Good morning, ladies and gentlemen, thank you for standing by. Welcome to today's Danone 2019 first half results conference call. At this time, all participants are on a listen only mode. There will be a presentation followed by a question and answer session. At which time, if you wish to ask a question, you'll need to press star one on your telephone and wait for your name to be announced. I must advise you that this conference is being recorded today, Thursday the 25th of July, 2019. I'd now like to hand the conference over to your speaker today, Nadia Nicolas. Please go ahead.
Thank you, operator. Good morning. Nadia speaking. Thanks for joining us. We know it's a busy day for you, so we appreciate your attendance to this call. Hosting the conference today, CFO Cécile Cabanis. Cécile will go through the presentation and will then turn the call over to your questions, and we'll try to end before 9:30 A.M. A few words before we start, to first remind you that the half year financial report with full financial statements is available on Danone website. To also ask you to limit yourselves during the Q&A session to a maximum of two questions, please. Finally, draw your attention to the disclaimer on page two related to forward-looking statements and financial indicators definition. With that, let me hand it over to Cécile.
Thank you, Nadia. Hello, everyone. Thanks a lot for joining Danone's first half earnings call. I know it's a day with a lot of traffic, we'll try to be very sharp. Overall, if we had to summarize H1, it's really about the title of the press release, meaning that this half is a story about strong levels of execution, which have led to us being able to continue to drive profitable growth and acceleration again this quarter. Thanks to this, we continue to be fully on track with our short-term and longer-term roadmap. I would like to start this call by saying a big thank you to all the teams for their great work and commitment to drive this semester, and the rest on the results. Let's jump directly into page three with the key figures.
We are pleased to see top line accelerating in Q2, in line with what we shared, in Q1, 2.5% on a like-for-like basis. The recurring operating margin improved again, and it makes now seven consecutive semesters of positive margin momentum. We landed in H1 at 14.69%, up 68 basis points on a like-for-like basis, and up more than 40 basis points in total. This balanced combination of top line growth and margin delivery resulted into another semester of strong EPS, recurring EPS growth delivery, 6%, EUR 1.87 per share. Moving to the next page. A bit of a qualitative comment on how we obtain these results. First, on our top line growth, the first thing to note is that it's broad-based in Q2, so it doesn't rely only on one region or one entity. All the three entities have been growing more than 2%.
We continue to have a strong innovation momentum, with innovation representing, in H1, around 30% of net sales. Of course, you have also the launches of last year that continue to ramp up, the momentum continue to be strong. Essential Dairy and Plant-Based has delivered a growth in every region, and overall in Europe. Europe, Q1 was stabilization, it's now growing. I'm pleased to say that all the transformation that was started has really resulted in Europe returning to growth after many years of decline. On Early Life Nutrition, we also had a positive growth in Q2, higher than expected, I will come back on that. We've been able to bring China back to growth one quarter ahead of our initial expectation, this is, again, thanks to a strong execution. Water sales in Europe were a drawback this quarter, impacted by poor weather conditions, not like today.
If you remember in May, the temperature was particularly cold compared to the average of normal in the season. Moving to efficiency, we continue to unlock value across the P&L and the organization. We delivered around EUR 400 million in total savings in the first semester. With protein that keeps on delivering sustainable saving, around EUR 150 million in the first semester. This came mainly from implementing new ways of working, mainly from the operations part and adaptation of sales and marketing model. We have also invested around EUR 150 million in non-recurring costs for adjusting the organization in different parts. It includes the first part of the cost on the merge between Early Life Nutrition and Advanced Medical Nutrition, and some other actions in local markets to reduce the cost base, notably Morocco.
Finally, we remain highly disciplined when it comes to invested capital, and we are well on track to improve our ROIC this year. The progress against our priority leads me to reaffirm our 2019 guidance of like-for-like sales growth around 3% and recurring margin, operating margin above 15%. This means that, as we said, the acceleration of growth will continue in H2. Moving on page five. You can see in more detail the first semester performance by entity. Not only, as I just said, have all of our business been growing top line in excess of 2%, and actually, when you look at it, more than 3% for specialized nutrition, but also all of them having been stepping up in margin between 50 and 100 basis points on a like-for-like basis.
Volumes remain negative, -1%, if you look at this materially improving versus Q1, which was -2.2%. On EDP, volumes improve a lot from -3.8% in Q1 to -1.2%, thanks to Morocco and Europe now stable in volume. Our focus on valorized products in CIS, as well as the overall strategy of portfolio premiumization and channel shift, which increased in single serve across the business and also in Brazil, kept driving volume decrease in the entity. In Specialized Nutrition, the base of comparison in Q2 in ELN China remained challenging, as we explained in the past. This is what is driving the negative volume of -1.3%. Water volumes were down 0.4%, which is mainly linked to the cold temperatures in Europe that drove volumes down in the regions, while in the rest of the world, we registered positive volumes.
More generally, we need to remind everyone that we've been prioritizing a mix of our volumes, and this is driving another quarter of improvement when we look at the value part of the growth. Moving now to page seven, which is the classical sales bridge. Reported sales stood at EUR 6.5 billion, up 1.3% on a reported basis. If we look at the different effects, we have a 1.4% negative scope effect, which is linked to the deconsolidation from April 1st of Earthbound Farm, our organic salad business in the U.S. that we sold in April. We have a very minor currency effect of -0.1%. You know that since the beginning of the year, we are reporting Argentina performance outside of the like-for-like performance, given the entire inflation environment to better qualitatively measure the performance.
We put Argentina aside, and this is +0.3% like-for-like growth impact for Argentina. Moving to the like-for-like performance, as we said, sales grew 2.5%, driven mostly by volume, 3.5%, with volume down 1%, but driving almost all the acceleration in like-for-like revenues versus Q1. If we move now to the detail for each entity, and I will start with specialized nutrition. H1 sales growth was 1.8%, supported by strong fundamentals that continue in Advanced Medical Nutrition and a return to growth of Early Life Nutrition in Q2. Looking at the margin, H1 margin stood at 25.3% of Specialized Nutrition, up 55 basis points on a like-for-like basis on the back of valorization of the top line and efficiencies in terms of cost. Going into the next page, and going through the Q2 levels of growth.
Advanced Medical Nutrition generated mid-single digit sales growth overall in H1, with growing volume. As I said, driven by strong fundamentals in all segments, both adult and pediatric, and all regions. China remained a key contributor of growth, growing at double-digit rates, we have also a robust market in Europe in term of growth and rest of the world. Early Life Nutrition posted this quarter a moderate sales growth, including a slight growth in China and solid growth in the rest of the regions. Going through China, overall, there is no change in the category dynamics. We said that growth would be mid-single digit rate, this is what we continue to observe, where we have a higher demand for growing up milks and ultra-premium specialty products that are more than offsetting the declining volume impact from lower number of births since 2017.
After three quarters of decline, also linked to the high base of comparison of the previous quarters, our business posted a slight growth with declining volumes. This performance was better than anticipated, especially in the direct channel. I remind you that it's around 70% of the total China business. This is thanks to the faster execution of our growth plan, and in particular, in lower tier cities, on which I will zoom in a minute.
In the indirect channels, while the C2C segment continued to decline as a result of the additional pressure on smaller daigous from the new CBEC regulation, the business with friend and family and social e-commerce platform like WeChat kept growing and performed well. Outside China, the solid growth included continued strong performance in Asia, notably Southeast Asia, India, and Indonesia, with our brand Bebelac being among one of the best performing brand in the portfolio since its relaunch last year. We have promising result from the recent launch of Hi-Q Super Gold Plus, which is a formula for post C-section moms. In the Americas, double-digit growth rate both in U.S. and Brazil, and still a negative but improving performance in Europe.
Notably improvement in France with positive results from the large pipeline of innovation that were launched under the brand Blédina, notably around organic milk, low sugar first spoon dairy, and some recipes on food diet. In Poland, Bobovita baby food pouches are starting well. We finally just launched a new Aptamil range in the U.K. called Sensavia, where the milk protein has been broken down into smaller pieces. Moving to the next slide, and to deep dive on what I was mentioning around China, to show how we achieved a return to a slight growth. First, we've continued the deployment of our direct-to-store, route-to-market model, which is specific for independent mom and baby stores in lower tier cities, which remember, represent the fastest growing market in China. Where our weighted distribution is progressively increasing. You have it on the left part of the chart.
You have the overall market weight between A, B cities and C, D cities, then our weighted distribution in each part of it. You see that there is still potential, and we're increasing our weighted distribution in lower tier cities. On the right part of the chart, we continue to invest in innovation and renovation to increase presence in ultra-premium segments from our sourcing countries through cross-border e-commerce channel. This include a renovated brand equity platform for Karicare, an upgraded Aptamil Profutura, the launch of a new Aptamil EleCare Pepti SYNEO for dietary management of cow's milk protein allergy, and the recent launch of an A2 milk-based formula under Cow & Gate brand in Hong Kong. In terms of outlook, we continue to expect 2019 to be unbalanced growth, as we lengthily discussed last time.
We have now closed H1 at 1.8% growth for specialized nutrition overall, and we expect a strong second half in line with our previous guidance. Page 11, essential dairy & Plant-Based. Essential Dairy & Plant-Based posted a 1.2% like-for-like growth in H2. Here again, accelerating between Q1 and Q2, with improving volumes from -3.8% in Q1 to -1.2% in Q2. In terms of margin, the recurring operating margin stood at 9.4% in H1, posting 58 basis points of improvement on a like-for-like basis, thanks to cost efficiencies and again, the work on our positive mix evolution. Moving to the detailed performance for Q2 by regions and by segment. Q2 was an important quarter for EDP because there are several elements that support both our confidence in the dairy business strategic transformation, which has now stabilized at global level.
Also our excitement on the WhiteWave addition to our business and the potential of P lant-based, where Plant-based activity continue to deliver strong growth. If we look at the main regions, as I said previously, Europe delivered slightly positive growth this quarter, including good performance in Southern Europe. We have Spain and France stabilized for the first time since seven years. In France, the yogurt category is growing again, driven by valorized alternative offerings that are matching new consumer aspiration and new channel shift around naturality, nutritional profile. Organic is now accounting to 5% of the market. New consumer are joining, and our innovation around probiotic shot, targeting on-the-go consumption habit, sorry, drive sales and increase our reach in specific urban impulse channel. Alpro continued to post double-digit growth with a good balance between the core performance and new geographies. North America delivered moderate growth.
The performance is mixed across segments, with former WhiteWave growing mid-single digit on one hand, but flat dairy yogurt on the other hand. Plant-Based posted solid growth, including a sustained high single-digit growth in almond-based beverage and a double-digit growth in adjacent categories like yogurt, desserts, ice cream, and creamas. Vega performance was still a negative but improving sequentially, giving us good signs of a sequential recovery. Coffee creamers growth continued to be strong, supported by a buoyant demand and market share gain in ready-to-drink coffee. Coming back to yogurt, the sales growth was robust in Canada, slightly negative in the U.S., impacted mostly by the intense promo activity from competition in all segments that are driven, some distribution losses, mostly in Greek. We have the right portfolio and very solid plan to recover distribution in the second half, so we are confident on that.
If we look at other regions, performance in CIS slowed down this quarter with core segment that has been impacted by a softer consumer environment, while kids and indulgence offering keeps really growing very well. We have launched a new brand for hyper-indulgence that is called Versa and is giving good signs of start. In LATAM, Mexico posted solid growth supported by growing Plant-based penetration. Brazil is growing again with a good performance of Danonino, which is the kid brand. Looking forward, growth should continue to improve for EDP at around 3% in H2. Moving to the next slide. One word on Morocco. We are now more than one year after the start of the boycott. We are progressing very well against our agenda of both rebuilding growth momentum and adapting the cost base. The noise on social networks is behind us for now.
If you look at the graph of market share, it's back to almost 40%, and we are again number one in the market, building on the success of what we've been doing last year, which is a unique process of re-engagement with the people through local consultation that we handled in summer of last year. You remember that as an outcome of these interactions, we reshaped our milk portfolio in term of price positioning, but also with the launch of a half skim milk pouch that didn't exist on the market and is now representing about a third of our milk sales. We launched a slate of innovation that now accounts for more than 20% of net sales locally, such as Danette Maxi. Morocco grew in Q2 at around 10%, and we expect this trend to continue for the remaining of the year.
In parallel, we are addressing the cost base, streamlining the sourcing of milk and adapting our sales force. Moving to Waters, page 14. The Waters division delivered solid growth in H1, around 3%, and a margin close to 13%. This was possible thanks to a strong execution and delivery on valorization of our offers through positive mix deriving from innovation and some price increase, and above the average in terms of efficiency, especially returns on protein programs. Moving to Q2 details, page 15. Waters posted a 2.1% sales growth. While emerging markets delivered growth around 5%, Europe and to a lesser extent, North America, have been impacted by poor weather conditions and declined by around -1%.
In Europe, and in particular Western Europe, the water category was severely impacted by temperature below the average of the season and exceptional rainfall. While Q2 had been particularly warm in 2018. In May, the water category was double-digit negative in U.K. and Germany, for example. In the last few weeks, weather condition improved significantly, as I'm sure you're living through them. Sales in Europe were up again in June. In terms of innovation, Volvic infusions and Badoit Bulle de Fruits keep going very good. We are also launching recipes now without sugar across Europe. We made the first step into coffee infusion under the Volvic brand in Germany. In Asia, growth was solid, led by a strong performance of Aqua in Indonesia. Aqua keeps increasing its reach across the country and benefits also from some targeted price increases.
Turkey registered strong growth as well with the combination of our two brands in the country, Hayat and Sirma, that are gaining market share. In China, Mizone was not growing, and we are working, as I said to you last time, on repositioning the brand to adapt to the new dynamics of the beverage category in China. It will take some time. Finally, in Latin America, Bonafont registered strong growth, supported by very good plain water performance. In term of outlook, looking forward, the outlook remains unchanged, expecting solid growth for the full year with the second half that will be more Q4 weighted than Q3. Next page. Very critical and important topic on the water category, is the roadmap towards circular packaging. What I've put on this chart is a few example of actions that were done locally in order to continue to advance on the roadmap.
You have a few examples. We've launched bottles fully made in recycled PET for iconic water brands like Volvic, evian in France, Aqua d'Or in Denmark, and Bonafont in Mexico. This initiative has been supported by very powerful activation campaigns like what you might have seen on the partnership between evian and Wimbledon, which is really building on the circularity stewardship of the brand. We are also creating new business opportunities by proposing disruptive consumption options. We've launched evian (re)new, which is evian first in-home water appliance, made of a five liter, 100% recycled PET skin and still fully recyclable. It brings a significant reduction in plastic packaging, minus 66% versus our iconic 1.5 liter bottle. It is being currently rolled out in the U.K. and in France. We are confident that our focus on circular packaging will continue to support the category, the growth of the water business.
Moving now to margin, and before the classical margin bridge, a few words on where we stand in protein, page 18. We have, as I said earlier, EUR 150 million savings that were generated this first semester, which is bringing the total savings since the launch of the program to EUR 450 million cumulative. After having started with SG&A cost last year, the main drivers this semester have been operations, industrial and logistic, and sales and marketing. In operations, you have here two example of a digitally driven initiative that were launched. We started to produce spare parts for maintenance through 3D printing, generating savings both on cost of material and transportation cost. This is really a game changer that is also shortening the lead times. We have also launched a logistic control tower cross categories to optimize the truck fill rate and opening the door to cross-selling synergies opportunity.
In sales and marketing, we began to see the first result of our internal center of expertise in advertising content production, which brought 20% to 30% savings on a panel of commercials on which it was applied. We aim to progressively deploy this to all our campaigns. We expect the second semester to bring around EUR 200 million to fuel growth and support margin development. Let's go through the margin bridge. Another semester of strong like-for-like margin improvement, 68 basis points. An improvement of 42 basis points in reported term. Absolute margin stood at 14.69%, progressing towards the 15% guidance for this year.
This performance is, if you look first at the like-for-like margin development, you can see that margin from operation is increasing, 34 basis point, which is really the result despite an inflation of around 6% of both the valorization in our portfolio and the big effort on cost efficiency, I think this is really showing the quality of the margin improvement. We've also, as a result of both protein and the fact that we are now moving towards more efficient digital advertising, been able to have a positive impact on the sales and marketing expenses at 26 basis point. Finally, green again, the overhead and the rest, which is also continuing to illustrate the effort on efficiency. Moving back to the rest of the margin. A scope that is driven an accretion of 10 basis point, and it's the sale of Earthbound Farm.
The currency had a negative impact, nine basis points, overall on the margin, entirely generated by IAS 29 hyperinflation accounting standard. As I was referring in the sales bridge, we have here the Argentinian impact on like-for-like margin of Argentina, 27 basis points in margin. It's really the result of deterioration of margin because of the huge inflation that we have in the P&L. This is costing 27 basis points. The rest, I described. Overall, I think it's a very strong result to have been able to make this performance in terms of like-for-like margin, especially on margin on operation, where we had to face an inflation of 6%. Moving to the EPS, page 21. Recurring EPS was up 6.3%, EUR 1.87, driven by the operational performance of the company in the first semester.
You see the +4.8% in the first box, which is the translation of the profitable growth for H1. The cost of net debt and scope effect were broadly neutral, while tax associates and minorities brought another 4% EPS accretion. The underlying tax rate in H1 stood at 27%, decreasing versus last year, supported by a favorable tax rate evolution in some of our largest country, as well as a positive country mix. Finally, currencies had a negative impact of 3%, driven by the appreciation of the U.S. dollar on our financing cost, by the effect of depreciation of the Argentinian peso. Moving to page 22, I thought it was important to look at the reported EPS and look at the different non-recurring elements, because you have two elements. You have the elements of this year and the exceptional positive impact of last year from the sale of Yakult.
To comment on this year, two elements, mostly in exceptional. The first one is the impact of the sale of Earthbound Farm, completed in April. That triggered a loss of around EUR 50 million at net income level. The first part of restructuring cost that I was commenting earlier, which are linked to the adaptation of the organization, around EUR 150 million, which include first part of the cost of integration between early life nutrition and medical nutrition. The savings will start to come in H2. Right sizing of some organization locally, I mentioned Morocco especially. This, combined with a positive impact in 2018, of the capital gain on Yakult, which was EUR 700 million, drove mechanically a decrease of around 15% of our reported EPS to EUR 1.58.
We expect the second portion of restructuring costs in H2, bringing the total cost for this year at around EUR 300 million. We expect savings to support margin expansion going forward. Moving to cash flow. Free cash flow in the first semester was strong, EUR 1.1 billion, confirming the system cash delivery level of the company. The main driver of the performance was, of course, the strong delivery of profit after tax. Working capital was impacted in H1 by an increase in inventories to seize some opportunities, especially on PET pre-buying, and to protect our operations in the U.K. against a potential hard Brexit. It remains negative. Working capital was around -2.5% for the semester. Change in net debt, next page 24. Net debt at the end of June stood at EUR 13.9 billion, up EUR 1.2 billion compared to the end of 2018. This was totally expected.
The main driver of the increase is the application of IFRS 16, which is adding around EUR 700 million of debt from operating leases that are now treated into a net debt. Apart from this, a very simple equation, EUR 1.1 billion free cash flow delivery of the semester, high finance, the cash dividend that has been paid in May. We remain fully on track with our de-leverage plan, and process, and target for 2020. We close the first semester completely in line with our expectations. Again, thanks to great work from the teams on execution. We enter the second half with a lot of confidence around accelerating top line to exit the year consistent with the 2020 objective, and continue to expand margin. No new priorities.
It's really the continuity of our three priorities around top line acceleration, maximizing efficiencies, and continue to be very disciplined in capital allocation. We expect that in H2, the volume will improve and the growth will further accelerate through, of course, an easier base effect, but also, and most importantly, the continued stabilization of dairy, the sustained expansion of Plant-based, on which I will come back in a second. The increased presence in fast-growing channel, and the further development in China, smaller cities and premium IMS segments. Protein will continue to deliver savings to fuel the brands and improve margin. That will also benefit from the first result, as I mentioned, of the adaptation that we started earlier this year. As far as capital allocation is concerned, in H2, we will step up our CapEx to invest, in particular, in capacity increase and innovation production lines for EDP in North America.
Our investments in H1 were close to last year in terms of volume, but we are going to increase them in the second half, given the plan on Plant-based. The combination of the resilience of our operating model and all of these activated initiatives put us fully on track towards our 2019 guidance again, 3% like-for-like growth, and at least 15% recurring operating margin. We are also fully on track to deliver our 2020 objectives. A few words on Plant-based on page 26. An important milestone that we set is to reach EUR 5 billion in Plant-based in 2025. Today, it's really a very promising source of acceleration in the portfolio. The momentum is building up as we execute our growth strategy. Plant-Based sales, as I said, continue to post strong growth, sequentially accelerating in Q2 with three main drivers.
The first driver of growth is, of course, continue to focus on developing Plant-based beverage, which is the core of the portfolio. Today, 70% of our global Plant-based sales with value-added innovation, including organic, protein-added Plant-based beverage, and playing the full scope of ingredients. There is new ingredient with a fast start, which is oat. We've launched the Silk Oatmilk in Q2, and it has become now number two in oat in the U.S. The second driver of development is around revenue synergies and geographical expansion, building on our existing fresh go-to market and leadership position in some of the markets. It's the start of the journey. You have some examples on the chart, which I will not describe in detail, but it's really a plan that is rolling out and working very well, fully part of the expansion and acceleration of growth.
Finally, we are feeding a robust innovation pipeline, investing in attractive adjacencies like ready-to-drink coffee, stretching the existing dairy brands as well. We plan to launch a Plant-based version of Activia in Europe before the end of the year, combining probiotic offerings with Plant-based recipes. These exciting developments make us fully confident that we have the right strategy and plans, and that we are progressing well towards our ambitious target of EUR 5 billion Plant-based sales. Next page to end and before opening to Q&A. Our roadmap is not ending in 2020. We continue to have our eye totally fixed on our 2030 goals, which is ultimately our compass. It's about integrated goals. I commented the quarter, so we talked mostly about short-term financial performance. What we are driving as an agenda, it's much broader than that.
It's because of this integrated agenda that we are fully confident that beyond 2020, we can really create sustainable value creation and share it in a proper way with responsible business practice. I will stop there because I know your agenda is very busy. I'm open for Q&A.
Thank you. As a reminder, ladies and gentlemen, should you wish to ask a question, please press star and one on your telephone keypad. The first question comes from the line of Jon Cox from Kepler Cheuvreux. Please go ahead, your line is now open.
Good morning, guys. Thanks for taking the question. Jon Cox, Kepler Cheuvreux. Just two questions then. One is on China. You mentioned 70% is now direct, 30% is indirect. I wonder what the split was. You said the daigou proportion was under pressure, but you said the other social platforms are actually doing okay. I wonder what the split of that 30% is between the sort of that daigou, which is falling apart, and the other part. You mentioned you got a strong growth in the second half in line with previous guidance. Just remind me what the previous guidance was there on China. Second question, just on the restructuring, which you can see why we've done it, but I'm just wondering, what will the financial cash charges be on that for the full year?
It doesn't look like there's anything in H1, but obviously you're increasing it for H2. Is it going to be all of the EUR 300 million, or will it be something less? Related to that, is this just going to be incremental to your 2020 targets, or is it really new as part of the 2020 targets for the operating margin goal above 16% next year? Thank you.
Thank you for these two quick questions. I will try to remember everything. The first question that you asked, Jon, was on China, indirect/direct repartition that we mentioned. What was in the indirect part of C2C versus social platform, like friends and family? It's overall half-half. Regarding the rhythm of growth for China in H2, I have nothing more to add than what we said, which was the year in China will be imbalanced, with a first semester that will be negative and growth in the second semester. There is this good news that we have been able to be faster to recover growth given the strong execution of our plans in the direct part. Overall, the outlook of the second half has not changed. We will be back in strong growth in China.
On the restructuring charges, yes, we have the cash impact, which is in the free cash flow, in H1. Overall, everything we are doing is really supporting the agenda of margin improvement. We have a very clear guidance for 2019, objective for 2020. Everything we are doing is noticing that.
Okay. we shouldn't read it as in stop pumping in more margin expectations from 2021, say, at this point.
No.
Okay. Thanks.
Thank you. Your next question comes from the line of Warren Ackerman from Barclays. Please go ahead. Your line is now open.
Good morning, Cécile. It's Warren here at Barclays.
Hi, Warren.
Hi. Two questions from me also. The first one is on EDP. Obviously, good news around Europe, but I wanted to ask you a bit more around EDP, the old NORAM business. I was quite encouraged to hear about the old WhiteWave business growing mid-single digits. There's some pluses and minuses. Could you maybe just go a little bit deeper into what's going on in EDP North America and what your outlook is for the back half? You said EDP 3% overall. Just wondering whether you expect North America, what contribution North America to make to that second half number, 3%. The second one is just around the same old question on price mix, which was higher than consensus for the Q2. I think it was almost 100 basis points higher than consensus with volume a bit light.
Are you able to split out the price mix between mix and price? Ideally, if you can give it to us for the three divisions, and examples of where you're premiumizing the portfolio most. Because obviously it always looks like your volumes are light because the mix is booked into price rather than volume. Just interested, if you can give us any color on that would be super. Thank you.
Thank you, Warren. On EDP, overall the improvement is really around indeed good news in Europe, but when it comes to the segments, it's both, as I said, there is stabilization overall and continued great momentum in Plant-Based. On NORAM, it's what I described, meaning that we have solid growth in Plant-Based, and there is mixed growth in terms of how it's split because we continue. You remember we had issues on veggie launch last year.
Yeah.
It's improving but still negative, so it's weighing in the performance of Plant-Based America. On yogurt, I mentioned we are minus 1% in the U.S., plus 4% in Canada. It's mostly the legacy traditional Greek segment, which is going down, as it was the case in Q1, driven by strong promotion from competition. Overall, it's what I said, we should improve in H2, so you will see NORAM improving in H2, and especially on yogurt, which is the main driver of lower performance in NORAM. Coffee creamers continue to grow very strongly, as I said, with particular success of ready-to-drink coffee. Price mix. Sorry. On price mix, we have both. We have positive price and mix. In EDP, it's fully balanced between both.
In water and SN, we have some negative country mix, but in term of products, we have positive product mix, and because of what I said around innovation and premiumization, every innovation in SN is going into premiumization. I mentioned a certain number in China. Water is the same. We had the opportunity to comment last year that Volvic infusion and other innovations in aquatic drinks were pricing 50% more than the classical range. We made some tactical price increase in some countries given the PET inflation of last year. It's really a value-driven, which is sustainable in term of its key constituents, and it's a balance between mix and price.
Around two thirds overall, or 60 to two thirds overall of price mix being mix?
It's balanced.
Balanced. Okay. Overall. Okay. Good. Thanks.
Thank you. Your next question comes from the line of Alain Oberhuber from MainFirst. Please go ahead, your line is now open.
Good morning.
Before you start, Alain. Good morning, Alain. I hope you're well. This is Nadia speaking. Would be great if you and next question could be I see in the queue there's a lot of people, so in order to give a chance to everyone to attend, would be great to limit the number of questions to a two maximum, please. Thank you.
Sure, absolutely. Good morning, Cécile and Nadia, Alain Oberhuber, MainFirst.
Morning.
Two questions. Just regarding the organic growth for the rest of the year. You gave some kind of indication last time of about 4%. Is it geared more to Q4 or is it balanced Q3 and Q4? Within that question, could we expect that the acceleration will mainly come from volume and value remains more or less stable? The second question is just about the waters business in China with Mizone. How much is Mizone now in sales, and when do you expect an improvement? Could we see that already this year or will it be next year? Thank you.
Thank you for the question. In term of the growth development in Q2, it will be driven by volume improvement, mostly. This is what you can count on. In term of weight between Q3 and Q4, it really depends on the activities. For waters, it will be more Q4-weighted because Q3 last year was exceptional. Even if we have a very good weather this year, last year was the same. It will be more Q4-weighted. On the rest, it should be fairly balanced with an acceleration on EDP and Early Life Nutrition will also depend on the volatility. On your question, and maybe to add on that, because it's true that this year we are facing a number of base of comparison.
If you were to calculate the underlying growth without the impact of the base of comparison for this quarter, you would be at 3.5%, around 3.5%. This is what you can have in mind in term of underlying dynamics. Regarding Mizone in China, I don't want to give a date. I don't want to be caught in a situation on which we were caught for Activia in Europe. We need to take the time to review how we want to play the brand in an environment that is changing very fast in term of beverage in China. We need to modernize it. We will take the time we need. In Q2, overall, Mizone sales were down.
Thank you very much.
Thank you, Alain.
Thank you. Your next question comes from the line of David Hayes from SG. Please go ahead, your line is now open.
Morning. Thank you. Two questions from me. Firstly, just on Morocco. If you do the math, because obviously the first month of the quarter you still had the boycott issue before you lapped it. Just doing the math, it looks like broadly you must have been doing about 30% growth in May and June. I just wanted to see whether that's logical, and then why you expect it to slow down to more like 10% on an ongoing basis for the rest of the year. Secondly, there's been a couple of articles in the last few weeks or so talking about Danone potentially reviewing its African assets with a view to a joint venture or sale. I just wonder whether there's an off chance you can comment on that, please. Thanks so much.
Thank you, David. On Morocco, I let you do your calculation. It's good that in H2, which should be more than 10%, it should accelerate because as you said, the boycott had still one month impact in Q2, which will not happen in Q3, Q4. On the rumors, first, we don't comment the rumors. Second, I've been spending some time to show you that we are really working on rebonding, and working hard on executing the agenda to make sure that we rebuild the momentum of growth on Morocco as well as adapting the cost base. The rest of Africa is doing quite well in a number of countries, and we are really focusing, and the Africa team is doing a really great job to make sure that we drive Africa as part of our value creation agenda for the next years.
Okay. Thank you.
Thank you. Your next question comes from the line of Richard Taylor from Morgan Stanley. Please go ahead, your line is now open.
Good morning, Cécile and Nadia. Richard Taylor here from Morgan Stanley. Just one question from me to be efficient. The trend in Plant-Based nutrition is clearly continuing to accelerate. Could you give us some color on which segments and regions are most dynamic for you? Perhaps how you think about your positioning versus meat alternatives.
In terms of Plant-Based, we have double-digit growth for the brand Alpro. This is very balanced between the increase of growth in the core portfolio an existing base as well as new geographies. It was, I think on page 26, you have the different territories of expansion. the other part is around U.S., around Plant-Based beverage, mostly in almond and new ingredient like oat. That continues to be very dynamic. of course, adjacencies. We have very good performance in yogurt in the U.S. as well as ice cream. in Europe, we launch coffee. It's really these three buckets that are driving the overall growth.
I think what we see on meat, for me, what it shows is that in 2016, when we decided to go for Plant-Based because we had this conviction that it was going to be the next driver of growth, it shows that we were right. Also, we were challenged because we were pioneer, as it's the case in some actions that we do. For me, it's the best time of the Plant-Based potential and avenues for growth in the future.
Thank you.
Thank you. Your next question comes from the line of Martin Deboo from Jefferies. Please go ahead. Your line is now open.
Morning, Cécile. It's Martin Deboo, Jefferies. I'll be as brief as I can. Both questions on margins and really underlying, sort of trying to establish where the margin momentum is in the business at the moment. The two questions are, Cécile, why is water's LFL margin so good in H1? I think they were down 80 bps LFL last year. There's a hell of a margin turnaround there. I guess the question is, can you carry that sort of momentum into H2? Second question is, why is there such a big gap between reported and LFL margin progress in Specialized Nutrition? Your sort of explanation at group level of that is very good, if I might say so, but I can't quite understand it in SN because there's no Earthbound effect, and I wouldn't have thought it was much of an Argentina effect.
Why is there the big gap between reported and LFL? Those are the two questions. Thanks.
Okay. On the overall margin improvement and turnaround for water. Last year, you remember we were facing very high inflation in PET. There are three elements and yes, it's true that it's extraordinary and the teams did a really great job, and I want to pay a tribute to the team because it's really on all elements. You have some carryover of the price increases that we had last year, second part of the year, to compensate and mitigate part of the inflation in some countries. You have what I said around valorization of the portfolio, acquired drinks momentum, especially the new innovation which are really bringing accretion to the growth margin, and huge work on efficiencies. They've been really ahead of the crew in term of deploying protein initiatives in operations and also doing a very disciplined work on overheads and fixed costs.
It's really not a coincidence. It's a very disciplined management and conscious management of the different elements of the P&L. Your question on SN reported versus like- for- like, we had some negative currency effects, which is linked to the geographical mix, which is not always offset and edged through valorization and efficiency. It's the translation effect. Overall, we have an appreciation of the USD and Happy Family is mainly a food business, which is less profitable than the IMF. We have the impact of the ARS depreciation. It's really the way the mix of profitable and growth played in H1, but we shouldn't have the same impact in H2. It should be lower.
Okay. Thank you very much.
Thank you. Our final question for today comes from the line of Guillaume Delmas from Bank of America. Please go ahead. Your line is now open.
Good morning, Cécile. Two questions on the Plant-Based business, because you mentioned that growth accelerated in the second quarter. If I remember well, you were expanding by 7%-8% in Q1. Should we conclude you're now in double-digit territory, but still below your long-term targeted run rate of 16%+? If so, above and beyond the continued turnaround of the Vega brand in the U.S., where do you think the main sources of growth acceleration are for your Plant-Based business? Secondly, still on Plant-Based, you're one year now into the rollout of Alpro in France and Spain. What have been the key learnings so far, particularly in terms of repeat purchase and market share development? Thank you.
Thank you. It's three questions. Overall on Plant-Based, Q2 was not yet double digits. It was double digits for Alpro, but overall for the full Plant-Based category, it's high single digits. On your second question, which is the main acceleration, it's really what I said around Alpro, which is today, mostly Europe. You have a good balance between growing the core, continue to gain market share, and expansion in new territories. As well as adjacencies, you have an example on my page 26 of the presentation on coffee for Alpro. We have ice cream also for Alpro. The drivers, for the long term, it's really what I said, is continue to grow the core, and keep the key battles on the important segment like Plant-Based beverage, which is 70% of the total business today.
It's the brand Alpro in Europe, Silk in the U.S., that we're expanding. Silk is expanding in LATAM, Brazil into Mexico and Brazil. In Europe, we are expanding Alpro. We have also just started in Russia. In terms of learnings, everywhere we launched Alpro, it's going very well, both in terms of building the distribution, but also in terms of repeat rate. We are very confident of all the potential on Plant-Based. It's a matter now of right execution and making sure that we are pushing it to the max.
Thank you very much.
Thank you, Guillaume. Thank you, Cécile. Thanks everyone for your attendance. We're available with rest of the team to follow up today. Enjoy the day. Bye-bye.
That does conclude our-.
Bye. Thanks a lot. Good luck for your Thursday.
Thank you for participating. You all now disconnect.