DAIRY CREST GROUP PLC

1
DAIRY CREST GROUP PLC INTERIM RESULTS For the
period ended 30 September 2007
2
Key Highlights

• Successful first half as reshaped business
  continues to grow
• good growth from key pillar brands including
  Cathedral City, Utterly Butterly, Country Life
  Spreadable, St Hubert Omega 3 and Petits Filous
• new healthier variants of key brands performing
  well
• encouraging early results from trials of our new
  internet based doorstep delivery service
  milkmore
• Strong performance from St Hubert, as first step
  into Europe, with market share gains in France
• Clover performance improving following product
  recall in May
• Price increases being implemented to reflect
  rising raw milk costs
• Investment in new, highly automated, cheese
  packing facility at Nuneaton

3
Financial Review Alastair Murray

4
Financial Highlights

• Group Revenue up 29 to 761.4m (2006 588.6m)
• Adjusted profit before tax up 21 to 37.1m
  (2006 30.6m)
• Adjusted earnings per share up 22 to 22.2p
  (2006 18.2p)
• Interim dividend up 6 to 7.1p (2006 6.7p)
• Net debt 458.5m (2006 329.0m)

Before exceptional items and amortisation of
acquired intangibles
5
Income Statement
Before exceptional items and amortisation of
acquired intangibles
6
Exceptional Items
7
Earnings and Dividends
8
Segmental Analysis
Before exceptional items and amortisation of
acquired intangibles
9
Operating Margin
Before exceptional items and amortisation of
acquired intangibles
10
Balance Sheet
11
Operating Cash Flow
Before exceptional items and amortisation of
acquired intangibles Net of grant
amortisation Operating property profits and
share based payments charges
12
Cash Flow
13
Pensions Summary

• Full actuarial valuation as at 31 March 2007
  progressing to plan
• actuarial assumptions agreed and reflected in
  Sept 2007 valuation
• future funding discussions ongoing
• IAS19 gross deficit at 30 September 2007 of
  11.1m
• 10.7m increase since March 2007
• based on more prudent life expectancy assumptions
• Additional cash contributions of 12.0m committed
  in 2007/08

14
Business Review Mark Allen
15
Milk Price Increases

• Unprecedented upward movement in milk prices in
  2007/08
• worldwide demand for dairy products increasing
• shortages in UK milk production
• Significant impact on cost base
• other input costs are also rising (e.g. vegetable
  oil and HDPE)

35
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Source Milkprices.com, cheese prices are based
on Davidstow contract
16
Price Increases

• Higher ingredients realisations
• SMP, cream, butter and whey
• Dairy Crest has achieved or is implementing
  significant price increases across most
  categories to reflect uplift in input costs
• Fresh milk retail milk, middle ground and
  doorstep
• Potted cream
• Cheese Cathedral City and retailer branded
  cheddar
• Packet Butter Country Life and retailer brand
  butter
• Spreads

17
UK Spreads

• Strong growth from Utterly Butterly with sales up
  18 by value
• Omega 3 launched in August 2007
• increased overall market share in dairy spreads
  with volumes up 9
• Clover impacted by product recall in May with
  sales down 17 by value
• factory improvements have constrained promotional
  activity
• materially impacted performance of UK spreads
• Country Life Spreadable performing well with
  sales up 25 by value
• early performance of Lighter variant has been
  encouraging
• offset by Country Life packet butter with sales
  down 10 by value
• Price increases on packet butter and spreads
• to offset higher cream and vegetable oil costs
• Focus on delivering improved performance
• for 2008/09

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St Hubert

• Overall performance in line with our expectations
• sales up 4 over six months to September 2006
• increased market share of French spreads to 35
• Continued strong growth from Omega 3 up 16 by
  value
• number one brand variant in French spreads
• Stabilised position of St Hubert 41
• increase in marketing and promotional activity
• Vallé performing well in Italy with sales up 3
  by value

19
St Hubert Omega 3 No.1 brand
France spreads market share evolution
Source IRI (by value)
20
Cheese

• Strong growth from Cathedral City with sales up
  23 by value
• 148m brand at retail sales price
• Cathedral City Lighter (launched February 2007)
  performing well
• Mild and Lighter - over 10 of Cathedral City
  sales in H1
• Strong Davidstow growth with sales up 22 by
  value
• Whey market has declined since summer
• H2 performance expected to benefit from price
  increases
• tighter industry stock levels
• Investment in Nuneaton cheese packing site
• project cost c. 25 million
• initial packing capacity c. 33,000 tonnes
• first commercial production early 2009

21
Yoplait Dairy Crest

• Maintains leading position in children's sector
  with market share back over 50
• Overall Yoplait brand sales up 7 by value
• Petits Filous and Frubes returned to strong
  growth
• Petits Filous up 24 by value
• Frubes up 16 by value
• increased promotional and marketing activity with
  emphasis on Vitamin D and Calcium
• Yop up 14 by value
• Weight Watchers and Wildlife down slightly
  against strong comparators last year

22
Liquid Products and Ingredients

• Retail milk volumes up 6 by value and 2 by
  volume
• retained as key supplier to Morrisons
• Continued focus on operational cost base
• Totnes closed in September 2007
• Frijj margins enhanced through price increases
  and lower promotional activity
• sales down 1 by value
• Flavoured milk sales up 43 by value and potted
  cream sales up 18 by value
• Strong realisations in dairy ingredients
• lower than expected milk volumes processed
  through ingredients

23
Household

• Overall household volumes up 38 year on year
• benefit of inclusion of Express Dairies in H1
• Non-milk product sales up by 20
• Underlying doorstep net decline improved to below
  7
• On track with Express Dairies integration
• Leicester head office now effectively closed
• Significant price increases achieved in the
  middle ground
• Doorstep price increase of 4 pence per pint
  successfully implemented in September

24
milkmore

• Trials now running in five depots
• Surbiton, Epsom, Richmond, Hanworth and Wimbledon
• Modernised service based on internet ordering
• order online by 10pm for delivery the following
  morning
• online payment by debit and credit cards
• Focus on non milk products including locally
  sourced and organic
• organic fruit and vegetable boxes
• free range eggs
• organic orange juice
• smoothies

25
milkmore

• Early indications are encouraging with
  significant uplift in average spend per week per
  customer on both milk and non milk products
• Customers feedback has been generally very
  positive
• like online ordering environment and product
  range
• Online payment working well
• The visibility of customer orders and trading
  history is of significant benefit
• Considering options for rolling out service next
  year

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Summary and Outlook

• Good first half performance
• Most key pillar brands are continuing to make
  good progress
• healthier variants performing well
• Clover performance improving following product
  recall in May
• Continuing trials of milkmore
• Price increases being implemented to reflect
  rising raw milk costs
• The Groups expectations for the full year remain
  unchanged

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DAIRY CREST GROUP PLC INTERIM RESULTS For the
period ended 30 September 2007