Dairy giant Yili continues to throw out growth figures

Chinese dairy giant Yili has further increased sales and profits in 2023, although the growth rate is slightly less impressive than previous years. In the first quarter of 2024, turnover even showed a small decline, although profit did improve. This is evident from the annual figures and quarterly update that were published together this week. 

Since 2016, Yili has recorded purely growing turnover figures and this trend will also be continued in 2023. Turnover grew by just under 2,5% last year to 126 billion Chinese renminbi. This amounts to €16,1 billion, making the company one of the five largest dairy companies in the world. This means that the growth rate is somewhat lower than in 2022, when turnover growth was more than 10%.

Bottom line, profit rose to €1,3 billion, which equates to an impressive profit margin of 8,3%. In addition, the cash flow also improved significantly in the past financial year. 

Growing ice cream division
The company realizes a large part of its turnover (almost 70%) with liquid dairy products, although that branch grew limited in 2023. Barely a quarter of turnover comes from the milk powder trade, which division grew by 5% last year. The ice cream division is relatively small, but grew strongly by more than 10% last year. Yili's foreign activities grew by a similar percentage.

The Chinese dairy giant is also active in the Netherlands with its own innovation center on the grounds of Wageningen University, which was recently expanded. In addition, the company has a majority interest in the Hong Kong listed Ausnutria, which has various production locations in the Netherlands that are currently being reorganized. In addition, Ausnutria is also a shareholder Farmel.  

Outlook 2024
The company expects a further increase in turnover and profit for 2024. However, this expectation was not fully realized in the first quarter, as turnover weakened slightly. Profits, on the other hand, did improve in the first months of 2024 and were 18,2% higher than the same period last year.

Wouter Job

Wouter Baan is Head of Meat & Dairy at BoerenbusinessAt DCA Market Intelligence, he focuses on dairy, pork, and meat markets. He also monitors (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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