1

2

Disclaimer

The presentation is prepared by China Mengniu Dairy Company Limited(the “Company”) and is solely for the purpose of co rporate communication and general reference only. The presentation is not in tended as an offer to sell, or to solicit an offer to buy or to form any basis of in vestment decision for any class of securities of the Company in any jurisdiction. A ll such information should not be used or relied on without professional advice. T he presentation is a brief summary in nature and do not purport to be a comple te description of the Company, its business, its current or historical op erating results or its future business prospects.

This presentation is provided without any warranty or representation of any kind, either expressed or implied. The Company spec ifically disclaim all responsibilities in respect of any use or reliance of any information, whether financial or otherwise, contained in this presentat ion.

3

Presentation Team

Chris Kwok Financial Controller & Company Secretary

Wu Jingshui Executive Director & Chief Financial Officer

Lu Jianjun Chief Administrative Officer

4

Agenda

Results Highlights

Future Strategies

Financial Overview

Business Overview

5

Results Highlights

6

Overview of 2010 Annual Results

RMB’M 2009 2010 % Change

Revenue 25,710.5 30,265.4 ↑↑↑↑17.7%

Gross profit 6,852.2 7,786.4 ↑↑↑↑13.6%

EBITDA 1,997.9 2,208.2 ↑↑↑↑10.5%

Net profit attributable to owners of the Company

1,115.8 1,237.3 ↑↑↑↑10.9%

Basic earnings per share (RMB) 0.681 0.712 ↑↑↑↑4.6%

Dividend (RMB) 0.1413 0.16 ↑↑↑↑13.2%

7

Segment Breakdown

Liquid Milk

10.5%

88.4% 88.8%

10.3%

1.1% 0.9%

0%

20%

40%

60%

80%

100%

2009 2010

+ 0.4ppt

- 0.2ppt

- 0.2ppt

RMB25,710.5M RMB30,265.4MYoY Growth:

+ 17.7%

+ 18.2%

+ 15.9%

- 2.5%

Ice Cream Other Dairy Products

RevenueLiquid milk

• Revenue up 18.2% to RMB26,871.8M• Focused on the product R&D and optimized product

mix to increase the proportion of high-end products in the product portfolio

Ice cream

• Revenue up 15.9% to RMB3,111.5M• Strengthened the development of mid-range to

high-end products and expanded market coverage

Other dairy products

• Revenue reached RMB282.1M• Chinese name of MENGNIU ARLA (蒙牛阿拉) was

renamed as 欧世蒙牛, focusing on the high-end market

8

62.5%62.4%

28.1% 27.3%

9.5% 10.2%

0%

20%

40%

60%

80%

100%

2009 2010

Liquid Milk Segment

UHTMilk Milk Beverages Yogurt

YoY Growth:+ 18.2%

+ 18.3%

+ 27.5%

+ 14.9%

RMB22,736.2M RMB26,871.8M

- 0.8ppt

+ 0.1ppt

Revenue of Liquid Milk

+ 0.7ppt

UHT Milk

• Revenue up 18.3% to RMB16,790.4M• The Future Star Milk series was upgraded and

garnered numerous awards during the year• Launched Milk Deluxe Chunxian and XinYang Dao

Zhenyang Milk

Milk Beverages

• Revenue up 14.9% to RMB7,336.2M• Fruit Milk Drink obtained three independent

intellectual property patents across the world• Launched new series of Yiyou Te in plastic

packages

Yogurt

• Revenue up 27.5% to RMB2,745.2M• Champion became the first brand of Mengniu to

obtain national certification as a health-care product and be the theme in the Champion Technology Pavilion at the Shanghai World Expo

9

Financial Overview

10

2010 Financial Overview

RMB’M 2009 2010 % Change

Gross profit 6,852.2 7,786.4 ↑↑↑↑13.6%

- Gross profit margin 26.7% 25.7% ↓↓↓↓1.0 ppt

Net profit 1,115.8 1,237.3 ↑↑↑↑10.9%

- Net profit margin 4.3% 4.1% ↓↓↓↓0.2 ppt

Despite the substantial increase in the raw materia l price, the Group maintained a satisfactory gross profit margin level:

• Increased portion of high-end functional products and optimized product portfolio• Exercised effective cost control measures• Adjusted the selling prices of certain products • Effectively offset the effects brought by the surge in raw material prices

Stable net profit margin:• Precise management and effective cost control measures• Effectively reduced the operating expenses through internal structural reform and strictly controlled expenses• Maximized the use of marketing resources to reduce the percentage of A&P expenses to revenue• Offset the decline in gross profit margin

11

2009 2010

% ChangeRMB’M

% of Revenue

RMB’M% of

Revenue

Cost of goods sold 18,858.2 73.3% 22,479.0 74.3% ↑↑↑↑1.0

Total operation expeneses 5,630.3 21.9% 6,524.9 21.6% ↓↓↓↓0.3

Selling & distribution costs

Administrative & other

operating expenses

4,653.5

976.8

18.1%

3.8%

5,429.1

1,095.8

17.9%

3.7%

↓0.2

↓0.1

Finance cost 61.2 0.2% 45.2 0.1% ↓↓↓↓0.1

Effective Cost Control

12

0

500

1,000

1,500

2,000

2,500

2009 2010

Leverage and Financial Resources

0%

2%

4%

6%

8%

10%

2009 2010

(RMB’M)

(1) Debt to Equity Ratio = Total Bank Loans/ Total Equity

Debt to Equity Ratio(1) Net Cash Flow from

Operating Activities

7.6%6.9%

2,131.6

2,485.1

13

Working Capital

012345678

2009 20100

4

8

12

16

2009 2010

10

20

30

40

50

2009 2010

(Day) (Day)Receivables Turnover

(1)Inventory Turnover

Payables Turnover(2)

(Day)

6.6 7 14.9 15.4

45.8 47.8

(1) Receivable Turnover = [(Average balance of Trade and Bills receivables) / Revenue] x No. of days

(2) Payable Turnover = [(Average balance of Trade and Bills payables) / Cost of Sales] x No. of days

14

Business Overview

15

The world’s 16th dairy company

Mengniu’s dairy products ranked first, in terms of both sales volume and sales value, among similar products in China market for the fifth consecutive year

Ranked 132nd in “Top 500 Asian Brands”

Selected among “Asia’s Fab 50 Companies 2010” compiled by Forbes

Ranked 20th in the “Top 50 Most Valuable Chinese Brands 2010” published by WPP

Branding and Marketing

AwardsAdvocated “High Quality for a Green Life”

Organized various large-scale eco-activity campaigns

The “Champion Technology Pavilion” was held successfully during the Shanghai World Expo

16

Quality Control

Quality control at every stage of its production process

Obtained GMP certification for 7 of its production plants, and 5 laboratoriespassed evaluation earning qualification certificates

Collaborated with the Chinese Academy of Inspection and Quarantine to set up a “Joint Dairy Products Laboratory”

Established a supplier quality management department

Enhanced the supervision over food safety

Provided a sound guarantee for technological advancement

Jointly engaged in the R&D of new methods for supervising and testing food safety

Strengthened control over suppliers’quality

Ensured the quality and safety of the raw and supplemental materials

17

Enhancement of Milk Sources

Invested more than RMB700 million in enhancing milk sources and supporting their production in 2010

• Entrusted loans provided for dairy farmers and prepayment for raw milk

• Investment in the large scaled ranches and construction of modernisedranches’ facilities

Further raising the proportion of milk sources provided by ranches and scaled farms to more than 70%, well above the industry level

18

R&D Achievements

Set up overseas R&D station in Paris

Set up overseas information stations in Geneva and Tokyo

Attained breakthrough in the scientific research project on “Development of Lactic Acid Bacteria and Fermentation Agents with Self-owned Intellectual Property Rights” jointly conducted with the Harbin Institute of Technology

Submitted 1,012 patent applications and obtained patents of 750 items, out of which 88 patents were applied for and 83 patents were obtained during the year

19

Environmental Protection

Implemented measures of energy-saving and emission-reduction measures in each of its systems, which effectively improved the utilization of resources

Became the first dairy enterprise in the PRC to engage in carbon auditing for the full range of its production processes

Initiated 90 large-scale ecological experience activities in 30 cities across the PRC

Advocated the formation of a green ecological production chain in the dairy industry, Mengniu became a pioneer in the industry in using packaging materials which were certified by FSC

Launched an online “Carbon Test” in collaboration with cooperation partners on the network and kicked off a “Press it Flat after Drinking and Support the Recycling of Milk Cartons”activity

Initiated a three-year “Low-Carbon Enterprise Responsibility Programme” in cooperated with about 10 industry leaders such as Lenovo, Haier Group and Sohu

Awarded the “Most-Watched Low Carbon Contribution Enterprise”, “China’s Outstanding Low Carbon and Energy Saving Enterprise in the PRC”, “Eco-China Contribution Award”

20

Future Strategies

21

Continue to strengthen its market influence

Continue to focus on different niche demographic markets to consolidate its market leading position

Optimise its product structure and enhance profitability

Consolidate its market leading position by innovative quality to solidify the image as a high-end brand

Provide a diversified choice of dairy products

Future Strategies

Enhancement of Milk Sources Product Portfolio

Continue to establish additional overseas R&D station and strengthen its management over overseas information stations

Leverage overseas technological advances to drive improvement of the core competence

Enhance the research of fundamental technology and internal R&D capability

Cultivate its R&D capability in the dairy industry, strive to be China’s leading and the world’s top notch

R&D Capability

Continue its strategy of standardisation of ranches to ensure product quality in upstream

Focus on the development of large-scale breeding model

Further enhance milk sources through various means

22

Future Strategies

Reform its internal system for enhancing management level

Employment qualification system in place, in order to secure specialiseddevelopment of staff

Stringent implementation to enhance the level of precise management

Management System

“High Quality for a Green Life” to be its theme of development in the next few years

Achieving low-carbon economy by saving energy and reducing emissions in its production process and promoting environmental protection in its marketing activities to commit itself towards green economy

Striving to become one of the top five most valuable and most influential brands within the fast moving consumer goods industry

Brand Building

23

Five-Year Planning

BBecome one of the worldecome one of the world ’’s top ten s top ten dairy companiesdairy companies

Optimize the product mix, actively expand the business to increase market shares

Develop overseas market to promote internationalisation

Strengthen the management of milk sources to enhance the quality of milk sources and its stable supply

Strengthen the R&D capability to enhance its core competence

Promote green industry chain by living out “High Quality for a Green Life”

Promote the charity programs to carry out “Integrity” business

24

THANK YOU