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Mead Johnson Nutrition Co MJN
Q1 2013 Earnings Call Transcript

Transcript Call Date 04/25/2013

Operator: Good day, ladies and gentlemen and welcome to the Mead Johnson Nutrition First Quarter 2013 Earnings Conference Call. My name is Francis, and I will be your coordinator for today. At this time, all participants are in a listen-only mode. Following the prepared remarks, there will be a question-and-answer session. As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference call over to Kathy MacDonald, Vice President, Investor Relations. Please proceed, Kathy.

Kathy MacDonald - VP - IR: Thank you, Francis and good morning. Welcome to Mead Johnson's first quarter conference call. With me today are Steve Golsby, our Chief Executive Officer; Kasper Jakobsen, our Chief Operating Officer and designated CEO elect; and Pet Leemputte, our Chief Financial Officer. As we start, let me remind everyone that our comments will include forward-looking statements about our future results, including statements about our financial prospects and projections, new product launches, and market conditions that constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

Keep in mind that our actual results may differ materially from expectations as of today due to various factors including those listed in our Annual Report on Form 10-K, quarterly report on Form 10-Q, and current reports on Form 8-K, in each case as filed with or furnished to the Securities and Exchange Commission and our earnings release issued this morning, all of which are available upon request or on our website at meadjohnson.com.

In addition, any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some time in the future, we specifically disclaim any obligation to do so even if our estimates change. Given that you are in the midst of the earnings reporting season, we will be respectful of your time and limit this call including Q&A to 45 minutes.

I will now turn the call over to Steve.

Stephen W. Golsby - President and CEO: Thank you, Kathy and good morning, everyone. As you likely read in our press release, Mead Johnson delivered sales growth of 5% on a constant dollar basis in the first quarter. Sales growth was 6% from our core operation, which excludes the impact of several low margin non-core businesses that we exited late last year. We are very pleased with these results as we had expected a lower rate of sales growth due to the tough comparison to China's record results in the first quarter last year.

While China performed as expected with continued sequential share gains, that Kasper will discuss in a minute, the higher than anticipated sales are attributed to Hong Kong. Sales in Hong Kong were particularly strong, prior to the March introduction of new regulations that limited exports to China. The Asia/Latin America segment delivered growth of 7%, with 5% from organic growth and 2% from our 2012 Argentine acquisition. The North America/Europe segment had another quarter of positive sales growth, excluding the impact of the non-core businesses that we exited in 2012, sales growth for the segment is 5%.

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