2020 annual results release
TRANSCRIPT
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2020
Annual Results Release
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Disclaimer
This material is prepared by Yashili International Holdings Ltd (the “Company”) for corporate communication and general reference only. This material does not constitute an offer to sell or subscribe for any securities of the Company in any jurisdiction or form the basis of any such investment decision.
All information contained herein shall not be used or relied upon without professional consultation. This material is a brief summary of the Company and does not constitute a comprehensive description of the Company and its business activities, current and previous operating results or future operating prospects.
There is no express or implied representation or warranty on any information contained herein. We do not accept any liability for any loss or damage arising from the use of this material or from any financial or other information relied upon in connection with this material.
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2020 Annual
Results Review
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Financial highlightsRMB million 2019 2020 +/-
Revenue 3,412.0 3,649.2 7.0%
Gross Profit 1,266.8 1,333.8 5.3%
Gross Profit
Margin37.1% 36.6% -0.5%
Operating Profit 80.0 108.1 35.1%
Operating Profit
Margin2.3% 3.0% 0.7%
EBITDA 156.9 210.4 34.1%
EBITDA Margin 4.6% 5.8% 1.2%
Profit Attributable to
the owner of the Company
112.4 101.1 -10.1%
Net Profit Margin 3.3% 2.8% -0.5%
Basic earnings per share
(RMB cents)2.4 2.1 -12.5%
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Sales revenue breakdown
RMB million1H 2H Total
2019 2020 +/- 2019 2020 +/- 2019 2020 +/-
Milk powder 1,399 1,290 -7.8% 1252 1,685 34.6% 2650 2976 12.3%
OEM: BP&FP 264 224 -15.1% 311 203 -34.6% 575 427 -25.7%
Dissolvable
products59 74 24.3% 84 93 10.5% 143 166 16.2%
Others 25 57 124.1% 18 23 26.2% 44 80 83.0%
Total 1,747 1,645 -5.9% 1665 2,004 20.4% 3412 3649 7.0%
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Selling and administrative expenses
(RMB million) (RMB million)
Administrative
Management Expenses
Selling and Distribution
Expenses
2019 2020
963.8 1,039.1
Expenses
28.2% 28.5%
% of revenue
6.5%
5.1%
占收入比例
223.0
186.6
费用
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2019 2020
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Operation efficiency indicators
Note:
(1) The average balance of inventory for the period divided by the cost of sales for the period and multiplied by 365 days;
(2) The average balance of trade and bills receivables for the period divided by the turnover for the period and multiplied by 365 days;
(3) The average balance of trade and bills payables for the period divided by the cost of sales for the period and multiplied by 365 days.
Inventory Turnover (1)
Receivable Turnover(2)
Payable Turnover(3)
Days Days Days
16 12
143 150
77
99
2019 2020 2019 2020 2019 2020
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101.1
84.1
Cash flow and capital expenditures
Note: Excluded equity investments
(RMB million) (RMB million)
Net Cash Flows From
Operating ActivitiesNet Capital Expenditures
177.2
118.7
2019 20202019 2020
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Takes responsibility and safeguards
people amid COVID-19 outbreak
No layoffs or pay-cuts
• Wider pay rise coverage
• Higher basic salary
The first to support
affected area
• The first to provide infant formula for the affected area: Just 8 days after the
outbreak, 7,000 cartons of infant formula were produced and sent to Hubei
Province to meet the urgent needs of local mothers.
• Over RMB 46 million donated amid the epidemic.
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Brand
rejuvenating
Business model of infant formula
starts to reap rewards
Model
creation
01 02
• Reshape brand and upgrade products
• Launch and promote breast milk-like concept
• Intensive coverage of key regions
• Notable improvement in brand equity
• Develop innovative market promotions
• Penetrate into lower-tier markets
• Hold fast the “Double Ten Thousand Scheme”
• Pursue breakthroughs in major points
Core product
up by
102%in 2H from 1H
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Seizes opportunities in milk powder
for adults and achieves strong growth
Revenue
52%01.
Enhance distribution network
02.Optimize product mix
03.Enhance sales performance per store
04.Explore new channels and opportunities
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2019 2020
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「Reeborne」
「M8」
The world’s first children’s milk
powder containing breast milk
probiotics
「Topconic」
The world’s first probiotic milk
powder that can boost immunity
and has a healthcare product
serial number
The world’s first breast
milk-like UPU. Over 90%
resemblance to fat in breast milk.
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R&D leads business development
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2021, the year of turnaround
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To initiate high-quality growth
One body
Two wings
Three
momentums
Double pillars
Five battles
Mission:Every drop of nutrition makes every life thrive
Organization Culture
Infant formula Milk powder for adults
R&D and
innovation
Brand
upgradeDigitally
driven
1 2 3
Brand ServiceDigital
intelligenceChannel Turnover
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New mission: Every drop of
nutrition makes every life thrive
Every drop of nutrition Makes every life thrive
Yashili fills every drop of milk
full of nutrition with advanced
technology and hard work, bringing
it from the ranch to the cups on the
table, reflecting our pursuit for
excellence and superior quality.
Nourish and bring improved health to
customers in different life stages by
providing the precise nutritional content
they need, so they can live a better life.
Work with partners to create a win-win
ecosystem, uniting our dreams and
collaborating to create a brighter future.
Help every Yashilier to release their
potential, maximize the values of value
creators and make the brightest sparks
even brighter.
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Infant formula and milk powder for adults, a two-pronged
development approach
—— Provides nutrition to consumers during all stages of life
0 to 40 week fetus
0 to 3 -year-old infants
4 to 15 -year-old kids
18 to 40 –year-old
adults
Over 40A
du
lt milk
po
wd
er to
es
tab
lish
ma
rke
t
lea
de
rsh
ip a
nd
stre
ng
the
n h
igh
-en
d
po
sitio
nin
g
Ord
erly
ex
pa
ns
ion
of
su
cc
es
sfu
l mo
de
l of
infa
nt fo
rmu
la
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R&D and Innovation – Continuous and
more investment
Three-in-one
Independent R&D
Shareholder
empowering
College-enterprise
alliance
Breakthroughs
Breast milk-like
technology
General health
technology
Probiotics/prebiotics
Technological
innovation to
enhance the
vitality of products
1 2 3
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Brand upgrade – Increase investment
and enlarge market share
Infant formulaMilk powder
for adults
Milk powder
for children
Focus on two
major brands,
“Reeborne” and
“Baby & Me”
Establish market
leadership and build
the high-end brand
of “Topconic”
Establish business
presence for high-
end children’s milk
powder and build
diversified product
portfolio
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Digitally driven, consumers empowered
1 2
34
Better
experiences
Shorter
chains
Innovative
modelsMore Precise
marketing
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Five battles in 2021
Turnover
03
Service
05
Brand
01
Channel
02
Digital
intelligence
04
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Allow people at the frontline to
make decisions
• Consolidate BUs
• Grant accountability and authority to the
smallest business units
• Shift from control functions to empowering
functions
Promote people who make
accomplishments
• Set clear requirements on talent and build
the image of outstanding professionals
• Set clear development paths; 70% of
employees promoted internally
• Review promotions regularly and realize
cross-level promotions of outstanding staff
Nurture people with great
potential
• Formulate competence enhancement
plans
• Commence successor nurturing plans
Provide incentives to
people who perform well
• Differentiated salary adjustments
• Goal-exceeding bonus with no ceiling
• Virtual shareholding
People-oriented, with strengthened
organizational support
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Reshape corporate culture to support
strategy execution
Core
Values
Corporate
Spirit
Mission: “Every drop of nutrition makes every life thrive”
Operation
philosophy
Management
philosophy
Quality
philosophy
Talent
philosophy
Corporate spirit :
Dare to explore and
compete with
oneself
Core Values:
Consumer first
Respect for values
Results-oriented
Digitally intelligent innovations
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Q&A