#1伊利 Ⓡ 品质,源于热爱 Inner Mongolia Yili Industrial Group Half-year Results 2023#2Disclaimer This material is provided by the Inner Mongolia Yili Industrial Group Co., Ltd. (the "Company"). This presentation is a simple description, which is for general reference only, not a complete version. Material involving industry, strategy, vision and other forward-looking statements is not substantive commitment to investors. Investors should be aware of investment risks. Should there be any inconsistencies between Chinese and English versions, the Chinese version shall prevail. (伊利 品质,源于热爱 源于热爱 2#3Catalogue 1 About Yili 2 Financial Review 3 Business Review & Outlook 4 Culture and Brand Management#4• . About Yili (伊利 品质,源于热爱 Yili ranks among the Global Dairy Top 5 and has sustained an undisputable position of No. 1 in Asia for nine consecutive years. Yili is China's largest dairy producer, offering the largest number of products. Additionally, Yili is an international enterprise that has achieved industrial layout in Asia, Europe, the Americas, and Oceania. With its exceptional product quality, leading service capabilities and comprehensive capacity for sustainable development, Yili is well-respected and received among global event organizers, national and local governments and the public. Yili was selected to serve as the exclusive supplier of dairy products and services at major international events, including the Beijing 2008 Olympic Games, the Expo 2010 Shanghai China, the G20 2016 China, the 2019 7th CISM Military World Games, and the Beijing 2022 Winter Olympic Games. Yili has also become a partner of the World Economic Forum, the Boao Forum for Asia, and the World Internet Conference. Standing at the new starting point of the global dairy top 5, Yili has officially released its strategic goal of "becoming No.1 among the global dairy enterprises and advancing to the global top 5 healthy food enterprise". 伊利 LAWER CHE CL RDUSTRIAL#5Introduction of our Leader PAN, Gang (The Chairman and CEO of Yili Group) By 2002, he was the youngest CEO among the 520 key industrial enterprises. Mr. Pan has been holding the position of Chairman and CEO of Yili Group since June 2005. Management Thinking • • The "global networking" and the "along-the-supply-chain innovation" strategy The "quality management" and the "precise management" management ideas Solid results matter more than time taken; Industrial prosperity outranks personal glory; Social value takes precedence over business fortune; That's the value that we hold in every step of our growth. (伊利 品质,源于热爱#6Catalogue 1 About Yili 2 Financial Review 3 Business Review & Outlook 4 Culture and Brand Management#7140 120 100 Financial Review (伊利 品质,源于热爱 Total revenue in 2022 was RMB 123.17 billion, and net profit attributable to shareholders of the company was RMB 9.43 billion. Both revenue and net profit maintained growth as compared with last year and continued to rank No.1 in the dairy industry in Asia. Unit: Billion RMB 品质 Total Revenue (1996 - 2022) 47.8 96.9 90.2 79.6 68.1 60.4 60.6 54.4 123.2 110.6 42.0 40 T 40 37.5 29.7 24.3 20 16.6 21.7 19.4 12.2 8.7 6.3 0.4 0.9 1.0 1.2 1.5 2.7 4.0 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Data source: Company data 7#8Financial Highlights RMB (million) 2022 H1 2023 H1 Growth rate G&A expense ratio Operating profit Revenue Revenue from core business Gross profit Gross profit margin Selling expense ratio 质 63,463 66,197 4.3% 62,465 65,423 4.7% 21,032 21,805 3.7% 33.67% 33.33% -0.34 ppts 18.34% 17.55% -0.79 ppts 3.85% 4.01% 0.16 ppts 7,325 7,327 0.0% Net profit attributable to shareholders of the company 6,133 6,305 2.8% Net profit margin 9.66% 9.52% -0.14 ppts EPS (RMB) 0.96 0.99 3.1% ROE 12.19% 11.86% -0.33 ppts Note 1: Gross profit is calculated from core business revenue Data source: Company data (伊利 品质,源于热爱 8#9Core Business Revenue Segment Breakdown Liquid milk 2022 H1 RMB (million) Revenue % Revenue 2023 H1 (伊利 品质,源于热爱 % Growth rate 42,892 68.7% 42,423 64.8% -1.1% Milk powder and milk products 12,071 19.3% 13,521 20.7% 12.0% Ice cream Other products Total Data source: Company data 7,295 11.7% 9,158 14.0% 25.5% 207 0.3% 321 0.5% 55.1% 62,465 100.0% 65,423 100.0% 4.7% 9#10Gross Margin by Segment -0.34 ppts 33.3 % 33.7% 2022 H1 2023 H1 30.0% +0.11 ppts 30.1 % Total Liquid milk 2022 H1 2023 H1 -2.73 ppts Milk powder and milk products Ice cream -0.61 ppts 39.8 % 39.2% 43.1 % 40.4% 2022 H1 2023 H1 Data source: Company data I (伊利 品质,源于热爱 2022 H1 2023 H1 10#11Analysis of Profit Growth 1H2023 Total Profit Growth Attribution Unit: million RMB +773 +20 +4.0% -210 -298 7,384 7,099 2022H1 Gross Profit Selling Expense G&A Expense Other 2023H1 Data source: Company data (伊利 品质,源于热爱 11#12Cash Flow and Capital Expenditure Net cash flow from operating activities Unit: million RMB 6,012 5,530 Unit: million RMB 6,737 Capital expenditure (伊利 品质,源于热爱 Cash paid for fixed assets, intangible assets and other long-term assets Net cash from the subsidiaries 394 3,046 3,116 2022 H1 2023 H1 2022 H1 2023 H1 Data source: Company data 12#13Catalogue 1 About Yili 2 Financial Review 3 4 Business Review & Outlook Culture and Brand Management#14Industry Industry status (伊利 品质,源于热爱 Health awareness is continuously increasing: Consumer demand for high-quality and nutritious dairy products continues to grow, with retail sales in some segments showing an upward trend year-on-year The retail sales of organic white milk increased by 17.1% year- on-year The number of households purchasing ambient liquid dairy products in county towns and county-level cities has increased by 2.1% compared to the same period last year The aging trend drives the development of adult milk based nutrition products: Retail sales in the market maintain a good growth momentum In the first half of this year, the retail sales of adult milk powder increased by approximately 6.2% year-on-year The CPC Central Committee and the State Council issued the "Guideline on Expanding Domestic Demand (2022-2035)" Advocate improving the diet structure of residents, increasing the supply of healthy and nutritious agricultural products and food, and implement a series of measures to expand domestic demand and stimulate economic development As an important element of balanced diet, dairy products are an essential component of improving physical quality and creating healthy lifestyle; with the recovery of economy, the consumption scale of dairy products will continue to grow, and the developing trend of the industry will gradually improve Domestic milk supply is relatively sufficient: Affected by the decrease in terminal sales, the price of raw milk showed a downward trend compared with the same period last year The market price of other main raw and supplementary materials was stable and slightly lower than that of the same period last year Data Source: Nielson, Syntun 14#15Company Brand Take quality as the cornerstone, and continuously tamp the brand's competitive advantages (伊利 品质,源于热爱 The World The Yili 全球热爱 品质如伊 * 2023年凯度BrandZ最具价值全球品牌排行榜 正式发布 80 (伊利) 金與 纯牛奶 安慕希 AMAFOZIAL 35 21:250mL 方奶址|12-36月协3段(4 (伊利 品质,源于热爱 • Yili adheres to the corporate belief that "Yili means the best quality", follows the brand concept of "nourishing life", and promotes the establishment of a global brand system Relying on big data, Yili continuously enhances communication and interaction between the brand and consumers; the company takes quality as the cornerstone and continuously tamps the competitive advantages of the brand Kantar BrandZ Most Valuable Global Brands 2023 was officially announced, Yili has once again claimed the top spot as the most valuable dairy brand globally this year In Chinese Mainland "Brand Footprint Report 2023" by Kantar Worldpanel, Yili was once again ranked first among the most chosen FMCG brands in the Chinese market for 8 consecutive years 15#16Company Innovation Guiding by the "Value Leading" Strategic Goal, Yili continuously improves its innovation capabilities (伊利 品质,源于热爱 2023世界乳品 伊利 Joynay COOKSES CREAM WORLD DAIRY INNOVATION AWARDS 20 Lactoferrin: Yili is the first to break the technical barriers in the industry regarding the extraction of active lactoferrin, increasing the retention rate of lactoferrin in pure milk at room temperature from 10% to over 90% Sugar control: Yili launched the world's first sugar control milk, the first low GI (Low Glycemic Index) formula milk powder, and a series of formula food with special medical and nutritional functions Strains for infants and children: The first strain for infants and young children was independently developed by Ausnutria, which has been approved by the state and has broken the monopoly of overseas institutions on probiotic research in infants and young children Revenue of new products accounts for over 15% 创新奖 18项提名 稳居全球乳业第一 伊利荣获 温 (舒代) 安慕希 沙漠有机 臻浓牛奶 有 【全脂驼乳粉, 高钙 安糖健 (+50%瓶 © 净含量:250元 30 保 无乳糖牛奶處鮮 16#17Company Channels Create omni-channel advantages, and seize opportunities in online, catering and other channels W Online Channels Catering Channels Rapid growth of e-commerce platforms On major e-commerce platforms, the sales of liquid milk increased by 29.5% year-on-year, and its market share increased by 3ppts, ranking No.1 in the industry Promote digital transformation in channels On one hand, actively explore and expand new channels On the other hand, through digital empowerment, further strengthen the delicacy management of all channels, improve operation efficiency, and promote sustained business growth Channel customization service in liquid milk The company leverages consumption hotspots in industries such as catering, tourism, and entertainment to vigorously develop customized channel services for liquid milk product solutions for catering customers in cheese business The company focuses on the innovation of specialized dairy products, relying on dual core milk source bases in China and New Zealand to build the "Yili Pro" platform, providing high-quality and comprehensive product solutions for dairy products and services to professional customers in the baking, catering, and beverage industries Data Source: Nielson, Syntun (伊利 品质,源于热爱 17#18Company Digitalization Continuously promote digital transformation, and comprehensively improve operational and management efficiency EV digitalization empowers Supply Chain digitalization empowers Innovation System digitalization empowers Membership Management digitalization empowers Channel Operation • By utilizing big data technology, Yili is able to integrate information from ranches to stores to consumers; additionally, a dynamic intelligent decision engine composed of multiple algorithms is implanted to support efficient collaborative operation of the supply chain By applying artificial intelligence technology, an agile innovation system has been established throughout the entire process from consumer insight to product launch; this has shortened the product innovation cycle and effectively improved innovation efficiency and quality With the help of digital tools, Yili established the "XinHuo Joy Club" membership platform; By serving user's needs, the company actively carries out nutrition education and brand interaction, and provides precise membership services to drive the accelerated growth of milk powder Relying on digital technology innovation, Yili continuously improves the integrated operational efficiency of online and offline channels, shortens product delivery cycles, and reduces supply chain operational costs; Continuously optimizing the delicacy management system and driving business growth in all aspects 伊利 品质,源于热爱 18#19Company Globalization Actively explore overseas markets, and steadily promote international business ( 品质,源于热爱 eta Pak Tel Ο ΑΜΒΡΟΣΙΑΣ GREEN STYLE FLAVOURED YOGHURT True Fame M ΑΜΒΡΟΣΙΑΣ GREEK STYLE FLAVOURED YOGHURT Heat Treated Fermented Milk -Premiu Droking Yoghu Strawberry Flavour Net Contert Mango & Passion Fruit Fla Net Content: 230g 2000 Yili ΑΜΒΡΟΣΙΑΣ GREEK STYLE FLAVOURED YOGHURT Heat Treated Fermented Milk Pact & Fur Net Content 200g Steady growth of business overseas • The company continues to engage in cooperation with global partners, optimize production capacity of overseas bases, actively develop overseas markets, and further expand business overseas In 1H2023, the company's oversea revenue increased by 19.9% compared to the same period last year Efficient collaboration of the global supply chain The company continues to improve the mechanism between domestic and foreign markets and production bases, fully leveraging the efficiency and collaborative advantages of the "global supply chain networks" As of the end of June 2023, the company has 75 production bases worldwide, with products sold to over 60 countries and regions, and a comprehensive production capacity of 16.18 million tons/year 19#20Catalogue 1 About Yili 2 Financial Review 3 Business Review & Outlook 4 Culture and Brand Management#21Culture & Brand Essence Belief "Yili" means the best quality Vision Be the most trusted global healthy food provider Core Values Excellence Accountability Innovation Win-win Respect The Spirit of Yili Ownership mindset Powerful execution capability C Brand Essence Nourish for life Strong sense of responsibility the provider of healthy food and the advocator of healthy lifestyle (伊利 品质,源于热爱 21#22伊利 Ⓡ 品质,源于热爱 Thank you!