Ladies and gentlemen, thank you for standing by, and welcome to the Denone Q3 twenty nineteen Sales Call. Joining us on the call today, we have Cecile Tabinet, CFO, and Nadia Benslam, Nicholas Head of IR. This time, all participants are in a listen only mode. I must advise you all the call is being recorded today, Friday 8 of October 2019. I would now like to hand the call over to your first speaker today, Nadia Benslam Nicholas.
Please go ahead.
Thank you, operator. Good morning to everyone. This is Nadia speaking. Welcome to the investor call for the announced Q3 2019 sales. I'm joined today by our CFO, Cecile Cabanis.
We will begin with some prepared remarks by Cecile, that will keep to around 20 minutes leaving plenty of time for Q And A. Before I head over to Cecile, I draw your attention as usual to the disclaimer on Page 2. About forward looking statements and non GAAP financial indicators. Thank you, Nadia, and a
welcome welcome to all of you. As always, you know, we appreciate your interest in Danan. If you recall, when we last speak in July, I guided towards an acceleration in revenue growth as the year progressed. And, as you seen by now, we have accelerated growth in Q3 with a 3% like for like sales growth that compares with a 2.5% in Q2. If we look across the businesses, we progress towards our long term goals.
And many of our initiatives aimed at quality of growth, product innovation, pricemix enhancement, and discipline in revenue and portfolio management. This initiative are gaining further traction with great outcomes from both consumers and customers. That said, it's also fair to say that we closed the quarter slightly below where we wanted to be as some of the headwinds that we flagged that Q2 did not ease. And especially, we do not control the weather. Now going into details of the number in the next page, page 4, the total sales for the 3rd quarter reached a EUR 6,419,000,000, which is an increase of 3.7% on a reported basis.
If we look in more detail at the bridge, the like for like sales growth that I just mentioned was 3% in Q3. Accelerating from 2.5% in Q2. The value growth continued to be the main driver of the like for like growth with a 4.6% positive impact in all reporting lines, it's positive. And with both some price and revenue management, and a product mix country mix that all contribute positively. Volumes were down minus 1.6%.
Driven by soft demand in Waters and still a negative volume in Russia for ADP. In the next block, I think it's useful to remind that our like for like numbers, it include Argentina's performance, given the way we've decided to treat the hyper inflationary situation in the country. Not like some of our peers. So if we include Argentina, we would have posted a 3.4% growth in Q3. Scope effect linked to the divestment of Health Bend Farm, last April is negative in impact of 1.3%.
And finally, currencies had a positive impact adding 1.6% of sales, mainly driven by U. S. Dollar appreciation. If I go to Slide 5, I will, of course, detail each entity performance, but I think it's worth to highlight the volume value growth through each business. Specialized Nutrition Growth Acceleration versus the second quarter was driven 1 third by the volumes, now back into positive territory for the first time since the beginning the year and to serve by value reflecting both a positive country and product mix, given value enhancing Innovate across our portfolio and performance of China.
Essential Dairy And Plan Based delivered a sustained 3.4% value growth reflecting here again, the delivery of the strategy of product premiumization, format adaptation and portfolio rationalization. The volumes were down minus 2.7%, which is due to a negative development in our U. S. Greek yogurt segment and negative volumes in Russia, as I mentioned earlier. Waters volume were down 2.5% mean, primarily from Europe, where we faced a tough comparison due, especially to the weather in August.
If we move through the details of our business and I'm jumping to Page 7, we specialize nutrition. So as you seen a spectacular quarter close to double digit, 9.8%. Exactly 1 year ago, I was outlining the new IMF category dynamics in China and the expectation for our business to go through 4 volatile and difficult quarters before starting to grow strongly again, which has materialized. If we go through the number by, segment in more details, Advanced Medical Nutrition delivered another very good quarter. We sales up mid single digit led by the pediatric segment and a growth that was again double digit in China and solid in Europe.
Early Life Nutrition sales have grown more than 10% this quarter, the key region of accelerated growth was, as expected, China, which was up more than 20%. Rest of the World posted another solid quarter with Americas growing strongly. Europe, that improved, driven in particular by the UK on a low base, if you remember last year. The rest of Asia posted strong growth, including a market share gain and further expansion in Southeast Asia. Coming back to China, the early Nutrition growth in China was favored by the base of comparison.
I, as we outlined earlier of Q3 2018, But looking at the underlying performance, we are sequentially growing in absolute term, and Q3 was the highest quarter ever in net sales. The acceleration in growth in Life Nutrition China was supported mostly by 2, actions. The first one is an increased presence in physical stores in lower tier is where we nearly doubled the number of MBS in which we directly distribute our product. And second, a very strong growth in our direct e commerce and including the rollout of some innovations in our cross border channels such as CarriCare ship milk. All together, the direct channel has grown faster than the indirect and it now accounting in Q3 for 5% of total sales in China, which is a successful performance in a category, growing in line with our estimates at mid single digit.
Moving to, essential and very plan based. A growth of 0.7% like for like in Q3 with volumes down minus 2.7% and value up 3.4%. The slowdown versus the previous quarter is entirely coming from 2 things. First, the dynamic of the Greek segment in the U. S, your growth business and second, the performance of CIS.
Both of these countries or segment end countries are facing some consumer and trading challenging environment. The momentum outside of this region continued to be And if we look at our main region, Europe confirmed and delivered slightly positive growth again, which is the key achievement of this quarter. We continue to make progress in the transformation of our dairy business and to move our portfolio towards new generations through innovation such as organic, clean level, nutrition labeling and on the go, with a positive mix impact. We are also making good progress in the execution of our plant based expansion plan, which is the biggest pillar of the acceleration in the coming years. And overall, we are top of that to accelerate launching, and we have launched now an Activia plant based, both in Spain and in Germany.
North America reported flat sales in Q3. Planned Based reported solid growth we exclude Vega, which was still negative this quarter, the renewal growth sales declined with the deteriorating price mix reflecting a competitiveness in the category, which is not in the total category, but, as I mentioned, penalized by the Greek conventional note segment, while more trendy segment like kids and newborn yogurt, probably you can plan best continue to grow. Premium Dairy also posted a declining sales given what we started to announce in term of discontinuation of noncore SKUs, while the core business under the Horizon brand has grown, has increased its market share in the refrigerated organic milk market. Coffee creamers continued to grow solidly driven notably by international delight, high school fee, address, and fee, and good performance of stock. Looking at the rest of the world, as I alluded to in CIS, the sales were down low single digit this quarter with a very negative volume as premium functional yield growth in Russia have been impacted by a consumer trading down and by some distribution loss.
LatAm posted moderate growth, driven by Mexico and in Astome Morocco delivered double digit growth as expected. One extra comment, which on plan based, which is really a key lever of EDP growth acceleration for the next year. It continued to deliver a consistent strong growth in Q3, including double digit growth of ARPU accelerating its rollout in new geographies and also outside Europe. Moving to Waters on Page 11. By now, it won't be a surprise because some other in the industry commented on the weather, but our water posted negative growth, minus 0.9%.
Worse than expected. Back in July, I said that, the entity would have to go through a very tough summer base comparison in Q3 that was up last year, 7% in the quarter. This was due to exceptional hot and dry weather in Europe in August last year. The overall result came actually big below expectation at some per hectoliter this year on average were 1 degree lower than Q3 2018. And you have, you can have a look at the chart on the bottom left of this slide.
And you can see the evolution over the last 3 summer and the correlation that we see between net sales and temperatures. And this is for our 4 biggest Eurofighter operations. So overall, this is not a dynamic topic. It was a category, short term topic where in all this market, we are gaining a mark we are not losing market share. It's around a stable or gaining.
Europe accounts, as you know, approximately 40% of the entity and the sales were down low single digit. All the decline was concentrated in August, and there was a return to growth in September. In Asia, the trends by country were confirm, meaning a continued strong growth in Indonesia and Turkey, declining sales for Mizone, where, as you know, we focus on a full rework of the brand to recon with younger Chinese consumers. Finally, LatAm delivered a strong quarter with all countries seeing positively. Moving to the outlook on Page 12, Overall, we have strong underlying business fundamental to pursue our sales growth acceleration, Dory, even if we continue to evolve in the context with uncertainty in terms of geopolitics and macroeconomic mix.
But if we focus on our activity fundamentals and plans, in specialized nutrition, our Asian platform will further and geographies through innovation also, particularly in China, where we have now a wide offer in premium alternative ingredient recipes through our direct international channel. Within EDP, Europe should continue to grow and yogurt in the U. S. Will be a focus for us with plan for, for example, our most successful innovation to be distributed nationwide. This is the case for our new low sugar brand to good which registered outstanding velocities and repeat rate.
We also expect plant base to further accelerate in Q3 4 with the new visual identity of Alpro, the recent launch of Activia plant based in Spain and Germany, and overall a step up our Oat offer, which is a buoyant ingredient in this category. Finally, what should improve, driven by, new consumer trends, such as no sugar and organic and or showed you the whole strength of the categories. If I go to Page 13, Our priorities and trajectory remain unchanged. Q3 was the 3rd consecutive quarter of top line growth acceleration, And looking at the 9 months year to date, we have delivered 2.1% sales growth. As a consequence, we can now our cell guidance for the full year 2019 and, sales will be between 2.5 and 3% on a full year basis like for like.
And of course, reiterate our guidance for recurring operating margin at above 15%. This should lead our recurring EPS to grow high single digit for the full year another very strong year that would bring the total growth of recurring EPS since 2014 to close to 50%, five-0 over the period. We remain very focused on discipline capital allocation, including continued portfolio management and delivery. And with this in mind, we continue to progress towards both our 2020 objective and 2030 goals. Maybe to conclude on Page 14.
Also, I appreciate that we are in a quarter coming the it's our 9 integrated goals. And, but the business, the brands and the people model towards was our key. It defines also our midterm mandate, especially how we manage the tension between the short, the mid and the long term, and we are fully focused on this agenda in order to make sure that we are creating a sustainable value for all Thank you very much. And I'm opening to your questions.
So 20 minutes sharp, Thank you, Cecile. Before going to Q And A, a reminder to kindly ask you to limit yourself during the session a maximum of 2 questions, please. I think the first questions come from Alain Oberiberber at MainFirst.
Thank you very much, Cecile. Good morning, Cecile and Nadia on our open loop main first. I have two questions. The first is regarding the specialized penetration and congratulations for very strong performance. However, if you look at the value and volume mix it looks like that the value mix is really high.
My question is a little bit, why was the pricing this high? And is this sustainable going into 2020? And the second question I have ease regarding ETP USA. Could you elaborate a little bit on the brand we are giving that almost 2% of group sales, when do you expect that to improve and maybe what are you going to do in order to have this improvement? Thank you very much.
Okay. So on a specialized nutrition, yes, the value is an impact element of the growth. But you have to remember that in this value, we have 2 components. First, we have the country mix coming from the very high performance of China, which is above 20% of growth. And second, in Q3, we have launched a certain number of innovation to our direct international channel, which also have increased the overall mix.
So this is, this is overall the what comes to this value part. On volume. However, we have now, progressed and we are back in 2 positive territory, and I think it's important to acknowledge it. On EDP U. S.
As I said, the overall The overall performance has been good. If you something I didn't say, but I think it's worth mentioning is that on the year to date basis, 85% of WhiteWave Portfolio is growing more than 6%. Now we have some offenders, the rest, the 15%. And on Vega, as you know, it's the leader in plant based nutrition in North America. Car.
You remember that we had an unfortunate unsuccessful reformulation of Vega 1 of last year, And since that, the sales of Vega have been declining, we are working on different items. The first one was an ongoing reformulation of the Vega 1, organic to improve the flavor. And it's expected to hit the shelf by the end of the year. And a recent launch of a new vehicle line, which is, protein made simple. It's a powder targeting the new mainstream consumers to the brand alongside the core sporadic's original Vega consumer base.
This action plan is supported by activation in order revitalize the spot DNA of the brand with an official sponsorship of triathlon events, iron man, world champion, she in Hawaii. And overall, you have to also know that the decline in performance is concentrated in one channel only, which is the club channel, where we had a very limited assessment and very much dependent on Vega 1, which is the one part, which is having problems. In modern trade, the guys stable in sales since the beginning of the year.
Next question is from Warren Ackerman at Barclays. Warren?
Morning, Cecile, morning Nadia. I hope you hopefully you can hear me okay. So 2 from me. The first one is on the EDP bridge. At the Q2 stage, you said EDP.
EDP grew just over 2% and you were talking about 3% EDP growth in the second half. So in Q3, we got 0.7. So that's well, 2 points to 200 basis below what you were saying. I get Russia down low single digit on say 15% of EDP, but that's only 50, 60 basis points. Can you maybe kind of walk us through the bridge of the miss versus your previous expectations And what do you expect specifically for EDP in Q4?
Why should we have confidence that EDP on the very low Q3 comes back to something decent in Q4. Just struggling to understand where you were. I know Russia and the U. S. Has got worse, but I just don't see how the numbers work.
And then secondly, on the guidance for the full year, if I take the low end of the guidance, 2.5 it implies 3.7% for Q4. And at top end, it implies 5.7% if either 3%. So it's a big range for Q4 3.7to5.7andmidpoint4.7. Can you maybe talk to us about what you need to do to get into the top end of the range and the bottom end of the range? And are you still confident that you will exit this year in line with your 2020 targets and that what we've seen in Q3 is a blip and maybe you can talk to us specifically about Russia because that seems to be the thing that changed what you're doing on Russia to try and improve the performance in the back in the fourth quarter and into 2020?
Thank you.
Thank you, Warren. So first on the bridge that you mentioned, It's 2 effects, overall under the bridge versus Q2. It's U. S. Going from moderate in Q2 to flat in Q3.
And this is, mainly due to what I mentioned on the Greek yogurt segment as well as premium dairy, whereas you know, we are also doing a conscious portfolio, pulling in order to make sure that, we are not continuing to push, the SKU that are not making sense. And the second one is Russia, which went from a flat in Q2 into a low single digit negative in Q3. As I mentioned, given the softer context leading consumers to trade down And as you know, we had set for many years now, and I think we all enjoyed very much for many years, the very solid growth of Russia and margin improvement. We've played on valorized. And today, the functional part of the value portfolio is not is getting less traction trading down.
So we are reviewing the portfolio in order to make sure that we are back to a consumer, a new environment. So this is one And then, in CIS, you also have Ukraine, Kazakhstan, and Belarus, which are continued to go well. And then I think it was more than two questions. So I
Yes, I get that still, but I don't get 200 basis. That doesn't account for 200 basis points shortfall from previous guidance? If I did a math on it, it's 50 bps on
Yes, because we thought Q3 would accelerate.
Okay.
As I'm not crediting the weather for water,
Okay. I'll take that one offline. And then on the guidance for Q4, the range?
You did your math and I think your ask, well done. And then on the acceleration levers, it's, it's what I mentioned. So specialized nutrition It will continue to be the Asian platform that will further expand through both penetration and innovation. I mentioned that in Q3, we managed to double our presence in mom and baby store in Lower Tier Cities. In EDP, Europe should continue to grow and your growth is in the U.
S. Should improve with both TDP gains and also, national presence of some of our well performing innovation. Plan based continued to accelerate, and we expect it will continue to accelerate in Q4. And of course, sweaters will improve. So looking forward, we are confident we have the high flavors to accelerate the growth.
Okay,
thanks.
Next question is from Richard Stella at Morgan Stanley.
Good morning. Just two questions from me. I was wondering if you could give some color on the competitive dynamic in plant based beverages, both from a branded competitive perspective and from private label. Has the dynamic changed at all? So that's the first question.
And then secondly, you've reaffirmed your objectives for 20. I'm guessing that includes the guidance for 4% to 5% like for like growth. Of course, this quarter is something of a setback So I think it would be really helpful if you could maybe talk through what gives you confidence the businesses will accelerate from here. Thank you.
Thank you for your question. So overall, we don't see any particular change in the competitive environment of a plant based beverage. So there is nothing specific to mention here. We continue to have a very, very good performance in Alpro. We continue to have good track in the innovation we put on the market.
And overall, solid growth in the U. S. And here again, a good welcoming of the innovations. On On the objective 2020, yes, they are confirmed. The main accelerator action factors are really the one and I mentioned on each of our entities.
So it will be around making sure we are doing a great execution of the plants because the plans are there in order to make sure that we can accelerate around the levels that I I mentioned answering to our end question, and then we'll be vigilant in the overall uncertainty on the global context Now I mean, I've read many of your comments on the Q3. We are talking about 1 quarter 1 quarter over a 5 years agenda, with very good performance. And I remind it to all of you of the performance in term of EPS growth. So I think we need to take the quarter for what it is. The weather in Europe was what it was.
If I could predict the weather, I would probably be some miles. So we need also to make sure that we understand that we are talking about Q3 that the fundamental of the business, they continue to be there, that Dupland Base, which is our main acceleration levers for EDP is accelerating and the plans are executing as we go according to plan. And a specialized nutrition, which is, has been very dynamic in China. And as I mentioned, it's not only a comparable base effect because on the absolute value, we are sequentially improving, and it was the best quarter ever in term of Julio. So let's not be caught on the quarter headline and make sure that we are all understanding the fundamentals of the business.
And where do we go? Where we come from? Where do we go and the plans that we have.
Next question is from Salin Panutti at JP Morgan. Good morning, Celine.
Yes, good morning, sorry. Can you hear me? Yeah, I wanted to come back on China. So two things on China. So, a specialized nutrition, you said mid single digit growth in the market and you alluded to what you did in terms of increased penetration.
Is it possible to understand, out of the 20% growth. What was the comp effect and what was the additional traction that you are getting? In order to get a bit of an understanding of what's the sustainability of growth as we look into 2020? And the second part of the China question is about Waters. Maison, you said I think we're declining.
Could you give us a bit more background of what's going on there? And whether we should see a turnaround. And then if I may take your second question, in terms of U. S. Yogurt you mentioned the rollout international of new innovation.
What about could you tell about the growth in dairy specifically? Are we now looking at a market that is declining? And what is the volume versus value component? Thank you.
Thank you, Celine. So on China, overall, in order to help you understand the dynamic, what I could say that if remove the base of comparison effect, we would be outperforming the market in terms of growth. Which is what we guided in time, even of midterm growth. And we said the overall category, we believe it will grow 3 to 5 percent and we will outperform the category. So versus the mid single digit, the underlying, increasing performance is out there the market.
On water, Mizone is declining. Maybe you recall at the beginning of the year, I'm not sure it was Emmanuel or myself, but we said that we were not counting on Amazon growth that there has been some, disruption in the category, and we needed to review the attributes of the brand and the mix overall. The teams are doing that, as we speak, and we would probably aim at launching a new version somewhere in the 1st part of next year. So that should help in order to rebound. But before that, we will continue to have a negative a negative growth on my zone, acknowledging that Q4 will be a small quarter on Amazon, you know, that Q2, Q3 are really the big, the big quarter.
On the new group, overall, our new group, we really have 2 segments as we've started to commence from several quarters now, we have Greek and conventional, Greek had, enjoying many years of growth and was 43% of the category. And it's it's decreasing. It's decreasing on the back of unsuccessful innovation that are going from across player in the industry. And most importantly, for loss of EDPs on the entire segment as well as an aggressive promotion pressure from competition. So that's overall what we see.
Now we have, on the other hand, the rest of the segments. I remember that our act Delis was the first SKU for a long time and growing. The key segment continued to be dynamic. And the plant base, as well in terms of emerging yogurt. So you really have 2 realities.
Greg being 43% of the segment course, it's weighing on the overall growth.
Thank you. I may have missed it, but did you did you give the number for plant based growth in the quarter?
Yeah, it was a consistent strong growth.
Thank
you. Next question is from James Edward Jones at AirDC. Good morning, James.
Danon's got a bit of a reputation for missing guidance, certainly more so than most of the companies that I follow. Do you feel that over optimistic forecasting at a group level is detrimental to operational management over the long term as people try to cut corners to make to make over optimistic guidance? And do you feel as need to take a more conservative approach to setting group guidance? And secondly, you confirmed the 2020 targets, but you didn't mention the 2020 two target for ROIC. Can you please confirm that that's still valid?
Thank you for your question. First, I would like to, remind everyone that, since 2014, we've been delivering what we said. And I think it's important because, that's what we are really focused on, make sure that we execute our plan. Now you also have to realize, and I think we had that discussion in the previous years that we need to manage the tension between the short, the medium and the long term, we need to make sure that what we do is create getting value and not just hitting the numbers of the quarter, which would be absolutely meaningless. So overall, I don't think your comment is fair in term of assessing, but I hear it, we are you can say mean, you can use the term you want on guidance.
We are 2.1%, 9 months year to date. We had a guidance around 3, which was not precise, we are giving a precision of 2.5% to 3%. And this is what we've done so far. And we have confirmed the margin guidance more than 15%. And I have also added that this would lead to a strong EPS growth.
And yes, sorry, sorry, on the ROIC, we are continuing to improve. And the target is confirmed. Yes.
Got it. Thank you. And I suppose I'll just come back on that and say look at the share price, people are clearly, clearly are concerned about this, judging by the tone of the questions that have been people are concerned about the, how realistic it is that you're going to see that revenue growth in Q4. That you're going to see 46 revenue growth after 2020. I'm just, I suppose, asking do you does everything in the business need to operate its full potential in order to hit those numbers?
Or is there a bit of slack built into your built into your guidance and your expectations?
Well, on what we control, the plan are there they are set up in order to deliver on what we don't know, I cannot answer.
Thank you. Thank you. Thank you very much. Next question, I think we'll have time for maybe 3 next questions. From Davydays at Societe Generale.
Good morning, David.
Good morning, all. Hi. Just two for me. Just on Russia, I'm sorry if I missed this, but I think you mentioned in the prepared remarks, you mentioned about distribution disruption impact. Just wonder whether touch on that whether there was a little bit of one offness that impacted or whether that was just a reference to shelf space generally in the category?
And then the second question is, the quarterly budget process,
you made a
strong or outlined strongly a couple of years ago so that the use of this quarterly budget review and that you are then reallocating focus in terms of investment and plans. I just wonder as you've gone through this year, perhaps in the last round of that quarterly budget review, what's changed? What specifically have you been have you moved resources into focus on more on where maybe you've been a little bit less focused. Thank you.
Thank you, David. So on Hersha, I don't think we can we can say there was a specific one off impact. There are some new competitive environment with local players and regional players. And on some of our distributors, it is changing a bit dynamic, but mostly it's around the portfolio and the consumers trading down on a strategy that has really delivered for so many years. So we need to adjust that.
Then on the quarterly performance, yes, we continue to be very active in the way we allocate or reallocate resources. If I take an example, over the Q3, we have put more resources behind our Chinese ELN platform in order to support the innovation. And, and overall, the success that we were getting in term of traction on penetration.
Thank you,
David. Next question is from Katie Hutchison at Davy.
Good morning, Cecile. Good morning, Nadia. And two questions from my side, please. So firstly, in terms of pricemix by region, so we've seen 3 quarters of positive pricemix growth in North America and Europe combined Can we infer from that that gross margin is continuing to expand in that region in line with your midterm objectives? And then secondly on plant based and your strategy for Asia.
What is your strategy for that region and also how I'll turn substrates and plants outside of almond and soy are progressing and some numbers behind that would be helpful. Thank you.
Thank you, Kathy. So, overall, yes, to your first part of the question, meaning that the gross margin given the pricemix is expanding are also for EDP, for example, we were hit by quite an inflation in term of milk, but we also have a productivity So we are vigilant, to make sure that we have the right dynamic in terms of overall gross margin. And if you remember, we had also set a rule in term of innovation that they should be accretive to the gross margin. So we are following that closely. In terms of Asian plant based today for us, it's very, very small and it's built in our plan for the next year's in term of acceleration, but we will come back in due time to discuss that with you.
Okay. And on the alternative substrates?
So on the alternative substrates, so we continue be a strong in soy overall. And, in term and almond, of course, which is quite a good segment. And as I think I mentioned, OT is getting very buoyant. So we are now present in haute and especially with Alpro expecting to accelerate on that Okay.
Thank you. Okay. Thank you very much, Kate. I think we are planning to take a last question. From Guillaume Delmas at Bank of America Merrill Lynch.
Good morning, Guillaume.
Good morning, Cecile, good morning, Nadia. So a couple of questions for me. The first one is on Latin America. You mentioned the region posted moderate growth in the quarter, it sounds like a sequential slowdown relative to the first half when you were talking about solid growth in the region. So wondering if you could shed more light on Latin America and particularly on Brazil whether you're seeing some continued improvement there.
And my second question is on ELN China. So going back, on YellowN China, wondering if you saw any one offs in your Q3 performance, I mean, particularly given the high number of innovations, are you aware of any trade loading test because I think Hong Kong accounts for around 10% of Yale And China sales. Thank you.
Okay. So on your first question, yes, overall, in LatAm, it's worth to maybe sell a few words on Brazil, especially on ADP, Brazil. Which was this quarter impacted by a steep decrease in the milk part of the portfolio. Because, as part of our revenue management initiative given the very low milk price in Brazil today, we are managing this part On the other hand, in Brazil, yogurt keep growing with good performance of innovation, such as Yopro, And also, distributors, reshuffle is now completed. So, we will continue to improve, versus the crisis that we had 2 years back.
And then on, your question, so on Hong Kong, there were some temporary disruption, but, international performance. And then you had another question. And why not? But overall, We need to really make sure that when it comes to Early Life Nutrition, China, it can be volatile from 1 quarter another, and we don't control everything. So it's really important to look at it over a longer period, and which is what we are what we gave, I think, last quarter in term of the last 2 years performance, where we grew 25%.
So we need to really be careful on the quarterly performance overall, but we have not made specific one off as far as we are concerned.
This closes this Q And A session. Thanks, everyone, for your interest. IR team remains available only long to answer any follow-up questions. With that, thank you, Christine. Thank you very much, Raul, and let's catch up later.
Bye bye.
That does conclude the conference for today. Thank you for participating. You may all disconnect.
Hello.