2020

Annual Results Release

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.

2

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

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

7

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

10

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

11

2019 2020

「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.

12

R&D leads business development

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

14

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

16

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

17

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

18

Digitally driven, consumers empowered

1 2

34

Better

experiences

Shorter

chains

Innovative

modelsMore Precise

marketing

19

Five battles in 2021

Turnover

03

Service

05

Brand

01

Channel

02

Digital

intelligence

04

20

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

21

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