Yili recently reported its nine-month or Q1 to Q3 financial results for FY2023, announcing ‘record high’ revenue figures of RMB979.4bn (US$13.3bn) with 3.77% year-on-year growth, and RMB9.38bn (US$1.28bn) in profits with 16.4% year-on-year growth.
Much of this growth was attributed to the performance of the firm’s liquid milk and ice cream categories.
“Yili's liquid milk business continued to secure our leading position in the segment with accelerated growth throughout Q1 to Q3 this year, reporting a revenue of RMB65.4bn (US$8.93bn) from January to September,” the firm’s CFO Zhao Cheng Xia said when announcing the results.
“This was a year-on-year increase of 2.1%, and the growth rate hit a very strong 8.48% in the third quarter alone.
“Our rapidly growing ice cream business has also topped the segment in terms of market share [in China] and saw a revenue of RMB10.4bn (US$1.4bn) - This saw a significant year-on-year increase of 12.9%, one of the highest in our portfolio.”
The firm also highlighted digital upgrades across its value chain as a major contributor to its performance this year, lauding these as having greatly improved business efficiencies.
“Yili [has greatly benefitted from] digital-oriented upgrading across the entire value chain and seen significant progress in overall business efficiency, which is shaping our new competitive advantages,” the firm added via a formal statement.
“Apart from driving robust development in business performance, this digitalised operation system is also contributing to a sustainable dairy industry, representing success both commercially and socially.”
Yili also recently won the International Dairy Foundation Dairy Innovation Award for its SATINE Environmentally Sustainable Packaging with No Ink or Printing.
The firm now officially operates five net-zero carbon factories and 31 factories certified as state-level ‘Green Factories’ in China.
Growth amidst adversity
Yili’s success comes amidst a financial season where global names such as Nestle and Carlsberg have reported poorer numbers than in past years due to global economic challenges and inflationary pressures.
Dairy as a category appears to be showing robust performance in the APAC region, as apart from strong government support in China for dairy consumption, over in New Zealand dairy co-operative Fonterra also delivered positive earnings news earlier this year with some 170% year-on-year growth in profits after tax to NZ$1.6bn (US$942mn) for its FY23 timeframe ending July 2023.
“There were a number of key drivers that helped us deliver this result, including favourable margins in our Ingredients channel, in particular the cheese and protein portfolios,” Fonterra CEO Miles Hurrell had said when announcing the results last month.
“We also saw improved performance in our Foodservice channel due to increased product pricing and higher demand as Greater China’s lockdown restrictions started to ease from the start of calendar year 2023.
“[That said], we acknowledge that across the year, farmers will continue to feel the pressure from high input costs and a reduced Farmgate Milk Price. We'll continue to do all that we can to support farmers through this challenging period.”
Yili also operates a New Zealand arm, Oceania Dairy, which houses the Yili Oceania Innovation Center.