Good day and welcome to the Jones First Quarter 2018 Sales Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Nadia Ben Falam Nicholas, VP, Investor Relations. Please go ahead.
Thank you very much. Ladies and gentlemen, good morning. This is Nadia Bin Salem Nicola, Head of Investor Relations speaking. Thanks for being with us this morning for Danone's first results first quarter results. I'm here with Cecile Cabanis.
You may
go ahead.
Thank you very much. Ladies and gentlemen, good morning. This is Nadia Ben Salim Nicola, Head of Investor Relations. Morning for Danone's first results. 1st quarter results.
I'm here with Cecile Cabani, CFO. As usual, we will go through the presentation and then a Q and Please note that we are experiencing technical issues, unfortunately, this morning with our webcast provider. As a result, while you will be able to hear her CECIL presentation slides will not be synchronized with her speech. She will therefore indicate each time you have to turn to next page, we apologize for this inconvenience. Before I hand it over to Cecile, I invite you to go through our usual disclaimer
on
some issues. But as I move along, I will make sure I mentioned the number of the slides so that you can follow easy. So I'm pleased to announce our results for Q1. As you've seen in the press release, Q1 is a strong start to the year. Further progress in our transformation journey.
We continue to execute on our 3 strategic pillars for 20 and T, mainly accelerating growth, maximizing efficiencies and allocating capital with discipline. I would like start this call by thanking our teams for their relentless focus on delivery and execution demonstrated again by our strong results this quarter. On our first priority, and I'm on Slide 3. To accelerate growth, we delivered the like for like sales growth of almost 5% outperforming most of our markets. Importantly, this outperformance highlights the strength of our portfolio of categories and brands.
It includes both positive volume and value contribution, coupled with our unique capability to adapt, a continuous focus behind innovation and execution. The performance reflects improvement across all of our 4 reporting entities and bodes well for our ability to accelerate towards 2020. The main growth engine this quarter was growth, supported by another quarter of exceptional growth in China for Early Life Nutrition. I'm also pleased to report positive growth in Q1 EDP International and very solid growth for Waters against the Crofta. Secondly, our initiative to maximize efficiencies continue to deployed across the company, we are progressing on track program and are confident to deliver the savings targets that we set for the year.
Lastly, continue to ensure that we allocate capital with discipline and actively manage our portfolio. It was highlighted this quarter by the partial sale of our stake in Yakult, which closed at the end of March. The billion will be used to continue on our deleveraging path, while providing us additional capacity to invest in our organic delivery and transformation agenda towards sustainable value creation. And we remain committed to executing on our strategic priorities through the remainder of the year and beyond. Moving to Slide 4.
In addition to delivering a strong quarter in terms of financial performance and strategic to Sean. We also made significant progress on our ambitions to lead the way in creating and sharing sustainable value for all stakeholders. First, with the successful launch last month of an innovative million social bond, then then became the 1st multinational corporation to issue a bond aimed at financing project that includes positive social impacts in line with the social bonds principle. We are pleased to note that this bond insurance attracted significant interest from ESG in and we truly believe that creating a positive impact on our ecosystem is a key enabler to drive dedible value. 2nd, last week, we achieved a key milestone in our global BCO certification road map with the BCO certification of denim, North America, 2 years ahead of target and the biggest pickup certified company in the world.
It brings the portion of denim business now because certified around 30% of our global sales. Achieving occurred certification is about more than being recognized as a sustainable company. It is about having sustainable next practices, and it's a very important milestone for the company as it continues to reflect the company long standing commitment to deliver financial success along with social and environmental products. Let me go now through the details of the numbers, and I start with the classical sales bridge on Page 5. So in the first quarter 2018, consolidated sales to the 6,000,000,000, reflecting sales growth of 10.8% on a reported basis, It includes from left to right on the bridge.
First, the base effect responding to the contribution of WhiteWave from January 1, to March 31, 2017, which contributed to 16.2% sales growth. 2nd, a negative impact of 1.4% from other changes in the scope of consolidation, resulting primarily from the disposal of 25 in August 2017. 3rd, a very strong negative currency impact of around 9 percent, reflecting the appreciation of the euro against primarily U. S. Dollar, Argentinian peso, Indonesian Rupya, Russian ruble, and Vian real, which all depreciated by more than 10% in Q1 versus last year.
Finally, like for like sales growth 4.9 percent. Growth continued to be driven by value effect at 3.8 percent with positive volumes contributing 1.1% to growth. On the volume side, the evolution reflects positive contributions from specialized nutrition, water EDP NorAM as well as improvements in trends in EDP International. And on the value side, results were driven by our continued efforts in enhancing mix in each category, with also some targeted price increase in specific inflationary markets like Argentina and Russia. Going through regional dynamics, there continued to be mixed trends as over the last few quarters, with Europe and Iran being broadly flat versus last year, while rest of the world posted double digit growth, driven by China and continued positive dynamics in other markets.
Let's now go in more details through each reporting entities, starting with the overview on Page 6. So if we start with specialized nutrition, a specialized nutrition delivered another quarter of very strong growth in Q1 14.5 percent, in line with the trends that we observed in H2 last year, balance between positive volume effect of 5.6% and value contribution at 8.9 percent, supported by another quarter of exceptional growth for E and A in China as well as positive dynamics in other markets. Essential Dairy And Planez activities continued to show gradual improvement in Q1. In EDP International, we delivered positive like for like growth of 0.8%, driven by an improvement in volume trends at -3.2 percent versus a 6.1% in full year 2017 and positive value contribution of 4% as a result of our innovation efforts as well as portfolio shifts into more valorized segments and targeted price increase in Argentina and Russia. EDP NorAM sales were nearly flat in the Q1, continuing its recovery trend.
Volumes were 1.7%, supported by plant based category dynamics. Sales were impacted by a 1.9% negative price mix effect, which primarily reflects promotional pressure in regular and Greek labor, as well as continue challenging dynamics in premium dairy. Finally, Waters posted a very solid like for like growth slightly better than anticipated. Volume were up 2.4% growing in all regions, except in time due to weather condition in Mexico. I will go now into more detail to go through the drivers of performance for each entity.
And I will start on Page 8 with Specialized Nutrition. Nutrition first. Early Life Nutrition posted high teens sales growth in Q1 with a good set of results across regions, including another exceptional growth quarter in China, which was up over 50%. The performance includes also double digit growth dynamics in America, and solid performance in Europe. In China, the exceptional performance was driven by both volumes and value support it by.
A strong market demand growing at double digit rates, driven by the growing up milk segment as a result of the peaking birth in H2 2016, while the IF and stage 1 category started to normalize, given the lower number of birth in 17. Growth was also supported by market share gains in the fastest growing direct channel, both in e commerce and mom and baby stores. There has been a continued expansion of APA Mill Platinum in the Ultra Premium category now representing 20 percent of our sales, which drove a positive mix contribution to sales growth. As we progress, we continue to focus on building a sustainable direct model of sales in China with also a positive value effect. Q1, more than 90% of the growth came from the direct platform.
We also benefited from a favorable year on year comparison in the indirect portion of the business with low Q1 last year. And lastly, we ended 2017 with very low stocks given to higher than expected demand around the end of the year, and we have now rebuilt normalized level of inventory. So while we are posting exceptional performances, I would like to reiterate that China growth will normalize quarter after quarter, given what we already commented on lower growth rate into 17 and including a high base of comparison in the second part of the or to another until the regulation is fully implemented. Turning to Advanced Medical Nutrition, Advanced Medical delivered a solid quarter with a high single digit growth in the pediatric segment and slightly positive growth in the adult tube segment, partially offset by difficult comps, if you remember, in China, due to the preloading of customer last year before SAP presentation. Brazil, Germany and Poland has been strongly contributing to growth with double digit growth rates.
With that, we now expect specialized nutrition at a mid to high single digit sales growth, sorry, the full year of 2018 with Q2 to be another quarter of still very strong growth, close to double it, while the second half of the year should reflect for E And M China, a normalization improves. So moving on Page 10 to Essentials and Dairy plan base, starting with NARAM, we as you've seen, celebrated last week, the 1 year anniversary of the WhiteWave acquisition, with the great news of its pickup certification. The gradual improvement of EDP Norham continued in the first quarter with a sequential improvement for the 3rd consecutive quarter. Sales were nearly flat as expected and slightly positive at 0.5% if we exclude a fresh food business. Which as expected was, broadly in line with the dynamics that we observed in Q4 2017.
We are operating in an environment that remain challenging, and we continue to execute our competitive plans to expand market leader Ship and build a robust and relevant innovation pipeline, manage certain category specific headwinds in yogurt and premium dairy. And, of course, pursue the synergies from the integration of WaitWave. If we go through each segment, Growth was driven in Q1 by coffee creamer and plant based segments. Both of them represent about 40 percent of our sales in North America. Both category posted strong sales growth with market share gains in dynamic categories and supported by the launch and the ramp up of successful innovation.
In coffee creamer, our growth was strong in both Whiteener and refrigerated coffee creamers, along with double digit growth in the ready tutoring segment, benefiting from the continued of Coffee House inspired brand stock. On plan based, Q1 confirmed the growth acceleration. If taking successful effort to turn around silicon based beverage. Top line growth was notably driven by the ongoing rebound of the net based beverage category as we observed already in patients. Plan based ice cream's end novelties continue to grow nicely.
Finally, Vega continued its expansion outside valois and attritional powders into adjacent categories like bars and ready to drinks. Moving to yogurt. In yogurt, sales declined marginally as we slightly outperformed a category that deteriorated in Q1. Been penalized by our Naval, regular and Greek products, while emerging segments such as kids, plant based and in the lines are growing. The outperformance resulted from growth initiatives and innovations with a favorable mix in segments, while regular and Greek products at First Home increased promotional intensity.
Finally, premium dairy registered another quarter of strong sales decline in Q1 with both volumes and value down Market dynamics remains challenging as organic milk supply continued to outstrip demand, driving lower on price. Overall, for the full year, we expect no change to the outlook with the growth that continued to be broadly flat in Q2 and then gradually improved to be slightly positive in 2nd part of the year. Bory. H1 margin will be impacted by strong credit cost inflation, as already published by most of our FNB peers in U. S.
And also high promo pressure in some categories. Moving to, EDP International. And I'm on Page 12. So in Q1, Deep International posted Advent supported a further improvement and went back to positive growth despite continued headwinds in Brazil. If we look outside of Brazil, we had growth for EDP International around 2%.
All regions improved sequentially in Q1, and in particular, in Europe, sales trends have firm the improvement trend that we observed for the 3rd consecutive quarter, while remaining slightly negative. Consumer demand improved in Europe, but at different regional pace with UK and Eastern Europe being the main contributing regions to growth, while Spain and France remain still tough. From a brand perspective, Activia pursued its progressive recovery and continued to register sign off products supported by the local overall base of comp. We will continue in the next quarters to pursue our local innovation and activation strategy and should recover further progress. We continue to enjoy growth in young and local brands, driven by investment in brand support and product innovation, such as Keya version of Light And Free in the UK, BU Abwar, a drinkable version of the organic brand leather in France.
And finally, in planned debt, Alprobe continued to maintain its high single digit growth momentum, growing both in its core market and proceeding with its geographical expansion in France and Spain and product diversification, such as ice cream, organic beverages, and coffee drinks. Moving out of Europe. CIS posted a strong and other quarter of strong growth, reflecting the resilience of its gross model, with persistent positive effect of favorable brand mix related to high margin products. Denis Simo and Danone performed well, supported by a key innovation successes launched in H last year. In the other regions, we delivered overall slight positive growth despite Brazil decline.
As expected, Brazil to post a double digit negative performance that is counterbalanced by positive growth in markets like Mexico, 9%. After Q1 of great progress, we expect EDP International Growth to confirm stabilization for the full year, This improvement versus last year will be driven by a gradual improvement Sorry for that. And continued momentum for Alpro. Brazil is likely to remain under pressure as flagged out already in previous quarters. So finally, Waters.
Waters had a good start to the year. With sales up 4.2%. Balance across regions and segments and supported by a strong category fundamentals, successful premium innovation and brand activation plan. Europe delivered low to mid single growth, local brands such as Vonvira in Spain and VVH Trache in Poland were the main contributors to growth. Asia posted strong growth, both for Aquadrillings and Plan Waters.
Mizone in China was mid single digit in low season with a stable market share. And finally, North America delivered double digit growth, driven by the continued Chenough Vivienne. For the full year, we continue to expect a solid sales growth close to the performance that we had in 20 team, well balanced among geographies and categories. And as mentioned in February, PET price and Brexit will be strong headwinds to the margin, and we are ramping up protein savings program execution to mitigate as much as possible impact. Let's move to Page 15.
Nothing, revenue there. Looking forward to the reminder of the year, I'd like to reiterate that the environment in which we operate continues to be challenging and tile. As discussed during the full year earnings call, this year will be colored by crude oil price, very strong inflation, generating now the expectation is double digit increase in our PET cost. Currencies such as GBP devaluation will be a headwind to the model, And since a few months, and that probably the news since last time we spoke, as already highlighted by most of the other foot players, we have observed a very steep increase in transport costs in the U. S.
Moving to Page 16. Having said that, confirm our 2018 guidance as well as our 2020 ambition. Q1 is another delivery step in that direction. For 2018, our guidance is to deliver double digit recurring EPS growth at constant exchange rate and excluding the impact of the Yako transaction. And this will be primarily the results of our profitable growth model, including an acceleration growth on a full year basis versus 2017, progressing towards our 2020 objective in all our reporting 9.
Probably with H1 stronger than H2, given the comment and the expectation on normal the
2nd
factor of, the guidance. This margin improvement will be in the U. S. As well as very high inflation in PET. That will be mitigated by both synergies from the integration of WhiteWave and protein roll out where savings will hamper all along the year.
This will lead to an improvement in margin that will be stronger in the second half than in the first half. To wrap up, Q1 is another strong quarter of delivery on both our economic and social agenda, and I would like on our agenda towards 2020 and continue to lead the way to creating and sharing sustainable value for all. Thank you for your attention. I hope with the slide, it was none too painful, and I will now answer your questions.
Thank you, Cecile. And before we open the line to your questions, a kind reminder to ask you to a maximum of 2. We'll allow everyone a chance to feature.
We will now take our first question. It comes from Warren Ackerman from Societe Generale. Please go ahead. Your line is open.
Good morning. Cecile, good morning Nadia. So Warren Ackerman here at Cincinnati General. Firstly, congratulations, especially with a good volume performance today. My two questions are, firstly, on EDP International.
I think I heard you saying Cecile the ex Brazil EDP International is +2 percent. Which is obviously very encouraging. I was wondering whether you can actually just split out for us what the actual performance was in Brazil European Dairy and then Russia, maybe some actual numbers on those 3. And maybe you can actually dig into a bit more detail on the kind of drivers and the outlook for all 3, particularly Brazil, how long are we seeing or how long should we still see it being sort of double digit negative? And then on Activia, obviously big brand, good to hear performance improving in the UK and Eastern Europe.
What about France and Spain? And then secondly, can you talk a bit more about the margin phasing? You kind of gave us some hints by division first half, second half. But there are some other things as well happening in terms of phasing of cost savings on WhiteWave synergies and protein. Also the fact that WhiteWave was consolidated for 1 quarter, but is 2 quarters this year.
So I guess that's going to have an impact on the first half. Any kind of color around the first half, second half margin phasing would be very helpful. Thank you.
Thanks Wyenne. You're always the first to ask your question.
Try my best.
On EDP International, I think the overall message to return is that, Outside of Brazil, there have been progress in all regions in term of the agenda. On the European part, we are making progress, but still having on the dairy side slight negative, growth performance in Q1. However, we have Alpro, as you know, that is continuing to grow high single digit. In Russia, I said strong performance, so it's really a consistent, solid to strong growth that we've been sets in executing the plans around the brand mix and valorization. So this continued to, to pay on results.
And in the rest of the world, if you take, the, all of the regions, it's slight positive, including a double digit negative performance in Brazil. So this means that the rest of the market are overall positive with a good moment and dynamics of growth. So that's, overall, the split that we have Going forward, for the remaining part of the year, we will continue to see progress and confirm stabilization quarter after quarter. Once again, we are being very careful not to push for tactical short term, improvement, but making sure that we are taking, the spend to, to restore the growth in a sustainable all manner. So we will confirm that within the full year.
And as we said in Q4, and there is no change there. Brazil will continue to be, impacting, with headwinds for the remainder of the year. We no real improvement. So that's the overall EDP International dynamics. Then moving to margin, let me make different comments.
1st, last year, we decided to move to a guidance on EPS because we wanted to make sure that, we could decouple growth acceleration and margin efficiencies and have the ability to make sure that we would manage the right combination of both cents and margin in order to deliver short term agenda, but also transform and go towards our 2020 path. And what we committed is that there will be sustained improvement of margin year on year and that at the end of debt contract we would pass would be on the EPS guidance. So on the margin, we are committed to what we said, meaning that there will be a sustained improvement of margin for the full year. There will be an improvement in H 1, but given the strong headwinds, we said that the improvement in H1 is likely to be lower than the improvement in 2, where both synergies for Norham And Protein Savings will ramp up accelerate throughout the year. So that's the overall message on margin.
I don't want to guide more precisely because I don't think thing at the right pace and, in a in a agile manner to ensure our growth pace as well.
Okay. Okay, great. Thanks.
Thank you, Tazeel. Thank you, Warren. Next question?
The next question comes from Eileen from Morgan Stanley. Please go ahead. Your line is open.
Good morning, Nadia. Two quick questions from me. So first of all, in EDP International, it's encouraging to see your sales turn positive in 1Q. For Europe specifically on what you call your young brands, Am I right in thinking it's a quarter of your portfolio in Europe now? And could you give us more color on what growth you're seeing here and And how that strategy fits in with your Activia franchise?
So for example, is the growth adding to Activia or is there some cannibalization That's the first question. The second question is on China ELN.
Would you be able to give
us some color on growth rates in the channel? So would it be fair to say that direct is still growing 100% for you. And how much of this 50% growth is actually coming from just distribution rollout. So sell in rather than sell out of eptinezumil Platinum. So in other words, how much is actually sustainable for history and beyond?
Thanks very much.
Okay. So maybe I'll start with China. I think, to answer your question, about how much is sustainable. It's overall what we said in term of the normalization of growth. Meaning, today, you have a market demand that is still double digit, but as we already mentioned, you will start to recycle the birth of H2 2016 and then start have to enter a period where you have an effect of the deceleration of birth from 2017.
So there will be a normalization of the market. And we've said that mid term, we expect the market to grow, somewhere low single to mid digit mid single digit. So that's the overall outlook for the market. There will still be a strong Q2, and then we will start facing very strong comps from last year and the normalization will happen. On direct sales, what we say is 9 percent of the after quarter, the way between indirect and direct.
So I will leave you your own math. But overall, the direct channel, channel is, is a very, very important part of the growth. It 90%. Then, if we move towards distribution gain, yes, it's a part of the growth It's, it's also an impact from the mix of the growth, a positive mix of the growth, because we are in an ultra premium segment with a premium valorization. So it has an impact on the overall mix of growth.
But here again, if you, if you want to reconnect with the outlook and what to effect in the coming quarters, just take our outlook for the year, which is growth will normalize. And we expect now specialized nutrition for the full year to be mid to high single digit, that will be supported by the strong dynamic of Chinese IMF demand, but also with a very strong progress in the Daimhoff platform. So, this is where we are. They will continue to be volatility. So you also need to bear with us from the indirect part.
But overall, this is the outlook that we have. And don't forget that at the time, ELN in China will be normalizing. We will make further progress in the rest of the reporting line, mainly EDP So overall, there will be a contribution to growth that will rebalance between the different categories of the portfolio. Then on EDP International, your question integration. We had a question on Activia and whether growth is adding.
So before growth will be adding, the first part of the answer is that, AKTIGA, we are progressing to our recovery. It's not a brand that is recovered. So today, everything that we do and innovation is participating to that, is in order to stabilize sequentially the brand before we can, grow it again. It's very important to understand that, from consumer and from channels. So there is a lot of growth that is coming also for format in new edge.
So everything, part of the plan is bringing, improvement in the recovery and stabilization of the brand. It's very difficult to split on a very precise effect in terms of cannibalizing. The overall commitment is to recover gross the brand. And all the teams are making everything they have to in terms of plans of activation and innovation to make sure it happens. So yes, there will be some change in the portfolio in terms of what is contributing to growth.
And Europe? Thank you. Eileen, you had another question on Europe or it was Activia?
Yes, it was just on the young brands, actually, Is it, I mean, how big a portfolio part of your portfolio in Europe is it now?
It's still small. It's less than 20% today.
Okay. I'm sorry. I was asking about is it still growing high single digit you. I think that's what you were saying last time.
The next question comes from Martin Deboo from Jefferies. Please go ahead. Your line is open.
Yes. Good morning, everybody. 2 quick ones from me. The first on China Baby, and I maybe just like to ask Skyline's question a different way, which is Cecile, can you remind me what your read is on the H 216, but births in China versus the prior year just so we can get clear on what the birth effect is. That's the question on that one.
And secondly, I'm just going to re ask the question I ask Q1, which is around mix dynamics. Are you prepared to say of the price mix component? How much was mix and how much was price? And just in terms of mix drivers, you've called out Optumil in specialized, so I won't labor that point. But again, you've got very positive pricemix in EDP International, a lot of which I think must be mixed.
What is driving that exactly? You talked the call last time or Emmanuel did about Russia milk declining with positive mix, but any color on mix dynamics and particularly in EDB International would be helpful. Those are my two questions.
Okay, thank you. So in terms of the birth, for China in 2016, what we have observed is around 7% increase in bill, which, mostly occurred in H2, where we had the 13%, around percent increase in growth. And then, in 2017, we saw a decrease, an overall decrease impact. So that's the overall dynamic. And then, given the fact that you have both, if, milk and then growing up milk, it takes some time to recycle over the different stages.
On, volume price. So overall, you're right to say that, most of the price effect is in EDP International given the dynamics on both Argentina and Russia. Overall, if we take medical, specialized nutrition, there is no price impact. And in EDP International, you have a bit more than 50% that is that is linked to price. So that's the, the overall impact.
Revenue level, driven more by mix than price.
Thank you. Martin.
The next question comes from Alan Oberhuber from MainFirst. Please go ahead. Your line is open.
Good morning. Thank you. Good morning, Arthur. Alain Oberhuber. MainFirst.
I have two questions regarding the Waters business this decline we've seen in Mexico. Would you tell us how much water would have been up if we haven't seen this decline? And when do you think a recovery in Mexico waters? And the second question is regarding FX impact, which was significantly 2 days constant currency, what will be then the full year negative impact on currencies?
Your second question, Alan, was on the EPS or on something else?
No, just on group, group sales. Just on group sales. I mean, if you look at currency,
The line is on top of the platform not working. The line is pretty bad, so I don't hear all of you very well. On sales, we expect FX to be mid to high single digit negative on the full year top line, driven still by the appreciation of euro against our main foreign currency, our U. S, Argentina, Russian ruble. And, the impact will be unbalanced, high single digit in H1.
Now you've seen Q1 very strong. We will see around the same pattern, maybe slightly less in Q2. And low to mid single digit in H2. But as we speak now, then we will have, of course, to monitor it, quarter after quarter that. And then, your other question,
I think
need to be a we need to be a very relaxed, so to say, on Mexico because there was a short term impact linked to weather conditions. It will be restored in Q2. The overall performance of water has been very solid, again, on the back of a very strong category, a mix, strong plans, and we will continue to have the same outlook as the one we said in releasing our full year number in 17. So on that, there is no change in trend. There is no change in dynamics and no change in confidence our gross forward.
Our next question comes from John Cox from Kepler Cheuvreux. Please go ahead. Your line is open.
Hey, good morning guys. Congrats as well from my side. A good set of figures there. But I wonder, I've two questions, one on just the margin 1, just to come back to that. If you look at consensus, it's around 15% underlying operating margin for this year.
Given what you're saying, are you comfortable with that figure still or you think it's maybe a little bit too high? Second question, just on the North American business. I'm just wondering if you can give us a bit more granularity about what's happening there, particularly any thoughts on maybe divesting the fresh foods business because obviously that remains a big, a big drag and also about organic milk overhang. You said you were trying to develop new products. That is still weighing.
Just wondering how the development of new products in organic is, is maybe going to try to help get rid of that sort of oversupply situation organic now.
Thank you. So as you saw in February, I did not guide on margin, except the sustained improvement in margin. My commitment is to deliver full year guidance 2018, which is around the double digit recurring EPS growth at constant exchange rate and outside the impact of the active transaction. I have, committed that margin will bear an improvement that will be consistent and sustained year on year in order to reach into a 20 16%. So we're still aiming to do that.
I will not comment further at this stage. We've been having recently very steep increase in freight costs that we are working on mitigating through the synergies, through the acceleration on our protein delivery, that is still a volatile environment out there. We need to keep the flexibility to manage our risk and it is and continue to invest at the right reason behind our growth. And on that, I will not compromise. So we need to make sure that within all that, we are delivering on our objectives.
And I can tell you that we will deliver on our On North America and on Fresh Food, it's true that I didn't comment Fresh Foods. We call continue to see, in terms of top line, our negative development. We continue to turn around the business as well as making sure that, we are adapting and rebuilding the cost base and the supply. So that is in process. As I said to you, this is our first priority regarding this business.
And then, we will decide on, is there any strategic options that need to be looked at. And if we are the best operator to operate business going forward, acknowledging that we continue to believe that there is a strategic value in this business. And then on premium bearing and organic milk, yes, we continue to innovate into premium milk, but given the price range between what used to be organic, what is conventional, we are looking at products that are, better than conventional but still driving mix down versus organic milk, and we continue to work on plans. It's, it's it's an overall industry supply issue, which is long to recover, but we are working on that. The overall organic, category and dynamics, we have no doubt that and Horizon is a great brand.
So we need to face this cycle and then rebuild the overall growth dynamic.
Many thanks.
Thank you, Charles.
The two last questions before we end the call.
Certainly. The next question comes from Jeremy Fieclough from Redburn. Please go Your line is open.
Hi, good morning. It's Jeremy Fialco Redburn. So just following up on John's question on the U. S. Market.
Can you talk a little bit more about the yogurt and the Greek side? Clearly, you've signaled some greater promotion in that market. Do you think there are some more structural issues within that side of the business given the fact that there's been such a big shift towards plant based products, which I guess you're benefiting from on the other side of the business. So could this promotion be sustained as demand declines? And then secondly, if you could just split out the contribution of pricing in Argentina to the organic growth within the EDP International, given there was about a 30% currency devaluation quarter on quarter in air?
Thank you. So in, in terms of the U. S. Market sugar dynamic, our sales decline slightly in Q1, in a soft category that was a low single digit negative. So we continue to have a market share that's up, an all time high at 33.6%.
What you, what we commented in the previous quarters on the yogurt category is that overall in the past years, the shape space has increased. So there has been attraction to the overall category, and we continue to believe that, there is growth in this category. The per capita is still low. Now this shelf, how been getting quite crowded given the Greek dynamics that has been observed and regular yogurt, also given the performance of, of some competitors. So we are in a time where, need to manage, better the shelf.
We need to go through these dynamics around regular and Greek. But overall, if you look at other segment of yogurt like kids, plant based, other emerging trends, and and indulgence, this is a dynamic market. So there is a, there is a kind of shift of growth on the shelf And we also need to make sure that we are managing the overall crowded part of Greek shells increasing velocity and, and managing that. So for the time being, there has been, especially in Q1, high promotional intensity around Greek and regular, but we don't see that as a fatality going forward, and we continue to see that, there is a lot of space and potential for your growth. Going forward, and we have great plans to come, through the remaining of the year.
So that makes us confident. We have great innovation across formats, well performing around Activia Davis, happy families, So we continue to, to activate the portfolio to put good innovation and work with the trade on the category. And then on the EDP International on all, I will not go further to what I, I said. One way for you to look at is look at the impact that, that we posted last year in term of removing the adjustment we made on the other inflation. It's overview the best way you can get an overall, an overall estimation on the impact of Argentina on the impact of the overall inflation of Argentina to the overall equation term of top line.
Thank you, Jeremy.
Thank you. Comes from Alex Smith from Barclays.
Nutrition, are you able to say how much of the growth benefited from the inventory restock in China? I think you you had low levels of inventory in Q4, normal in Q1. I think you're guiding to Q2 being high single digits. So is that difference effect Lee, coming from the inventory restock, if I'm not mistaken? And then, really following up more on ELN China, appreciate you talk about the market beginning to slow as we get into the second half.
But if I look at the last few quarters, you talk about the market being up double digits this quarter, your own growth was over 50%, pretty much all coming from direct. Amount to market share. This is not a criticism, obviously. I'm just trying to understand where it's coming from, what it is are your brands differentiated compared to your other international competition or is it something in the executional channel mix? Just trying to help that dynamic would be, I understand that dynamic would be helpful.
No, go ahead. Good. Last one.
Okay. Sorry. I had another quick question on EDP, NORAM. Obviously, cost synergies beginning to come through. I'm just wondering where we are on the revenue synergy side of the story in terms of combining WhiteWave with your legacy younger business.
So what sort of timeframe can we begin to see some of those growth benefits begin to come through? Thanks.
So I'll start with the second one on independent RAM revenue synergies are coming through. You remember that when we announced the transaction, We were quite conservative on the revenue synergies, making sure that, we were only talking about, part of the regions where we had both portfolio in place, the synergies are coming through, according to, to plan, we end, we end an announced that we would do 1,000,000 dollars worth EBIT of revenue synergy. So we are in this plan, and we will have the 1st chunk of see this year, for both, Alpro in Europe coming into France and Spain more strongly, and also, North America given the portfolio and Mexico, to some extent. So it's coming through. It's there and according to plan.
On a specialized nutrition, probably the best way is really to list, all the impacts because, for example, if you take inventory, it's a minor part of the impact, but it's part of the impact. And when you need to reconfirm and I'm true for you. It's been quite tough to reconfirm the market growth together with our growth. It important to make sure that you have the full list of impact because each of them, some are bigger than others, but each of them is come So I will go again through the list, so you can make sure that you have all of them. And then I will let you follow with the team, if it's still, if you still need to, to follow-up on that.
So when you look at the performance in China, for Q1, it was overall 2 third volume and 1 third value. It was supported by industrial market demand. We commented several times. It's double digit growth. It's driven by, primarily growing up milk cell month as a result of the peak inverse in H2 2016, while stage 1 categories start it to normalize given the lower number of birth in 2017.
So that's the first item we've already double digit. Then the growth was supported, as you mentioned, by market share. Again, and market share gains, especially in the fastest growing segment, indirect in the direct Elroy, both in e commerce and mom and baby stores. Then there was a expansion of the AtEMIL Platinum Indium Indivitropremiumcategory, which is now representing 20% of our sales and which is driving positive mix to the overall contribution of sales growth. The other thing reason on the indirect part of the business.
Because if you remember 2016 second half of twenty sixteen, the indirect part of the business starting to bear negative volatility because of the announcement of the regulation that was to come, in several quarters. And last year, if remember, as from Q3, we started to observe that even the indirect part was growing again on a base of very low comps. So you have also a part, which is driven by low comps on the indirect part of the channel. And lastly, there is this stark impact. Also, it's minor.
Don't think that, we are getting we are getting the big impact from the inventory, but it's there. So I wanted to mention it We ended the stock very low in 2017 at the end because of higher demand than expected, and we are rebuilding see a normalized level of inventory. So it plays partly in the overall growth. So you really need to all this impact, to make sure that you reconcile properly, the growth rate that we've in the market and our very great performance. And I think it's also a tribute to the work that are done that is done by the team.
And the fact that we have a very strong brand that affects, that attract, sorry, market demand, and we can will be very happy of this performance.
Chenzalex.
So with that, I propose we close the call. We remain available with Thomas to follow on later in
the day. Thank you very much for your attention.
That will conclude today's call. Thank you for your participation, ladies and gentlemen. You may now disconnect.