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Transcript of DANONE MENGNIU DAIRY CHINA OVERVIEWdanone-danonecom-prod.s3.amazonaws.com/user_upload/... · DANONE...
DANONE MENGNIU DAIRY CHINA OVERVIEW THIBAUT HELLEPUTTE GENERAL MANAGER CHINA FRESH DAIRY PRODUCTS
CHINA: FRESH DAIRY MARKET POTENTIAL
A BIG MARKET WITH HUGE POTENTIAL
CHINA FDP MARKET (Billions Euro)
CAGR 07-13: +21 %
TOP 6 FDP MARKETS IN VOLUME (Millions Tons)
1.0 1.3 1.5 1.9
2.4 2.8 3.4
6.1
0
2
4
6
8
Y07 Y08 Y09 Y10 Y11 Y12 Y13 Y17 E
2,4
1,8 1,8 1,8 1,5
1
German China Russia France USA Spain
36.0 34.0
26.6
16.0 12.9 12.6 10.9 10.3 8.7 7.6 7.1
1.1
France Germany Spain Russia UK Japan Canada Australia South Africa USA Brazil China
FDP PER CAPITAL CONSUMPTION (PCC) ACROSS COUNTRIES 公斤 Kg
Source:Nielsen and global team S&I, China apply 0.8 coverage; 2013 number
WITH POTENTIAL OF VALORIZATION
403%
349%
285%
267%
252%
220%
199%
134%
UK
Italy
Germany
Austria
Spain
France
Russia
China
Price Index Fresh Dairy/Fresh Milk Fresh Dairy Value
Easy to digest
Tasty
High Nutrient Density
Natural
DANONE DAIRY CHINA: BEFORE / AFTER
Before JV After JV
Mengniu & Danone
National player
13 factories
650,000 Tons
Profitable
> 3200 FTE + 3rd party
Danone only
Local player
1 factory
25,000 Tons
Not profitable
200 FTE + 3rd party
OUR CHINESE PARTNERS
THE PARTNER IN OUR DEAL
No.357 Ranked in Fortune500 Y2013
Mengniu Value MS 22 %
2 LEADERS TOGETHER: CHINA #1 WITH WW #1
Activia: Local player
20% MS in Shanghai
WHERE ARE WE AFTER 11 MONTHS IN THE JV?
AN ALIGNED FRESH DAIRY VISION
Become the indisputable leader of Fresh Dairy in China by offering safe,
qualitative and superior products through a more diversified portfolio
Develop Per Capita Consumption and Market Share
Food Quality & Safety : build trust and reputation
Product superiority: drive consumer loyalty
Attract Consumers (Kids, Seniors…) through Chinese and International brands
BUILDING FURTHER FOOD SAFETY AND QUALITY
From only experts To all functions alignment & engagement
From plant centric quality To consumer centric quality
2014 DIRECTION
1.PORTFOLIO MANAGEMENT 2.OPERATION EFFICIENCY 3.EXPENSE AND CAPEX
Focus on three high profitable brands: YoyiC, GuanYiRu
and Bio
Simplify SKUs
Format / Multi-pack
Increase asset utilization
Breakthrough in manufacturing and supply
chain
Cost Out Value In (COVI)
Focus A&P on top three brands
Return On Investment
Cautious on capex
Revenue Strong double digit growth
EBIT Positive growth
POINT 0: DIFFERENT BUSINESS MODEL & APPROACH
Direct sales
Big lines
/
On Forecast
Marketing driven: Pull
Freshness to consumers
Distributor
11 factories /
100 small lines
10,000 Tons/day
20 % own farm
On order
Sales driven : Push
D+1 or 2 to distributors
UPSTREAM
OPERATION
PRODUCTION
ROAD TO MARKET
TOP-LINE
FRESHNESS
1ST PILLAR: PORTFOLIO MANAGEMENT TOP 3 BRANDS:>50% PORTFOLIO
Superiority Innovation
Everyday & target group
SALES & POINT OF SALES APPROACH
Pricing
Space
Assortment Iconization
Brand Block
Freshness
Stock
OOS level PPED level
Fresh Dairy category
Brand maturity
3 Must Win Battles
ROOTS
TRUNKS
BRANCHES
Perfect Execution
Regional approach
Superiority Differentiation
2ND PILLAR: OUR OPERATIONS
Secure business growth Optimized COGs
+ 100 Ktons /year
3RD PILLAR: CAPEX & EXPENSES
YTD
RESULTS
PROCESS
PROJECTS
NEXT STEPS
VALIDATED THE NEW APPROACH
TO LEVERAGE OUR SCALE
3-YEARS PLAN
VALIDATED BY JULY 2014
FOCUS OUR INVESTMENT
Few key sites to serve our market
CURRENT SITUATION
Man An Shan Pilot
Engineering Capability analysis
3Y CAPEX PLAN ON KEY SITES
Detailed CAPEX plan for 5 key sites
2015 Investment for YoYiC+GuanYiRu
Define 3 Year Business plan
Volume-Format-Region-Inno
3-YEAR PLAN