China Modern Dairy Holdings Ltd. · HKEX:1117

China Modern Dairy — FY2015 Earnings Presentation

30 slides from China Modern Dairy's earnings presentation, 2016

  1. Slide 1: 2015 Annual Results Announcement

    China Modern Dairy Holdings Ltd. 中国现代牧业控股有限公司 2015 Annual Results Announcement

  2. 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

  3. Slide 3: Financial Review, Business Outlook, Latest Development, Industry Overview

    01 Financial Review 02 Business Outlook 03 Latest Development 04 Industry Overview 3

  4. Slide 4: 2015 Annual Results Overview

    2015 Annual Results Overview Changes Changes From Jan 1 to From Jan 1 to (%/ppts ) From Jan 1 (%/ppts) RMB’000 Dec 31 2015 Dec 31 2014 compared to to Dec 31 2013 compared to 2014 2013 Turnover 4,826,341 5,026,706 -4.0% 3,289,281 46.7% Cost of sales (1) -3,167,298 -3,161,345 0.2% -2,304,022 37.5% Gro

  5. Slide 5: Diagram of Farm Distribution

    Diagram of Farm Distribution As of 31 December 2015, the Group had 27 dairy farms in 8 provinces in China. The current herd size of the Group is 225,542. 5

  6. Slide 6: Financial Overview

    Financial Overview Revenue Gross Profit and Gross Profit Margin （RMB million） （RMB million） 31% 29.9% 37.1% 34.4% 17% 10% 9% 23% 5,027 7% 4,826 833 1,865 1,502 137 1,659 3,289 161 321 375 985 212 4,194 87 32 3,324 1,567 2,968 866 1,072 2013年1月1日⾄12月31日 2014年1月1日⾄12月31日 2015年1月1日⾄12月31日 The Proportio

  7. Slide 7: 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 ） 37.1% 4,672 31.7% 28.9% 478 4,056 731 3,105 1733 137 1287 4,194 899 3,324 2,968 Jan 1 to Dec 31 2013 Jan 1 to Dec 31 2014 Jan 1 to De

  8. Slide 8: 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 52.9% 53.4% 50.9% 225,542 201,507 186,838 114,751 107,578 98,791 31 Dec 2013 31 Dec 2014 31 Dec 2015 31 Dec 2013 31 Dec 2014 31 Dec 2015 8

  9. Slide 9: 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） （Head/Ton/Annum） 8.9 9.1 8.4 5.5 4.1 Jan 1 to Dec 31 2013 Jan 1 to Dec 31 2014 Jan 1 to Dec 31 2015 2007 2012 Notes：（1）Source： National Bureau of Statistics of China , Frost & Su

  10. Slide 10: 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） 3,074 2,973 2,804 5.01 4.57 4.42 Jan 1 to Dec 31 2013 Jan 1 to Dec 31 2014 Jan 1 to Dec 31 2015 Jan 1 to Dec 31 2013 Jan 1 to Dec 31 2014 Jan 1 to Dec 31 2015 Note: (1) The cost

  11. Slide 11: 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 10.1% 18.6% 27.3% 31.5% 89.9% 81.4% 72.7% 68.5% Jan 1 to Dec 31 2014 Jan 1 to Dec 31 2015 Jan 1 to Dec 31 2014 Jan 1 to Dec 31 2015 External Sales Internal Sale

  12. Slide 12: Downstream Segment-Strong Growth

    Downstream Segment-Strong Growth Sales of Liquid Milk Products Cash Costs of Liquid Milk Products (1) （RMB million） （RMB/kg） 1,502 7,707 7,499 6,567 833 321 Jan 1 to Dec 31 2013 Jan 1 to Dec 31 2014 Jan 1 to Dec 31 2015 Jan 1 to Dec 31 2013 Jan 1 to Dec 31 2014 Jan 1 to Dec 31 2015 Note: (1) The cos

  13. Slide 13: Downstream Segment-Gross Profit and Gross Profit Margin

    Downstream Segment-Gross Profit and Gross Profit Margin Before Internal Sales Elimination After Internal Sales Elimination(1) （RMB million） （RMB million） 37.2% 39.1% 35.7% 27.0% 25.0% 16.4% 587 375 298 137 87 119 Jan 1 to Dec 31 2013 Jan 1 to Dec 31 2014 Jan 1 to Dec 31 2015 Jan 1 to Dec 31 2013 Jan

  14. Slide 14: Selling Expenses & Selling Expenses as % of Revenue

    Selling Expenses & Selling Expenses as % of Revenue Total Selling Expenses and Selling Expenses Selling Expenses as % of Revenue of as % of Revenue of the Group Liquid Milk Products （RMB million） 4.0% 1.7% 2.2% 194.5 111.5 7.4% 111.9 5.8% 5.1% 48.2 56.8 16.5 83.0 63.7 40.4 原奶 Liquid Milk 品牌奶 Selling

  15. Slide 15: Financial Position

    Financial Position Items Dec 31 2015 Dec 31 2014 Changes RMB’000 RMB’000 % Biological Assets 7,590,878 6,530,814 16.2% Fixed Assets 5,376,897 4,457,970 20.6% Total Assets 17,507,836 14,117,110 24.0% Total Liabilities 9,557,804 7,461,158 28.1% Total Borrowing 6,247,251 5,787,848 7.9% Debt Ratio(1) 44

  16. Slide 16: Working Capital Ratios

    Working Capital Ratios Trade Receivable Inventory Turnover Turnover(1) Trade Payable Turnover(2) (Days) (Days) (Days) 92.0 62.0 66.0 64.0 78.0 44.0 From Jan 1 to Dec 31 2014 From Jan 1 to Dec 31 2015 From Jan 1 to Dec 31 2014 From Jan 1 to Dec 31 2015 From Jan 1 to Dec 31 2014 From Jan 1 to Dec 31 2

  17. Slide 17: Cash Flows & Capital Expenses

    Cash Flows & Capital Expenses Operating Cash Flows Capital Expenses(1) （ RMB million ） （ RMB million ） 1,674 1,782 1,569 1,621 1,543 735 836 955 1,005 939 733 666 Jan 1 to Dec 31 2013 Jan 1 to Dec 31 2014 Jan 1 to Dec 31 2015 Jan 1 to Dec 31 2013 Jan 1 to Dec 31 2014 Jan 1 to Dec 31 2015 PPE related

  18. Slide 18: Business Outlook

    01 Financial Review 02 Business Outlook 03 Latest Development 04 Industry Overview 18

  19. Slide 19: Adopting Vertically Integrated Business Model with Forage Grass Planting, Cow Breeding and Milk Processing

    Adopting Vertically Integrated Business Model with Forage Grass Planting, Cow Breeding and Milk Processing Our Industrial Chain Real Picture of Operation Our Advantages ► Modern Farm entered into the New Framework Supply Agreement with Qius hi Grass Industry Co. Ltd. (秋實草業有限公司) , Forage which has es

  20. Slide 20: Implemented Integrated Industry Chain Management for Comprehensive Quality Control

    Implemented Integrated Industry Chain Management for Comprehensive Quality Control From Earth To Mouth Well established High-Quality + Safety + Ensured high quality of all integrated industry chain system and process Assurance products to customers Source Procedures Logistics POS Procurement of Logi

  21. Slide 21: 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 with scientific and standardized design. With refined processing management, the Group is capable of producing “Two Hours” milk, which can prevent milk from thermal

  22. Slide 22: Safety of Milk Benefits under Modern Method

    Safety of Milk Benefits under Modern Method Ensure Safety of Milk Source, Better Cost Control and Eliminate Risks Traditional Method Modern Method Fresh Milk Dairy Farmers Intermediate Stations Purchasing Stations China Modern Dairy Downstream products Dairy Products processing completed Agencies Tr

  23. Slide 23: High Quality Raw Milk

    High Quality Raw Milk Advanced Techniques Rapid Growth in Raw Milk Sales Volume ► Adopting the leading edge breeding and feeding techniques to （’000 tons） improve the milk yield and quality 931 924 680 Optimizing feeding Improving the gene combinations of milkable techniques cows Strengthening feed

  24. Slide 24: Latest Development

    01 Financial Review 02 Business Outlook 03 Latest Development 04 Industry Overview 24

  25. Slide 25: Join hand with the Ministry of Agriculture to promote sustainable development of China Dairy Sector

    Join hand with the Ministry of Agriculture of PRC and Dairy companies to promote the sustainable development of China Dairy Sector. Join hand with the Innovation team of the Copy with the challenges from the global Ministry of Agriculture of PRC dairy brands ►On the premise of ensuring that the indi

  26. Slide 26: Enhancing Brand Value

    Enhancing Brand Value Awarded the Gold Prize in Food Category for the Awarded Achievement Innovation of Chinese Second Consecutive Year Agricultural Science Awarded the Top 10 Innovative PRC Enterprises Awarded Outstanding Contribution in Food Safety and Public Health for the Second Consecutive year

  27. Slide 27: Industry Overview

    01 Financial Review 02 Business Outlook 03 Latest Development 04 Industry Overview 27

  28. Slide 28: Impacted by the Imported Dairy Products

    Impacted by the Imported Dairy Products Rapid Volume Growth in Imported Liquid Milk Volume declined in Imported Bulk Milk Powder Imported liquid milk products flooded into the Imported bulk milk powder v olume Chinese market as of low price 6,000 decreased by 41% YoY in 2015 due to 180.00 70 1.4 wea

  29. Slide 29: Benefit from the Growing Demand for Raw Milk

    Benefit from the Growing Demand for Raw Milk China’s Per Capita Dairy Products Increased Proportion of Premium Raw Milk Consumption is Still at Growing Stage Per capita liquid milk consumption, 2015 (kg/person) The Percentage of Premium Raw Milk Accounts Among Total Raw Milk Output 140.0 132.4 125.3

  30. Slide 30: Thank you!

    Thank you!

China Modern Dairy Holdings — FY2015 Earnings Presentation on 6ix