's Head of Investor Relations. Please go ahead.

Speaker #2: The contemplated transaction will enhance our presence in the premium functional nutrition category. It is offering us new capabilities, especially in direct-to-consumer channel management, combined with state-of-the-art digital marketing skills.

Speaker #2: Good morning, everyone. Mathilde Rodie speaking, Head of Investor Relations. Thank you for being with us this morning for Danone's Q1 2026 sales call. I'm here with our CFO, Juergen Esser, who will go through some prepared remarks before taking your questions.

Mathilde Rodier: Good morning, everyone. Mathilde Rodier speaking, Head of Investor Relations. Thank you for being with us this morning for Danone's 2026 Q1 Sales Call. I'm here with our CFO, Juergen Esser, who will go through some prepared remarks before taking your questions. Before we start, I draw your attention to the disclaimer on slide 20 of the presentation related to forward-looking statements and the definition of financial indicators that we'll refer to during the presentation. With that, let me hand it over to Juergen.

Mathilde Rodie: Good morning, everyone. Mathilde Rodier speaking, Head of Investor Relations. Thank you for being with us this morning for Danone's 2026 Q1 Sales Call. I'm here with our CFO, Juergen Esser, who will go through some prepared remarks before taking your questions. Before we start, I draw your attention to the disclaimer on slide 20 of the presentation related to forward-looking statements and the definition of financial indicators that we'll refer to during the presentation. With that, let me hand it over to Juergen.

Speaker #2: The Hewlett Company is a perfect strategic fit with a highly complementary mission. In parallel, we announced for our Argentinian dairy business an exciting new chapter.

Speaker #2: And before we start, I draw your attention to the disclaimer on slide 20 of the presentation related to forward-looking statements and the definition of financial indicators that we will refer to during the presentation.

Speaker #2: Together with our partner Accor, we are creating a joint venture, combining our respective portfolios to unlock the full potential of the dairy market in this region.

Speaker #2: Whilst the transaction will technically deconsolidate our Argentinian dairy business, we expect the synergistic effects to this joint venture to be EPS equative over time.

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

Speaker #3: Thank you, Mathilde, and good morning to all of you. Welcome to our Q1 2026 sales presentation. Thank you for taking the time to be with us.

Juergen Esser: Thank you, Mathilde, and good morning to all of you. Welcome to our Q1 2026 sales presentation. Thank you for taking the time to be with us. I suggest we go straight into it as it is a busy day for all of you. Let's go to slide number 2. As you would have seen from our press release this morning, we reported a solid set of numbers for Q1, a quarter which was far from business as usual. Firstly, the conflict in the Middle East. Most important is that all our colleagues who live and work in this region are safe and well. A big thank you for their commitment during these challenging times. As you all know, this conflict is having consequences on logistics and distribution flows in the region, a region that is representing around 2% to 3% of the sales of our company.

Juergen Esser: Thank you, Mathilde, and good morning to all of you. Welcome to our Q1 2026 sales presentation. Thank you for taking the time to be with us. I suggest we go straight into it as it is a busy day for all of you. Let's go to slide number two. As you would have seen from our press release this morning, we reported a solid set of numbers for Q1, a quarter which was far from business as usual. Firstly, the conflict in the Middle East. Most important is that all our colleagues who live and work in this region are safe and well. A big thank you for their commitment during these challenging times. As you all know, this conflict is having consequences on logistics and distribution flows in the region, a region that is representing around 2% to 3% of the sales of our company.

Speaker #2: Both transactions, which we expect to close in the second semester, are fully aligned with our renewed DANON agenda and our capital allocation priorities and discipline.

Speaker #3: I suggest we go straight into it, as this is a busy day for all of you. So let's go to slide number 2. As you have seen from our press release this morning, we reported a solid set of numbers for the first quarter—a quarter which was far from business as usual.

Speaker #2: Let me now move on to slide number 4. Amid the described complex condition in this Q1, we delivered a solid like-for-like sales performance of plus 2.7 percent, with volume mix-up plus 1.5 percent.

Speaker #3: Firstly, regarding the conflict in the Middle East, most important is that all our colleagues who live and work in this region are safe and well.

Speaker #3: A big thank you for their commitment during these challenging times. As you all know, this conflict is having consequences on logistics and distribution flows in the region.

Speaker #2: Our growth was balanced across all categories. EDP delivered again solid growth of plus 3.4 percent, driven by the ongoing rollout of our functional innovations, particularly those rooted in protein and gut health.

Speaker #3: A region that is representing around 2 to 3 percent of the sales of our company. Our start of the year was also impacted by the infant milk recalls that affected the industry in the EMEA zone.

Speaker #2: Specialized nutrition posted plus 1.9 percent. The underlying growth dynamics across the globe remained strong, which more than compensated for the IMF recall impacts. And finally, waters that grew plus 2.3 percent.

Juergen Esser: Our start to the year was also impacted by the infant milk recalls that affected the industry in the EMEA zone. This has created shelf disruptions and out-of-stock situations across the region, with a particular challenge for the stock replenishment in the Middle East due to the beforementioned conflict situation. Amid this challenging context, we are pleased that the numbers we publish today demonstrate the resilience of our portfolio, the strength of our categories, and of our brands. Our objective is more than ever to come out of this environment stronger than before. Based on this confidence, we are accelerating on our strategic portfolio management with the signing of two important transactions during Q1. I suggest we move to the next page number 3, so I can give you more color on it.

Speaker #3: This has created shelf disruptions and out-of-stock situations across the region, with a particular challenge for stock replenishment in the Middle East due to the aforementioned conflict situation.

Speaker #2: The waters category saw a resilient start to the season, with solid growth in many markets. We will talk about the regional performance in the coming minutes, so I will not enter here into the details by geography.

Speaker #3: Amid these challenging contexts, we are pleased that the numbers we published today demonstrate the resilience of our portfolio, the strength of our categories, and of our brands.

Speaker #2: Let me instead suggest moving on to slide number 5. And to double-click on some of the underlying dynamics. The consumer preference for healthy food and hydration is rising everywhere around the world, and we are continuing to address this opportunity with several platforms contributing strongly to our growth.

Speaker #3: And our objective is, more than ever, to come out of this environment stronger than before. Based on this confidence, we are accelerating our strategic portfolio management with the signing of two important transactions during the first quarter.

Speaker #3: I suggest we move to the next page, page number 3, so I can give you more color on it. Both transactions that we signed during the quarter will further strengthen our unique health-driven portfolio and contribute to our industry-leading value creation ambitions.

Speaker #2: In dairy, high-protein yogurts continue to be the key contributor in all regions. From North America to Europe and Asia. In addition, our more recent innovations, such as skyr and kefir, are flying off the shelves, and we are expanding them fast within and beyond Europe.

Juergen Esser: Both transactions that we signed during the quarter will further strengthen our unique health-driven portfolio and contribute to our industry-leading value creation ambitions. First, the acquisition of the Huel company. Huel is a leader in complete nutritionally balanced meals with sizable business in Europe and in the US. The contemplated transaction will enhance our presence in the premium functional nutrition category. It is offering us new capabilities, especially in direct-to-consumer channel management, combined with state-of-the-art digital marketing skills. The Huel company is a perfect strategic fit with a highly complementary mission. In parallel, we announced our Argentinian dairy business, an exciting new chapter. Together with our partner, Arcor, we are creating a joint venture combining our respective portfolios to unlock the full potential of the dairy market in this region.

Speaker #3: First, the acquisition of the Hewlett Company. Hewlett is a leader in complete, nutritionally balanced meals with sizable business in Europe and in the US.

Speaker #2: We continue to innovate in many segments and regions, and are particularly excited about new product launches under the Alpro brand in Europe, including the Meal2Go meal replacement solution, which you can see here in the picture.

Speaker #3: The contemplated transaction will enhance our presence in the premium functional nutrition category. It is offering us new capabilities, especially in direct-to-consumer channel management, combined with state-of-the-art digital marketing skills.

Speaker #2: Meal2Go was launched in Germany recently and is currently being rolled out to other European markets. And finally, in medical nutrition, we continue to see strong dynamics supported by favorable demographic trends and rising diagnosis rates.

Speaker #3: The Hewlett Company is a perfect strategic fit with a highly complementary mission. In parallel, we announced for our Argentinian dairy business an exciting new chapter.

Speaker #2: This is benefiting our diet medical as well as our pediatric nutrition business across all regions both of them going from strength to strength. All these platforms are responding to structural consumer and patient needs, and increasingly contribute to the quality of our growth as they scale up.

Speaker #3: Together with our partner Arcor, we are creating a joint venture, combining our respective portfolios to unlock the full potential of the dairy market in this region.

Speaker #3: Whilst the transaction will technically deconsolidate our Argentinian dairy business, we expect the synergistic effects of this joint venture to be EPS-equative over time.

Juergen Esser: While the transaction will technically deconsolidate our Argentinian dairy business, we expect the synergistic effects to this joint venture to be EPS accretive over time. Both transactions, which we expect to close in H2, are fully aligned with our renewed Danone agenda and our capital allocation priorities and discipline. Let me now move on to slide 4. Amid the described complex condition in this Q1, we delivered a solid like-for-like sales performance of +2.7%, with volume mix up +1.5%. Our growth was balanced across all categories. EDP delivered again solid growth of +3.4%, driven by the ongoing rollout of our functional innovations, particularly those rooted in protein and gut health. Specialized Nutrition posted +1.9%. The underlying growth dynamics across the globe remain strong, which more than compensated for the IMF recall impacts. Finally, Waters, that grew +2.3%.

Speaker #2: Having said that, these successes should not take our attention away from key challenges that we are addressing. We mentioned the conflict in the Middle East, which is posing supply chain and cost inflation pressures.

Speaker #3: Both transactions, which we expect to close in the second semester, are fully aligned with our renewed DANONE agenda and our capital allocation priorities and discipline.

Speaker #2: We have some short-term hedging protection in place, which is moderating the immediate impact on our P&L. To address the volatile context, we have accelerated the run rate of ongoing productivity projects, and are monitoring the situation closely.

Speaker #3: Let me now move on to slide number 4. Amid the described complex condition in this Q1, we delivered a solid like-for-like sales performance of plus 2.7 percent, with volume mix up plus 1.5 percent.

Speaker #2: On the infant formula situation in EMEA, whilst the supply chain in Europe is mostly back to normal, the Middle East situation is not yet stable due to long lead times of stock replenishment.

Speaker #3: Our growth was balanced across all categories. EDP delivered again solid growth of plus 3.4 percent, driven by the ongoing rollout of our functional innovations, particularly those rooted in protein and gut health.

Speaker #2: Our priority is on rebuilding the credibility of the category, and we are refocusing our investments to make this happen. We expect the situation to progressively normalize as we go through the year.

Speaker #3: Specialized Nutrition posted plus 1.9 percent. The underlying growth dynamics across the globe remained strong, which more than compensated for the IMF recall impacts. And finally, Waters grew plus 2.3 percent.

Speaker #2: And finally, in the US, we talked previously about not being happy with our competitiveness. We have seen an improvement in Q1, an encouraging sign.

Speaker #2: We will have more capacity coming online during 2026 that will help us to double down on our execution on the dairy shelf. Creamers are lapping as we speak.

Speaker #3: The Waters category saw a resilient start to the season, with solid growth in many markets. We will talk about the regional performance in the coming minutes, so I will not enter here into the details by geography.

Juergen Esser: The Waters category saw a resilient start to the season with solid growth in many markets. We will talk about the regional performance in the coming minutes, so I will not enter here into the details by geography. Let me instead suggest moving on to slide number five and to double-click on some of the underlying dynamics. The consumer preference for healthy food and hydration is rising everywhere around the world, and we are continuing to address this opportunity with several platforms contributing strongly to our growth. In dairy, high protein yogurt continue to be the key contributor in all regions, from North America to Europe and Asia. In addition, our more recent innovations, such as Skyr and Kefir, are flying off the shelves, and we are expanding them fast within and beyond Europe.

Speaker #2: The supply issues of Q1 2025. All of this will support our recovery for the coming quarters. Overall, the opportunity moving forward lies in accelerating our winning platforms, including the ones on the left side of this slide, as much as in correcting the things which do not yet deliver to our expectations.

Speaker #3: Let me instead suggest moving on to slide number 5, and to double-click on some of the underlying dynamics. The consumer preference for healthy food and hydration is rising everywhere around the world, and we are continuing to address this opportunity with several platforms contributing strongly to our growth.

Speaker #2: A formula which has proven successful all these last years. With that said, let's turn to the sales bridge on slide number 6. Reported sales reached 6.7 billion euros in the first quarter.

Speaker #3: In dairy, high-protein yogurts continue to be the key contributor in all regions, from North America to Europe and Asia. In addition, our more recent innovations, such as Skyr and Kefir, are flying off the shelves, and we are expanding them fast within and beyond Europe.

Speaker #2: In addition to the plus 2.7 percent like-for-like growth previously discussed, we experienced adverse currency effects of minus 5.6 percent, resulting from the appreciation of the euro against most currencies.

Speaker #3: We continue to innovate in many segments and regions, and are particularly excited about new product launches under the Alpro brand in Europe, including the Meal2Go meal replacement solution, which you can see here in the picture.

Juergen Esser: We continue to innovate in many segments and regions and are particularly excited about new product launches under the Alpro brand in Europe, including the Meal To Go meal replacement solution, which you can see here in the picture. Meal To Go was launched in Germany recently and is currently being rolled out to other European markets. Finally, in Medical Nutrition, we continue to see strong dynamics supported by favorable demographic trends and rising diagnosis rates. This is benefiting our adult Medical as well as our pediatric nutrition business across all regions, both of them going from strength to strength. All these platforms are responding to structural consumer and patient needs and increasingly contribute to the quality of our growth as they scale up. Having said that, these successes should not take our attention away from key challenges that we are addressing.

Speaker #2: And lastly, to mention, for the third consecutive quarter, we are reporting a positive scope effect, predominantly from the Kate Farms integration of plus 0.5 percent.

Speaker #3: Meal2Go was launched in Germany recently and is currently being rolled out to other European markets. And finally, in medical nutrition, we continue to see strong dynamics supported by favorable demographic trends and rising diagnosis rates.

Speaker #2: Now let's look at the performance by region, moving to slide number 7. And let me pause briefly here because this is an important point.

Speaker #2: You will remember that as of this year, we have moved from 5 to 3 rather classical macro regions. EMEA, on the left side of the chart, Americas in the middle, and APAC on the right.

Speaker #3: This is benefiting our diet medical as well as our pediatric nutrition business across all regions, both of them going from strength to strength. All these platforms are responding to structural consumer and patient needs, and increasingly contribute to the quality of our growth as they scale up.

Speaker #2: This change reflects how we manage the business operationally and strategically, moving to this leaner setup further enhances our company's agility and improves clarity and accountability.

Speaker #3: Having said that, these successes should not take our attention away from key challenges that we are addressing. We mentioned the conflict in the Middle East, which is posing supply chain and cost inflation pressures.

Speaker #2: To ease the reading of our performance, we will make the switch in reporting progressive and for now, we will continue to provide for additional information also like-for-like numbers for previous zones of Europe, North America, and CNRO.

Juergen Esser: We mentioned the conflict in the Middle East, which is posing supply chain and cost inflation pressures. We have some short-term hedging protection in place, which is moderating the immediate impact on our P&L. To address the volatile context, we have accelerated the run rate of ongoing productivity projects and are monitoring the situation closely. On the infant formula situation in EMEA, while the supply chain in Europe is mostly back to normal, the Middle East situation is not yet stable due to long lead times of stock replenishment. Our priority is on rebuilding the credibility of the category, and we are refocusing our investments to make this happen. We expect the situation to progressively normalize as we go through the year. Finally, in the US, we talked previously about not being happy with our competitiveness. We have seen an improvement in Q1, an encouraging sign.

Speaker #3: We have some short-term hedging protection in place, which is moderating the immediate impact on our P&L. To address the volatile context, we have accelerated the run rate of ongoing productivity projects and are monitoring the situation closely.

Speaker #2: Let me now start the zone review with EMEA. On the next slide, on slide number 8. EMEA delivered plus 0.6 percent like-for-like growth in Q1, led by price of plus 2 percent.

Speaker #3: On the infant formula situation in EMEA, whilst the supply chain in Europe is mostly back to normal, the Middle East situation is not yet stable due to long lead times of stock replenishment.

Speaker #2: Within EMEA, Europe delivered plus 0.4 percent like-for-like. We saw sustained momentum in EDP, driven by many of our function-led innovations across dairy and plant-based.

Speaker #3: Our priority is on rebuilding the credibility of the category, and we are refocusing our investments to make this happen. We expect the situation to progressively normalize as we go through the year.

Speaker #2: In particular, we saw good growth in our winning platforms, including in high-protein, skyr, and kefir, as well as in Alpro. Activia also delivered another quarter of growth, confirming the green shoots observed in Europe in Q4.

Speaker #3: And finally, in the US, we talked previously about not being happy with our competitiveness. We have seen an improvement in Q1, an encouraging sign.

Speaker #3: We will have more capacity coming online during 2026 that will help us to double down on our execution on the dairy shelf. Creamers are lapping as we speak.

Juergen Esser: We'll have more capacity coming online during 2026 that will help us to double down on our execution on the dairy shelf. Creamers are lapping, as we speak, the supply issues of Q1 2025. All of this will support our recovery for the coming quarters. Overall, the opportunity moving forward lies in accelerating our winning platforms, including the ones on the left side of this slide, as much as in correcting the things which do not yet deliver to our expectations, a formula which has proven successful all these last years. With that said, let's turn to the sales bridge on slide 6. Reported sales reached EUR 6.7 billion in Q1. In addition to the plus 2.7% like-for-like growth previously discussed, we experienced adverse currency effects of -5.6%, resulting from the appreciation of the euro against most currencies.

Speaker #2: As expected, specialized nutrition was impacted by the IMF recall in Europe and the Middle East that we already discussed. Our key focus is now on rebuilding trust into the category and in our brands.

Speaker #3: The supply issues of Q1 2025—all of this will support our recovery for the coming quarters. Overall, the opportunity moving forward lies in accelerating our winning platforms, including the ones on the left side of this slide, as much as in correcting the things which do not yet deliver to our expectations.

Speaker #2: In waters, we posted solid growth ahead of the season, particularly in Evian and supported by the rollout of Volvic functional water innovations across more markets in Europe.

Speaker #2: So overall, a robust underlying performance in EMEA, amid the temporary headwinds. Turning to the Americas, on slide number 9. The Americas region delivered plus 3.4 percent like-for-like growth, led by volume mix of plus 2.5 percent and price of plus 0.9 percent.

Speaker #3: A formula which has proven successful all these last years. With that said, let's turn to the sales.

Speaker #1: Which on slide number six . Reported sales reached €6.7 billion in the first quarter . In addition to the 2.7% like for like growth previously discussed .

Speaker #1: We experienced adverse currency effects of minus 5.6%, resulting from the appreciation of the euro against most currencies. And lastly, to mention, for the third consecutive quarter, we are reporting a positive scope effect, predominantly from the Kate Farms integration, of plus 0.5%.

Speaker #2: Within those numbers, NORAM, North America, delivered plus 1.5 percent like-for-like growth. In the US, our priority is to regain momentum and competitive-ness outside of protein and Q1 showed some improvement versus the low point in Q4.

Juergen Esser: Lastly, to mention for the third consecutive quarter, we are reporting a positive scope effect predominantly from the Kate Farms integration of +0.5%. Now, let's look at the performance by region, moving to slide number 7. Let me pause briefly here because this is an important point. You will remember that as of this year, we have moved from five to three rather classical macro regions. EMEA on the left side of the chart, Americas in the middle, and APAC on the right. This change reflects how we manage the business operationally and strategically. Moving to this leaner setup further enhances our company's agility and improves clarity and accountability.

Speaker #2: This was driven by additional capacity on yogurt, starting to kick in, and an improving dynamic on creamers. Helped by easier base of comms since the month of March.

Speaker #2: On top of that, our stock brands continued to deliver strong double-digit growth. Specialized nutrition saw high single-digit growth in the quarter, led by Aptamil in Latin America and Neocase in the US.

Speaker #2: Overall, an improved situation in the Americas, with still a lot of things to do in the US, quality of execution remains the focus area, particularly in dairy and this is where the teams are fully mobilized.

Speaker #2: Turning to slide number 10. APAC delivered plus 6 percent like-for-like growth, entirely driven by volume mix. Within APAC, CNRO delivered plus 10.3 percent growth, like-for-like.

Juergen Esser: To ease the reading of our performance, we will make the switch in reporting progressively, and for now, we will continue to provide additional information, also like-for-like numbers, for previous zones of Europe, North America, and China AON. Let me now start the zone review with EMEA on the next slide, on slide 8. EMEA delivered a 0.6% like-for-like growth in Q1, led by price of +2%. Within EMEA, Europe delivered +0.4% like-for-like. We saw sustained momentum in EDP, driven by many of our functional-led innovations across dairy and plant-based. In particular, we saw good growth in our winning platforms, including in high protein, Skyr, and Kefir, as well as in Alpro. Activia also delivered another quarter of growth, confirming the green shoots observed in Europe in Q4.

Speaker #2: In EDP, Japan again demonstrated strong momentum, continuing to gain share in a very competitive dairy market thanks to strong functional claim execution. Specialized nutrition continued to deliver solid growth in China across both IMF and medical nutrition.

Speaker #2: In Q1, we saw particularly strong demand for our allergy range within pediatrics, for adult oral solutions in adult medical nutrition, as well as for essences within the IMF category.

Speaker #2: The medical nutrition category remains vibrant while the infant milk category continues to normalize as expected. And in waters, we saw contrasting dynamics across our two main brands in the region, solid growth for Mizone as we are preparing for the season, while severe flooding impacted the category in Indonesia.

Juergen Esser: As expected, Specialized Nutrition was impacted by the IMF recall in Europe and the Middle East that we already discussed. Our key focus is now on rebuilding trust into the category and in our brands. In Waters, we posted solid growth ahead of the season, particularly in Evian, and supported by the rollout of Volvic functional water innovations across more markets in Europe. Overall, a robust underlying performance in EMEA amidst the temporary headwinds. Turning to the Americas on slide 9. The Americas region delivered +3.4% like-for-like growth, led by volume mix of +2.5% and price of +0.9%. Within those numbers, NORAM, North America, delivered +1.5% like-for-like growth. In the US, our priority is to regain momentum and competitiveness outside of protein, and Q1 showed some improvement versus the low point in Q4.

Speaker #2: Overall, APAC remains a growth region for us with opportunities across countries and categories. And with that, let me conclude with slide number 11. As we have been discussing this morning, we delivered a solid performance in this first quarter amid a challenging context.

Speaker #2: We are applying with rigor our winning strategy, focus on our health-focused categories, that benefit from attractive underlying demand, and that continue to grow faster than the average of the food and beverage market.

So overall, a robust underlying performance in EMA. Emit, the temporary had been—

Speaker #2: We are therefore confirming today our guidance for year 2026, consistent with our mid-term guidance of like-for-like sales growth between plus 3 and plus 5 percent and for recurring operating income to grow faster than sales.

Turning to the Americas on slide number 9.

Speaker #2: And with that, let me hand it back to Mathilde to start the Q&A session. Thank you, Juergen. So we'll start the Q&A session with a question from Guillaume Delmas, UBS.

The Americas region delivered plus 3.4% like-for-like growth, led by volume mix of plus 2.5% and price of plus 0.9% within those numbers. No Ram. North America delivered plus 1.5% like-for-like growth.

Juergen Esser: This was driven by additional capacity on yogurt starting to kick in and an improving dynamic on creamers, helped by easier base of comps since the month of March. On top of that, our STōK brands continued to deliver strong double-digit growth. Specialized Nutrition saw high single-digit growth in the quarter, led by Aptamil in Latin America and Neocate in the US. Overall, an improved situation in the Americas with still a lot of things to do in the US. Quality of execution remains the focus area, particularly in dairy, and this is where the teams are fully mobilized. Turning to slide 10. APAC delivered +6% like-for-like growth, entirely driven by volume mix. Within APAC, China AON delivered +10.3% growth like-for-like. In EDP, Japan again demonstrated strong momentum, continuing to gain share in a very competitive dairy market, thanks to strong functional claim execution.

In the US, our priority is to regain momentum and competitiveness outside of protein, and Q1 showed some improvement versus the low point in Q4.

Speaker #2: Guillaume?

Speaker #3: Thank you very much. And good morning, Juergen and Mathilde. First, quick housekeeping. Could you quantify the impact from the IMF recall on your Q1 numbers at the time of the fully results you were talking about, 50 to 100 basis points?

This was driven by additional capacity on yogurt starting to kick in, and an improving dynamic on 3 Bus.

Is your base of comps since the month of March.

On top of that, our stock brands continued to deliver strong double-digit growth.

Speaker #3: And then what kind of impact are you assuming for Q2? And then my two questions. The first one on the commodity cost outlook. And particularly, on this, to what extent this outlook has changed in recent weeks?

Specialized Nutrition saw high single-digit growth in the quarter, led by Aptamil in Latin America and Nutricia in the US.

Overall, an improved situation in the Americas, with a lot of things to do in the US.

Quality of execution remains the focus area, particularly in Dairy, and this is where the teams are fully mobilized.

Speaker #3: And as a result, what kind of COGS inflation would you be baking in in your 2026 operating profit guidance? And still on input cost inflation, I mean, we've heard from a large French dairy company.

So turning to slide number 10,

APAC delivered plus 6% like-for-like growth, entirely driven by what you mix within a pack.

Speaker #3: They were already thinking about pricing actions. Wondering if it's something you're also contemplating or, as you were alluding to on the call, Juergen, for now you think your productivity savings can fully offset this additional commodity headwinds.

C and our own delivered plus 10.3% growth like-for-like.

Juergen Esser: Specialized Nutrition continued to deliver solid growth in China across both IMF and Medical Nutrition. In Q1, we saw particularly strong demand for our allergy range within pediatrics, for adult oral solutions in adult medical nutrition, as well as for Essensis within the IMF category. The medical nutrition category remains vibrant, while the infant milk category continues to normalize as expected. In Waters, we saw contrasting dynamics across our two main brands in the region. Solid growth for Mizone as we are preparing for the season, while severe flooding impacted the category in Indonesia. Overall, Asia Pacific remains a growth region for us, with opportunities across countries and categories. With that, let me conclude with slide number 11. As we have been discussing this morning, we delivered a solid performance in this Q1 amid a challenging context.

In EDP Japan, again, demonstrated strong momentum, continuing to gain share in a very competitive dairy market, thanks to strong functional claim execution.

Speaker #3: And then second question, short one, just on North America. Back in February, you sounded confident about a significant step up in like-for-like sales growth from Q2.

Specialized Nutrition continued to deliver solid growth in China, across both IMF and Medical Nutrition.

In Q1, there is a particularly strong demand for our allergy range within Pediatrics.

Speaker #3: We've seen some early positive signs in Q1. So I would assume this is still the case. And if you can help us a little bit unpack what will be the key drivers behind that, if it's just the creamers' basis of comparison, or you would expect a more broad-based acceleration.

So that orange solutions in direct Medical Nutrition, as well as for a census within the IMF category.

The Medical Nutrition category remains vibrant, while the Infant Milks category continues to normalize as expected.

Speaker #3: Thank you very much.

Speaker #1: Yeah. Good morning, Guillaume. Many questions. So let me go through that. First, on the IMF impact, the impact we saw in Q1 is exactly in line with what we discussed a couple of weeks ago.

And in Waters, we saw contrasting dynamics across our two main brands in the region: solid growth for Mizone as we are preparing for the season, while severe flooding impacted the category in Indonesia.

Overall, Apark remains a growth region for us, with opportunities across countries and categories.

Speaker #1: So not nothing more to say here. It's been really an exceptional situation, as we faced, in a way, the combined effects of a larger industry recall together with the Middle East supply chain disruption.

And with that, let me conclude with this slide, number 11.

Juergen Esser: We are applying with rigor our winning strategy, focused on our health-focused categories that benefit from attractive underlying demand and that continue to grow faster than the average of the food and beverage market. We are therefore confirming today our guidance for 2026, consistent with our midterm guidance of like-for-like sales growth between +3% and +5%, and for recurring operating income to grow faster than sales. With that, let me hand it back to Mathilde to start the Q&A session.

Speaker #1: Europe's supply chain situation is back to normal in most of the countries. Middle East, as you can imagine, is a bit more difficult because shipping a product into the Middle East is a bit more tough.

Speaker #1: But we are making also good progress there. So we expect progressive normalization of the IMF business performance during the course of the year. When it comes to the commodity outlook, I mean, the situation is obviously extremely volatile.

As we have been discussing this morning, we delivered solid performance in this first quarter amid a challenging context. We are applying with rigor our Winning Strategy, focusing on our health-focused categories that benefit from attractive underlying demand and that continue to grow faster than the average of the food and beverage market.

We are therefore confirming today our guidance for year 2026.

Consistent with our midterm guidance of like-for-like sales growth between plus 3% and plus 5%, and for recurring operating income to go faster than sales.

And with that, let me hand it back to Mate to start the Q&A session.

Olivier Fretel: Thank you, Juergen. We'll start the Q&A session with a question from Guillaume Delmas, UBS. Guillaume?

Mathilde Rodie: Thank you, Juergen. We'll start the Q&A session with a question from Guillaume Delmas, UBS. Guillaume?

Speaker #1: You have seen that over the last weeks, impacting spot prices for transportation and packaging, obviously, immediately, but also for some other materials, including fertilizers.

Thank you, you again.

Guillaume Delmas: Thank you very much, and good morning, Juergen and Mathilde. First, quick housekeeping. Could you quantify the impact on the IMF recall on your Q1 numbers? At the time of the full year results, you were talking about 50 to 100 basis points. What kind of impact are you assuming for Q2? My two questions, the first one on the commodity cost outlook, and particularly on this, to what extent this outlook has changed in recent weeks? What kind of COGS inflation will you be baking in your 2026 operating profit guidance? Still on input cost inflation, we've heard from a large French dairy company. They were already thinking about pricing actions.

Speaker #1: We have as you know, hedging protection in place. We just moderating short-term the impact on our P&L. The way we are addressing it, in this very volatile context, is that we have been accelerating first and foremost ongoing productivity efforts.

Speaker #1: To mitigate the immediate cost impacts as much as possible. And for the rest, we are pretty much monitoring the situation. To decide if and where we may need to take other mitigation actions.

Thank you very much, and good morning, Jen and Mathilde. Uh, first, quick housekeeping—could you quantify the impact of the IMF recall on your Q1 numbers? At the time of the full-year result, you were talking about 50 to 100 basis points. Uh, and then, what kind of impact are you assuming for Q2?

Speaker #1: But there's really too early to say. So we are focusing on really monitoring the situation for at least for the next days and weeks to decide upon to do more or less.

Speaker #1: For North America, I would say we are pleased with what we saw in the we are pleased with what we saw in Q1. We saw a step up versus the Q4.

Um, and then my two questions. Um, the first one on the commodity cost outlook. Um, and particularly on this, to what extent this outlook has changed in recent weeks? And as a result, what kind of COGS inflation would you be baking in, uh, in your 2026 operating profit guidance?

Speaker #1: And the step up came through Yoghurts and came through Creamers. Because of more capacity, as you mentioned, and because of the lapping in Creamers in March.

Guillaume Delmas: Wondering if it's something you're also contemplating, or as you were alluding to on the call, Juergen, for now you think your productivity savings can fully offset these additional commodity headwinds. Then second question, a short one just on North America. Back in February, you sounded confident about a significant step up in like-for-like sales growth from Q2. We've seen some early positive signs in Q1, so I would assume this is still the case. If you can help us a little bit unpack what will be the key drivers behind that, if it's just the creamers' basis of comparison, or you would expect a more broad-based acceleration. Thank you very much.

And still have an input cost inflation. I mean, we've heard from a large French dairy company, they were already thinking about pricing actions.

Speaker #1: So obviously, we'll not give a guidance for a quarter for a region for a subsegment. But our ambition is to further improve the situation, progressively, as we go in the year.

Savings can fully offset, uh, this, uh, additional commodity headwinds.

Speaker #1: As you will have more capacity coming online. And as we are activating more and more our brands across the portfolio in North America.

Speaker #3: Thank you very much.

Speaker #2: Thank you, Guillaume. Next question from John Cox. Kepler. John?

Speaker #4: Yeah. Good morning, guys. Thank you for this. Sorry, just to come back to the formula. I wonder if you could just be a bit more granular in terms of what you think the impact was.

Juergen Esser: Yeah. Good morning, Guillaume. Many questions, so let me go through that. First on the IMF impact. The impact we saw in Q1 is exactly in line with what we discussed a couple of weeks ago, so nothing more to say here. It's been really an exceptional situation as we faced, in a way, the combined effects of a larger industry recall together with the Middle East supply chain disruption. Europe supply chain situation is back to normal in most of the countries. Middle East, as you can imagine, is a bit more difficult because shipping a product into the Middle East is a bit more tough, but we are making also good progress there. We expect a progressive normalization of the IMF business performance during the course of the year. When it comes to the commodity outlook, the situation is obviously extremely volatile.

And then second question, uh, short 1 just on North America. Uh, back in February, you started confident about a significant step up in like, for like sales growth from Q2. Uh, we've seen some early positive signs in q1. So I would assume this is still the case and and if you can help us a little bit unpack what will be the key drivers behind that? If it's just the the screen is basis of comparison or you would expect a more broad-based acceleration. Thank you very much.

Speaker #4: If you just say, "Take flat the specialized nutrition in Europe and do the minus 4.3," that's about 65 basis points. I'm just wondering any more granularity on it.

Yeah, good morning. You have many, many questions, so let me go through that first. On the IMF impact, the impact we saw in Q1 is exactly in line with what we discussed a couple of weeks ago. So, not—no

Speaker #4: I understand the category is slowing down because of everything that's happened. What your thoughts are on the category in Europe as we go through the year.

Speaker #4: And then just knock-on impact elsewhere. It looks like there's a bit of a slowdown elsewhere, but nothing really material. I wonder if you can just confirm that about the.

Speaker #4: About formula. Thank you.

Speaker #1: Yeah. Morning, John. Look, on the quantification, there's really not much more to say. What you see in Q1 is really in line with what we said.

Nothing more to say, he has been really an exceptional situation as we faced in a way. The combined effects of a larger industry recall together with the Middle East supply, chain, disruption, uh, Europe supply chain situation is back to normal in most of the countries Middle East. As you can, imagine is a bit more difficult because shipping a product into the Middle East, is a is a bit more tough but we are making also good progress there. Uh, so we expect the progressive normalization of the IMF business performance during the course during the course of the year.

Speaker #1: Despite the fact that the Middle East conflict was not really on our radar during the full year, discussions. When it comes to Europe, as I said, the supply chain situation is pretty much back to normal.

Juergen Esser: You have seen that over the last weeks, impacting spot prices for transportation and packaging obviously, immediately, but also for some other materials, including fertilizer. We have, as you know, hedging protection in place, which is moderating short-term the impact on our P&L. The way we are addressing it, in this very volatile context, is that we have been accelerating, first and foremost, ongoing productivity efforts, to mitigate the immediate cost impacts as much as possible. For the rest, we are pretty much monitoring the situation to decide if and where we may need to take other mitigation actions, but that's really too early to say. We are focusing on really monitoring the situation, at least for the next days and weeks, to decide upon to do more or less. For North America, I would say, we are pleased with what we saw in Q1.

Speaker #1: What we are seeing is, and there's no surprise, that the category during those recalls has been a bit softer. And this is why we are investing into rebuilding the trust with parents and key opinion leaders.

When it comes to the commodity outlook, uh, I mean the situation is obviously extremely, extremely volatile. Um, you have seen that over the last weeks, impacting spot prices for transportation and packaging, obviously, immediately, but also for some other materials, including fertilizer.

We have, as you know, hedging protection in place.

Speaker #1: Which contributes to recovery. Market share situation across Europe is quite fluid. We are up in some countries, down in some others. Very much depending on local competitive situations since the recall.

Uh, which is moderating, short-term, the impact on our P&L—the way we are addressing it. Uh, in this Revolt I context, is that we have been accelerating, first and foremost, ongoing productivity efforts.

Speaker #1: Sometimes market share rating is a bit difficult because what happened in that situation is that people went instead to supermarkets more to pharmacies. So there's been a big shift in shopping behaviors during the crisis.

Speaker #1: That is now rebouncing back. Net-net, looking at it, I believe that we will be able to regain a strong competitive situation. And that also the category will progressively recover.

To mitigate the immediate cost impacts as much as possible. And for the rest, we are pretty much monitoring the situation to decide if and where we need to take other mitigation actions. But it is really too early to say. So we are, we are focusing on really monitoring the situation, but at least for the next days and weeks to decide upon to do more or less.

Speaker #1: So this is why I believe IMF business, for us over the year, will progressively go back to where it used to be. Not a lot more to say.

Juergen Esser: We saw a step up versus the Q4, and the step up came through yogurts and came through creamers, because of more capacity, as you mentioned, and because of the lapping in creamers in March. Obviously we'll not give a guidance for a quarter, for a region, for a sub-segment. Our ambition is to further improve the situation progressively as we go on the year, as we'll have more capacity coming online and as we are activating more and more our brands across the portfolio in North America.

Speaker #1: Middle East, we'll stay a little bit tense. For the coming weeks, depending on how the conflict goes.

Speaker #4: Yeah. And in Croatia, like China and stuff?

Speaker #1: Yeah. China, look, China was not affected by the recalls. We had, as you can see from the numbers, we had a solid sell-in in Q1.

Uh, for North America, I would say we are, we are pleased with what we saw in the, we are pleased with what we saw in q1. We saw a step up whether the Q4 and the step-up came through yogos and came through a creamos because of more capacity as you mentioned, and because of the lapping increasers in in March, so obviously, we will not give a guidance for for a quarter for a region for a sub segments. Uh, but

Speaker #1: However, we are constantly monitoring social media. Which is true for China and which is true for the world to understand any possible sentiment change.

Uh, but our ambition is to further improve the situation progressively. As we go on through the year, as you will have more capacity coming online, and as we are activating more and more of our brands across the portfolio in North America.

Guillaume Delmas: Thank you very much.

Olivier Fretel: Thank you, Guillaume. Next question from Jon Cox, Kepler. Jon?

Mathilde Rodie: Thank you, Guillaume. Next question from Jon Cox, Kepler. Jon?

Thank you very much.

Speaker #1: Yeah. It's also true that in many countries authorities have increased since the recall. The frequency and depth of quality controls. Which is true for China.

Thank you. Next question from John Cox.

K player.

Jon Cox: Yeah, good morning, guys. Thank you for this. Sorry, just to come back to the formula. I wonder if you could just be a bit more granular in terms of what you think the impact was. If you just, say, take flat the Specialized Nutrition in Europe and do the -4.3, that's about 65 basis points. I'm just wondering, any more granularity on it? I understand the category is slowing down because of everything that's happened. What are your thoughts on the category in Europe as we go through the year? Then just knock-on impact elsewhere. It looks like there's a bit of a slowdown elsewhere, but nothing really material. I wonder if you can just confirm that about formula. Thank you.

Speaker #1: Here, especially for imported products. Our teams on the ground are working hard to make sure that we address these requirements while avoiding any supply chain disruptions.

John, yeah, good morning, guys. Uh, thank you, thank you for this. Um, just sorry, just to come back to the formula. Uh

I want to give you a bit more granularity in terms of what we think the impact was. If you just say

Speaker #1: That you know, overall, for China, the category is normalizing. There is no new news. So overall, not a lot of news to say.

Speaker #4: Thank you.

Speaker #2: Thank you, John. So the next question is from David Roux, Morgan Stanley.

Speaker #3: Morning, Mathilde and Juergen. Two questions from my side. Firstly, just on US yoghurt. Could you give us an update on where you stand with your incremental yoghurt capacity in the US?

Juergen Esser: Yeah. Morning, Jon. Look, on the quantification, there's really not much more to say. What you see in Q1 is really in line with what we said, despite the fact that the Middle East conflict was not really on our radar during the full year discussions. When it comes to Europe, as I said, the supply chain situation is pretty much back to normal. What we are seeing is, and there's no surprise that the category during those recalls has been a bit softer, and this is why we are investing into rebuilding the trust with parents and key opinion leaders, which should contribute to recovery. Market share situation, of course, Europe is quite fluid. We are up in some countries, down in some others, very much depending on local competitive situations since the recall.

Take flat, uh, the, uh, specialized nutrition in Europe and do the minus 4.3, that's about 65 basis points. Um, I'm just wondering, uh, you know, any more granularity on it, and I understand the category is slowing down because of everything that's happened. Um, you know, what your thoughts are on the category in Europe as we go through the year, and then just the knock-on impact elsewhere. Uh, it looks like there's a bit of a slowdown elsewhere, but nothing really material. Um, I wanted if you can just confirm that about the, um, uh, about formula. Thank you.

Speaker #3: Is this now fully commissioned? And how long do we think this should take until it translates to sort of an improvement of the yoghurt's volumes there?

Yeah, morning John. Look, on the quantification, there's really not much more to say, uh.

Speaker #3: And then my second one is on the fuel deal. Can you tell us what the right level of interest costs for Danone will be now post-consolidation of this?

What you see, what you see in Q1 is really in line with what we said, that despite the fact that the Middle East conflict was not really on our radar during the full-year discussions,

Speaker #3: And then what is the earnings accretion from this deal? Thank you.

Speaker #1: Look, good morning, David. I would say in the US, a good improvement in Q1. As we were traveling through the quarter, yoghurt, we started to benefit from capacity coming online.

Speaker #1: But as we discussed at several occasions, this is not a one-shot capacity increase. This is several production lines coming online as we travel through the year.

Juergen Esser: Sometimes market share reading is a bit difficult because what happens in that situation is that people went instead to supermarkets, more to pharmacies. There's been a big shift in shopping behaviors during the crisis that is now rebounding back. Net-net, looking at it, I believe that we'll be able to regain a strong competitive situation and that also the category will progressively recover. This is why I believe MF business for us over the year will progressively to go back to where it used to be. Not a lot more to say. Middle East will stay a little bit tense for the coming weeks, depending on how the conflict goes.

Speaker #1: And especially as we travel through the first six months of the year. And so as this capacity comes online, we have the ability to reactivate not only high protein, which continues to grow strongly.

Speaker #1: But also to activate our other brands. In the US. So that has started in Q1, but it really started and so it will be progressive as we go through the next two quarters in particular.

Speaker #1: But I would say we are rather happy with that. Creamers, as I said, we were lapping in the months of March. The supply chain issues of last year, we could see that in the, let's say, internal reading, but also in the external reading in market shares.

That to supermarkets more to pharmacies. So there's been a big shift in shopping behaviors during uh during the during the crisis that is now rebounding back net, net. Uh, looking at it, I believe that you'll be able to regain a strong competitive situation, and that also the category will be progressively recovered. So this is why I believe IMF business for us over the over, the year will progressively to go back to where, where it used to be, um, not not a lot more to say, Middle East. We stay a little bit tense uh, for the coming weeks, depending on how the conflict goes.

Jon Cox: Into Asia, like China and stuff?

Juergen Esser: Yeah, China. Look, China was not affected by the recalls. As you can see from the numbers, we had a solid sell-in in Q1. However, we are constantly monitoring social media, which is true for China, which is true for the world, to understand any possible sentiment change. It's also true that in many countries, authorities have increased, since the recall, the frequency and depth of quality controls, which is true for China, here, especially for imported products. Our teams on the ground are working hard to make sure that we address these requirements while avoiding any supply chain disruptions. That, you know, overall for China, the category is normalizing. There is no new news. Overall, not a lot news to say.

I'm into Asia, like China and stuff.

Speaker #1: Which gives us also confidence for the full year. On fuel, look, first, very exciting. Fantastic company. Fantastic complementary product groups. And on top of the products, they are selling, I think, what is unique in their model is really their direct-to-consumer channel management.

Yeah, China look. Uh, you know, China was not affected by the, by the recalls. We had the, as you can see, from the numbers, we had a solid sell sell in, in, in q1. However, we are constantly monitoring social media, which is true for China and which is true for the for the world to understand any possible sentiment change.

Speaker #1: Combined with quite state-of-the-art digital marketing capabilities. So this is really exciting. It increases our exposure to fast-growing markets in both in Europe and in the US.

Yeah, it's also pretty many countries or 30s have increased since the recall the frequency and, and depth of of quality controls, which is true for China here, especially for imported products, our teams on the ground are working hard to make sure that that we address these requirements while avoiding any, uh, supply chain disruptions that, you know, overall, for China, the category is normalizing. There's no new news. Uh, so, so overall, not not a lot of news to, to say,

Celine Pannuti: Thank you.

Jon Cox: Thank you.

Speaker #1: And so it will enhance our growth profile in both regions. When it comes to interest costs related to the deal, you saw actually what we have been issuing in bonds over the last weeks.

Thank you.

Mathilde Rodier: Thank you, Jon. The next question is from David Roux, Morgan Stanley.

Mathilde Rodie: Thank you, Jon. The next question is from David Roux, Morgan Stanley.

Thank you, Jen. So the next question is from David, Morgan standing.

David Roux: Morning, Mathilde and Juergen. Two questions from my side. Firstly, just on US yogurt, could you give us an update on where you stand with your incremental yogurt capacity in the US? Is this now fully commissioned, and how long do we think this should take until it translates to sort of an improvement of the yogurt's volumes there? My second one is on the Huel deal. Can you tell us what the right level of interest costs for Danone will be now post-consolidation of this? What is the earnings accretion from this deal? Thank you.

Speaker #1: Which gives you a sense of the interest costs linked to this operation. It will not be EPS equative in year one, as you can imagine.

Jen, um, two questions from my side, firstly. Um, just on US yogurt, could you give us an update?

Speaker #1: But it will be EPS equative very fast because it's a fast-growing business at very nice gross margins. And so we make sure that we are pushing this opportunity to the max, leveraging the totality of their product portfolio.

On, um, where you stand with your incremental yoga capacity in the US— is this now fully commissioned, and how long do we think this should take until it translates to, sort of, an improvement of the yoga volumes there?

Speaker #1: As they have very variety of product formats. So really excited about this welcoming hue to the Danone family.

And then my second one is on the fuel deal. Um, can you tell us what the right level of interest costs, um, for Danone, um,

Speaker #4: Great. Juergen, can I just follow up on your last point on fuel? So is it fair to assume that some of the expensive debt that fuel has will be refinanced with some of the paper you've issued now?

Will it be in now, post-consolidation of this? And then, what is the earnings accretion from the steel? Thank you.

Juergen Esser: Look, good morning, David. I would say, in the US, a good improvement in Q1, as we were traveling through the quarter. Yogurt, we started to benefit from capacity coming online. As we discussed at several occasions, this is not a one-shot capacity increase. This is several production lines coming online as we travel through the year, and especially as we travel through the first six months of the year. As this capacity comes online, we have the ability to reactivate not only high protein, which continues to grow strongly, but also to activate our other brands in US. That has started in Q1, but it really started, and so it will be progressive, as we go through the next two quarters in particular. I would say we are rather happy with that.

Speaker #1: Well, you saw we issued bonds over the last weeks. So in that sense, they are I mean, from the financing standpoint, things have been in the pocket.

Speaker #4: Thank you.

Speaker #2: Thank you, David. The next question from Warren Ackerman, Barclays.

Speaker #5: Yeah. Good morning, Juergen. Good morning, Mathilde, Warren here at Barclays. I've got one small housekeeping and then two questions. The housekeeping is in China, Juergen.

Look um, good morning, David the I would say in the US a good Improvement, uh, in q1. Uh, as we were traveling through the, through the quarter, a year ago, we started to benefit from a capacity coming online but as we discussed that several occasions, uh, this is not the 1 shot capacity. Increase, this is uh, several production lines coming online as we travel through the year and especially as we travel through the first 6 months of the year. And so, as this capacity comes online. This, we, we have the ability to reactivate, not only high protein, which continues to grow.

Speaker #5: Are you able to kind of clarify whether you're seeing any issues on the border product coming into China on extended cerulide testing as we've heard from A2 Mill?

Speaker #5: Just wondering whether that's something to think about. That's the housekeeping. And then my two questions are, can you maybe Juergen kind of outline the kind of growth that you're seeing in your kind of three sort of growth platforms, which are high protein, out-of-home, and medical, just to give us an idea in terms of how they're tracking?

Juergen Esser: Creamers, as I said, we were lapping in the month of March, the supply chain issues of last year. We could see that in the, let's say, internal reading, but also in the external reading in market shares, which gives us also confidence for the full year. On Huel, look, first, very exciting. Fantastic company. Fantastic complementary product groups. On top of the products they are selling, I think what is unique in their model is really the direct-to-consumer channel management, combined with quite state-of-the-art digital marketing capabilities. This is really exciting. It increases our exposure to fast-growing markets in both Europe and in the US. It will enhance our growth profile in both regions.

Speaker #5: The first one. And then secondly, obviously a lot of focus on Asia. But can you talk a little bit about some of the kind of other EMs as well, particularly thinking kind of Latin America, trends, and perhaps some of the kind of Southeast Asian, India regions as well?

Strongly, but also to activate our, uh, other brands uh, in in the US. So that has started in q1 but it really started and so it will be Progressive as we go through the next. Uh, so next 2 Quarters Inn in particular, but I would say we are rather happy with that. Um, 3 months, I said we were lapping. We lapping in the months of March, uh, the supply chain issues of last year. We could see that in the, let's say internal reading, but also in the external reading, in market shares, uh, which gives us also confidence for the for the 3 year on, uh, on fuel. Uh, look, um,

Speaker #5: Just given the conflict. Thank you.

Speaker #1: Yeah. Good morning. Good morning, Warren. Yeah. First, on China and border, we see what everybody's seeing, which is that the authorities across the globe are strengthening instantly the, let's say, quality controls.

Speaker #1: This is also true for imported IMF products into China. The teams on the ground are mobilized and are managing it to avoid any kind of supply chain disruption.

First very exciting. Uh, fantastic, fantastic, uh, company of fantastic complimentary product groups. And on top of the products, they are selling. I think what, what is unique in their model, is really the direct to Consumer management Channel management combined with quite state-of-the-art the digital, uh, uh, marketing, uh, capabilities. So, this is really exciting, it, it's, um, increases our exposure to fast growing markets in both in Europe, and in the US.

Speaker #1: So not a lot to report here. When it comes to our winning platforms, high protein is the number one growth driver of the company.

Juergen Esser: When it comes to interest costs related to the deal, you saw actually what we have been issuing in bonds over the last weeks, which gives you a sense of the interest costs linked to this operation. It will not be EPS accretive in year one, as you can imagine, but will be EPS accretive very fast because it's a fast-growing business at very nice gross margins. We make sure that we are pushing this opportunity to the max, leveraging the totality of their product portfolio, as they have a variety of product formats. Really excited about welcoming Huel to the Danone family.

Uh, and Switzerland, hence our growth profile in both, uh, in both regions. Um, when it comes to interest costs related to the deal, you, you saw actually what we have been issuing in bonds over the last weeks.

Speaker #1: Has been and is. Which is exciting. And I mean, in terms of scale, it continues to it's raising its contribution quarter after quarter as this is not anymore a European phenomenon or US phenomenon.

Speaker #1: I mean, high protein is now a reality. Everywhere around the world. I've been talking about Japan. I could talk about Latin America. I could talk about Australia.

Speaker #1: And so we are everywhere prioritizing investments into those platforms. While we are also investing into elements which are more essential protein delivery, like Skia.

David Roux: Great. Juergen, can I just follow up on your last point on Huel? Is it fair to assume that some of the expensive debt that Huel has will be refinanced with some of the paper you've issued now?

Speaker #1: I want here to mention the kefir also innovation. We have been launching, which is not really on high protein. It's more on gut health.

Juergen Esser: Well, you saw we issued bonds over the last weeks. In that sense, from a financing standpoint, things have been in the pocket.

Great. Um, yeah. Can I just follow up on, uh, your last point on fuel? So, is it fair to assume that some of the expensive debt that you have will be refinanced with some of the paper you've received now?

Speaker #1: This has been extremely well welcomed in the European markets between initially launched. And we are rolling that out as fast as possible. But you will see that appearing also in other markets around the world.

What you saw, we issued bonds over the last—over the last weeks. Also, in that sense, there are—I mean, from the financing standpoint, things have been in the pocket.

David Roux: Thank you.

Thank you.

Mathilde Rodier: Thank you, David. The next question from Warren Ackermann, Barclays.

Mathilde Rodie: Thank you, David. The next question from Warren Ackermann, Barclays.

Speaker #1: So we are very, very excited about it. Out-of-home continues to grow faster than sales in retail channels. And as we discussed at several instances, this is also due to the fact that all our innovations we are launching are eligible for out-of-home consumption.

Warren Ackerman: Yeah, good morning, Juergen. Good morning, Mathilde. Warren here at Barclays. I've got one small housekeeping and then two questions. The housekeeping is in China, Juergen, are you able to kind of clarify whether you're seeing any issues on the border, product coming into China, on extended sterility testing, as we've heard from a2 Milk. Just wondering whether that's something to think about. That's the housekeeping. My two questions are, can you, maybe, Juergen, outline the kind of growth that you're seeing in your three growth platforms, which are high protein, out-of-home, and medical, just to give us an idea in terms of how they're tracking? That's the first one.

Thank you, David. The next question from Warren. Ackman, bless.

Speaker #1: A lot of drinkable formats. This is also where fuel is extremely interesting because it comes with, again, with ambient product formats. So it's just strengthening on this point.

Speaker #1: And when it comes to medical, I mean, exciting. I mean, if there's one thing which is really exciting us, it's medical across the board.

Speaker #1: In the US, because Kate Farms integration goes very well. And in China, because we are making very good progress, not only in our, I would say, legacy business, which is tube, but also in oral feeding, which is pretty new to China, as we've been discussing.

Warren Ackerman: Secondly, obviously a lot of focus on Asia, but can you talk a little bit about some of the other EMs as well, particularly thinking Latin America trends and perhaps some of the Southeast Asian, India, regions as well, just given the conflict? Thank you.

Speaker #1: Last point on more emerging markets. Latin America doing actually pretty well. I need to say. Seeing good dynamics. Brazil, Mexico in particular. Argentina will be excited about the joint venture.

Ya, good morning. Uh Jurgen good morning, Miss Warren here at Park lays. Um I've got 1, small housekeeping and then 2 questions the housekeeping is in China. Jurgen, are you able to kind of clarify whether you're seeing any issues on the border, uh, product coming in to try and, uh, on extended Sterilite testing, as we've heard from A2 mil, just wondering, whether that's something to think about, uh, that's a housekeeping. And then, my 2 questions are, can you? Um, maybe Jurgen kind of outline the kind of growth that you're seeing in your kind of 3 sort of growth platforms, which are, you know, high protein, uh, out of home and, and, and medical just to give us an idea, uh, in terms of how that how they're tracking. Uh, the first 1 and then secondly, um, obviously a lot of focus on Asia, but can you talk a little bit about some of the kind of other uh Em's uh as well particularly thinking kind of Latin America uh trends

Juergen Esser: Yeah. Good morning, Warren. Yeah, first on China and border. We see what everybody's seeing, which is that the authorities across the globe are strengthening instantly the, let's say, quality or controls. This is also true for imported IMF products into China, that the teams on the ground are mobilized and are managing it to avoid any kind of supply chain disruption. So not a lot to report here. When it comes to our winning platforms, high protein is the number one growth driver of the company, has been and is, which is exciting and it's in terms of scale, it's raising its contribution quarter after quarter as this is not anymore a European phenomenon or US phenomenon. High protein is now a reality everywhere around the world. I've been talking about Japan. I could talk about Latin America, I could talk about Australia.

Some of the kind of Southeast Asian, India regions as well, just given the conflict. Thank you.

Speaker #1: So we will have a platform at scale. It will be a billionaire platform, which, yes, will not be anymore consolidated top line. But it should be EPS equative for the company over time.

Speaker #1: Southeast Asia actually very strong underlying dynamics has not been contributing at this to the same extent in Q1 as over the last year because we had some phasing effects there.

Speaker #1: But here we, I mean, you know that this is one of the big growth opportunities of the company.

Speaker #5: Thank you.

Speaker #2: Thank you, Warren. Next question from Olivier Nicolai.

Speaker #5: Good morning, Juergen. Mathilde and team. Just two questions first, and then just a follow-up. Could you please comment on the consumer demand in Europe, what you're seeing?

Speaker #5: I know it's still early days. But do you expect, on your experience, any type of downtrending in EDP? Secondly, just to clarify on the previous comment you made on the IMF recall, I think you said by within the year we'll be sorted.

Yeah, good morning, uh, good morning Gordon. Um, yeah, first on on China and and Border. We see what everybody is seeing, which is that the authorities across the globe are strengthening instantly, the let's say a quality, a controls. This is also true for imported IMF products into China, that the teams on the ground are mobilized and, and are managing it to avoid any kind of supply chain this option. So, not not a lot to report here, uh, when it comes to our winning platforms, um, high protein is the number 1, growth, driver of the company has been and is, um, which is exciting. And and it's it's I mean in terms of scale, it continues to it's raising its contribution quarter after quarter. As this is, not any more European phenomenon, or you or us phenomenal. I mean, high protein is now a reality everywhere around the world. I've been talking about Japan. I could talk about Latin America. I could talk about the austral.

Juergen Esser: We are everywhere, prioritizing investments into those platforms, while we are also investing into elements which are more essential protein delivery, like Skyr. I want here to mention the Kefir innovation we have been launching, which is not really on high protein, it's more on gut health. This has been extremely well welcomed in the European markets, which we initially launched, and we are rolling it out as fast as possible, but you will see that appearing also in other markets around the world. We are very excited about it. Out-of-home continues to grow faster than sales in retail channels. As we discussed at several instances, this is also due to the fact that all our innovations we are launching are eligible for out-of-home consumption, a lot of drinkable formats.

Speaker #5: Could you perhaps give us a little bit of a comment what kind of impact you would expect for Q2? And then lastly, on North America, following the purchase of Kate Farm, which allows you to enter that medical nutrition opportunity, are you currently satisfied with the access you have to the hospital channel?

Earlier. And so we are everywhere prioritizing investments into, uh, into those platforms. While we are also, uh, investing into, uh, Elements which are more essential, put the in delivery, like a skier. Um, I I want here to mention the, the, the key here. Uh, also Innovation we have been launching, which is not really on high protein. It's more on gut health.

Speaker #5: Or would you actually need more scale to capture fully this opportunity there? Thank you.

Speaker #1: Yeah. Good morning. Good morning, Olivier. Consumer demand in Europe, I mean, no surprise. Overall consumer sentiment is quite muted. Having said that, and we discussed that over the last quarters, it's very polarized dynamics in food and beverages.

Speaker #1: Healthy food is on trend. And consumers are willing to pay for value. We need to you need to offer value, but then consumers are willing to buy.

It has been extremely, uh, extremely well welcomed in the European markets, which we initially launched, and we are rolling that out as fast as possible. But you will see that appearing also in other markets around the world. So, we are very, very excited, uh, about it. Other form continues to grow, uh, faster than, uh, uh, sales in retail channels. And as we discussed at several instances, this is also due to the fact that all our innovations we are launching are, uh,

Juergen Esser: This is also where Huel is extremely interesting because it comes with, again, this ambient product format, so just strengthening on this point. When it comes to Medical, exciting. If there's one thing which is really exciting us, it's Medical across the board. In the US, because Kate Farms integration goes very well. In China, because we are making very good progress, not only in our, I would say, legacy business, which is tube, but also in oral feeding, which is pretty new to China, as we've been discussing. Last point on more emerging markets, Latin America doing actually pretty well, I need to say, seeing good dynamics, Brazil, Mexico, in particular. Argentina, we're excited about the joint venture. We will have a platform at scale.

Speaker #1: And so this is what we are seeing. High protein, kefir, immunity, everything which we are proposing, which is functional, which is differentiated, which is premium, by the way, is working well for us.

Eligible for other home consumption. A lot of drinkable for this is also very huge, is extremely interesting because it comes with, again, with ambience, product format. So it's just strengthening on this point. And when it comes to, um, medical,

Speaker #1: And so we are leveraging the science we have in our products. To deliver on or to make these products attractive to the consumer, even at a more premium price.

Speaker #1: Same is for Danette, by the way. Our premium desserts. Because people want to have pleasure during the day. So it's not only about functional benefits on health, but also feeling good, especially in these difficult times.

Uh, medical. I mean, exciting. I mean, if there’s one thing, which is really exciting, it’s medical across the board in the US because Kate Farms integration goes very well. And in China, because we are making very good progress, not only in our, I would say, legacy business—which is tube—but also in oral, in our feeding, which is pretty new to China as we’ve been discussing.

Speaker #1: So less worried about downtrending from a product standpoint. Obviously, we pay a lot of attention to be available in the right channels. At the right price points.

Last point on the more emerging markets—Latin America doing actually pretty well. Uh, I need to say, seeing good dynamics—uh, Brazil, Mexico in particular, Argentina. Be excited about the joint venture.

Juergen Esser: It will be a EUR 1 billion platform, which, yes, will not be anymore consolidated top line, but it should be EPS accretive for the company over time. Southeast Asia, actually, very strong underlying dynamics. It has not been contributing to the same extent in Q1 as over the last year because we had some phasing effects there. Here, you know that this is one of the big growth opportunities of the company.

Speaker #1: And so format management and channel management, including on discounters. But also on our way from home. Is a very, very important part of our strategy moving forward.

Speaker #1: IMF recall, look, please do not expect me to give a guidance for a sub-region and a sub-category. We expect a progressive improvement, as said supply chain situation in Europe is pretty much back to normal focus is on really recovering the credibility and the trust of the category.

So we will, we will have a platform at scale. It will be a billionaire platform, which yes, uh, will not be any more Consolidated, the top line, but it should be EPS secretive for the company. Over time, southeast Asia, actually very strong, underlying Dynamics has not been contributing at this to the same extending q1 as is over the last year, because we had some phasing effects there. But here we, I mean, you know, that this is 1 of the big growth opportunities of of the company.

Warren Ackerman: Thank you.

Thank you.

Mathilde Rodier: Thank you, Warren. Next question from Olivier Nicolai. One moment.

Mathilde Rodie: Thank you, Warren. Next question from Olivier Nicolai. One moment.

Questions from Nikolai.

Olivier Nicolai: Good morning, Juergen, Mathilde, and team. Just two questions first, and then just a follow-up. Could you please comment on the consumer demand in Europe, what you're seeing? I know it's still early days, but do you expect, on your experience, any type of downtrading in EDP? Secondly, just to clarify on the previous comment you made on the IMF recall, I think you said by within the year will be sorted. Could you perhaps give us a little bit of comment what kind of impact you would expect for Q2? Lastly, on North America, following the purchase of Kate Farms, which allows you to enter that Medical Nutrition opportunity, are you currently satisfied with the access you have to the hospital channel, or would you actually need more scale to capture fully this opportunity there? Thank you.

[Analyst]: Good morning, Juergen, Mathilde, and team. Just two questions first, and then just a follow-up. Could you please comment on the consumer demand in Europe, what you're seeing? I know it's still early days, but do you expect, on your experience, any type of downtrading in EDP? Secondly, just to clarify on the previous comment you made on the IMF recall, I think you said by within the year will be sorted. Could you perhaps give us a little bit of comment what kind of impact you would expect for Q2? Lastly, on North America, following the purchase of Kate Farms, which allows you to enter that Medical Nutrition opportunity, are you currently satisfied with the access you have to the hospital channel, or would you actually need more scale to capture fully this opportunity there? Thank you.

Speaker #1: And lastly, on North America, Kate Farms, very exciting for the reason you mentioned, which is the first time in the history of Danone, we have access to the healthcare system.

Speaker #1: And the hospital system in the US, this is a fantastic platform. And what we are doing, as we speak, is to combine the access of this platform with the science we are bringing from our global, specialized nutrition hub.

Speaker #1: And so the early science we have are very, very promising. We see good growth since the acquisition. And we are just starting to materialize the synergies we are seeing.

Speaker #1: You know that we before the acquisition of Kate Farms, we had already two smaller acquisitions of companies also in the same field in the US.

Speaker #1: Called Real Food Brands and Functional Formularies. So now we are unleashing the combined power of those assets. So quite exciting.

Juergen Esser: Yeah. Good morning, Olivier. Consumer demand in Europe, no surprise, overall consumer sentiment is quite muted. Having said that, and we discussed that over the last quarters, there's very polarized dynamics in food and beverages. Healthy food is on trend, and consumers are willing to pay for value. You need to offer value, but then consumers are willing to buy. This is what we are seeing. High protein, kefir, immunity, everything which we are proposing, which is functional, which is differentiated, which is premium, by the way, is working very fast. We are leveraging the science we have in our products to deliver on or to make this product attractive to the consumer, even at a more premium price. Same as for Danette, by the way, our premium dessert, because people want to have pleasure during the day.

Uh good morning Jen and team uh just um 2 questions first and then just a follow-up. Uh could you please comment on on the consumer demand in Europe? What you're seeing. I know it's still early days but do you expect on your experience? Any type of down trading in EDP? Um secondly just uh to cry fire on on the previous comment you made on the IMF recall. I think you said by within the year would be would be sorted. Uh could you perhaps give us a little bit more comments? What kind of impact you would expect for for Q2 and then lastly on on North America uh following the purchase of K farm, which allows you to enter that Medical Nutrition opportunity? Are you currently satisfied with the access? You have with the hospital Channel, or would you actually need more scale to capture your fully this opportunity there? Thank you.

Speaker #3: A lot more partnerships.

Speaker #2: Thank you. Thank you, Olivier. Next question from Nicolas Ferron. Bank of America.

Speaker #5: Yes, good morning, Juergen and Mathilde. Two quick questions for me. First one, maybe you could remind us if you ship your baby food product by plane or by boat to China?

Yeah, good morning. Good morning, Olivia consumer demands, uh, in Europe, I mean, no, no surprise. Overall, consumer sentiment is quite muted. Having said that and we discussed that over the last quarter, it's very polarized Dynamics in in food and beverages. The healthy foods is on Trend and consumers are willing to pay for Value. We need to you need to offer value, but then consumers are willing to buy. Uh, and so this is what we are seeing.

Speaker #5: And the second one, Juergen, do you have any strong view on what might be the changes in regulation in the US baby food market following the operations talk speed that's going on?

Speaker #5: Thank you.

Speaker #1: Good morning, Nicolas. Look, overall, you can imagine that our supply chain is very much a supply chain, which is using ship transportation or boat transportation especially between Europe and China.

Immunity—everything which we are proposing, which is functional, which is differentiated, which is premium, by the way—is working well for us. And so, we are leveraging the science we have in our products.

Speaker #1: But this is not only between Europe and China. That's true for the overall operations and very particular situations we may ship something by plane.

Juergen Esser: It's not only about functional benefit on health, but also feeling good, especially in this difficult time. Less worried about downtrending from a product standpoint. Obviously, we pay a lot of attention to be available in the right channels at the right price points, and so format management and channel management, including on discounters, but also on away from home, is a very important part of our strategy moving forward. As I recall, look, please do not expect me to give a guidance for a sub-region and a sub-category. We expect a progressive improvement as that supply chain situation in Europe is pretty much back to normal. Focus is on really recovering the credibility and the trust of the category.

Speaker #1: But you can imagine it from a financial standpoint, that's a bit less interesting. We are having, I would say, good control on our supply chain.

Speaker #1: Because we are used to a bit of erratic behavior in those supply chains. So I think that's pretty much under control. And nothing particular to report.

Speaker #1: When it comes to the US, and the infant milk market in the US, you know that we are not really playing in that market.

Speaker #1: So there's not a lot to say. So we are not following that very, very closely. I'm afraid to tell you.

Speaker #5: Okay. Thank you.

Uh, to, um, to deliver on to make these products attractive to the consumer, even at a more premium price. Same is for net, by the way, you know, our premium desert because people want to have pleasure during the day. So it's not only about functional benefits on health, but also feeling good especially in this difficult time. So less less varied about down trading from a product standpoint. Obviously, we pay a lot of attention to be available in the right channels at the right price points. And so a format management and channel management including on on Discounters but also on our way from home is a very, very, very important part of our strategy moving forward. IMF recall look. Um, please do not expect me to give a guidance for us, for a Sub sub region and a subcategory we expect a progressive Improvement. As said, supply chain situation in in Europe is pretty much back to normal. Focus is

Speaker #2: Thank you, Nicolas. And next, and last question from Celine Pannuti, JP Morgan.

Juergen Esser: Lastly, on North America, Kate Farms, very exciting for the reason you mentioned, which is the first time in the history of Danone we have access to the healthcare system, and the hospital system in the US. This is a fantastic platform. What we are doing as we speak is to combine the access of this platform with the science we are bringing from our global Specialized Nutrition hub. The early signs we have are very promising. We see good growth since the acquisition. We are just starting to materialize the synergies we are seeing. You know that before the acquisition of Kate Farms, we had already two smaller acquisitions of companies also in the same field in the US, called Real Food Blends and Functional Formularies. Now we are unleashing the combined power of those assets, so quite exciting.

Speaker #6: Thank you. Good morning, everyone. So my first question is coming back on the short-term impact. So Indonesia, flooding, and overall, you said the momentum in Southeast Asia is good.

Really recovering the credibility and the trust of the category. And lastly, on North America, Kate Farms—very exciting, for the reason you mentioned, which is the first time in the history of Danone we have access to the health care system.

Speaker #6: But do you expect water to step up in acceleration in Q2? And then Middle East, you have this constraint in shipping. Are you thinking that this is going to linger into the quarter?

Speaker #6: And how big is that? Because you said Middle East is 2 to 3 impact and is more so for specialized nutrition. Just try to understand a bit those elements.

Speaker #6: I see that

Speaker #1: That consensus is at four on Bloomberg for Q2 So do you think that is in line with what you expect to be a progressive acceleration in SL ?

Uh, and the hospital system in the US. This is a fantastic platform. And what we are doing. As we speak, is to combine the excess of this platform, with the, the science, we are bringing from, uh, our Global specialized nutrition Hub. And so, we, we really sense. We have a very, very promising. Uh, we see good growth since since the acquisition, and we are just starting to materialize. The the synergies. We are thinking, you know, that we before the acquisition of Kate Farms, we had already 2, smaller Acquisitions of companies. Also in the same field in the US,

Speaker #1: Do you think that is a good reflection ? Are you comfortable with that ? My second question is on margin Given the weak start to the year , specialized nutrition impact , are we expecting any margin in the first half of the year And in H2 you will be facing higher cogs .

Called Real Food Brands and Functional Formularies. So now we are unleashing the combined power of those assets. So quite exciting.

Olivier Nicolai: A lot more partnership.

[Analyst]: A lot more partnership.

Mathilde Rodier: Thank you. Thank you, Olivier Fretel. Next question from Nicolas Terhon, Bank of America.

Mathilde Rodie: Thank you. Thank you, Olivier Fretel. Next question from Nicolas Ceron, Bank of America.

Thank you. Thank you. Next question from Nicholas.

Nicolas Terhon: Good morning, Jürgen and Mathilde. Two quick question from me. First one, maybe you could remind us if you ship your baby food product by plane or by boat to China. The second one, Jürgen, do you have any strong view on what might be the changes in regulation in the US baby food market following the Operation Warp Speed that's going on? Thank you.

Nicolas Ceron: Good morning, Juergen and Mathilde. Two quick question from me. First one, maybe you could remind us if you ship your baby food product by plane or by boat to China. The second one, Juergen, do you have any strong view on what might be the changes in regulation in the US baby food market following the Operation Warp Speed that's going on? Thank you.

Speaker #1: Inflation Do you think we should start to think about that as we model for potential pressure in the second half of the year ?

Bank of America. It's good morning, Jan and Mathilde, two quick questions from me. First one: maybe you could remind us if you ship your baby food product by plane or by boat to China.

Speaker #1: Thank you

Speaker #2: Good morning Celine . So let me go one by one through your through your questions First on water . I mean , Indonesia is a big business for us .

And the second one you're going, do you have any strong view on what might be the changes in regulation in the US baby food market following the operations torque speed that's going on?

Thank you.

Juergen Esser: Good morning, Nicolas. Look, overall, you can imagine that our supply chain is very much a supply chain which is using ship transportation or boat transportation, especially between Europe and China. This is not only between Europe and China, that's true for our overall operations. In very particular situations, we may ship something by plane. You can imagine from a financial standpoint, that's a bit less interesting. We are having, I would say, good control on our supply chain, because we are used to a bit of erratic behavior in those supply chains, so I think that's pretty much under control and nothing particular to report. When it comes to the US and the infant milk market in the US, you know that we are not really playing in that market, so there's not a lot to say.

Speaker #2: It was a tough quarter because it has been has been raining a lot and a lot of flooding , which was very which was very public , which when you have a business model , like we have it going through all the hundreds and thousands of islands of Indonesia has been quite disruptive .

Speaker #2: But . So that should be back to us . This is back to normal as we speak . And so we will see a better performance , better performance .

Uh, good morning, Nicolas. Look overall, you can imagine that our our supply chain is very much, a supply chain, which is using, uh, ship transportation of both Transportation, uh, especially between Europe and and China, but this is not only between Europe and China. And that's true for the

Speaker #2: Moving forward , which obviously will help the overall waters performance Middle East , I would say people are our people are doing everything possible to find workarounds to deliver our products in the region that's growing better and better .

Um, we are having, I would say, good control on our supply chain.

Speaker #2: And of course , we are also hoping that the overall situation will , will improve . But here , you know , the I think the situation is , is better managed from , from , from day to day It happens that this is a lot of imported products going into , into that region .

Juergen Esser: We are not following that very closely, I'm afraid to tell you.

Speaker #2: But again , work arounds are working better and better . Don't ask me to give you a precise Q2 outlook or to to comment on what today's consensus is .

Uh because we are used to a bit of erratic behavior in those Supply chains. So I think that's pretty much pretty much under control and nothing particular to report when it comes to the US and the the uh, infant milk Market in the US. You know, that, uh, we are not really. We are not really playing in that market, so there's not not a lot to, to say. So, you know, we are not following that very, very closely. Um, I'm afraid to tell you,

Nicolas Terhon: Okay. Thank you.

Nicolas Ceron: Okay. Thank you.

Thank you.

Mathilde Rodier: Thank you, Nicolas. Next and last question from Celine Pannuti, JPMorgan.

Mathilde Rodie: Thank you, Nicolas. Next and last question from Celine Pannuti, JPMorgan.

Speaker #2: I think what the takeaway should be is probably that we are confirming today with confidence . Our guidance . And I think that's that's an important statement And this is true for top line .

Celine Pannuti: Thank you. Good morning, everyone. My first question is coming back on the short-term impact. Indonesia flooding and overall, you said the momentum in Southeast Asia is good, but do you expect to see a step up in acceleration in Q2? Middle East, you have this constraint in shipping. Are you thinking that this is going to linger into the quarter? How big is that? Because you said Middle East is 2 to 3 impact, and it's more for specialized. Just try to understand a bit those elements. I see that consensus is at 4 on Bloomberg for Q2. Do you think that is in line with what you expect to be a progressive acceleration in SN? Do you think that is a good reflection? Are you comfortable with that? My second question is on margin.

Thank you, Nicola. And next, and last question from Sellen Fee, GP Morgan.

Speaker #2: And which means in an acceleration versus the Q1 . And this is true for the for the bottom line . And we know that in our business model in DANONE , the bottom line , the margin is direct consequence of the top line , because our business model is , is based on quality growth for the margin .

Speaker #2: Obviously , two things to keep in mind . One is the softer start to the year with specialized nutrition and the other one , as you say , we don't know really what the inflationary pressure will do for for the full year .

Speaker #2: Too early to say for the moment . We have hedging in place , as I mentioned , is moderating the short term impact .

Speaker #2: And we are we are accelerating as much as we can . Productivity for the rest . I mean , you see the oil price one day at $80 , the next day at 120 .

Thank you. Good morning everyone. Um, so my first question, um, is coming back on the short term impact. So Indonesia, flooding, and overall you take a momentum in is good, but do you expect water, uh, to, uh, see a step up in acceleration in Q2 and then Middle East, you have this, uh, constraint in shipping, are you, you know, thinking that this is going to linger, uh, into the quarter? And how, how big is that? Uh, in? Because you send me the list is 2 to 3 pack and it's more for. So, for specialization, just try to understand a bit, uh, those, uh, uh, elements. Um, I see that consensus is at 4, uh, on Bloomberg for Q2. Uh, so do you think that is in line with

Would you expect there to be a progressive acceleration in A? Do you think that is a good reflection? Are you comfortable with that? My second question.

Speaker #2: It's extremely difficult to make a forecast for that . So I think what what will help us moving forward is the agility we have learned over the last year's to react to an erratic environment and to and to launch mitigation actions .

Celine Pannuti: Given the weak start to the year, Specialized Nutrition impact, are we expecting any margin in H1? In H2, you will be facing higher COGS inflation. Do you think we should start to think about that as we model for potential pressure in H2? Thank you.

Will margin. Um,

Speaker #2: Our focus remains quality , growth . And here we are extremely pleased to see that the underlying dynamics of our business remains very strong , because this is the best way to create value for the company for the years to come

Juergen Esser: Good morning, Celine. Let me go one by one through your questions. First on water, Indonesia is a big business for us. It was a tough quarter because it has been raining a lot and a lot of flooding, which was very public. Which, when you have a business model like we have it, going through all the hundreds and thousands of islands of Indonesia, has been quite disruptive. That should be back to normal as we speak, and so we will see a better performance moving forward, which obviously will help the overall Waters performance. Middle East, I would say our people are doing everything possible to find workarounds to deliver our product in the region. It's going better and better. Of course, we are also hoping that the overall situation will improve. Here, I think the situation is better managed from day to day.

Start to the year, specialized nutrition impact. Uh, are we expecting any margin in the first half of the year and, um, in H2 you will be facing higher COGS inflation. Uh, do you think we should start to think about that as we model for, uh, potential, uh, pressure in the second half of the year? Thank you.

Speaker #1: Thank you

Speaker #2: Thank you .

Speaker #3: Thank you , Celine . And we have one very last question that came at the last minute from some side Tom .

Speaker #4: Yes . Morning again . Just quickly on the China nutrition business overall . Sorry . I missed it earlier on the call , but could you give a view on what the growth rate of the infant formula is versus the adult nutrition in China ?

Good morning Seline, so let me go. Uh, 1 by 1 through your, through your questions. Uh, first on water. Uh yeah, I mean Indonesia is a big business for us. It was a tough quarter because there has been has been raining a lot and a lot of flooding which was very, it was very public which uh when you have a business model like we have it going through all the the hundreds and thousands of islands of Indonesia has been quite disruptive but so that should be better. This is back to normal as as we speak. And so we will see a better performance

Speaker #4: Please . And what do you see as happening to your market share in international formula please . In in China and perhaps what's happening to pricing like for like versus impacts on growth , please .

Uh, better performance moving forward, which obviously will help the overall Waters performance. Um, Middle East—um, I would say, uh, our people are doing everything possible to find workarounds to deliver our products in the region. That's going better and better. Uh, and of course, we are also hoping that the overall situation will, uh, will improve. Uh, but here, you know,

Speaker #2: Yeah , good , good morning Tom . So look , China and specialized nutrition solid pretty solid print in Q1 . Very exciting growth rates in in number of areas in medical nutrition .

Juergen Esser: It happens that this is a lot of imported products going into that region. Again, workarounds are working better and better. Don't ask me to give you a precise Q2 outlook or to comment on what today's content of this. I think what the takeaway should be is probably that we are confirming today with confidence our guidance. I think that's an important statement. This is true for top line, and which means implicitly an acceleration versus to Q1, and this is true for the bottom line. We know that in our business model in Danone, the bottom line, the margin is direct consequence of the top line because our business model is based on quality growth.

Speaker #2: Actually , in pediatrics , very , especially on the allergy formula . We are making on the adult side . A pretty good progress on , on launching or I would say solidifying the presence in oral medical nutrition .

Know, the I I think the, the situation is, um, is better managed from, from, from day to day. Uh, it happens that this is a lot of imported products going into into that region, but again, workarounds are working better and better. Uh, don't ask me to give you a precise cue toward log out to 1, to comment on what today's consensus is. I think what what the takeaway should be is probably that we are confirming today with confidence our guidance and I think that's that's an important statement.

Speaker #2: You know , this is something which hardly existed some time ago . And we believe that has a huge potential . So that's very exciting .

Speaker #2: So growing , very growing very fast on that side . On the other side , also , IMF , which is a pretty solid print in in Q1 where we are benefiting from two things , where we are benefiting from , I would say the overall very strong market and market share position .

Juergen Esser: For the margin, obviously two things to keep in mind, one is the softer start to the year with Specialized Nutrition, and the other one, as you say, we don't know really what the inflationary pressure will do for the full year. Too early to say. For the moment, we have hedging in place, as I mentioned, moderating the short-term impact, and we are accelerating productivity as much as we can. For the rest, you see the oil price one day at $80, the next day at $120. It's extremely difficult to make a forecast for that. I think what will help us moving forward is the agility we have learned over the last years to react to an erratic environment and to launch mitigation actions. Our focus remains quality growth.

Uh, and this is true for Topline and which means implicitly an acceleration versus to q1. And this is true for the for the bottom line. Uh, and we know that in our business model in Don, the, the bottom line, the margin is direct consequence of the Top Line because our business model is, uh, is based on a quality growth.

Speaker #2: We have gained over the last quarters and you have seen that that our market shares have been evolving strongly . And secondly , the strength of the senses , the senses brand or subbrands , which has helped us to have a very strong print , by the way , in in both Chinese label and international label pricing in pricing , in that category , there is nothing really to report .

Speaker #2: Actually , pricing for us has not been really a driver . I mean , not in Q1 , not for the last quarter's .

Uh, for the margin obviously to things to keep in mind, 1 is the softest start. To the year we specialize in creation and the other 1 is you say, we don't know really what the inflationary pressure will do for for the full year to early to say for the moment, we have a hedging in place, as I mentioned, in moderating the the short term impact then we are we are accelerating as much as we can uh productivity for the rest. I mean you see the oil price 1 day at $80, the next day at 120. It's extremely difficult to make a forecast for that. So I think what? What will help us moving forward? What is the agility? We have learned over the last

Speaker #2: In the end , all the numbers you see in in pricing in IMF , all the numbers you see in net sales in IMF of last quarter are equal to to volume mix contributions .

Juergen Esser: Here we are extremely pleased to see that the underlying dynamics of our business remains very strong because this is the best way to create value for the company for the years to come.

Speaker #2: So no particular comment on pricing

Yes, to react to a neurotic environment and to, um, and to launch mitigation actions, our focus remains quality growth. Uh, and here we are extremely pleased to see that the underlying dynamics of our business remain very strong, because this is the best way to create value for the company for the years to come.

Celine Pannuti: Thank you.

Thank you.

Juergen Esser: Thank you, Celine.

Speaker #4: Okay . Thank you .

Mathilde Rodier: Thank you, Celine. We have one very last question that came at the last minute from Tom Sykes, Deutsche Bank. Tom?

Mathilde Rodie: Thank you, Celine. We have one very last question that came at the last minute from Tom Sykes, Deutsche Bank. Tom?

Thank you. Thank you.

Speaker #3: Thank you Tom . So with that , we we end the Q&A . Thank you everyone .

The last question that came at the last minute. So from some site,

Tom Sykes: Yes. Thanks, Celine. Morning again. Just quickly coming back on the China nutrition business overall. Sorry, I missed it earlier on the call. Could you give a view on what the growth rate of the infant formula is versus the adult nutrition in China, please? And what do you see as happening to your market share, in international formula, please, in China? And perhaps what's happening to pricing like-for-like versus mix impacts on growth, please?

um,

Morning again. Just quickly coming back on the China.

Um, nutrition business overall, sorry. Mr. Earlier on the call. But could you give a view on what the growth rate of the infant formula is versus the adult nutrition in China, please? And, and what do you see as happening to your market share? Uh, in international formula. Please in uh, in China. Um, and perhaps what's happening to pricing like for like versus, uh, mix impacts on Grace please.

Juergen Esser: Yeah. Good morning, Tom. Look, China and Specialized Nutrition, pretty solid print in Q1. Very exciting growth rates in a number of areas in Medical Nutrition. Actually, on pediatrics, very strong, especially on the allergy formula. We are making, on the adult side, pretty good progress on launching or I would say solidifying the presence in oral Medical Nutrition. This is something which hardly existed some time ago, and we believe that has a huge potential. That's very exciting, so growing very fast on that side. On the other side, also IMF, which was a pretty solid print in Q1, where we are benefiting from two things. I would say the overall very strong markets and market share position we have gained over the last quarters. You have seen that our market shares have been evolving strongly.

Yeah, good, good morning, Tom. So look, China and Specialized Nutrition—solid. Pretty solid print in Q1. Uh, very exciting growth rates in a number of areas in Medical Nutrition. Uh, actually, in Pediatrics, very strong, especially on the allergy formula.

Uh, we are making, uh, on the adult side, pretty good, uh, progress on. Um,

Juergen Esser: Secondly, the strength of the Essensis brand or sub-brand, which has helped us to have a very strong print, by the way, in both Chinese label and international label. Pricing in that category, there's nothing really to report, actually. Pricing for us has not been really a driver. Not in Q1 or not for the last quarters. In the end, all the numbers you see in pricing in IMF, all the numbers you see in net sales in IMF of last quarters are equal to volume mixed contribution, so no particular comment on pricing.

On launching or or I would say solidifying the present in oral medical intuition. You know do something which hardly exists that sometime ago and we believe that is a huge potential. So that's very exciting. So growing very growing, very fast on that side, on the other side, also, IMF with with a pretty solid print in in q1, uh, where we are benefiting from to things. We are benefiting from I would say the overall, very strong markets and market share position, we have gained over the last quarter. So and and you have seen that that our marketers have been evolving strongly and and secondly the the strength of the census

Uh, the senses, um, brands or sub Brands, which is help us to have a very strong print by the way, in, um, in both, uh, Chinese label and international, uh, label pricing in pricing in that category. There's nothing really to report actually pricing for US has not been really a driver. I mean, not in q1 or not for the last quarters uh, in the end, all the numbers you see in uh in pricing in IMF, all the numbers you see in net sales in IMF of last quarters are equal to to volume mixed contribution. So no no particular comment on on prices.

Tom Sykes: Okay. Thank you.

Okay, thank you.

Mathilde Rodier: Thank you, Tom. With that, we end the Q&A. Thank you, everyone.

Mathilde Rodie: Thank you, Tom. With that, we end the Q&A. Thank you, everyone.

Thank you, Tom.

Juergen Esser: Thank you everyone for listening, for connecting, and talk to you very soon. Have a great day. Bye-bye.

So with that, we end the Q&A. Thank you, everyone. Thank you, everyone, for listening, for connecting, and talk to you very soon. Have a great day. Bye-bye.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect your lines.

Thank you for your participation. This does conclude today's program for the DANONE Q1 2026 Earnings Call. You may now disconnect your lines.

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