Danone S.A.

Thank you for standing by and bugged down in first quarter 2026, so cold. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please be advised that today's conference is being recorded. Our speaker today will be Juergen Esser, Chief Financial Officer. And now I'd like to hand the conference over to Mathilde Rodi, Danone's Head of Investor Relations. Please go ahead.

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

Thank you, Mathilde, and good morning to all of you. Welcome to our Q1 2026 sales presentation. Thank you for taking the time to be with us. I suggest we go straight into it. It is a busy day for all of you. Let's go to slide number two. As you have seen from our press release this morning, we reported a solid set of numbers for the first quarter, a quarter which was far from business as usual. Firstly, the conflict in the Middle East. Most important is that all our colleagues who live and work in this region are safe and well. A big thank you for their commitment during these challenging times. As you all know, this conflict is having consequences on logistics and distribution flows in the region, a region that is representing around 2% to 3% of the sales of our companies. Our start of the year was also impacted by the infant milk recalls that affected the industry in the EMEA zone. It has created shelf disruptions and out-of-stock situations across the region, with a particular challenge for the stock replenishment in the Middle East due to the before-mentioned conflict situation. Amid this challenging context, we are pleased that the numbers we published today demonstrate the resilience of our portfolio, the strength of our categories, and of our brands. And our objective is more than ever to come out of this environment stronger than before. Based on this confidence, we are accelerating on our strategic portfolio management with the signing of two important transactions during the first quarter. I suggest we move to the next page, page number three, so I can give you more color on it. Both transactions that we sign during the quarter will further strengthen our unique health-driven portfolio and contribute to our industry-leading value creation ambitions. First, the acquisition of the Huel company. Huel is the leader in complete and nutritionally balanced meals with sizable business in Europe and in the U.S. The contemplated transaction will enhance our presence in the premium functional nutrition category. This offering us new capabilities, especially in direct-to-consumer channel management, combined with state-of-the-art digital marketing skills. The Yule company is a perfect strategic fit with a highly complementary mission. In parallel, we announced for our Argentinian dairy business an exciting new chapter. Together with our partner Acor, we are creating a joint venture, combining our respective portfolios to unlock the full potential of the dairy market in this region. Whilst the transaction will technically deconsolidate our Argentinian dairy business, we expect the synergistic effects to this joint venture to be EPS-equative over time. Both transactions, which we expect to close in the second semester, are fully aligned with our Renew Done on Agenda and our capital allocation priorities and discipline. Let me now move on to slide number four. Amid the described complex condition in this Q1, we delivered a solid like-for-like sales performance of plus 2.7%, with volume mix-up plus 1.5%. Our growth was balanced across all categories. EDP delivered again solid growth of plus 3.4%, driven by the ongoing rollout of our functional innovations, particularly those rooted in protein and gut health. Specialized nutrition posted plus 1.9%, the underlying growth dynamics across the globe remained strong, which more than compensated for the IMF recall impacts. And finally, water, that grew plus 2.3%. The water category saw a resilient start to the season, with solid growth in many markets. We will talk about the regional performance in the coming minutes, so I will not enter here into the details by geography. Let me instead suggest moving on to slide number five. and to double-click on some of the underlying dynamics. The consumer preference for healthy food and hydration is rising everywhere around the world, and we are continuing to address this opportunity with several platforms contributing strongly to our growth. In dairy, high-protein yogurts continue to be the key contributor in all regions, from North America to Europe and Asia. In addition, our more recent innovations, such as skia and kefir, are flying off the shelves and we are expanding them fast within and beyond Europe. We continue to innovate in many segments and regions and are particularly excited about new product launches under the ALP program in Europe, including the Meal-to-Go meal replacement solution, which you can see here in the picture. Meal-to-Go was launched in Germany recently and is currently being rolled out to other European markets. And finally, in medical nutrition, we continue to see strong dynamics supported by favorable demographic trends and rising diagnosis rates. This is benefiting our diet medical as well as our pediatric nutrition business across all regions, both of them going from strength to strength. All these platforms are responding to structural consumer and patient needs and increasingly contribute to the quality of our growth as they scale up. Having said that, these successes should not take our attention away from key challenges that we are addressing. We mentioned the conflict in the Middle East, which is posing supply chain and cost inflation pressures. We have some short-term hedging protection in place, which is moderating the immediate impact on our P&A. To address the volatile context, we have accelerated the run rate of ongoing productivity projects and are monitoring the situation closely. On the infant formula situation in EMEA, Whilst the supply chain in Europe is mostly back to normal, the Middle East situation is not yet stable due to long lead times of stock replenishment. Our priority is on rebuilding the credibility of the categories, and we are refocusing our investments to make this happen. We expect the situation to progressively normalize as we go through the year. And finally, in the US, we talked previously about not being happy with our competitiveness. We have seen an improvement in Q1, an encouraging sign. We will have more capacity coming online during 2026 that will help us to double down on our execution on the dairy shelf. Creamers are lapping as we speak the supply issues of Q1 2025. All of this will support our recovery for the coming quarters. Overall, the opportunity moving forward lies in accelerating our winning platforms, including the ones on the left side of this slide, as much as in correcting the things which do not yet deliver to our expectations. The formula which has proven successful all these last years. With that said, let's turn to the sales bridge on slide number 6. Reported sales reached 6.7 billion euros in the first quarter. In addition to the plus 2.7% like-for-like growth previously discussed, the experienced adverse currency effects of minus 5.6%, residing from the appreciation of the euro against most currencies. And lastly to mention, for the third consecutive quarter, we are reporting a positive scope effect, predominantly from the Kate Farms integration of plus 0.5%. Now let's look at the performance by region, moving to slide number seven. And let me pause briefly here because this is an important point. You will remember that as of this year, we have moved from five to three rather classical macro regions. EMEA on the left side of the chart, Americas in the middle, and APAC on the right. This change reflects how we manage the business operationally and strategically. Moving to this leaner setup further enhances our company's agility and improves clarity and accountability. To ease the reading of our performance, we will make the switch in reporting progressive, and for now, we will continue to provide for additional information, also like for like numbers for previous zones of Europe, North America, and CNRO. Let me now start the zone review with EMEA on the next slide, on slide number eight. EMEA delivered plus 0.6% like-for-like growth in Q1, led by a price of plus 2%. Within EMEA, Europe delivered plus 0.4% like-for-like. We saw sustained momentum in EDP, driven by many of our function-led innovations across dairy and plant-based. In particular, we saw good growth in our winning platforms, including in high-protein, skia and kefir, as well as in Alpro. Activia also delivered another quarter of growth, confirming the green shoots observed in Europe in Q4. As expected, specialized nutrition was impacted by the IMF recall in Europe and the Middle East, as we already discussed. Our key focus is now on rebuilding trust into the category and in our brands. In waters, we posted solid growth ahead of the season, particularly in Evian, and supported by the rollout of Volvic functional water innovations across more markets in Europe. So overall, a robust underlying performance in EMEA amid the temporary headwinds. Turning to the Americas on slide number nine. The Americas region delivered plus 3.4% like-for-like growth, led by volume mix of plus 2.5% and price of plus 0.9%. Within those numbers, NORAM, North America, delivered plus 1.5% like-for-like growth. In the U.S., our priority is to regain momentum and competitiveness outside of protein, and Q1 showed some improvement versus the low point in Q4. This was driven by additional capacity on yogurt, starting to kick in, and an improving dynamic on creamers, helped by easier base of comps since the month of March. On top of that, our Stoke brand continued to deliver strong W-digit growth. Specialized nutrition saw high single-digit growth in the quarter, led by Aptamil in Latin America and Neocate in the U.S. Overall, an improved situation in the Americas, with a lot of things to do in the U.S., Quality of execution remains the focus area, particularly in dairy, and this is where the teams are fully mobilized. Turning to slide number 10. APAC delivered plus 6% like-for-like growth entirely driven by volume mix within APAC. CNRO delivered plus 10.3% growth like-for-like growth. In EDP, Japan again demonstrated strong momentum, continuing to gain share in a very competitive dairy market, thanks to strong functional claim execution. Specialized nutrition continued to deliver solid growth in China across both IMF and medical nutrition. In Q1, we saw particularly strong demand for our allergy range within pediatrics, for adult oral solutions in adult medical nutrition, as well as for essences within the IMF categories. The medical nutrition category remains vibrant, while the infant milk category continues to normalize as expected. And in waters, we saw contrasting dynamics across our two main brands in the region, solid growth for myzone as we are preparing for the season, while severe flooding impacted the category in Indonesia. Overall, APAC remains a growth region for us with opportunities across countries and categories. And with that, let me conclude with slide number 11. As we have been discussing this morning, we delivered a solid performance in this first quarter amid a challenging context. We are applying with rigor our winning strategy, focus on our health-focused categories that benefit from attractive underlying demand and that continue to grow faster than the average of the food and beverage market. We are therefore confirming today our guidance for year 2026, consistent with our mid-term guidance of like-for-like sales growth between plus 3 and plus 5% and for recurring operating income to grow faster than sales. And with that, let me hand it back to Mathilde to start the Q&A session.

Thank you, Jürgen. So we'll start the Q&A session with a question from Guillaume Delmas, UBS. Guillaume.

Thank you very much, and good morning, Jorgen and Mathilde. First, quick housekeeping. Could you quantify the impact on the IMF recall on your Q1 numbers? At the time of the four-year results, you were talking about 50 to 100 basis points. And then what kind of impact are you assuming for Q2? And then my two questions. The first one on the commodity cost outlook, And particularly on this, to what extent this outlook has changed in recent weeks? And as a result, what kind of COGS inflation would you be baking in in your 2026 operating profit guidance? And still on input cost inflation, I mean, we've heard from a large French dairy company. They were already thinking about pricing actions. Wondering if it's something you're also contemplating or, as you were alluding to on the call, Juergen, for now you think your productivity savings can fully offset this additional commodity headwind. And then second question, short one, just on North America. Back in February, you sounded confident about a significant step up in like-for-like sales growth from Q2. We've seen some early positive signs in Q1, so I would assume this is still the case. And if you can help us a little bit unpack what will be the key drivers behind that, if it's just the cremous basis of comparison, or you would expect a more broad-based acceleration. Thank you very much.

Good morning, thank you. Many, many questions, so let me go through that. First, on the IMF impact, the impact we saw in Q1 is exactly in line with what we discussed a couple of weeks ago, so nothing more to say. It has been really an exceptional situation as we faced, in a way, the combined effects of a larger industry recall together with the Middle East supply chain disruption. Europe's supply chain situation is back to normal in most of the countries. Middle East, as you can imagine, is a bit more difficult because shipping a product into the Middle East is a bit more tough, but they're making also good progress there. So we expect a progressive normalization of the IMF business performance during the course of the year. When it comes to the commodity outlook, I mean, the situation is obviously extremely, extremely volatile. You have seen it over the last week, impacting spot prices for transportation and packaging, obviously, immediately, but also for some other materials, including fertilizers. We have, as you know, hedging protection in place, which is moderating short-term the impact on our P&L. The way we are addressing it in this re-volatile context is that we have been accelerating, first and foremost, ongoing productivity efforts to mitigate the immediate cost impacts as much as possible. And for the rest, we are pretty much monitoring the situation to decide if and when we may need to take other mitigation actions, but they are really too early to say. So we are focusing on really monitoring the situation at least for the next days and weeks to to decide upon to do more or less. For North America, I would say we are pleased with what we saw in the, we are pleased with what we saw in Q1. We saw a step up versus the Q4, and the step up came through and came through because of more capacity, as you mentioned, and because of the in March. So obviously we're not to give a guidance for a quarter, for a region, for a sub-segment, but our ambition is to further improve the situation progressively as we go near, as you have more capacity coming online, and as we are activating more and more our brands across the portfolio in North America.

Thank you very much.

Thank you, Guillaume. Next question from John Cox, Kepler. John?

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

Morning John. Look, on the quantification, there's really not much more to say. What you see in Q1 is really in line with what we said, despite the fact that the Middle East conflict was not really on our radar during the full year discussions. When it comes to Europe, as I said, the supply chain situation is pretty much back to normal. What we are seeing is, and there is no surprise, that the category during those recalls has been a bit softer, and this is why we are investing into rebuilding the trust with parents and key opinion leaders. which should contribute to recovery. Market share situation across Europe is quite fluid. We are up in some countries, down in some others, very much depending on local competitive situations since the recall. Sometimes market share rating is a bit difficult because what happened in that situation is that people went, instead of supermarkets, more to pharmacies, so there's been a big shift in shopping behaviors during the crisis. That is now rebounding back. Looking at it, I believe that we will be able to regain a strong competitive situation and that also the category will progressively recover. So this is why I believe IMF business for us over the year will progressively go back to where it used to be. Not a lot more to say. Middle East will stay a little bit tense for the coming weeks, depending on how the conflict goes.

Any information about China and stuff?

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

Thank you.

Thank you, John. So the next question is from David Hu, Morgan Stanley.

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

Look, Good morning, David. I would say in the U.S., a good improvement in Chuan as we were traveling through the quarter. Yogo, we started to benefit from capacity coming online, but as we discussed at several occasions, this is not a one-shot capacity increase. This is several production lines coming online as we travel through the year, and especially as we travel through the first six months of the year. And so as this capacity comes online, We have the ability to reactivate not only high protein, which continues to grow strongly, but also to activate our other brands in the U.S. So that has started in Q1, but it really started, and so it will be progressive as we go through the next two quarters in particular. But I would say we are rather happy with that. Cremor, they said we were lapping in the month of March. the supply chain issues of last year. We could see that in the internal reading, but also in the external reading in market shares, which gives us also confidence for the full year. On Huel, look, first, very exciting. Fantastic, fantastic company, fantastic complementary product groups. And on top of the products they are selling, I think what is unique in their model is really the direct-to-consumer channel management, combined with quite state-of-the-art digital marketing capabilities. So this is really exciting. It increases our exposure to fast-growing markets in both in Europe and in the U.S., and so it will enhance our growth profile in both regions. When it comes to interest costs related to the deal, you saw actually what we have been issuing in bonds over the last weeks, which gives you a sense of the interest costs linked to this operation. It will not be EPS-inclusive in year one, as you can imagine, but it will be EPS-inclusive very fast, because it's a fast-growing business at very nice gross margins. to make sure that we are pushing this opportunity to the max, leveraging the totality of their product portfolio. They have a variety of product formats, so really excited about this, of welcoming you to the Danone family.

Great. Jürgen, can I just follow up on your last point on Huel? So is it fair to assume that some of the extensive debt that Huel has will be refinanced with some of the paper you've received now?

You saw the issued bonds over the last week, so in that sense, I mean, from a financing standpoint, things have been in the pocket.

Thank you.

Thank you, David. The next question from Warren Ackerman, Backlit.

Yeah, good morning, Jürgen. Good morning, Mr. Warren here at Barclays. I've got one small housekeeping and then two questions. The housekeeping is in China, Jürgen. Are you able to kind of clarify whether you're seeing any issues on the broader product coming into China on extended serolide testing as we've heard from A2 mill? Just wondering whether that's something to think about housekeeping. And then my two questions are, can you maybe... Juergen, kind of outline the kind of growth that you're seeing in your kind of three sort of growth platforms, which are, you know, high-protein, out-of-home, and medical, just to give us an idea in terms of how they're tracking, the first one. And then secondly... Obviously a lot of focus on Asia, but can you talk a little bit about some of the kind of other EMs as well, particularly thinking kind of Latin America trends and perhaps some of the kind of Southeast Asian India regions as well, just given the conflict? Thank you.

Good morning. First on China and border, we see what everybody is seeing, which is that the authorities across the globe are strengthening instantly the quality of controls. This is also true for imported IMF products into China. The teams on the ground are mobilized and are managing it to avoid any kind of supply chain disruption. So not a lot to report here. When it comes to our winning platforms, Hyprotein is the number one growth driver of the company, has been and is, which is exciting. I mean, in terms of scale, it continues to, it's raising its contribution quarter after quarter, as this is not anymore a European phenomenon or a US phenomenon. I mean, Hyprotein is now a reality everywhere around the world. I've been talking about Japan. I could talk about Latin America, I could talk about Australia, and so we are everywhere prioritizing investments into those platforms, while we are also investing into elements which are more essential protein delivery, like Sphere. I want here to mention the Kefir innovation we have been launching, which is not really on high protein, it's more on gut health, It has been extremely, extremely well welcomed in the European markets, which we initially launched, and we are rolling it out as fast as possible, but you will see it appearing also in other markets around the world. So we are very, very excited about it. Out of Form continues to grow faster than sales in retail channels, and as we discussed at several instances, this is also due to the fact that all of our innovations we are launching are eligible for out-of-home consumption, a lot of drinkable format. This is also where Huel is extremely interesting, because it comes with, again, this ambient product format, so it's just strengthening on this point. And when it comes to medical, I mean, exciting. I mean, if there's one thing which is really exciting, it's medical across the board. In the U.S., because Kate Farms integration goes very well, And in China, because we are making very good progress, not only in our, I would say, legacy business, which is tube, but also in oral feeding, which is pretty new to China, as we've been discussing. Last point on more emerging markets, Latin America doing actually pretty well, I need to say, seeing good dynamics, Brazil, Mexico in particular. Argentina very excited about the joint venture. So we will have a platform at scale. It will be a billionaire platform, which yet will not be any more consolidated at the time, but it should be equally as creative for the company over time. Southeast Asia actually has very strong underlying dynamics. It has not been contributing to the same extent in Q1 as over the last year because we had some phasing effects there, but here we are. You know, it is one of the big growth opportunities of the company.

Thank you.

Thank you, Warren. Next question from Olivier Nicolai.

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

Good morning. Good morning, Olivier. Consumer demand in Europe, I mean, no surprise, overall consumer sentiment is quite muted. Having said that, and we discussed that over the last quarters, there's a very polarized dynamics in food and beverages. The healthy food is on trend, and consumers are willing to pay for value. You need to offer value, but then consumers are willing to buy. And so this is what we are seeing. High protein, kefir, immunity, everything which we are proposing, which is functional, which is differentiated, which is premium, by the way, is working very fast. And so we are leveraging the science we have in our products to deliver, to make these products attractive to the consumer, even at a more premium price. Same is for Danette, by the way, you know, our premium dessert, because people want to have pleasure during the day. So it's not only about functional benefits and health, but also feeling good, especially in these difficult times. less varied about down trading from a product standpoint. Obviously, we pay a lot of attention to be available in the right channels, at the right price point, and so format management and channel management, including on discounters, but also on away from home, is a very, very important part of our strategy moving forward. IMF recall, look, please do not expect me to give a guidance for for a sub-region and a sub-category, we expect a progressive improvement. A set supply chain situation in Europe is pretty much back to normal. Focus is on really recovering the credibility and the trust of the categories. And lastly, on North America, Kate Farms, very exciting for the reason you mentioned, which is the first time in the history of Danone we have access to the healthcare system. and the hospital system in the U.S. This is a fantastic platform, and what we are doing at VSP is to combine the success of this platform with the science we are bringing from our global specialized nutrition hub, and so the early science we have are very, very promising. We see good growth since the acquisition, and we are just starting to materialize the synergies we are seeing. You know that we, before the acquisition of Kate Farms, we had already two smaller acquisitions of companies also in the same field in the U.S. called Real Food Brands and Functional Formularies. So now we are unleashing the combined power of those assets.

So quite exciting.

Thank you. Thank you, Olivier. Next question from Nicolas Ferron. Thank you, Henry.

Good morning, Jürgen and Mathilde. I have two quick questions for me. The first one, maybe you could remind us if you ship your baby food product by plane or by boat to China. And the second one, Jürgen, do you have any strong view on what might be the changes in regulation in the U.S. baby food market following the operation's talk speed that's going on? Thank you.

Good morning, Nicolas. Look, overall, you can imagine that our supply chain is very much a supply chain, which is using ship transportation of both transportation, especially between Europe and China. But this is not only between Europe and China. That's true for the overall operations in very particular situations. We may ship something, but you can imagine from a financial standpoint, it's a bit less interesting. We are having, I would say, good control on our supply chain, because we are used to a bit of erratic behavior in those supply chains, so I think that's pretty much under control and nothing particular to report. When it comes to the U.S. and the infant milk market in the U.S., you know that We are not really playing in that market, so there's not a lot to say. We are not following that very, very closely. I'm afraid to tell you.

Thank you.

Thank you, Nicolas. And next and last question from Celine Franitri, JP Morgan.

Thank you. Good morning, everyone. My first question is coming back on the short-term impact. So Indonesia floating and overall if the momentum in Southeast Asia is good, do you expect water to step up in acceleration in Q2? And then Middle East, you have this constraint in shipping. Are you thinking that this is going to linger into the quarter? And how big is that? because you said Middle East is two to three impact and it's more for specialization. Just try to understand a bit those elements. I see that consensus is at four on Bloomberg for Q2. So do you think that is in line with what you expect to be a progressive acceleration? Do you think that is a good reflection? Are you comfortable with that? My second question is on margin. So given the weak start to the year specialized nutrition impact, are we expecting any margin in the first half of the year? And in H2, you would be facing higher COGS inflation. Do you think we should start to think about that as we model for potential pressure in the second half of the year? Thank you.

Good morning Celine. So let me go one by one through your questions. First on water, I mean Indonesia is a big business for us. It was a tough quarter because it has been raining a lot and a lot of flooding which was very public. When you have a business model like we have it, going through all the hundreds and thousands of islands of Indonesia has been quite disruptive. So that should be back to normal as we speak, and so we will see a better performance moving forward, which obviously will help the overall waters performance. Middle East, I would say our people are doing everything possible to find work around to deliver our product in the region. It's going better and better. And, of course, we are also hoping that the overall situation will improve. But here, you know, I think the situation is better managed from day to day. It happens that this is a lot of imported products going into that region. But, again, workarounds are working better and better. Don't ask me to give you a precise cue to comment on what today's content is. I think what the takeaway should be is probably that we are confirming today with confidence our guidance. And I think that's an important statement. And this is true for top line, which means implicitly an acceleration versus a Q1. And this is true for the bottom line. And we know that in our business model in Danone, the bottom line, the margin, is very consequent of the top line because our business model is based on quality growth. For the margin, obviously, two things to keep in mind. One is the softer start to the year with specialized configuration, and the other one, as you say, we don't know really what the inflationary pressure will do for the full year. Too early to say. For the moment, we have hedging in place, as I mentioned, moderating the short-term impact, and we are accelerating as much as we can productivity. For the rest, I mean, you see the oil price one day at $80 and the next day at $120. It's extremely difficult to make a forecast for that. I think what will help us moving forward is the agility we have learned over the last years to react to an erratic environment and to launch mitigation actions. Our focus remains quality growth. And here we are extremely pleased to see that the underlying dynamics of our business remains very strong because this is the best way to create value for the company for the years to come.

Thank you.

Thank you, Céline.

Thank you, Céline. And we have one very last question that came at the last minute, so from some side. Tom?

Yes, good morning again. Just quickly coming back on the China issue, nutrition business overall sorry I missed it earlier on the call but could you give a view on what the growth rate of the infant formula is versus the adult nutrition in China please and what do you see as happening to your market share in international formula please in China and perhaps what's happening to pricing like for like versus mixed impacts on grace, please.

Yeah, good morning, Tom. So look, China and specialized nutrition, solid, pretty solid trend in Q1. Very exciting growth rates in a number of areas in medical nutrition, actually in pediatrics, very strong, especially on the allergy formula. We are making, on the adult side, a pretty good progress on launching, or I would say solidifying the presence in oral medical nutrition, something which hardly existed some time ago, and we believe that has a huge potential, so that's very exciting, so growing very fast on that side. On the other side, also IMS, which is a pretty solid trend in Q1. Where we are benefiting from two things, where we are benefiting from the overall very strong market and market share position we have gained over the last quarters, and you have seen that our market shares have been evolving strongly. And secondly, the strength of the census, the census brands or sub-brands, which has helped us to have a very strong print. by the way, in both Chinese labels and international labels. Pricing in that category, there is nothing really to report, actually. Pricing for us has not been really a driver. I mean, not in Taiwan, not for the last quarter. in the end, all the numbers you see in pricing in IMF, all the numbers you see in net sales in IMF of last quarter are equal to volume mix contributions, so no particular comment on pricing.

Okay, thank you.

Thank you, Sam. So with that, we end the Q&A. Thank you, everyone.

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

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