CHINA MENGNIU DAIRY COMPANY LIMITED

(2319.HK)

Mengniu to acquire Lion Dairy & Drinks business in Australia

November 2019

Legal disclaimer

2

The presentation is prepared by China Mengniu Dairy Company Limited (the “Company”) and is solely for the purpose ofcorporate communication and general reference only. The presentation is not intended as an offer to sell, or to solicit anoffer to buy or to for many basis of investment decision for any class of securities of the Company in any jurisdiction. Allsuch information should not be used or relied on without professional advice. The presentation is a brief summary in natureand does not purport to be a complete description of the Company, its business, its current or historical operating results orits future business prospects. This presentation contains projections and forward looking statements that may reflect theCompany’s current views with respect to future events and financial performance.

This presentation is provided without any warranty or representation of any kind, either expressed or implied. The Companyspecifically disclaims all responsibilities in respect of any use or reliance of any information, whether financial or otherwise,contained in this presentation. The Company undertakes no obligation to publicly update or revise any forward-lookingstatements, whether as a result of new information, future events or otherwise.

Note: 1. Excluding the Specialty Cheese business which was recently sold to Saputo Dairy Australia, a subsidiary of Saputo Inc. (a Canada-based manufacturer of dairy products) (completed October 2019). 2. Based on AUD/RMB exchange rate of 4.78 and AUD/HKD exchange rate of 5.31 (as at 22 November 2019). 3

Proposed acquisition of Lion Dairy & Drinks

Target 100% of the shares in Lion Dairy & Drinks Pty Limited (“Dairy & Drinks” or “D&D”)1, a leading Australia-based branded dairy and beverage company

Acquisition Method

Consideration

Share sale and purchase agreement with Kirin Foods Australia Holdings Pty Ltd, a wholly-owned subsidiary of Japan-based Kirin Holdings Co.

Cash consideration of A$600 million (equivalent to approximately RMB 2,868 million or HKD 3,187 million2), subject to completion adjustments

Conditions Subject to Australian regulatory approvals (Foreign Investment Review Board and Australian Competition and Consumer Commission)

Timetable Execution of share sale and purchase agreement: 24 November 2019Completion expected in 1H CY2020, subject to timing of receipt of Australian regulatory approvals

Iconic household brands, access to highly regarded Australian milk pool and extensive manufacturing and cold chain networks provide a strong foundation for Mengniu to unlock tremendous potential in the Asia Pacific markets

A highly attractive acquisition for Mengniu

Quality assets

support Asia Pacific

strategy

An important milestone, post-Bellamy’s, in formulating an integrated regional player with a multi-category / multi-brand portfolio to serve consumers in Australia, China and South East Asia (“SEA”)

Regional integration

4

Anticipated realisation of meaningful synergy benefits as Mengniu builds and consolidates regional supply chain networks and direct sourcing from Australia

Considerable synergy potential

Dairy & Drinks

Milk Beverages Yoghurt White Milk Juice & Drinks Water Ice Plant-based 3

Market position2 #1 #1 #2 #1 #1 #1

5

Iconic household brand portfolio

♦ D&D’s range of iconic Australian household dairy brands have a strong Australian heritage, history and reputation for quality. Together with the Bellamy’s brand, Mengniu will have an impressive suite of Australian brands with strong market recognition.

♦ Mengniu plans to continue building D&D’s brands to unlock their full potential in Australia, China and SEA through:

Continued investment to strengthen heritage brands and develop emerging brands in Australia, through capacity and capability enhancements as well as a continued focus on product innovation

Assisting D&D to access international markets via Mengniu’s extensive platform

Source: D&D information. Note: 1. Years denote number of years brand has been in existence. 2. Market share for Juice & Drinks represents Chilled Juice only. 3. A joint venture between D&D and Vitasoy International Holding Limited.

Selection of D&D’s brands, by category1

4 years

10+ years

40 years

2 years

35+ years

120 years

2 years

115+ years 10+ years

~30 years

1 year

45+ years

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Australia is a source of high quality milk supply

♦ Strong reputation for high quality milk supply and dairy products, particularly amongst consumers in China and SEA

♦ ~34% of Australia’s domestic dairy production is exported

Cost competitive nature of raw milk in Australia

♦ Raw milk in Australia is cost competitive relative to raw milk sourced in China

♦ Access to the Australian milk pool provides Mengniu with a sustainable long-term path to alleviating cost pressures from domestic supply

Geographical and trade advantage in supplying China and SEA

♦ Australia is the closest scale raw milk production base to China and SEA

Availability of high quality milk supply, competitive pricing and geographic proximity make Australia an ideal dairy region for China and SEA

Source: Australian Bureau of Agricultural and Resource Economics and Sciences. Note: 1. Conversion to RMB based on AUD/RMB exchange rate of 4.78 and NZD/RMB exchange rate of 4.51 (as at 22 November 2019). 2. New Zealand farmgate milk price should be considered illustrative only as it is based on Fonterra’s farmgate milk price and has been converted from kg/MS to cents per litre by dividing by 13.

♦ Dairy export tariffs between Australia and China expected to gradually decrease to zero, according to free trade agreements

Opportunities provided by dairy sector consolidation

♦ Whilst fragmented, the Australian dairy sector continues to consolidate, presenting opportunities for Mengniu

Australian and New Zealand farmgate milk price (cents / litre, in respective local currencies, and RMB / litre)1

2.03 1.77 2.05 1.99 1.892.40 2.30 2.11 1.96 2.20 2.32 2.44

1.652.12

2.642.11 2.03

2.91

1.53 1.35

2.12 2.32 2.20 2.45

08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20F

Australia

New Zealand

RMB per litre

Australian / New Zealand cents per litre 42.5 37.1 42.8 41.6 39.5 50.2 48.2 44.2 41.0 46.0 48.5 51.036.5 46.9 58.5 46.8 44.9 64.6 33.8 30.0 47.1 51.5 48.8 54.2

Extensive supply chain networks provide strong foundation

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Major grocery

Large scale, well-invested, national manufacturing capability

♦ Significant scale and reach across Australia which provides unrivalled advantages in bringing new products to market

♦ Hard-to-replicate cold chain network

Largest national cold chain distribution network

Access to high quality Australian milk supply

♦ D&D has a proven track record of long-term and stable milk supply, even during Australian drought conditions

♦ Will help Mengniu to alleviate increasing milk supply costs in China and unlock sustainable future growth

♦ Mengniu will support D&D in accessing the Chinese market via in-market expertise and investment in manufacturing capability and capacity

dairy farmers~280

Loyal supplier base

million (milk equivalent litres) ~825

Long term and stable milk supply (p.a.)

~150depots / distribution centres

(~50 owned)

>35,000customers across multiple channels

Independent retail Impulse

facility1 1facility

2 facilities

5 facilities

3facilities

1facility

13 manufacturing facilities across Australia

♦ Significant manufacturing capability in Australia, supported by material investment in recent years

Best-in-class Milk Beverages facility

One of the largest fruit procurement operations in Australia

♦ Future international growth aspirations to be supported through utilisation of significant available capacity and additional investment by Mengniu

fruit growers~85

Source: D&D information.

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Consistent with Mengniu’s growth strategy

Expandinto overseas marketswith near-term focus

on SEA and Australia

D&D acquisition provides a pathway for sustainable growth in both Room Temperature and Chilled Business as well as Asia Pacific market expansion

Turn around Ice Cream and IMF

business

Roll out new businesses in

fresh milk, cheese etc.

Healthy growth maintained for Room

Temperature and Chilled Business

♦ Entry into Australian market through indirect investment in Burra Foods in 2016

♦ Indonesia Yoyi C factory commenced operation in 2018

♦ Expansion in sales network in SEA

♦ Enhanced Australian presence through proposed acquisition of Bellamy’s Organic in 2019

♦ Recent and pending investments to secure milk supply (e.g. China Modern Dairy Holdings in 2017 and China Shengmu Organic Milk Limited in 20181)

♦ Continued investment in both existing and new sites to increase capacity to meet demand growth

♦ Enhancing route-to-market efficiency through channel empowerment projects

Note: 1. Represents year of announcement.

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Fully integrated player to serve SEA and China markets

Diverse product portfolio via combination of D&D1, Bellamy’s and Burra Foods

Milk Beverages & Alternatives

Yoghurt White Milk Chilled Juice

Note: 1. D&D portfolio also includes Ambient Juice and Water Ice. 2. D&D has the exclusive right to sell and distribute Yoplait branded products within defined territories, in accordance with a master franchise agreement with Sodima. Defined territories include Australia, Singapore, Malaysia, the Philippines, Indonesia, Thailand, Vietnam, Hong Kong, Taiwan, Brunei and the Maldives. Specifically excluded territories include Mainland China, Japan, South Korea, New Zealand, PNG, New Caledonia and Fiji.

Functional ingredients

Bulk liquid

Nutritional milk powders

Milk powder

Formula Food

D&D has integrated capability from procurement to distribution

2

Processing Cold chain distributionProcurement Sales and marketing

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Platform to drive growth in “One Belt, One Road” regions

♦ D&D’s market leading positions in Australia provide Mengniu with an immediate presence and established platform in the Australian market

♦ D&D currently also distributes products internationally, into SEA and China, with a core focus on yoghurt

Number of market leading yoghurt positions in SEA, most notably in Singapore where D&D has a ~35% total market share and ~55% premium market share

Opportunity for Mengniu to continue to drive growth in D&D’s yoghurt positions in SEA

♦ Significant potential for launching other product categories (such as milk based beverages) into the SEA markets

♦ Consistent with (and complementary to) Mengniu’s strategy to grow in SEA and Australia

Through disciplined investment in manufacturing capacity / capability and new product development, Mengniu expects to drive further growth in Australia as well as exports into SEA and China

Source: D&D information. Note: 1. D&D has the exclusive right to sell and distribute Yoplait branded products within defined territories, in accordance with a master franchise agreement with Sodima. Defined territories include Australia, Singapore, Malaysia, the Philippines, Indonesia, Thailand, Vietnam, Hong Kong, Taiwan, Brunei and the Maldives. Specifically excluded territories include Mainland China, Japan, South Korea, New Zealand, PNG, New Caledonia and Fiji.

~60% share of the imported Australian yoghurt segment

Mainland China

Thailand#1 in imported yoghurt

Malaysia#1 in imported yoghurt

Singapore#1 in yoghurt

PhilippinesTop 5 in yoghurt

Vietnam#13 in yoghurt

Indonesia#5 in yoghurt

D&D’s yoghurt market position in SEA and China

D&D’s yoghurt brands in international markets

1

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Considerable synergy potential as Mengniu builds and consolidates the supply chain

Procurement efficiencies

♦ Potential benefits from complementary base of operations in Australia across D&D, Burra Foods and Bellamy’s to be explored

Shared distribution network / increased product throughput

Potential sharing of infrastructure and back office systems (e.g. IT platforms, office occupancy)

♦ R&D efficiencies

♦ Sales and marketing collaboration

♦ Cross-selling across brands and products, both in Australia and internationally

Other potential synergiesUltra-high temperature (UHT) production

♦ Mengniu currently outsources the production of some of its UHT milk

♦ Preliminary analysis indicates that some D&D facilities may be potential candidates for in-house UHT processing

♦ In-house UHT processing has the potential to realise material cost savings

♦ Supply chain efficiencies in the sourcing of raw milk given increased operational scale and flexibility across Mengniu’s Australian platform

♦ Procurement cost saving opportunities for non-milk inputs

♦ Implementation of production capabilities / technologies to facilitate export of milk to Mengniu’s existing markets overseas

Ability to realise material cost savings through in-sourcing (given some production is currently outsourced)

Mengniu expects the impact of identified synergy opportunities to be meaningful over time

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Key financials and pro-forma analysis

D&D profit before tax (AUD m)1 D&D profit after tax (AUD m)1

Pro-forma combined analysis (FY18A)1,3

Revenue EBITDA EBITDA margin

10%

90%

D&D

Mengniu

8%

92%

6.6%7.8% 7.7%

D&D Mengniu Combined

Note: 1. Unaudited pro forma adjusted figures for the financial year ended 31 December. 2. Unaudited pro forma book value of net assets. As part of post-acquisition purchase price accounting (as required by accounting standards), an independent valuer will assess the fair value of assets which may result in a step-up or step-down to book value. 3. Combination based on AUD/RMB exchange rate of 4.78 (as at 22 November 2019).

Recent profitability (in particular, year-to-date FY19) impacted by ongoing drought conditions in Australia

which have resulted in higher milk input costs

D&D net assets (AUD m)2

Net asset value broadly equal to purchase consideration

Upon realisation of identified synergies, Mengniu expects a material positive financial impact

69.0 65.5

FY17 FY18

48.3 45.8

FY17 FY18

596

Aug-19

13

Q&A