#1伊利 Ⓡ 品质,源于热爱 Inner Mongolia Yili Industrial Group 2022 Annual and First Quarter 2023 Results#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 ESG & Sustainable Development 5 Long-term Vision#4About 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. Yili has now put into place a network comprising a global resource system, a global innovation system and a global market system in regions where the dairy industry is well developed. These regions include Asia, Europe, the Americas, and Oceania. Yili has over 2,000 partners distributed in 39 countries across six continents. The company owns 15 R&D and innovation centers and 75 production bases. Its liquid milk, milk powder, yogurt, cheese and ice cream are on the market in more than 60 countries and regions. 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. 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 5#6Catalogue 1 About Yili 2 Financial Review 3 Business Review & Outlook 4 ESG & Sustainable Development 5 Long-term Vision#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 (伊利 品质,源于热爱 RMB (million) 2021 2022 Growth rate 2022 Q1 2023 Q1 Growth rate Revenue 110,595 123,171 11.37% 31,047 33,441 7.71% Revenue from core business 108,462 121,149 11.70% 30,589 33,115 8.26% Gross profit' 33,342 39,275 17.79% 10,587 11,219 5.97% Gross profit margin 30.74% 32.42% 1.68ppts 34.61% 33.88% -0.73ppts Selling expense ratio 17.46% 18.60% 1.13ppts 18.14% 17.07% -1.07ppts G&A expense ratio 3.82% 4.34% 0.52ppts 3.32% 4.19% 0.87ppts Operating profit 10,230 10,860 6.15% 4,210 4,198 -0.27% Net profit attributable to shareholders 8,705 9,431 8.34% 3,519 3,615 2.73% of the company Net profit margin 7.87% 7.66% -0.21ppts 11.33% 10.81% -0.52ppts EPS (RMB) 1.43 1.48 3.50% 0.56 0.57 1.79% ROE 25.59% 19.23% -6.36ppts 7.12% 6.99% -0.13ppts Note 1: Gross profit is calculated from core business revenue Data source: Company data 8#9Core Business Revenue Segment Breakdown 2021 2022 2022Q1 2023Q1 (伊利 品质,源于热爱 RMB (million) Revenue % Revenue % Growth rate Growth Revenue % Revenue % rate Liquid milk 84,911 78.3% 84,926 70.1% 0.0% 22,318 73.0% 21,741 65.7% -2.6% Milk powder and 16,209 14.9% 26,260 21.7% 62.0% 5,395 17.6% 7,443 22.5% 37.9% milk products Ice cream 7,161 6.6% 9,567 7.9% 33.6% 2,795 9.1% 3,794 11.5% 35.7% Other products 182 0.2% 395 0.3% 116.5% 81 0.3% 138 0.4% 70.9% Total Data source: Company data 108,462 100.0% 121,149 100.0% 11.7% 30,589 100.0% 33,115 100.0% 8.3% 9#10Analysis of Revenue and Profit Growth Unit: million RMB 2022 Revenue growth attribution +1.2% 108,462 +1,349 11.7% +2.2% +0.2% +212 121,149 +2,436 +8.0% +8,688 2021 Volumn Product Mix¹) ASP Other Products²) 2022 Note 1: Revenue contribution from Ausnutria's consolidation is included in product mix Note2: 'Other products' in core business lists as a separate column in the analysis above without breakdown of volumn and ASP Data source: Company data Unit: million RMB 10,112 2022 Profit Before Tax Growth Attribution +5,933 -3,593 5.1% (伊利 品质,源于热爱 -1,116 -706 10,630 2021 Gross Profit Selling Expense G&A Expense Other 2022 10#11Gross Margin by Segment 1.68 ppts 30.7% 2021 39.2% 1.26 ppts 32.4 % 2022 40.5 % 2021 2022 Data source: Company data 28.3% Total Liquid milk 2021 Milk powder and milk products Ice cream I 40.3 % 0.91 ppts 1.80 ppts 29.2% 2022 38.5 % (伊利 品质,源于热爱 2021 2022 11#121) Operating Efficiency ¹) Notes Receivable and Accounts Receivable Turnover (Days) Inventory Turnover (Days) 6.3 7.9 2021 2022 38.8 51.4 2021 2022 Notes Payable and Accounts Payable Turnover (Days) Cash Turnover (Days) 60.5 66.8 2021 Note 1: Ausnutria is included in the operating efficiency of 2022 Data source: Company data 2022 -15.4 -7.5 2021 2022 (伊利 品质,源于热爱 12#13Cash Flow and Capital Expenditure Net cash flow from operating activities Unit: million RMB Unit: million RMB Capital expenditure | Cash paid for fixed assets, intangible assets and other long- term assets Net cash from the subsidiaries 518 7,143 15,528 13,420 6,683 6,646 2021 2022 2021 2022 Data source: Company data (伊利 品质,源于热爱 13#14EBITDA, ROIC and Dividend Rate EBITDA & EBITDA Margin Unit: million RMB % EBITDA EBITDA margin 16,100 14,343 2022 11,087 10,424 9,318 11.7% 11.6% 11.4% 2018 Data source: Company data 13.1% 13.0% 2019 2020 2021 2022 2022 ROIC 14.7% Dividend Rate 70.3% (伊利 品质,源于热爱 14#15Catalogue 1 About Yili 2 Financial Review 3 Business Review & Outlook 4 ESG & Sustainable Development 5 Long-term Vision#16Industry Industry Status Data source: Kantar (伊利 品质,源于热爱 "Dietary Guidelines for Chinese Residents" has been updated by National Health Commission: Increased the recommended consumption of milk and dairy products from 300g per day to 300-500g per day Advocate for citizens to obtain high-quality protein, calcium and other important nutrients through dairy products; improve dietary structure and physical health Innovation has become the driving force for sustainable development in the industry: Dairy products and other milk based nutrition products with organic, low GI, A2ẞ-Casein or other functional attributes are favored by consumers The aging trend drives the development of adult milk based nutrition products: Due to the population aging and increasing awareness in health, adult milk based nutrition products have already become the new potential in the industry & Health awareness is continuously increasing: As an important component of improving physical health and creating a healthy lifestyle, dairy consumption will continue to grow, and there is huge potential for the dairy industry and related milk based food industries In 2022, the number of households consuming liquid dairy products increased by 3.5% yoy, and the consumer group of liquid dairy products continued to grow Domestic brands of infant milk formula have gained more recognition from the consumers: With the continuous innovation and upgrade of domestic dairy products, the competitiveness of domestic infant milk formula has been further strengthened Domestic milk supply is relatively sufficient: Under the implementation of multiple national policies to ensure the development of the dairy industry, the domestic dairy industry has entered a new era of rapid development, with relatively sufficient milk supply 16#17行业 Industry Landscape and Trend Health consciousness Rise of new channel کی Consumption upgrade Digital intelligence (伊利 品质,源于热爱 . Consumers pay more attention to healthy lifestyles, and dairy consumption in lower tier cities is expected to be further released • The prospects of the healthy. food industry represented by dairy products are promising Emerging channels, such as online shopping, live streaming, community purchase and O20 home delivery, will drive the continuous expansion of dairy consumption and market scale of dairy industry • The trend of consumption upgrade is becoming increasingly evident • High-value categories, such as cheese and functional dairy products, are growing rapidly • "Digital intelligence" brings more possibilities for the upgrading of industrial chain 17#18Company Brand Adhere to brand building, continuously expand brand matrix, and comprehensively occupy consumers' minds 2022年国度BrandZ亠最具价值全球品牌排行榜正式发布 伊利稳居全球 食品饮料榜单 国际化 后千亿时代 零码未来计划 「以消费者为中心 纯牛奶 蝉联全球乳业榜首 伊利 (伊利 品质,源于热爱 Yili brand continues to lead the way Yili adheres to the corporate belief that "Yili means the best quality" and follows the brand concept of “nourishing life”. Yili Group was recognized as one of the five most valuable food and beverage brands of 2022 by Kantar BrandZ, continuously ranked the top among global dairy brands. In Chinese Mainland "Brand Footprint Report 2022" by Kantar Worldpanel, with a 92.4% brand penetration rate and a consumer reach of nearly 1.3 billion, Yili was once again ranked first among the most chosen FMCG brands in the Chinese market for 7 consecutive years. 18#19Company Innovation Improve innovation capabilities, and promote sustainable and healthy development Continuously improve innovation capabilities: Yili continues to promote the “3 reductions & 3 health”project, which include reducing salt, oil, sugar, and improving oral health, weight health, bone health. Aligning closely with the 15 R&D and innovation centers across the globe, Yili integrates Chinese and overseas R&D resources, establishes global innovation network, and actively carries out innovative collaboration throughout the industrial chain. Yili has built a three-level R&D platforms of "open innovation platform", "group innovation center” and “BU-level application innovation platform", and has applied digital platforms to accurately discover and identify consumer needs Fruitful achievement of innovation: Yili received 76 innovation awards domestically and internationally (伊利 品质,源于热爱 The awards cover multiple fields such as food and beverage innovation, product quality and flavor, including the "Innovation Award for New Product Development" from the International Dairy Federation (IDF). Yili's Satine Pro UF Milk won the "Global Food Industry Award" for its product innovation and creative design. Yili won the most awards globally at Global Dairy Congress In the 15th World Dairy Innovation Awards, Yili was honored with 6 awards, including Best Dairy Products for Children, Best Lactose Intolerant-friendly Dairy Product, Best Ice Cream, Best Cheese, Best Dairy Snack, Best Packaging Design. Yili received most "Chinese Award for Excellent Patent" among dairy companies By the end of December 2022, Yili had received a total of 694 invention patents granted at home and abroad, of which 8 were granted the "Chinese Award for Excellent Patent". 19#20Company Digitalization Focus on the goal of "leading the industry in creating consumer value", and upgrade digital capabilities (伊利 品质,源于热爱 PM 0000 颠球大战 数字伊利! • △△▲场领中国乳业高质量发展--- 【伊利 数字伊利 (伊利 数字伊利 引领中国乳业高质量发展 סן (PB 数字伊利 因索之旅 数字伊利因素之旅 Improve efficiency of product innovation • Accelerate innovative incubation and agile iteration of products and technologies Directly collaborate with consumers to improve efficiency of end-to-end product innovation Improve consumer satisfaction • • Promote the transformation and upgrade of digital consumer operation model Optimize consumer operation model and comprehensively improve consumer satisfaction with product and service Establish AI service platform • Build an artificial intelligence service platform with the help of big data analysis tools such as intelligent decision- making tool and computer vision 20#21Company Globalization • Efficient collaboration of the "global supply chain networks" and steady growth of business overseas Efficient collaboration of the "global supply chain networks" (伊利 品质,源于热爱 The butter production line in New Zealand has officially been put into operation, • . and the company's annual production capacity of high-quality forage butter can be doubled Acquisition of Canary Foods, a New Zealand dairy company. Through this acquisition, the company has increased its production capacity for world-class dairy products such as butterfat and cheese Continue to optimize the mechanism between domestic and foreign markets and production facilities; comprehensively enhance the overall planning, operating, coordinating, and anti-risk capabilities of global supply and production chain Steady growth of business overseas Oversea revenue increased by 52.2% yoy, including: • • Westland Dairy Company Limited achieved more than 25% increase in revenue The company's market share ranks among the top three in Thailand's ice-cream industry; and entering the top five in Indonesia's ice-cream industry Yili M CREMO พ่นให้สุดฟิล! อัมฟิล ฟันทุกชั้น Foyday BERLAPIS KEJUTANNYA Jayday MALT CHOCO CRUSH มัลติเลเยอร์ Dark Chocolate 15- Jux! ช็อกโก้ ครัช 21#22Company Product Liquid milk: market share of the ambient milk is in the leading position, while sales of organic milk is growing rapidly 纯牛奶 NEL Basic white milk Over double-digit growth of 3-year CAGR for Basic white milk (伊利 品质,源于热爱 Yili continued strengthening the brand's position in health, nutrition and quality. With strong brand influence, Yili has achieved faster growth than the industry The overall product matrix establishes a solid market foundation, and customized products expand the market space; together comprehensively accelerates the market penetration of basic white milk 金典 SATINE 有机纯牛奶 98: 250mL Premium white milk Top sales of organic milk globally, sales of organic milk doubled in 3 years Sustainable growth of organic products through Satine brand Satine organic series and high-end organic series have maintained fast growth of double digits; sales of Satine organic products rank first in the organic category Innovative launch of Jersey Organic, A2 Organic and other functional products to meet more diversified consumer needs Data source: Nielsen, Company data 22#23Company Product Liquid milk: leading market share of ambient yogurt, and innovation continues to stimulate market vitality (伊利 品质,源于热爱 Superior brand recognition • • In December 2022, the market share of Ambrosial had reached over 65% For the 5th consecutive year, Ambrosial has ranked No.1 in the brand recognition of liquid milk and yogurt category, firmly positioning itself in high quality, delicacy and fashion. Innovation promotes the brand development • • Following the consumer trend of health, innovatively launched the new product "Ambrosial bubble flavor" and the new series of diverse fruits flavor; New products launched in 2022 contributed more than 2.5 billion RMB in revenue Fast introduction of new products to young consumers through the creation of different IPs such as Yogurt Festival, Music Festival, Fruit Festival, Snow Festival, etc. 安慕希® 安慕希 安慕希 Ⓡ 爽口种 优质 安慕希 AMX 丹东草莓 产地直采 草莓奶昔风味酸奶 巴氏杀菌热处理风味酸奶 有 汽 气锻耳 安慕希 ® 安慕希 ® 清甜菠萝 ¥35% 蛋白质 4.198 安慕希 风味酸奶 净含量(规格:205gx12 服含話:2500w 安慕希 安慕希 AMX 长白山蓝莓 产地直采 蓝莓奶昔风味酸奶 巴氏杀菌热处理风味酸奶/ AMX 净含量/規格:230gX10 长白山蓝莓 丹东草苗 净含量/規格:230gX10 Data source: Nielsen 23#24Company Product • • Liquid milk: multiple brands operate in ambient category, occupying the leading positions in different sub-categories 优酸乳 Best-selling in China for 25 years, No. 1 brand in lactobacillus beverage with sales revenue of nearly 10 billion RMB Continuous innovation in taste, like sugar-coated haws flavor, apricot flavor and lychee flavor, to attract the new generation Expanded consumption scenarios; launched customized new products through catering channels • . No.1 brand in children's milk Dug deeper into consumer needs, taking the lead in introducing the concept of "native nutrition" and redefining children's milk that is more suitable for their growth DHA milk and A2 milk that meet the growth needs for children, successfully drove the development of QQ Star brand and domestic children's milk industry (伊利 品质,源于热爱 (12) SHUHUA • No.1 brand in lactose free milk with market share of nearly 60% Deep collaboration with aerospace and academician experts; successfully created the top professional functional milk brand 谷粒多 No.1 brand in cereal milk, top brand recognition in cereal milk for years 臻浓牛奶 No.1 brand in concentrated milk . New product, Zhennong High-calcium Milk, further expanded functional milk segments Data source: Nielsen, Company data 24#25Company Product Liquid milk: Satine pasteurized milk and set yogurt grew rapidly, new product launch in 2023 with diverse categories Satine pasteurized milk and set yogurt grew rapidly (伊利 品质,源于热爱 Focus on core brands, strengthen functional attributes, and continue innovation in 2023 Satine pasteurized milk: growth rate Satine pasteurized milk: increase in market share 【新上市 真实果肉 Q弹燕麦、蔗糖蔗糖 ↙ 依然 蔗糖 黃柳带麦酸奶 40%+ 0.9ppts 金典 (金山上市 经典老味道 选伊利官酪 蓋 416 Data source: Nielsen, Company data 高原有机+原生A2P 金典 AzB s 一瓶鲜奶 双份呵护 ML 高原有机牧场奶源 中欧有机双认证,全程有机可监测 原生A49.0 原生营养、自然亲和、漠漠珍克 有机鲜牛奶 Sales revenue of Gonglao increased by 30% yoy Market share of Gonglao reached 30%, first place in the set yogurt subcategory •每益添 小日乳 柠好清爽 小青柠口味新鲜上市 「越南进口 NFC 000 每益添 • Changqing ranks No.1 in brand power of chilled yogurt Newly launched Changqing Zero Sucrose products with more functional attributes First organic plus A2ẞ-casein product in the market, providing consumers with double care Seized the beverage opportunity and launched new product of lime flavor, becoming popular on the Internet with diverse selling channels 25#26Company Product . • Milk powder: IMF maintained high growth, and upgrade of the entire product line brought new momentum The annual market share of company's IMF business increased by 5 ppts (including Ausnutria), achieving the second position in the market With the help of the maternity ecological platform established by the company - LingYingHui, the growth rate of sales through company's maternity store channel is close to 30% in 2022 Continued research on breast milk in China for 21 years, setting a product mix of Jinlingguan with accumulated experience Completed the layout in children's milk powder, children's milk formula(QQ star) doubled in revenue in 2022 Digitalization in member operations is further enhanced, leading the share of standard milk formula (0-6 months) increased even faster In 2022, the company's entire series of products had passed the approval of the new national standard, leading the high-quality development of the industry (FPAM) OPEN ® 儿童成长配方奶粉 EVENED |金领冠 塞纳牧 金领冠 珍护 QQ星福高 ® (伊利 品质,源于热爱 Data source: Nielsen, Company data 2-1 S 1200mg * ESBULI 幼儿配方奶粉(12-36月龄,3段 3 幼儿配方奶粉(12-36月龄:3段) 26#27Company Product Milk powder: Adult milk powder focuses on professional formula and continues to lead the industry (伊利 品质,源于热爱 Adult milk powder has ranked No.1 in the category for 8 consecutive years OPEN 心活 膳底 (PT) FRIZ 欣活 欣活 伊利 ④ 欣活 ® 骨能膳底® 纾糖膳底 0 血糖生成指数<? o 富含16种营养 33 黄精 0蔗糖 蔗糖 低G (C) 黄精粉、葛松 净含量/規 潮材乳粉 净含量/规格:900支 与奶粉 CGL20P1000-4ROL 调制乳粉 净含量/规格:800克 方奶粉 鸡礼粉 o 高鈣(150 - 透明扇 GLOBAL UNION 植物醇酯 鱼油粉 酸枣仁粉 In 2022, the company's adult milk powder achieved more than 15% growth, and the annual market share increased by 1.1 ppts compared to 2021; both online and offline channels maintained the top position in the market XinHuo ranks No.1 in brand power, brand recognition and brand purchase, and successfully established leading brand in high-end middle-aged and elderly milk powder In 2022, the operation system of adult milk powder became independent of IMF, and it will then better implement channel penetration and terminal services Focusing on functional products that help to improve bone health, maintain cardiovascular health, manage blood sugar, etc.; the brand makes up for the gap in domestic market of functional milk powder Data source: Nielsen, Company data 27#28Company Product Cheese: cheese business has leaped to the second place in the industry, highlighting the diverse innovative products Performance in 2022 2C business increased by 3.5% in its annual market share compared to 2021 Yili focuses on the innovation of specialized dairy products, providing high-quality and comprehensive dairy products and solutions for professional customers, and further promoting the rapid development of cheese and butterfat businesses Product innovation in 2023 Proposed the brand proposition of "good milk creates good cheese", and continued to launch innovative products around two core needs: 1) delicious and fun, and 2) nutritional and healthy; meanwhile launched new products for diverse consumption scenarios (伊利 伊家好 奶酪 (伊利 伊家好 奶酪 (伊利 【伊家好 奶酪 +浓肆奶硃 20 (伊利 品质,源于热爱 伊家好 好奶造就 好奶酪 微从牧场到出厂的131项安心指标! 奶 伊利 【伊家好 奶酪 原利马苏里拉奶酪 奶酪 双新 金装 浓醇 ˙娜 奶酪棒 一口 蛋白质 盒 38.2009 10 【伊拿好 奶酵 Data source: Nielsen 28#29Company Product Ice cream: business growth rate exceeded 30%, leading the industry for 28 consecutive years Revenue of ice cream in 2022 grew more than 30% Market share of ice cream maintains No.1 in the market, leading the industry for 28 consecutive years · 租须尽欢 Explore both online channels and physical store business models to better enhance our channel advantages; Sales through e-commerce channel and new retail channel nearly doubled in 2022 Digital supply chain construction chain constructio • Empower supply chain with digital technology to further reduce logistics costs, enhance agile delivery capabilities and improve customer satisfaction (伊利 Ⓡ 品质,源于热爱 活色鲜香 此刻尽欢 Breakthrough in high-end brands • The growth rate of high-end brands such as Gemice, Qixuan, and NOC is faster, and the product mix is further optimized Continuously upgrade products, such as reducing sugar level and adding high protein concentrated milk, to meet more high-end needs of consumers 甄稀 GEMICE 甄选生牛乳 只为更纯正 甄稀冰淇淋,是伊利旗下的高端冰淇淋品牌 甄选生牛乳搭配久保白桃等真材实料 只为成就一杯纯正美味 一口甄稀,给你一份真实自然的快乐! 藝碼 全新升级 甄桶 甄稀 乾梯 Data source: Nielsen, Company data 29#30Business Outlook 2023 Business Outlook (伊利 品质,源于热爱 Total revenue to be RMB 135.5 billion 1 Profit before tax to be RMB 12.5 billion Adhere to the corporate belief of "Yili means the best quality" and "consumer-centered mindset ", deeply promote "value 1 innovation", and continue to lead the healthy and sustainable development of our business with finest quality products and top-notch services Adhere to innovation driven approach; while improving innovation capabilities and accelerating the development of new 2 businesses in the field of healthy food, actively explore new methods, scenarios, and media to achieve efficient brand communication, and comprehensively enhance the value of our brand assets Accelerate digital transformation, expand channels simultaneously with refined operations, and comprehensively improve the capability to operate in omni-channel 4 Continue to explore overseas markets, and steadily promote international business 5 Accelerate the development of raw milk resources, and improve service capabilities of supply chain 6 7 8 Continue to build the "Global Health Ecosystem", and achieve coordinated development and win-win collaboration with our partners. Adhere to the requirements of "striving for excellence, pursuing excellence, and constantly surpassing oneself", elevate operating efficiency, and consolidate the cultural foundation of the company Enhance the ability to manage sustainable development strategies, actively leverage the social influence of the corporate brand, and drive consumers to establish a sustainable and healthy lifestyle 30 3 2023 Business Strategies#31Catalogue 1 About Yili 2 Financial Review 3 Business Review & Outlook 4 ESG & Sustainable Development 5 Long-term Vision#32Honors and awards granted to Yili on sustainable development Environmental Awards 31 factories under Yili have obtained national "green factory" certificate, top in the industry Yili, as the only dairy enterprise, was selected for the "New Deal for People and Nature: Case Book on Business Actions in Biodiversity in China" Yili became the first enterprise in the industry to comply with the "Carbon management systems - Requirements with guidance for use" Yili was awarded the "CDP 2022 Nature Guardian Award" Issuing Authority (伊利 品质,源于热爱 Ministry of Industry and Information Technology WWF, Foreign Environmental Cooperation Center Ministry of Ecology and Environment (FECO) Société Générale de Surveillance (SGS) CDP Social Governance Yili obtained the first "water footprint verification" in compliance with ISO14046 Yili was entitled "National Demonstration Enterprise for Supply Chain Innovation and Implementation" Yili was awarded "National Demonstration Enterprise for Creating Harmonious Labor Relations" Mr. Gang Pan was awarded the 20th "Outstanding Quality Person of China", which is the highest honor of the individual award for National Quality Award (2022-2023) Mr. Gang Pan was awarded "National Excellent Entrepreneur for 2021-2022" British Standards Institution (BSI) The Ministry of Commerce of the People's Republic of China Ministry of Human Resources and Social Security of the People's Republic of China China Association for Quality China Enterprise Confederation, China Enterprise Directors Association 32#33Specialized research and technology to enhance precise nutrition Yili aims to provide dairy products that better meet the diverse needs of different consumer groups and improve their health level Yili continues to conduct research on nutrition and health, reduce the use of artificial additives, promote nationwide nutrition improvement initiatives, and provide the best quality products and top-notch services As of 2022, 98% of the products have reached the company's sugar reduction target, 100% of products have reached the company's fat and sodium reduction target Lower sugar products Proportion of revenue 59% Organic products Proportion of revenue 5% Products with sugar level lower than the sugar reduction target of Yili and low sugar and sugar free products that meet the requirements of GB 28050 standard Products produced according to China's organic product standards and obtained organic certificates Nutrient fortified products Proportion of revenue 20% Products with added nutrients following the GB 14880-2012 standard Low sodium products Proportion of revenue 84% Low fat products Proportion in revenue 13% Products that comply with the relevant requirements of GB 28050-2011 Low or no artificial additive products Proportion in revenue 94% Products without artificial flavor, synthetic pigment and synthetic preservative (伊利 品质,源于热爱 33#34• • • Yili was the first in the Chinese food industry to announce carbon peaking and carbon neutrality goals and Net Zero Roadmap (伊利 品质,源于热爱 On April 8, 2022, Yili was the first enterprise in Chinese food industry to release “Yili Group Plan For A Net Zero Carbon Future" and "Yili Group Roadmap to Realize the Plan for A Net Zero Carbon Future" Yili will strive to achieve carbon neutrality in the entire industrial chain by 2050, and has formulated specific targets for the three stages of 2030, 2040 and 2050 Yili will strive to reduce carbon emission intensity (Scope 1+2) by >50% compared to 2012 by 2030, and the total carbon emissions will decrease year by year 2021 Remarkable achievements will be made in green transformation of the industrial chain, and organizational energy efficiency will reach the international advanced level 2040 Industrial Chain Carbon Neutralization 2030 Business model of green & low-carbon circular development was initially formed, and energy utilization rate increased significantly 2050 Green & low-carbon circular development will be achieved, and clean, safe, efficient and high-quality energy will be applied 34#35Yili has made positive progress in addressing climate change (伊利 品质,源于热爱 31 factories under Yili have been awarded national "green factory" certificate 100% coverage of carbon footprint assessment for the five major product series 1049 energy-saving and emission reduction projects Both total carbon emission and carbon emission intensity decreased in 2022 Built five "carbon neutral" factories and developed five "carbon neutral" products Launched the "Net Zero Carbon Alliance" to promote industrial chain carbon reduction (伊利 同心致远 共赢零碳未来 伊利集团首届全球合作伙伴零碳联盟峰会:司 35 B#36Yili adheres to the full life cycle management of water footprint, and has set management goals for 2023 (伊利 品质,源于热爱 As of 2022, Yili's water management has achieved: 23 factories have been awarded the title of water saving enterprise Compared to 2021, the total water consumption decreased by 1.5% Proportion of factories with Annual total water water-saving projects 100% Recycling rate of reclaimed water 12.58% savings 1700k tons utilization rate of alternative water sources 4.07% Yili 2023 water management goals: The water consumption per ton of product will decrease by 1% compared to 2022, and the recycling rate of reclaimed water will increase by 2% Carry out water footprint assessment for 4 factories and 4 products; further improve water-saving plan; drive the industrial chain to jointly protect water resources; and improve the recirculation of water resources Yili will propose a "Sustainable Development Initiative" to all suppliers, focusing on developing water-saving targets and plans for 33 suppliers with higher water consumption 36#37Yili has always been actively developing environmentally friendly packaging and using biodegradable packages Based on 2019, Yili Packaging Materials in 2022 Paper savings 14,037 tons packing boxes come from the recycling of waste paper pulp Plastic savings 4,217 tons Packaging materials from FSC certified suppliers Yili's Sustainable Packaging Goals for 2025: • 伊利 品质,源于热爱 100% 100% Case: Yili's milk package recycling initiative Successfully completed the milk package recycling system at 6 CaiNiao courier stations in Hangzhou Converted milk packages into booklets, tables and chairs, textbooks, footballs, etc; Created a "full chain carbon reduction digital system" where consumers place empty milk boxes into the recycling bins of CaiNiao courier station, scan the code, and associate it with Cainiao account to receive corresponding green energy points • Eliminate the use of PVC and EPS Over 99% of the packaging materials will be redesigned to be recyclable Based on 2019, the cumulative reduction in the use of petroleum based plastic will reach 20,000 tons Develop new solutions to lower the additives in order to solve the current issue of high additives in PET packages and low recycling value Develop degradable or convenient recycling solutions to address environmental issues caused by straws or spoons being difficult to collect or recycle Continuously carry out light-weighted research, reduce the use of plastic in packaging materials, and reduce the proportion of packaging materials used per unit of product 37#38Yili has conducted many explorations in biodiversity through the "Yili Homeland Initiative" (伊利 品质,源于热爱 "Yili Homeland Initiative" is a new public welfare project for biodiversity conservation in support of achieving its aim to "safeguard the future of life". Joining hands with the WWF, the China Green Foundation and other official organizations, Yili has carried out activities covering smart grasslands and wetland protection in Northeast China as well as habitat protection for Asian elephants. In 2022, the official release of the "Yili Homeland Initiative" LOGO makes Yili's action to protect biodiversity and the Earth more vivid. Yili, as sole dairy enterprise, its case was included in the "New Deal for People and Nature: Case Book on Business Actions in Biodiversity in China" As a special partner of COP15, Yili was the sole dairy enterprise invited to the Convention on Biological Diversity WWF FÉCO Staffan Widstrand Wild Weds of China/ 人与自然和谐 新共识 企业参与生物多样性案例集(简本) 中国企业的生物多样性保护实践 -伊利家园行动 内蒙古伊利实业集团股份有限公司 内蒙古伊利实业集团股份有限公司 星乳业行业的领军企业,是首家市 署联合国生物多样性公约《企业 勾生物多样性承诺书》的中国企 业。伊利将生物多样性保护融入公 司战略。通过“共享健康可持续 发展(CD)体系”,“Wond htegrally Sharing Health". 称“WISH”体系,以及《伊利集 团可持续发展行动纲领(十条)》, 推动全公司形成共识。经过多年的 行动”,系统构建具有伊利特色的 生物多样性保护模式,在乳制品行 业所涉及的一二三产业全面开展行 动,取得了经济、社会、环境三方 共赢的成效,为破解乳制品行业经 色发展面临的挑战,探索出一条以 生态优先、绿色发展为导向的高质 量发展新路。未来,伊利将在“伊 利家园行动”的框架下,系统开展 应对气候变化和生物多样性保护实 线,进一步打造绿色产业链,到公 众和消费者保导绿色生活方式,提 升全社会的生物多样性保护意识, 与利益相关方携手共同守护人类的 绿色地球家园, 2022 UN BIODIVERSITY CONFERENCE COP15-CP/MOP10-NP/MOP4 Ecological Civilization-Building a Shared Future for All Life on Earth KUNMING MONTRÉAL 进入收季节的时费科尔須長時真人 2822 UM BIDDIVERSITY CAMFERENCE COP15 CP/MOPIMOPA 38#39Catalogue 1 About Yili 2 Financial Review 3 Business Review & Outlook 4 ESG & Sustainable Development 5 Long-term Vision#40Culture & 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 40#41Long-term Strategic Goals "Value Leading" Strategic Goal 1 Consumer value leading Social value leading Employee value leading Corporate value leading (伊利 品质,源于热爱 Continue to focus on the field of healthy food and lead the development of the industry based on the needs of consumers and by relying on the global technology innovation and R&D platform 2 Steadily advance in globalization strategy, and improve operation capability as an international brand 3 Actively expand the emerging channels, and leverage Internet technology to create new business models Long-term Strategies 4 Elaborate collaborative advantages of global supply chain, and improve overall operation efficiency of the company 5 6 Adhere to the requirements of "striving for excellence, pursuing excellence, and constantly surpassing oneself", and consolidate the cultural foundation of the company Continuously promote the implementation of the company's strategies on sustainable development of full value chain, and assist in achieving the "value leading" strategic goal 41#42伊利 Ⓡ 品质,源于热爱 Thank you!