China Modern Dairy Holdings Ltd. · HKEX:1117
China Modern Dairy — H1 2019 Earnings Presentation
27 slides from China Modern Dairy's earnings presentation, 2019
Slide 1: Interim Results Announcement
2019 Interim Results Announcement 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: Content
1 Financial Results 2 Business Updates Content 3 Industry Overview 3
Slide 4: Part 01
MODERN FARMING ) SAT Be WX | sas PART 01
Slide 5: 2019 Interim Results Review
2019 Interim Results Review RMB：Million 1H2019 1H2019 1H2018 Changes Revenue YoY Growth Revenue 2,570 2,570 2,468 4.1% 4.1% Cost of Sales -1,672 -1,672 -1,733 -3.5% Net Profit Gross Profit Margin 34.9% 34.9% 29.8% +5.1ppt Increased (1) 865 731 18.3% Cash EBITDA YoY Growth 2.77million Cash EBITDA 865
Slide 6: Ongoing Optimization of Herd Structure
二零一九年底综合业绩一览 Ongoing Optimization of Herd Structure Shangzhi Farm Herd Size & Proportion of Milkable Cows 10,000 cows Shuangcheng Farm 20,000 Tongliao Farm cows 10,000 cows Helin Farm 10,000 cows Saibei Farm 40,000 Cows Hengsheng Farm Chabei Farm 10,000 cows 30,000 cows 223,217 225,782 226,861 Baoji
Slide 7: Stable Increase in Unit Yield for Milkable Cow
Stable Increase in Unit Yield for Milkable Cow ton/head/annum Improve Health Increase Comfortability 10.6 10.3 9.8 Decrease Culling 9.4 Enhance Efficiency 1H2016 1H2017 1H2018 1H2019 7
Slide 8: Steady Increase of Production & Sales Volume
原奶产销量稳步增长 Steady Increase of Production & Sales Volume 1H2017 1H2018 1H2019 Note: Sales volume includes external sales and sales to branded liquid milk. 8
Slide 9: ASP & Sales Volume Breakdown
ASP & Sales Volume Breakdown External ASP Sales Volume Breakdown (RMB/kg) ► Domestic raw milk price kept rising due to the decline in herd ► Continue to implement long-term sales strategy size in recent years with Mengniu ► Proactively expand third-party sales and establish core customer base 9
Slide 10: Stable Increase of Sales & Gross Profit
原奶销售额及毛利稳步增长 Stable Increase of Sales & Gross Profit Raw Milk Sales (1) Raw Milk Gross Profit & GP Margin (2) （RMB Million） （RMB Million） Note: (1) Sales includes external sales and sales to branded liquid milk; (2)Before raw milk fair value adjustments & elimination of sales and costs of internal s
Slide 11: Efficient Control on Cash Cost
Efficient Control on Cash Cost Cash Cost Breakdown of Cost （RMB/kg） 2.42 2.42 2.31 By improving health, unit yield and use of silage, the cash cost of milk fell to RMB 2.31/kg, reaching a record low. 11
Slide 12: Balance Sheet Overview
Balance Sheet Overview As 2019 at 2019 As at 2018 RMB Million Changes （30 June 2019） （2019年6月30日） （31 Dec 2018） Biological Assets 7,651 7,651 7,717 -0.9% Fixed Assets 3,721 3,721 3,921 -5.1% Total Assets 15,474 15,474 15,946 -3.0% Total Liabilities 8,803 9,391 -6.3% 8,803 Total Borrowings 6,920 7,14
Slide 13: Improving Cash Flow
Improving Cash Flow Net Cash Inflow from Capex Free Cash Flow(1) Operating Activities （RMB Million） （RMB Million） （RMB Million） 351 856 140 461 416 709 329 1H2017 1H2018 1H2019 Expenses Gains 1H2017 1H2018 1H2019 -57 -538 Note: (1) Free Cash Flow = Operating Cash Flow – Investing Cash Flow 13
Slide 14: Continuous Decrease in Interest-bearing Debt
Continuous Decrease in Interest-bearing Debt （RMB 000 million） Focus on Dairy Farming and Enhance Operational Efficiency Continuous Decrease in Increase in ASP Interest-bearing Debt Decrease in Cash Cost Disposal of Non-core Assets Sale of Collateral Shares & Placing 14
Slide 15: Part 02
sor “*\\ MODERN FARMING ) SAT Be
Slide 16: Cooperation with CITIC & New Hope Dairy
Cooperation with CITIC & New Hope Dairy Cooperation with CITIC Cooperation with New Hope Dairy 30 % 70 % Energy Assets Factory New Hope will hold 9.28% of CMD, Shareholding approximately 595 million shares. May 5, CITIC Environment initially entered into Hefei and Bengbu Farms; Synergy on From Janua
Slide 17: Upgrade on Procurement Strategy
Upgrade on Procurement Strategy Launch of Aiyangniu Quantity Increase the purchase of silage to replace the Procurement Platform Consumption Increase Silage roughage whose prices continue rising. July: Negotiation on Frozen Sperm & Hoof Bath Quality Improve silage quality standards and Negotiation o
Slide 18: Information Management System
Information Management System Yimu Cloud Farm Production Goods Management System Management System • Information center of Farm； • One truck one code for tracing； • Efficient production data sharing • Timing monitoring from entry to exit; system ; • Improve efficiency of receiving goods ; • Efficien
Slide 19: Branded Milk: Producing High Quality Pasture Milk
Branded Milk：Producing High Quality Pasture Milk for 15 years Leveraged with Mengniu's marketing and channel advantages, our branded milk was re-launched with the positioning of “15 years of insisting on only producing pasture milk” and new packaging. Now we focus on 3rd & 4th -tier cities, integrat
Slide 20: Part 03
sor “*\\ MODERN FARMING ) SAT Be
Slide 21: Global Dairy Data Overview
全球乳业概况 Global Dairy Data Overview Number of Dairy Cows in Main 谷（2） Stable Raw Milk Production Volume 0’000 heads Global Production Areas (1) in Main Areas(2) 0’000 tonne The herd size in global major production areas is stable, but witnesses a decline in China since 2015. Source：（1） United States
Slide 22: Domestic Dairy Industry Overview
Domestic Dairy Industry Overview North China Raw Milk 13.366 Significant Imbalance of Raw Milk million tons North East between North and South 37.8% Raw Milk 7.294 million tons The northern region accounts for 20.6% 70% of domestic raw milk production, North West but 70% of domestic raw milk Raw M
Slide 23: Domestic Dairy Industry Overview
Domestic Dairy Industry Overview Ton /year China's dairy products per capita consumption High Potential for Domestic Yield Increase（1） yuan/capita growth rate rebound（2） 350 25% 300 20% 250 15% 200 150 10% 100 5% 50 0 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Slide 24: Domestic & International Raw Milk Price
Domestic & International Raw Milk Price China’s Dairy Imports in 1H 2019 Domestic & International Raw Milk Price（2） 0000 tons 5500 4.50 5000 4.30 4.10 4500 3.90 4000 3.70 3500 3.50 3000 3.30 3.10 2500 2.90 2000 2.70 1500 2.50 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 15Q1 15Q2 15Q3
Slide 25: Feed Cost
Feed Cost Domestic corn prices stable, soybean meal prices Imported soybean prices fell, and alfalfa prices rose(2) slightly rebound (1) USD/ton RMB/kg 4.50 800 4.00 700 3.50 600 3.00 500 2.50 400 2.00 1.50 300 1.00 200 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 15Q1 15Q2 15Q3 15Q4
Slide 26: The Revitalization Policies of Dairy Industry
The Revitalization Policies of Dairy Industry Seven ministries and commissions jointly issued the “Domestic Infant The Ministry of Agriculture Formula Milk Powder and Rural Affairs and the Enhancement Action Plan” Ministry of Finance to promote the production promulgated the policy to of domestic in
Slide 27: Thank You
Minn. THANK YOU ~~ -_
China Modern Dairy Holdings — H1 2019 Earnings Presentation on 6ix