2011 Annual Results Announcement

27 March 2012

The presentation is prepared by China Mengniu Dairy Company Limited(the “Company”) and is solely for the purpose of corporate communication andgeneral reference only. The presentation is not intended as an offer to sell, or tosolicit an offer to buy or to form any basis of investment decision for any class ofsecurities of the Company in any jurisdiction. All such information should not beused or relied on without professional advice. The presentation is a briefsummary in nature and do not purport to be a complete description of theCompany, its business, its current or historical operating results or its futureCompany, its business, its current or historical operating results or its futurebusiness prospects.

This presentation is provided without any warranty or representation of any kind,either expressed or implied. The Company specifically disclaim allresponsibilities in respect of any use or reliance of any information, whetherfinancial or otherwise, contained in this presentation.

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Wu Jingshui - Executive Director & Chief Financial Officer

Lu Jianjun - Chief Administrative Officer

Chris Kwok - Financial Controller & Company Secretary

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Results Highlights

Financial Overview

Business Overview

Future Strategies

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Results HighlightsResults Highlights

RMB’M 2010 2011 Change

Revenue 30,265.4 37,387.8 +23.5%

Gross profit 7,786.4 9,592.2 +23.2%

EBITDA 2,208.2 2,812.1 +27.3%

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EBITDA 2,208.2 2,812.1 +27.3%

Profit attributable to owners of the Company 1,237.3 1,589.3 +28.4%

Basic earnings per share (RMB) 0.712 0.908 +27.5%

Dividend (RMB) 0.16 0.198 +23.8%

90.1%

8.7%1.2%

2011 Revenue(RMB37,387.8M) Liquid milk

• Revenue up 25.4% to RMB33,701.2M• Focused on R&D and optimized product mix to

increase the proportion of high-end and innovative products

Ice cream

• Revenue up 4.7% to RMB3,258.6M• Overall product upgrade to optimise product mix,

and successfully launched the Deluxe series, the high-end brand of its ice cream productshigh-end brand of its ice cream products

• Selected as the exclusive dairy products of the International Horticultural Exposition 2011 held in Xi’an

Other dairy products

• Revenue up 51.8% to RMB428M• MENGNIU ARLA debuted with a novel image,

highlighting the concept of a “Scandinavian Mind with a Chinese Heart”

• The marketing strategies were fine-tuned, more professional training were provided to sales staff and after-sales service was offered to customers, thus sales increased gradually

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88.8%10.3%

0.9%

Revenue(RMB30,265.4M)

Liquid milk Ice cream Other dairy products

2010

61.8%

24.7%

13.5%

Revenue of Liquid Milk(RMB33,701.2M)

UHT Milk

• Revenue up 24.1% to RMB20,837.6M• Milk Deluxe has gained wide market recognition • Upgrade and modification for the Future Star Milk• XinYangDao Zhenyang Milk won the IDF Dairy

Innovation Award for the second time in representation of China

• Launched XinYangDao Qinyan Milk, XinYangDao Low Lactose Low Fat Milk and Modern Ranch Pure Milk

Milk Beverages

2011

Milk Beverages

• Revenue up 13.3% to RMB8,309.6M• Fruit Milk Drink was honoured with the China Patent

Excellence Award for the first time• Yiyou Te was named as an “Innovative Product”

Yogurt

• Revenue up 65.9% to RMB4,554M• Launched European Double Layer Fruit Yogurt, a solid

yogurt product with a huge success• Champion was the Group’s first yogurt product to

obtain national certification as a health-care product• The acquisition of Junlebao as a yogurt sub-brand of

Mengniu, gradually realising synergies

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62.5%

27.3%

10.2%

Revenue of Liquid Milk(RMB26,871.8M)

UHT Milk Milk Beverages Yogurt

2010

Financial OverviewFinancial Overview

RMB’M 2010 2011 Change

Gross profit 7,786.4 9,592.2 +23.2%

- Gross profit margin 25.7% 25.7% -

Net profit 1,237.3 1,589.3 +28.4%

- Net profit margin 4.1% 4.3% +0.2ppt

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

• Increased portion of high-end functional products and optimized product portfolio• Exercised stringent cost control measures

Stable net profit margin:• Improved operational efficiency• Effective cost control

2010 2011 Change

RMB’M% of

RevenueRMB’M

% of Revenue

ppt

Cost of goods sold 22,479.0 74.3% 27,796 74.3% -Cost of goods sold 22,479.0 74.3% 27,796 74.3% -

Total operating expenses 6,524.9 21.6% 7,992 21.4% -0.2

Selling & distribution

costs

Administrative & other

operating expenses

5,429.1

1,095.8

17.9%

3.7%

6,694.7

1,297.3

17.9%

3.5%

-

-0.2

Finance cost 45.2 0.1% 60.9 0.2% +0.1

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2,000

2,500

3,000

2,485.1

2,520.1

6%

8%

10%

6.9%

Debt to Equity Ratio (1) Net Cash Inflow from Operating Activities

(RMB’M)

0

500

1,000

1,500

2,000

2010 20110%

2%

4%

6%

2010 2011

4.5%

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

0

2

4

6

87 6.9

0

5

10

15

20

2010 2011

15.418.8(day)(day)

Receivables Turnover (1) Inventory Turnover

13

02010 2011 2010 2011

0

10

20

30

40

50

60

2010 2011

47.8 47.5(day)

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

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

Payables Turnover (2)

Business OverviewBusiness Overview

Offered assistance to milkfarmers by providing entrustedloans, prepaying for raw milk,investing in large scale ranchesand constructing modernisedranches facilities

The proportion of milk sourcesfrom ranches and scaled farmsaccounted for nearly 80% of thetotal

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Enhance the milk sources quality at the supply sources

Provided comprehensive technicalservice support to the suppliers,including recruitment of technicalstaff or experts to offer technicaltraining and consultation relatingto vaccination of dairy cattle andscientific nutrition

Controlled and managed segmentssuch as feed and veterinary drugssafety and promoted the modernisedfarming methods

Passed the requirements of SGAQSIQ for re-examining production permits of dairy

products

Perfect the “end-to-end” total quality control

monitoring

Obtained the certification by HACCP for the

prevention of hazardous substances in food Upgrade both the monitoring

Expansion of the electronic tracking system as the

secondary tracking system

Obtained the compliance certificate for FSSC22000

recognised in the international market

substances in food production

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Upgrade both the management and technologies of quality control

Practice of green philosophy and implemented the su stainable development

Participated in “Ecological Movement Support China”, “Earth Hour” and “Package Recycling – I Am Changing the World” activitiesLaunched a green interactive platform “Mengniu Green Life Arena”

Organized and participated in charitable activities to contribute the society

Extended “Love Gifts Action”Sponsored different activities, such as “Heavenly Voice on Campus” and “Blossoming

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Sponsored different activities, such as “Heavenly Voice on Campus” and “Blossoming Flowers” and “Tour of China Road Cycling Race 2011”

Awards

Ranking as the 18th Chinese Brand under “BrandZ™ Top 50 Most Valuable Chinese Brands 2012”“Best Environmental Sustainability Initiative” and “IDF Dairy Innovation Award”Inclusion in Hurun Brand List 2011Outstanding Brand Award 2010-2011

R&D Achievements

• By the end of December 2011, Mengniu has submitted 1,161 patent applications and obtained patents for 901 items on a cumulative basis, out of which 149 patents were applied for and 151 patents were obtained in 2011

• Officially commenced the

Production and Operations

• As at December 2011, the aggregate annual production capacity of the Group increased to 7.05 million tons

• Strategy of “Selling to where it is produced and producing at where it is sold” was deployed throughout the country

Joint Ventures and Alliances

• Sharing of resources via the vast platform provided by COFCO

• Established a preferential supply relationship with China Modern Dairy to source safe and reliable premium milk sources

• Being the designated dairy product for the Lunar Exploration • Officially commenced the

operation of its overseas R&D station in Tokyo

• Research on the application of new streptococcus thermophilesin the industrial production of fermented milk and their effects in prebiotics was endorsed by the Chinese Institute of Food Science and Technology

• Strengthened the scientific and standardised management in production operations, introduced the automated production technologies and equipment, and kicked off R&D projects with equipment suppliers on the production procedures

• The operation system rationalised supply chain procedures and logistics projects were implemented

product for the Lunar Exploration Program for a number of consecutive years

• Nominated once again as the Gold Sponsor of the Boao Forum for Asia 2011

Future StrategiesFuture Strategies

2012 The Year

Enhancementof

Milk Sources

Quality Inspection

Further increase the proportion of ranch milk sourcesStrengthen the monitoring of upstream raw materialsExplore the industry chain by entering the upstream dairy cattle breeding industry

Independent raw material quality control centre and finished goods quality control centre were establishedFormed a quality and safety administration centreAccept voluntary inspection by authoritative institutions of the Government

Continue to research and develop dairy

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The Year of Quality

Global Strategy

Brand Building

Product Portfolio

Set up a global strategic department to conduct thorough market research on the international dairy industryWith the strategic positioning in the internationalisedmarket, internationalised resources and internationalisedcapacity as an integral part of the strategy

Promote a corporate image of offering healthy dairy productsIntensify green strategy and put low-carbon vision into practice

Continue to research and develop dairy products with high added value and functionality to increase the proportion of mid-range to high-end productsBuild popular high-end brands and provide greater choices of dairy products to different demographic segments of customers

Thank You!Thank You!