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Danone reported solid Q1 in view of infant formula recall in Europe and Middle East conflict, saying US segment is starting to gain momentum after sluggish period during which it remade mgmt team. Total sales rose 2.7% on adjusted basis to &euro;6.7 bil on 1.5% growth in volume/mix and 1.2% in pricing. Paris-based dairy & water giant claimed positive volume/mix in all key categories. By region, core EMEA group suffered stagnant period with sales off 1.6% to &euro;3 bil, +0.6% on adjusted basis, as volume/mix sagged 1.4%. In Americas, sales rose 3.4% on adjusted basis to &euro;2.3 bil on 2.5% volume/mix growth. Within that segment, tho, N Amer had more modest performance, up 1.5% on adjusted basis with volume/mix +1.7% and price -0.3%. Smaller Asia Pacific region rose 6% to &euro;1.5 bil on 6.2% volume/mix lift.By category, dairy segment rose adjusted 3.4% to &euro;3.3 bil on 2.1% volume/mix gain. Specialized Nutrition rose adjusted 1.9% to &euro;2.3 bil on 1.3% volume/mix gain. Waters portfolio was up adjusted 2.3% to &euro;1.1 bil on 0.3% volume/mix gain. "Our winning platforms continued to perform strongly, notably in dairy with high protein, skyr and kefir, in waters with Evian and Mizone, as well as in medical nutrition around the globe," per CEO Antoine de Saint-Affrique. He pointed to coupla deals that should accelerate transformation: pickup of Huel meal replacement brand for nutrition group, as well as creation of dairy joint venture with Arcor in Argentina. Still, "we remained constructively dissatisfied and focused on delivering on our priorities and addressing the areas that still require further progress." Shareholders seemed constructively satisfied with progress, bidding up shares over 2% in trading today.In Americas, Danone rode protein wave as more yogurt capacity kicked in even as its Stok RTD coffee continued to grow by double digits. International Delight and other coffee creamers were "progressively improving" as they lap supply issues of a year earlier. Specialized Nutrition rode gains by Aptamil in Latin America and Neocate in North America, with Huel now entering the fold. Huel brings high gross margins and also extends co's participation on shelf-stable side of bevs. Earlier acquisition, Kate Farms, is on track with integration moves. Waters were "solid" in region.One area of oppty in N Amer is to build on access to hospital system that Kate Farms acquisition augmented. It reps "the first time in the history of Danone we have access to the healthcare system, and the hospital system in the US," said CFO Jurgen Esser, per Investing.com transcript. "This is a fantastic platform, and what we are doing as we speak is to combine the access of this platform with the science we are bringing from our global specialized nutrition hub." A pair of past, smaller US acquisitions, Real Food Blends and Functional Formularies, provided an initial entry point. "Now we are unleashing the combined power of those assets."Infant formula recall was a black eye for co but CFO Esser said Danone is putting issue behind it. "While 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," Esser said. "Our priority is on rebuilding the credibility of the category, and we are refocusing our investments to make this happen. We expect the situation to progressively normalize as we go through the year." He added later: "Our key focus is now on rebuilding trust into the category and in our brands." Execs are being vigilant that issue doesn't create problems in other markets, notably China, where authorities are taking tougher stance in monitoring formula biz.

Danone Reports Headway in Q1 as US Regains Momentum, Infant Formula Recall Moves into Rear Window; Volume/Mix Still a Challenge, Up Just 1.5%

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