Good morning, ladies and gentlemen, and thank you for standing by. Welcome to today's Dan on 2019 First Half Results Conference Call. At this time all participants are in a listen only mode. I must advise you that this conference is being recorded today, Thursday, 25th July to 2019. And I'd now like to turn the conference over to your speaker today, Nadia Nicola.
Please go ahead.
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, Cecile Companies. Cecile will go through the presentation and we'll then turn the call over to your questions. And we'll try to end before 9:30. 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.
Please. And finally, draw your attention to the disclaimer on page 2 related to forward looking statements and financial indicators definition. And with that, let me hand it over to Cecile.
Thank you, Nadia. Hello, everyone. Thanks a lot for joining Danone's first half earnings call. I know it's there with a lot of traffic, so we'll try to be a very chart. And overall, if we had to summarize H1, it's silly 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.
And, thanks to this, we continue to be fully on track with our short term and a longer term road map. And 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 rentals. So let's jump into directly into page 3 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 in proved again. And it makes now 7 consecutive semesters of positive margin momentum. We landed in H1 at 14.69 percent, 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% per share. Moving to the next page, a bit of a qualitative comment on how we obtain these results.
1st, 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 1 and see 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 percent of net sales. Of course, you have also the launches of last year that continue to ramp up. So the momentum continued to be strong.
Essential Dairy and plant based has delivered growth in every regions and overall in Europe. On 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, and I will come back on that.
We've been able to bring China back to growth 1 quarter ahead of our initial expectation. And this is, again, thanks to a strong execution. Water sales in Europe where a drawback this quarter impacted by poor weather conditions, not like today, but if you remember, in May, the temperature was particularly cold compared to the average of normal in the season. Moving to efficient we continue to unlock value across the P and L and the organization. We delivered around EUR 400,000,000 in total savings in the first sir.
With protein that keeps on delivering sustainable saving around EUR 150,000,000 in the 1st semester, And this came mainly from implementing new ways of working, mainly from the operations part. And adaptation of sales and marketing models. We have also invested around 100 and 1,000,000 in nonrecurring costs for adjusting, the organization in different a part. It includes the 1st part of the cost on the merge between Early Life Nutrition and AdvancedMed on attrition and some other actions in local market to reduce the cost base, notably more 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 course will continue in each 2. Moving on, page 5, you can see in more detail the 1st semester performance by entity. So 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% 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, minus 1%.
But if you look at this, materially improving versus Q1, which was minus 2.2%. On EDP, volumes improved a lot from minus 3.8% in Q1 to minus 1.2%. Thanks to Morocco and Europe now stable in volumes. However, our focus on valorized in CIS as well as the overall strategy of portfolio premiumization and a 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 as we explained in the past, and this is what is driving the negative volume of minus 1.3%.
Finally, 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, 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 goods. Moving now to Page 7, which is the classical sales bridge. So reported sales to that 6,500,000,000, up 1.3% on a reported basis. If we look at the different effects, we have 1.4% negative scope effect, which is linked to the deconsolidation from April 1st of Urban Farm, our organic salad business in the U.
S. That we sold in April. We have a very minor currency effect of minus 0.1 percent. You know that since the beginning of the year, we are report Argentina performance outside of the like for like performance given the entire inflation environment to better qualitatively measure the performance. So we put Argentina aside, and this is a plus 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 value, 3.5% with volume down 1%. But driving almost of 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 a 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 margins stood at 25.3 percent 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 term of cost. Going into the next page, and going through the Q2 levels of growth, advanced medical nutrition generated a mid single digit sales growth overall in H1 with growing volume As I said, driven by strong fundamentals in all segments, both adults and pediatrics and all regions. China remained a key contributor of growth growing at double digit rates. And we have also a robust market in Europe in terms of growth and high of the world. Early light Nutrition posted this quarter a moderate sales growth, including a slight growth in China and solid growth the rest of the regions.
Going through China, overall, there is no change in the category dynamic. We said that growth would be mid single digit rate. And this is what we continue to observe, where we have a higher demand for growing up milk and intrapremium specialty products that are more than offsetting the declining volume impact from lower number of birth 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 an anticipated, especially in the direct channel. I remind you that it's around 70% of the total China business. And 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 daigos from the new CBC regulation, the business with Prime 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 Babelag being among one of the best performing brand in the portfolio since it's relaunched last year, and we are promising results from the recent launch of high Q Super Gold Plus, which is a formula for a positive section, In the Americas, double digit growth rate, both in U. S. And Brazil, and still a negative, but improving performance in Europe, a notably improvement in France with positive results from the large pipeline of innovation that we are launched under the Grenbladina notably around organic milk, low sugar, fast food dairy, and some recipes on food diet. And in Poland, Bogovita baby food purchases are starting well. We finally just launched a new upcoming range in the UK called Senthavia where the milk protein has been broken down into smaller pieces.
Moving to the next slide, and deep dive on what I was mentioning around China, to show how we achieved return to a slight growth. So first, we've continued the deployment of our direct to store what to market model, which is specific for independent moment baby stores in Lower Tier Cities, which I remember represent the fastest growing market in China. And 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 CD it is and then our weighted distribution in each part of it. So you see that there is still potential and we're increasing our weighted distribution in a lower tier cities.
On the right part of the chart, we continue to invest in innovation and renovation to increase presence in our premium segments, from our sourcing countries, who, Cross border, e commerce channel, and this include a renovated brand equity form for Carriquare and upgraded Atamil Cropetora, the launch of a new Atamil aliecurepepticineal for dietary management of caromilk protein allergy and the recent launch of an based formula under our Cowen Get brand in Hong Kong. In term of O2Q, we continue to expect 2019 to be unbalanced in growth as we wrongly discussed last time. We have now closed H1 at 1.8% growth for Specialized Nutrition overall, and we expect a strong 2nd half in line with our previous guidance. Page 11, essential dairy and plant base, essential dairy and plant based, posted 1.2 percent like for like growth in H2. Here again, accelerating between Q1 and Q2 with improving volumes from minus 3.8% in Q1 to minus 0.2% in Q2.
In terms of margin, the recurring operating margins 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 mix evolution. Moving to the detailed performance for Q2 by regions and by segment. Q2 was an important quarter for Ity because there are several elements that support both our confidence in the dairy business strategic transformation, which has now stabilized at global level and also our excitement on the WhiteWave addition our business and the potential of plant based where plant based activity continue to deliver strong growth. If we look at the main regions, so 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 7 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 IB habit sorry, drive sales and increase our reach in a specific Eurobank impulse channel. Alco 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 white web growing mid single digit on one hand, but slight barrier you've got on the other hand.
Plant based positive solid growth, including a sustained high single digit growth in Almond based beverage and a double digit growth in adjacent categories like yogurt deserves ice cream and creamers. Vega performance was still a negative but improving sequentially, giving us good signs of sequential recovery. Coffee creamers growth continued to be strong, supported by a buoyant demand and market share gain in a ready to drink coffee. Coming back to Yogo, the sales growth was robust in Canada slightly negative in the U. S.
Impacted mostly by the intense promo activity from competition in whole segment that are high driven, sorry, some distribution losses mostly in Drake, 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 slowdown this quarter, with core segment that has been impacted by a softer consumer environment, while kids and indulgence offering keeps really growing very well. And we have launched a new brand for Piper indulgence, that is called Versa and is giving good signs of start. In LatAm, Mexico posted solid growth supported by growing flambest in attrition, Brazil is growing again with a good performance of Danonino, which is the key brand. Looking forward, growth should continue to improve for EDP entity at around 3% in H2.
Moving to the next slide, 1 more than Morocco. We are now more than 1 year after the start of the boycott. We are progressing very well against our agenda of both rebuilding 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 1 in the market, building on the success of what we've been doing last year, which is a unique process of reengagement year.
And you remember that as an outcome of these interactions, we reshaped our mill portfolio in term of price churning, but also with the launch of a half skin milk pouch that didn't exist on the market, and it now presenting about a third of our mix sales. And we launched a slate of innovation that now accounts for more than 20 percent of net sales locally, such as the net max. Morocco grew in Q2 at around 10% and we expect this trend to continue for the remaining of the year. The portfolio transformation is also enabling to improve the mix And in parallel, we are addressing the cost base, streamlining the sourcing of milk and adapting our platforms. 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 term of efficiencies, which really returns on protein programs. Moving to our Q2 details page 15, Waters posted a 2.1% sales growth. While emerging market delivered growth around 5% Europe and to a lesser extent North America have been in hit by poor weather conditions and declined by around -1 percent.
In Europe, and in part Western Europe, the water category was severely impacted by temperature below the average of the season and exceptional rainfall. While Q2 had been particularly 1 in 2018. In Medwater category was double down digit negative in New York And Germany, for example, and in the last few weeks, weather condition improved significantly as I'm sure you're living through them. And sales in Europe were up again in June. In terms of innovation, Velveque Infusions and badoit, but the free keep going very good.
And we are also launching recipes now without sugar across Europe. And we made the first step into coffee infusion under the Walgreens brand in Germany. In Asia, growth was solid, led by a strong performance of Aquane Indonesia, aqua keeps increasing its reach across the country and benefits also from some targeted price increases. Turkey registers on growth as well with the combination of our 2 brands in the country, Iyatt and Cerna that are gaining market share. In China, Maison 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, strong growth supported by very good Panwater performance. In term of outlook, looking forward, the outlook remains unchanged, expecting solid growth for the full year with the 2nd half that will be more Q4 weighted done, Q3. Next page, very critical and important topic on the water category is the road map 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 road map. So you have a few examples.
We've launched bottles fully made in recyclty for iconic water brands like VolveIC, Asia in France, Ecuador in Denmark and Buena France in Mexico. This initiative has been supported by very powerful activation campaigns like what you might have seen on the partnership between Evian and Wimber done, which is really building on the Circularities to hardship of the brand. We are also creating new business opportunity by proposing descriptive consumption options. We've launched, avian renew which is Avion's 1st in home water appliance made of a 5 liter 100% recycled PT skin and still fully recyclable. It brings a significant reduction in a plastic packaging, minus 66% versus our iconic 1.5 liter bottle.
It has been currently rolled out in the UK and in France. We are confident that our focus on Circular Packaging will continue to support the category, the growth of the Moving now to margin. And before the classical margin bridge, a few words on where we stand in 18, Page 18. So we have, as I said earlier, that we have generated this past semester, which is bringing the total savings since the launch of the program to a EUR 450,000,000 cumulative. After having started with SG and A cost last year, the main driver semester have been operations, industrial and logistic and sales and marketing.
In operations, you have here 2 examples of a digitally driven initiative that were launched. We started to produce spare parts for maintenance through CD printing, generating savings, both on cost of material and transportation costs. This is really a game changer that is also sharpening delete times. We have also launched a logistic control tower cross category to optimize the truck fill rate and opening the door to cross selling synergies opportunities. 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 commercial on which it was applied, we aim to progressively deploy it to all our campaigns.
We expect the 2nd semester bring around EUR 200 more 1,000,000 to fuel growth and support margin and development. Let's go through the margin bridge. Another semester of strong like for like margin improvement 68 basis points and improvement of 42 basis points in reported term. Absolutes margins stood at 14 point 9%, progressing towards the 15% guidance for this year. And 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 points, which is really the result despite an inflation of around 6% of growth the valorization in our portfolio and the big effort on cost efficiency. And 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 points. And 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.
Scope that is driven an acquisition of 10 basis points and it's the sale of Urban Farm. The currency had a negative impact, 90,000,000 overall on the margin entirely generated by, 29 hyperinflation accounting standard. Then as I was referring in the sales bridge, We have here the Argentinian impact on a like for like margin of Argentina, 27 basis points in margin. It's It's really the result of deterioration of margin because of the huge inflation that we have in the P and L, So this is costing 27 bps and the rest I described. Overall, I think it's the very strong results to have been able to, make this performance in terms of like for like margin especially on margin and operation where we had to face an inflation of 6%.
Moving to the EPS, page 21. Recurring EPS was up 6.3 percent, driven by the operational performance of the company in the first semester. You see the plus 4.8% in the first box, which is the transition of the profitable growth for H1. The cost of net debt and SCOOP effect were broadly neutral, while tax associated with minorities both another 4% EPS taxation. The underlying tax rate in H1 stood at 27 percent, 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 US dollar on our financing costs and 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 nonrecurring elements because you have 2 elements. You have the elements of this year and do exceptional positive impact of last year from the sale of Jack Wood. To comment on this year, so 2 elements mostly in, exceptional. The first one is the impact of the sale first confirmed, completed in April, that triggered a loss of around 1,000,000 at net income level.
As part of restructuring the 1st part of restructuring call that I was commenting earlier, which are linked to the adaptation of the organization around EUR 150,000,000, which include a 1st part of the cost of integration between Early Life Nutrition And Medical accretion, the savings will start to come in H2 and a rightsizing of some organization locally I mentioned MAROC special, Morocco, especially. This, combined with a positive impact into a 18 of the capital gain on the output, which was EUR 700,000,000, drove mechanically a decrease of around 15% of our capacity DPS to 1.58. We expect the 2nd portion of restructuring costs in H2, bringing the total cost this year at around 1,000,000, and we expect savings to surpass margin expansion going forward. Moving to cash flow. Free cash flow in the 1st semester was strong, 1,100,000,000 confirming the sustained 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 see some opportunities, especially on on the PT pre buying and to protect our operations in the UK against a potential hard Brexit. But it remains negative, working capital was around minus 2.5% for the semester. Change in net debt, next page, 24. Net debt as the end of June stood at 1,000,000,000, up 1,000,000,000 compared to the end of 2018.
This was totally expected. Now the main driver of the increase is the application of IFRS 16, which is adding around EUR 700,000,000 of debt from operating leases that are now fitted into net debt Apart from this, a very simple equation, 1,100,000,000 free cash flow delivery of the semester, Heart Finance at the cash dividend that is that has been paid in May. With this, the net debt to EBITDA ratio is standing slightly above 3 times at the end of H1 and we remain fully on track with our deleverage plan and process and target for 2020. We closed the 1st semester completely in line with our expectations, again, thanks to a great work from the teams and execution. And we entered the 2nd half with a lot of confidence around accelerating top line to exit the year consistent with the 2020 objective and continue to expand the to expand margin.
So no new priorities, it's really the continuity of our SIP 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 basis point 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's smaller cities and premium IMS segments. Cotein will continue to deliver savings to fuel the grants 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 investment in H1 was close to last year in term of volume, but we are going to increase them in 2nd half, given the plan on funding. The combination of the resilience of our operating model and all of this activated initiatives put us fully on track towards our 2019 guidance again. 3% like for like growth and at least 15% recurring open margin. And we are also working on track to deliver our 2020 objectives. The few words on plan based on page 26.
The an important milestone that we set is to reach 1,000,000,000 in plan 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 grow strong growth sequentially accelerating in Q2 with 3 main drivers. The 1st driver of growth is, of course, continue to focus on dev developing plant based beverage, which is the core of the portfolio to the 70% of our global plant based sales, with value added innovation, including organic propane added plant based beverage and playing the full scope of ingredient. There is new ingredient with a fast start, which is So we've launched the silk oat milk in Q2.
And it has become now number 2 in oats in the U. S. The second driver of development is around, revenue synergies and geographical expansion, building on our existing crash road to market and leadership position in some of the market. It's the start of the journey. You have some example on the chart, which I will not describe in details, but it's really a plan that is rolling out and we're seeing very well, fully part of the expansion and acceleration of growth.
Finally, we are feeding a robust innovation pipeline in this in attractive address and fees, like credit losing coffee, fetching the existing dairy brands as well. We plan to launch plant based version of Activia in Europe before the end of the year, combining probiotic offerings with plant based 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 5,000,000,000 plant based sales. Next page to end and to before opening to Q And A. Of course, our road map 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 a short term financial performance. But what we are driving as an agenda, it's much broader than that. And 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 products.
I will stop there because I know your agenda is very busy and open for Q
Your first question comes from the line of John Cox from Kepler Cheuvreux. Please go ahead. Your line is now open.
Yes, good morning guys. Thanks for taking the question. John Cox, Kepler Cheuvreux. Just two questions then. One is on China.
Wonder if you can just you mentioned 70% is now direct, 30% is indirect. I wonder what the split was. You said the daegu proportion was under pressure, but you said to the other social platforms actually doing okay. I wonder what the split of that percent is between the sort of that Daigou, which is falling apart and the other part. And you mentioned you get a strong growth in second half in line with previous guidance.
Just remind me what the previous guidance was there on China. 2nd question, just on the restructuring, which can see why we've done it, but I'm just wondering what were the financial cash charges beyond that, for 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 the three 1,000,000, or will it be something less? And 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.
So I will try to remember everything. So the first question that you asked John was on China indirect, direct, repetition that we mentioned. What was indeed direct the path of C2C versus, social, platform, like, friends and family. It's overall half health. Then regarding the growth for the rhythm of growth for China in H2, I have nothing more towards than what we said, which was the year in China will be unbalanced.
With a 1st semester that will be a negative and growth in the 2nd semester There is good news that, we have been able to be faster to recover growth given the strong execution of our plans in the direct part. But overall, the outcome, the outlook of the second half has not changed. We will be back in strong growth in China. Then on the restructuring charges, yes, we have the cash impact, which is in the free cash flow in H1. And overall, it's 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're doing is noticing that.
Okay. So you shouldn't read it as in start pumping in more margin expectations from 2021, so 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, Cecile. It's Warren Ackerman here at Barclays. Hi, Warren. Hi. Two questions for me also.
The first one is on EDP. Obviously, good news around Europe, but I want to ask you a bit more around EDP, the old Norram business. I was quite encouraged to hear about the old WhiteWave business growing mid single digits and 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? I mean, you said the EDP 3% overall.
Just wondering whether you expect North America what contribution North America to make to that second half number, 3%. And then the second one is just around the same old question on pricemix. Which was higher than consensus for the Q2. I think it was almost 100 bps higher than consensus with volume a bit light. Are you able to split out the price mix between mix and price.
And ideally, if you can give it to us for the 3 divisions, and sort of examples of where you're premiumizing the portfolio most because obviously it always looks like your volumes are light because the mix is booked in the price rather than volume. Just interested if you can give us any color on that, it would be super. Thank you.
Thank you, Warren. So on EDP, overall, it's silly, the improvement is really around indeed good news in euro but when it comes to the segment, it's both, as I said, there is stabilization overall and continued great momentum in plan days. On Norham, it's what I described, meaning that We have a solid growth in plant based, and there is a mix mix growth in terms of, how it's split and because we continue, you remember, we had issues on the vagary loans last year. It's improving, but been negative. So it's a it's weighing in the performance of Plan Based America.
And then On your growth, 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, strong promotion from competition. But overall, it's what I said, we should improve in H2.
So you would see now on improving in H2 and especially on new growth, which is a demand driver of lower performance in in Norham. And then coffee creamers continue to grow very strongly, as I said, with particular success of ready to drink coffee. And then price mix, sorry, sorry. So 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 terms of products, we have positive product mix. And because of what I said on innovation and premiumization, every innovation in SN is going into premiumization. I mentioned a certain number in China. And water is the same.
We had the opportunity to comment last year that the Volvik infusion and other innovations in acquired drinks were pricing 50% more than the classical range. And we made some tactical price increase in some countries given the PT inflation of last year. So it's really a valued driven, which is sustainable in term of key constituents and it's a balance between mix and price.
So around 2 thirds overall or 60 to 2 thirds overall, or price mix being mixed?
It's balanced.
Balance cycle overall. Okay.
Thank you. Your next question comes from the line of Alan Oberhuber from MainFirst. Please go ahead. Your line is now open.
Good morning. Before you start that, Alain, good morning, Alain. I hope you're well. This is Nadia speaking, would be great if you and the next question could be, I mean, I see in the queue, there's a lot of people. So in order to give a chance to everyone to attend, we great to limit the number of questions to maximum, please.
Thank you.
Sure, absolutely. Fine. Good morning. Cecile and Nadia, how that will improve the main. So 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 key it more to Q4 or is it balanced Q3 and Q4? And within that question, could we expect that the acceleration will mainly come from volume and value remains more or less stable. And the last question is just about the business in China with MISO? How much is MISO now in sales?
And when do you expect an improvement could we see that all edit this year that will be next year? Thank you.
Thank you for the question. So in terms of the gross development in 2H2, it will be driven by volume improvement. Mostly. So this is what you what you can control. And then in terms 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. So even if we have a very good winter, this year, last year was the same. So it will be more Q4 weighted. And then 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, for this quarter, you would be at 3.5%. Around 3.5%. So this is what you can have in mind in terms 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 in Farcedia in Europe.
We need to take the time to review how we want to pay the grant in an environment that is changing, very fast in terms of beverage in China. We need to modernize it. So we will take the time we need. And in Q2, overall, my sales were down.
Thank you. Your next question comes from the line of David Hayes from SG. Please go ahead. Your line is now open.
Good morning. Thank you. Two questions from me. So firstly, just on Morocco, if you do the math, because obviously the 1st month of the quarter, you still had the boycott issue before you lapped it. So just doing the math, it looks like broadly must have been doing about 30% growth in May or June.
I just wanted to see whether that's logical? And then why are you expected to slow down to more like 10% on an ongoing basis for the rest of the year? And then secondly, there's been a couple of articles in the last few weeks or so. I'm talking about down on 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. So on Morocco, I'll 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 that's still 1 month impact in Q2, which will not happen in Q3, Q4. And then on the remarks, first, we don't comment the remarks.
2nd, I've been spending some time to show you that we are really working on rebounding 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 the 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.
Your next question comes from the line of Richard Taylor from Stanley. Please go ahead. Your line is now open.
Good morning, Cecilia Nadia. Richard Taylor from Morgan Stanley. Just one question for me to be efficient. 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 and perhaps how you think about your positioning versus meat alternatives?
So in terms of plan based, we, we have double digit growth for the brand Alpro, This is a 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. And then the other part is around U. S.
Around plant based beverage, mostly in almonds and new ingredient like oats that continues to be very dynamic. And of course, address and fees, we have a very, very good performance in Joburg in the U. S. As well as ice cream. And in Europe, we launched coffee.
So it's Philly. 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 plan base, because we had this disconviction 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.
But for me, it's It's the best sign of the plant based put on shore and avenue store 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.
Yes, good morning, Cecile. It's Martin Deberg, Jefferies. I'll do it 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. So the two questions are.
Cecile, what LFL margin so good in H1. I think they were down 80 bps LFL last year. So there's a hell of a margin turnaround there. And I guess the question is, can you carry that sort of momentum into H2? And second question is, why is there such a big gap between supported an 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 there was much of an Argentina effect. So why is there the big gap between reported in LFL. So those are the two questions. Thanks.
Okay. On the overall margin improvement and turnaround for water. So last year, you remember, we were facing very high inflation in PET, there are 3 elements. And yes, it's that it's extraordinary and the teams did a really, really great job and I want to pivot to the team because it's really on all elements. So you have some carryover of the price increases that we had last year's 2nd part of the year to to compensate and mitigate part of the inflation in some countries.
Then you have what I said around valorization of the portfolio Acquoise Drinks momentum, especially the new innovation, which are really bringing accretion to the gross margin. And a huge work of efficiencies. They've been really ahead of the crew in some of deploying protein initiatives in operations and also doing a very disciplined work on overheads and fixed costs. So it's really not a coincidence. It's a very disciplined management and conscious management of the different elements of the P and L.
Your question on SME reported versus like for like. We had some negative currency effects on which is linked to the geographical mix, which is not always offset an edge to a valorization efficiencies, the cancellation effects. And overall, we have an appreciation of the USDA and happy families, mainly a food business, which is less profitable than the IMF. And we have the impact of the Argentinian peso depreciation. So it's really the way the mix of profit pool 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, Cecile. So two questions on the plant based business because you mentioned that growth accelerated in the second quarter. If I remember well, you were expecting by 7% to 8% in Q1. So should we conclude you're now in double digit territory, but still below your long term targeted run rate of 16% plus And 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?
And secondly, still un plant based, I mean, your 1 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. So it's 3 questions. Overall, on plan base, Q2 was not yet double digit. It was double digit for Alpro, but overall for the full plan base, category, it's high single digit. Then on your second question, which is the main acceleration.
It's really what I said around in Alco. So which is today mostly Europe, you have a good balance between growing the car, continue to gain market share and expansion in utilities as well as adjacencies, you have an example on my page 26 of the presentation on for Alpro. We have a stream also for Alpro. And the drivers, it's silly 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 a 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 and fees is expanding in LatAm, Brazil, in Q2, Mexico and Brazil. And in Europe, we are expanding Alpro. We have also just started in Russia, In term of learnings, everywhere we launched, Alpro, it's going very well, both in term of, building the distribution, but also in term of repeat rates.
So we are very confident of all the potential on planned days. It's a matter now of right execution and making sure that we are pushing it to the mic.
Thank you very much.
Thank you, Guillaume. Thank you, Cecile. Thanks, everyone, for your attendance. And we are available with of the team to follow-up today. Enjoy the day.
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