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Mead Johnson Nutrition's CEO Discusses Q1 2012 Results - Earnings Call Transcript

As stated in the past, that after we completed the SAP implementation and the actions to achieve full standalone status, we would have more resources available to consider business development growth opportunities to complement our compelling organic growth strategies. Our business development focus will be on tuck-in deals like this one that allows to further strengthen growth with a primary focus on emerging markets.

Since Kasper will share our operating segment results shortly, let me provide an update on our full-year guidance. We continue to be very positive about our outlook for the year and expect our annual constant dollar sales growth to be in the range of 9% to 11%, up from our previous guidance of 7% to 9%. About 1.5 points of this increase is driven by the acquisition in Argentina with the remainder from modestly higher expectations to growth in our emerging markets.

We currently estimate that the non-GAAP EBIT margin, as a percentage of sales, will be at or slightly above the 23.6% level seen in 2011 with demand generation investments accelerating for the balance of the year.

For the full year, non-GAAP EPS is expected to be in the range of $3.04 to $3.14, up $0.04 from our prior guidance.

I will now turn the call over to Kasper, who assumed the role of chief operating officer for the company earlier this year. I will return at the conclusion of our prepared remarks to wrap up and address your questions.

Peter Kasper Jakobsen

Thank you, Steve, and good morning, everyone. I'll focus my comments on the operating performance and the expectations of our 2 segments.

Starting with Asia and Latin America, first quarter sales for this segment grew 21% on a constant dollar basis versus the prior year with just over $700 million and now accounts for 71% of our global sales. Absent the 2-week contribution from the Argentine joint venture following the closing in mid-March, sales increased 20%. Higher volumes were the key driver of our first quarter results, adding 16% to our top line with pricing accounting for the remaining 5% of growth. We will not talk in any detail about our specific plans in Asia and Latin America, but we expect pricing will make a bigger contribution to sales growth in the near future when compared to that seen in recent quarters.

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