China Modern Dairy Holdings Ltd. · HKEX:1117
China Modern Dairy — H1 2015 Earnings Presentation
33 slides from China Modern Dairy's earnings presentation, 2015
Slide 1: 2015 Interim Results Announcement
2015 Interim Results Announcement China Modern Dairy Holdings Ltd. 中国现代牧业控股有限公司 1
Slide 2: Disclaimer
Disclaimer This presentation material is prepared by China Modern Dairy Holdings Ltd. (the “Company”) solely for your information only. All or any part of this presentation material may not be taken away, reproduced, redistributed, or retransmitted in any manner. You agree to be bound by the above c
Slide 3: Agenda
Agenda Company Overview Latest Development Financial Review Business Outlook Industry Overview 3
Slide 4: Company Overview
Company Overview
Slide 5: China Modern Dairy – The Largest Dairy Farming Company in China
China Modern Dairy– The Largest Dairy Farming Company in China Company Overview Outstanding Performance Herd Size The largest dairy farming company in China and the first listed company focused on dairy cow breeding in the world (Head） 177,921 190,027 197,833 Advanced breeding and feeding techni
Slide 6: Milestones
Milestones The largest dairy farming company in Branded UHT milk was China awarded gold prize 2006 October November 2008 to for a second Our first dairy 2008 June 2009 consecutive year Completed equity 2015 —Monde Selection farm in Signed Maanshan, 10-year financings with April 2012 Anhui prov
Slide 7: Diagram of Farm Distribution
Diagram of Farm Distribution Farm Distribution Note: Farms in black stand for those in operation, a total of 26 farms; Farms in blue stand for those under construction, a total of 1 farm. As of June 30 2015, the Company had 27 dairy farms in China, which had 26 farms operating and 1 farm under const
Slide 8: Pioneered the Layout of Zero-Distance Integration from Milking to Processing
Pioneered the Layout of “Zero-Distance Integration from Milking to Processing” The whole processing is fully under control accomplished by scientific and standardized design. With refined processing management, the Group is capable of producing “Two Hours” milk, which can prevent milk from thermal i
Slide 9: High-quality Raw Milk Benefits Our Pricing
High-quality Raw Milk Benefits Our Pricing Advanced Techniques Rapid Growth in Raw Milk Sales Volume （’000 tons） ► Adopting the leading edge breeding and feeding techniques to improve the milk yield and quality Improving the gene 470 451 Optimizing feeding techniques combinations of milkable 306 cow
Slide 10: Latest Development
Latest Development
Slide 11: Acquisition of Joint Venture Farms
Acquisition of Joint Venture Farms 1 JV farms have more significant advantages than any other peer farms in the industry 2 Solidify and enhance the leading position among upstream enterprises 3 Obtain advanced operating experience and recruiting management talents through introduction of outstanding
Slide 12: Enhancing Brand Value
Enhancing Brand Value ► China Modern Dairy’s self-branded milk products has been awarded the Gold Award for a second consecutive year in the food category by Monde Selection at its 54th Award Ceremony in Lisbon, Portugal. This is the first time domestic milk product gained this honor consecutively.
Slide 13: Financial Review
Financial Review
Slide 14: 2015 Interim Results Overview
2015 Interim Results Overview As of 30 June 2015, Cash EBITDA decreased by 11.3% YoY and Net profit decreased by 7%YoY, mainly due to the significant decrease of raw milk price. Items 1H2015 1H2014 Changes RMB’000 RMB’000 %/ppts Turnovers 2,437,320 2,584,535 -5.7% Cost of Sales(1) -1,548,426 -1,579,
Slide 15: Liquid Milk Products' Revenue and Profit Contribution are Rising
Financial Overview-Liquid Milk Products’ Revenue and Profit Contribution are Rising Revenue Gross Profit and Gross Profit Margin （RMB million） （RMB million） Liquid milk products’ Liquid milk contribution 8% 11% 32% products’ 8% 7% 25% contribution 38.9% 36.5% 2,585 26.2% 2,437 49 1,005 285 889 68 78
Slide 16: Upstream Segment - Sales, Gross Profit and Gross Profit Margin
Upstream Segment-Sales, Gross Profit and Gross Profit Margin Gross profit and gross profit margin Sales of Raw Milk of sales raw milk(1) （RMB million） （RMB million） 38.9% 32.8% 25.3% 2,420 2,031 942 170 1,318 383 666 47 2,251 334 1,648 1,271 Jan 1 to Jun 30 2013 Jan 1 to Jun 30 2014 Jan 1 to Jun 30
Slide 17: Upstream Segment - Herd Size
Upstream Segment–Herd Size Steady Growth in Herd Size Structure of Milkable Cows Herd Size（head） Number of Milkable Cow （head）and as % of Total Dairy Cows 56.6% 51.9% 197,833 107,516 48.7% 102,593 190,027 86,710 177,921 Jun 30 2013 Jun 30 2014 Jun 30 2015 Jun 30 2013 Jun 30 2014 Jun 30 2015 17
Slide 18: Upstream Segment - Milk Yield and Sales Volume
Upstream Segment-Milk Yield and Sales Volume Continued Improvement of Milk Yield Industrial Situation(1) （head/ton/annum） 9.0 9.1 8.4 5.5 4.1 Jan 1 to Jun 30 2013 Jan 1 to Jun 30 2014 Jan 1 to Jun 30 2015 2007 2012 Milk Yield Raw Milk Sales Volume(2) （’000 ton) Milk yield Items (kg/head/day） 470 451
Slide 19: Upstream Segment - Raw Milk Price and Cash Cost
Upstream Segment - Raw Milk Price and Cash Cost Raw Milk Price for External Sales Raw Milk Cash Cost(1) （ RMB/kg） (RMB/ton） 5.14 3,025 2,969 2,830 4.54 4.30 Jan 1 to Jun 30 2013 Jan 1 to Jun 30 2014 Jan 1 to Jun 30 2015 Jan 1 to Jun 30 2013 Jan 1 to Jun 30 2014 Jan 1 to Jun 30 2015 Note: (1) The cos
Slide 20: Upstream Segment - Proportion of Raw Milk Sales Volume
Upstream Segment-Proportion of Raw Milk Sales Volume Diversified Customer Base of Raw Milk Sales and Increased Proportion of Internal Sales 6.7% 19.4% 27.8% 26.4% 93.3% 80.6% 72.2% 73.6% From Jan 1 to Jun 30 2014 From Jan 1 to Jun 30 2015 From Jan 1 to Jun 30 2014 From Jan 1 to Jun 30 2015 External
Slide 21: Downstream Segment - Strong Growth
Downstream Segment-Strong Growth Sales of Liquid Milk Products Average Selling Price of Liquid Milk Products （RMB million） （RMB/kg） 789 11.0 9.5 8.9 548 285 Jan 1 to Jun 30 2014 Jul 1 to Dec 31 2014 Jan 1 to Jun 30 2015 Jan 1 to Jun 30 2014 Jul 1 to Dec 31 2014 Jan 1 to Jun 30 2015 21
Slide 22: Downstream Segment - Gross Profit and Gross Profit Margin
Downstream Segment-Gross Profit and Gross Profit Margin Before Internal elimination After Internal elimination (1) 43.1% 42.1% 31.4% 340 28.5% 23.9% 225 12.6% 172 120 68 69 Jan 1 to Jun 30 2014 Jul 1 to Dec 31 2014 Jan 1 to Jun 30 2015 Jan 1 to Jun 30 2014 Jul 1 to Dec 31 2014 Jan 1 to Jun 30 2015 G
Slide 23: Selling Expenses and Selling Expenses as % of Revenue
Selling Expenses and Selling Expenses as % of Revenue Total Selling Expenses and Selling Expenses and Selling Expenses as % of Selling Expenses as % of Revenue Revenue of Liquid Milk Products (RMB million) 2.8% 67.7 1.9% 1.7% 49.2 5.4% 5.3% 5.2% 41.0 14.9 23.2 5.9 34.3 26.7 17.3 Jan 1 to Jun 30 2013
Slide 24: KA Channel Penetration Rate of Liquid Milk Products and Market Development
KA Channel Penetration Rate of Liquid Milk Products and Market Development KA channel penetration rate, as of June 30 2015 100.0% 100.0% 82.0% 85.7% Nothern China Eastern China Shanxi Others ► As of June 30 2015, China Modern Dairy’s liquid milk products had set foot in 28 provinces (and autonomous
Slide 25: Liquid Milk Products' Market Share is Growing
Liquid Milk Products’ Market Share is Growing Since the launch of liquid milk products in 2012, the market share of CMD increased rapidly under the circumstances that China’s high-end milk market size is ever-growing. The Top-4 companies’ market size in high-end milk category of China, 3Q2012-2Q2015
Slide 26: Financial Position
Financial Position Items Jun 30 2015 Dec 31 2014 Changes RMB’000 RMB’000 %/ppt Biological assets 6,762,218 6,530,814 3.5% Fixed assets 4,484,901 4,457,970 0.6% Total assets 14,018,725 14,210,853 -1.4% Total liabilities 6,887,397 7,554,901 -8.8% Total borrowing 5,534,427 5,787,848 -4.4% Debt ratio(1)
Slide 27: Asset Utilization Rate
Asset Utilization Rate Operating Cash Flows Generated from Operating Activities Turnover Days （RMB million） Items From Jan to Jun From Jan to Jun 2015 2014 52 61 Inventories 1,037 60 38 Trade Receivable 770 75 77 Trade Payable 368 ► With the increase in both revenues and contribution ratio of liquid
Slide 28: Business Outlook
Business Outlook
Slide 29: Company Future Strategy for Growth
Company Future Strategy for Growth China Modern Dairy Aims to Be Recognized as the Best Dairy Farm Brand for Raw Milk in China Improve Milk Yield through Gene Penetrate into High Demand Growth < > Improvement Regions Expand the Farm Scale by Organic Optimize Feed Mix < > Growth of Herd Size < > Stre
Slide 30: Large-scale Farms Possess Significant Competitive Edges
Large-scale Farms Possess Significant Competitive Edges Ensure Safety of Milk Source, Control Cost Better and Avoid the Risks Individual Farms Operation Model Large-scale Farm Operation Model Fresh Milk Dairy Farmers Intermediate Station Purchasing Station China Modern Dairy Agencies Traders vs. Own
Slide 31: Industry Overview
Industry Overview
Slide 32: Benefit from the Growing Demand for Raw Milk and Consolidation Trends of Dairy Industry
Benefit from the Growing Demand for Raw Milk and Consolidation Trends of Dairy Industry Consolidation Trends of Dairy Industry Growing Demand for Raw Milk in China 100% (million tons) 6% 8% 10% 12% 15% 90% 18% 14% 80% 19% 20% 21% 22% 58.6 63.7 70% 22% 52.3 54.8 60% 46.6 49.0 50% 40% 80% 73% 69% 67%
Slide 33: Thank you!
Thank you!
China Modern Dairy Holdings — H1 2015 Earnings Presentation on 6ix