Upload
others
View
4
Download
0
Embed Size (px)
Citation preview
CHINA MENGNIU DAIRY COMPANY LIMITED
(2319.HK)
2016 ANNUAL RESULTS
MARCH 2017
Legal Disclaimer
The presentation is prepared by China Mengniu Dairy Company Limited (the “Company”) and is
solely for the purpose of corporate communication and general reference only. The presentation is
not intended as an offer to sell, or to solicit an offer to buy or to form any basis of investment
decision for any class of securities of the Company in any jurisdiction. All such information should
not be used or relied on without professional advice. The presentation is a brief summary in nature
and does not purport to be a complete description of the Company, its business, its current or
historical operating results or its future business prospects. This presentation contains projections
and forward looking statements that may reflect the Company’s current views with respect to future
events and financial performance.
This presentation is provided without any warranty or representation of any kind, either expressed
or implied. The Company specifically disclaims all responsibilities in respect of any use or reliance
of any information, whether financial or otherwise, contained in this presentation. The Company
undertakes no obligation to publicly update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
2
Mengniu
Lu Minfang, Chief Executive Officer & Executive Director
Bai Ying, Chief Operation Officer & Executive Director
Wu Wenting, Vice President & Executive Director
Zhang Ping, Chief Financial Officer
Liu Shengli, Vice President
Gao Fei, Vice President
Shi Dongwei, Vice President
Chris Kwok, Financial Controller & Company Secretary
Yashili
Chopin Zhang, Chief Executive Officer & Executive Director
Hua Li, Chief Operation Officer & Executive Director
Wen Jieping, Chief Financial Officer
Management Team
3
Financial Overview
2015 2016 +/-RMB Million
Gross Profit
Gross Profit Margin
EBITDA
EBITDA Margin
Net Profit Margin
Profit Attributable to
Owners of the
Company
Basic EPS
(RMB)
53,779.3 +9.7%
17,635.4 +14.7%
32.8% +1.4ppt
956.0 -77.4%
1.8% -6.8ppt
-751.2 -131.7%
-1.4% -6.2ppt
-0.193 -131.7%
Revenue 49,026.5
15,375.5
31.4%
4,229.9
8.6%
2,367.3
4.8%
0.609
Financial Highlights
5
6
Financial Highlights –
Excluding One-off Items in 2016
2015 2016 +/-
Net Profit Margin (2)
Profit Attributable to
Owners of the Company(2)
2,039.6 -13.8%
3.8% -1.0ppt
Revenue (1)
2,367.3
4.8%
Gross Profit (1)
Gross Profit Margin (1)
18,188.4 +18.3%
34.0% +2.6ppt
15,375.5
31.4%
53,558.3 +9.2%49,026.5
Goodwill Impairment
on Yashili2,253.8 -100%-
EBITDA (2)
EBITDA Margin (2)
3,841.6 -9.2%
7.2% -1.4ppt
4,229.9
8.6%
(1) Excluding the impact of sales of milk powder to third parties in 2016
(2) Excluding the impact of sales of milk powder to third parties and goodwill impairment on Yashili in 2016
RMB Million
Revenue Breakdown by Segment
2015 +/- (%)% of
Revenue+/- (ppt)
(1) Others refers to cheese, plant-based nutritional food business, .etc.
Ice Cream
Milk Formula
Others (1)
Liquid Milk
Total
2016
48,102.9 +11.0%
2,179.9 +1.8%
3,150.9 -2.4%
345.6 +4.8 %
89.4% +1.1ppt
4.1% -0.3ppt
5.9% -0.7ppt
0.6% -0.1ppt
53,779.3 +9.7% 100.0% /
43,326.6
2,141.2
3,228.8
329.9
49,026.5
RMB Million
7
Stable Market Share Performance
Source: AC Nielsen Retail Research
Liquid Milk
UHT Products
Chilled Products
Mengniu A B OthersC
Chilled Yogurt
8
32.0% 31.4%
19.5% 20.4%
15.7% 13.6%
7.8% 8.5%
25.0% 26.1%
2015 2016
27.3% 27.4%
25.7% 26.8%
8.5% 7.6%
30.9% 32.0%
2015 2016
27.3% 27.9%
29.6% 31.3%
10.2% 8.4%6.4% 5.6%
26.5% 26.8%
2015 2016
28.4% 27.6%
16.9% 15.1%
15.3% 15.6%
8.7%
30.7% 32.7%
2015 2016
9.0%7.6% 6.2%
Key Categories Maintained
Strong Growth
0.7%
170.4%
5.3%
35.5%
-10.7%
10.2%
74.1%
17.7%16.1%
3.3%
-50%
0%
50%
100%
150%
200%
Source: Company data, AC Nielsen Retail Research
3.8%
43.9%
12.6% 11.2%
-2.3%
-20%
0%
20%
40%
60%
80%
100%
Mengniu Sales Growth2016 Industry Growth at
Retail End
Liquid
Milk
UHT
Yogurt
Premium
UHT
Chilled
Yogurt
Basic
UHT
2015 2016
Liquid
Milk
UHT
Yogurt
Premium
UHT
Chilled
Yogurt
Basic
UHT
9
Brand Clusters (1) 2015 2016 + / - (ppt)
Star Brands +
Opportunity Brands43.2% 44.8% +1.6ppt
Profit Contributor
Brands5.1% 4.8% -0.3ppt
Backbone Brands 38.2% 36.1% -2.1ppt
(1) Only states major brand clusters as a percentage of Mengniu standalone revenue (excluding Yashili)
Continuous Improvement of
Product Mix
1.6ppt
10
Cashflow and CAPEX
Net Cash Inflows from
Operating ActivitiesCapital Expenditure
2015 2016
2,874.4 3,037.5
152.5 230.8
1,084.2
2015 2016
1,909.2
4,512.9
(RMB Million)(RMB Million)
Plant &
equipment
Biological
assets
Equity
investment
3,026.9
4,352.5
11
3.8%
4.6%
22.4%
25.0%
2015 2016
1,871.3
2,471.4
2015 2016
10,985.0
13,435.2
(RMB Million) (RMB Million)
Expense % of revenue
S&D G&A
Expense % of revenue
SG&A Expenses
12
2015 2016
47.1
38.6
2015 2016
10.3
13.4
2015 2016
52.3 50.8
(Days) (Days) (Days)
Inventory Turnover Receivables Turnover (1) Payables Turnover (2)
Operating Efficiency Index
(1) Receivables Turnover = (Average Balance of Trade and Bills Receivables / Revenue) x Number of Days
(2) Payable Turnover = (Average Balance of Trade and Bills Payables / Cost of Sales) x Numbers of Days
13
Business Review
and Prospect
2016 Overview
Remarkable
growth versus
industry, laid
solid foundation
for reaching 2020
strategic target
Realized substantial progress for “Route to Market”
Advanced transformation of regional offices to P&L entities
Further implemented the strategy of “enhance distributors,
solidify sales companies & develop CBUs”
Reinforced channel execution, implemented sales strategy,
improved penetration and strengthened control over POS
Optimized product mix and improved branding strategies
Improved quality, launched new products and strengthened product
competitiveness
Optimized product structure and continuously focused on star brands
Promoted brand internationalization with strong marketing efforts
Reached consensus with strategic shareholders on
future development strategies
Strengthened ties with upstream partners – increased shareholding
of China Modern Dairy
15
Deepened cooperation with Danone and made clear development direction
of milk formula business with the target of improving Yashili’s
operation
China Dairy Industry 2017 –
Challenges and Opportunities
Challenges
Opportunities
Pressure of cost inflation across industry
Demand for dairy products not yet significantly accelerated
Near-term market disturbance before the full roll-out of infant milk
formula registration policy as well as continuous competition
from overseas brands
Much work to be done for market penetration in lower-tier areas given
great potential for dairy product consumption in China
Product mix upgrade being the focus of industry growth
Market competition expected to be gradually eased as raw milk supply &
demand tends to be balanced
Milk source deployment is of increasing strategic importance to maintain
industry leading position
16
To grow into the most dynamic and
internationalized Chinese company
targeting at one hundred billion revenue
scale
Mengniu 2020 Strategies
Mission
Vision
Goal
To become a century-old, consumer-
centric and innovation-led health and
nutrition food company
Focus on nutrition and health, deliver a drop of happiness for every moment and every day to more people
17
Five Key Themes of Strategy
Implementation in 2017
1
4 5
Improve operational
efficiency and
strengthen profitability2 3
Adjust strategic initiatives based on industry and market
dynamics to realize 2020 strategic goals
Take organization
restructuring and
enhance head-quarter
competitiveness
Deploy upstream
resources at home and
abroad with a forward-
looking vision and build an
efficient and integrated
enterprise
Focus on star brands
and promote full
upgrade across all
categories
Continue “Route to Market”
initiative and strengthen
competitiveness in sales
channels
18
UHT products
OthersChilled
products
Ice cream
Milk formula
Focus on UHT/chilled
segments
Accelerate milk formula
business
Take Organization Restructuring and Enhance
Head-quarter Competitiveness
(plant-based,cheese, .etc.)
1
Develop high-potential
businesses
Stabilize ice cream
business
Group level
R&DConsumer
insightBrand building
Quality &
regulatory
monitoring
Public affairs
administrationTalent training
Serve, support and monitor
business divisions
19
Function-based system to
new division-based system
Build a professional and high-efficiency
functional team at head-quarter
Improve Operational Efficiency
and Strengthen Profitability2
Improve
merchandising
efficiency
Public
bidding
& centralized
procurement
Enhance quality
& efficiency along
supply chain
Establish centralized
procurement system
and operation flow
Continuously improve
public bidding practice
Proactively work out
cost-saving plans
Set up specific plans
to improve quality &
efficiency of supply
chain based on
different business
formats
Leverage experience
of Danone and Arla to
rigorously promote
supply chain cost
reduction plans
Benchmark
merchandising
efficiency with industry
peers, while develop
and implement
corrective actions
20
7
Deploy Upstream Resources at Home &
Abroad with A Forward-looking Vision &
Build An Efficient and Integrated Enterprise
3
Establish milk sourcing division to ensure effective implementation of
milk sourcing strategies
Centralized procurement &
management of raw milk and milk powder
− Exert overall control and procurement
planning of raw milk and milk powder to
effectively control cost
Control premium raw milk sourcing
in domestic market
− Ensure stable & high quality raw milk supply to
develop premium UHT products and low temperature
category
− Develop China Modern Dairy’s downstream business
and drive performance improvement of Mengniu’s
mid-to-high end products
Deploy upstream milk source and
other milk-related materials globally
Europe
Australia / New Zealand
− Balance prices, effectively manage cost and
secure high quality & stable supply of raw
materials
21
Focus on Star Brands and Promote
Full Upgrade across All Categories4
Brand Building
Product Screening
Sort out product
lines and carry
out
premiumization
strategies
Optimize
product mix and
focus on star
brands
R&D on nutrition and
products in complement
Make full use of three R&D
platforms, actively develop
new products and upgrade
existing products
Promote overall long-term
& sustainable growth
through high value-added
products
Strengthen cooperation with world-class brands and promote brand
internationalization
− Exclusive partner of dairy products for Universal Beijing Resort
Increase investment in brand building and enhance long-term
brand influence
− Implantation into popular TV shows and other high quality
entertainment resources
− Implantation into and joint promotion with Hollywood movies
R&D/Innovation
22
Continue “Route to Market” Initiative
and Strengthen Competitiveness in
Sales Channels
Continuously promote and enhance transformation of regional offices to P&L
entities, implement responsibility system and management mechanism
Stabilize distributor system while develop direct sales capability to
strengthen control over POS
Specify development paths of distributors, sales companies and CBUs, and
balance the roles of the three
Expand market share and enhance penetration in lower tier cities
Improve Key Account management framework and strengthen cooperation
through various means
− Data analysis, differentiated marketing strategies, strategic alliance with
retailers
Continue to build advantages over special channels
− Convenience store sales improvement project
Full application of Wei Sales Platform for more sophisticated POS management
Improve layout of E-commerce platforms and maintain leading position
5
Strategies
Actions
23
24