DAIRY CREST GROUP PLC

1
DAIRY CREST GROUP PLC PRELIMINARY RESULTS For
the year ended 31 March 2006
2
Highlights

• Building value through brand development
• Group Revenue (including share of jvs) 1.42bn
  (2005 1.35bn)
• Adjusted profit before tax 67.7m (2005 75.7m)
• Adjusted earnings per share 40.3 pence (2005
  43.9 pence)
• Full year dividend up 6.4 to 21.5 pence (2005
  20.2 pence)
• Net debt 280.2m (2005 227.5m)

Including share of joint ventures and before
exceptional items and amortisation of acquired
intangibles
3
Highlights

• Building value through brand development
• We continue to make good progress with our brand
  portfolio
• strong performances from Cathedral City, Clover,
  Country Life Spreadable and the Yoplait brands
• active programme of new product launches with
  emphasis on functional foods
• recent launch of Cathedral City Mild
• We have strengthened the Dairies division
• integration of Midlands Co-op Dairies and Foston
  completed on time and to plan
• successful implementation of additional Morrisons
  fresh milk
• better balance of industry supply and demand in
  fresh milk
• good performance by household business

4
Financial Review Alastair Murray

5
Income Statement
All items include share of joint
ventures Before exceptional items and
amortisation of acquired intangibles
6
Exceptional Items
Profit on sale before tax
7
Earnings and Dividends
8
Segmental Analysis
Including pre tax and interest share of jvs and
before exceptional items
9
Operating Margin
Including share of joint ventures and before
exceptional items
10
Balance Sheet
11
Operating Cash Flow
Including share of joint ventures and before
exceptional items Net of grants
12
Cash Flow
13
Pensions Summary

• IAS19 gross deficit at 31 March 2006 of 62.0m
  (2005102.7m)
• highly volatile measure
• increased asset valuations and discount rate
• Scheme to close to new entrants from July 2006
• Additional cash contribution of 6.0m in 2005/06
• Employer contributions to increase by 11.0m to
  c.28.3m from 2006/07
• additional cash contribution of 12.0m
• basic contribution increased from 11.3m to
  c.16.3m
• Committed to maintain additional cash
  contribution of 12.0m in 2007/08
• Next full actuarial valuation as at 31 March 2007

14
Business Review Drummond Hall
15
Total Shareholder Return since IPO

• TSR Share price dividends

Source Datastream (May 2006)
16
Our brands are getting bigger
248
1996/97
2005/06
36
1996/97
2005/06
1996/97
210
2005/06
1996/97
317
2005/06
Source Dairy Crest Annual Sales Volumes (Country
Life 100 since Sept 2004) 1996/97 indexed to
100
17
Our brands are getting bigger
bigger than
106m
bigger than
66m
bigger than
52m
bigger than
41m
Source TNS / AC Nielsen / IRI 52 week ended
March 2006
18
Weve been active with new product development
19
Spreads

• Spreads business continues to be biggest profit
  contributor
• Marketing continues to focus on four key brands
• - simplified portfolio with fewer brands and
  skus
• Good performance from Clover
• - sales value growth of 5
• - lower proportion of sales on promotion
• - price increases achieved in Sept 2005 and Jan
  2006
• Utterly Butterly continues to make progress
  against competition
• increased share of dairy spreads sector
• sales up 7 by volume and down 2 by value

20
Clover and UB outperform ICBINB
DC acquired UB
MAT Value 000s
Source AC Nielsen (MAT) 26 March 2006
21
Country Life

• Good growth in Country Life
• packet sales up 9 by value
• spreadable sales up 23 by value
• Successful marketing campaign launched in summer
  2005
• - first national TV advertising for 20 years
• Lightly salted version of Country Life Spreadable
  launched in January 2006

• New packaging for Country Life range introduced
• Opportunities to stretch the Country Life brand
  into new areas

22
St. Ivel Gold

• St. Ivel Gold volume and share under pressure
• - sales down 17 by value
• - strong competitor performance
• St. Ivel Gold relaunched in January 2006
• new packaging
• new television advertising campaign
• new Omega-3 variant launched

• St. Ivel Gold will be the platform for functional
  spreads

23
Cathedral City

• Strong performance from Cathedral City
• - sales up 17 by value and 11 by volume
• - lower proportion of sales on promotion
• New packaging launched
• Successful TV advertising campaign
• Cathedral City Mild launched May 2006
• Final phase of Davidstow redevelopment completed

24
Cathedral City Growth
Source TNS (MAT) 26 March 2006
25
Cheese

• Strong overall performance from our cheese
  business
• Cathedral City growth
• cost related price increases achieved in summer
  2005
• Davidstow brand performed strongly with sales up
  19
• Successful implementation of new own label supply
  arrangements with ASDA and Morrisons
• Stilton business continues to be challenging
• impairment charge on value of assets of 9.3m
• launch of new speciality cheese brand Over the
  Moon
• Strong market for whey products
• Industry cheese stocks have risen in second half
• - pressure on pricing in commodity cheese in
  2006/07

26
Cheese Stocks
British Cheese Board cheddar stocks 12 month
moving average
K tonnes
27
Yoplait Dairy Crest

• Continued good growth in chilled yogurts and
  desserts market
• Brands continue to perform strongly with overall
  sales value up 11
• Petits Filous up 25
• Frubes up 34
• Wildlife up 6
• YOP up 13
• Weight Watchers down 4 by value but held market
  share in Light
• New product development in functional foods
• Petits Filous Plus probiotic yogurt drink for
  kids
• Closure of own label operations in June 2005

28
Liquid Products

• Retail milk volumes down 17 year on year
• - Tesco volume ceased in April 2005
• Morrisons additional volume successfully
  implemented at end of October 2005
• Acquisitions of Midland Co-op Dairies and Foston
  dairy in May 2005
• - integration completed on schedule and to plan
• MCD Birmingham dairy closed February 2006
• Foston now fully operational
• Better balance of supply and demand in fresh milk
  industry
• Price increases achieved from March 2005 and
  further increases achieved in January 2006 to
  offset higher input costs

29
Other Liquid Products

• Strong growth in organic milk
• own label milk sales up 49 by value
• Rachels brand sales up 47 by value
• FRijj maintained market leading position
• value down 5 due to lower promotional volumes
• addressing capacity constraints for 2006/07
• Potted cream sales up 15 by value
• - MS sole supply position from August 2006
• St. Ivel advance encouraging performance so far
• good levels of trade distribution
• annualised retail sales of approximately 13m

30
Household

• Overall household volumes up 31 year on year
• volume gained in middle ground
• Midlands Co-op Dairies acquisition May 2005
• Arlas London foodservice business October 2005
• ongoing infill acquisitions
• Uplift in Midlands Co-op performance
• Average milk per round 322 to 450 gallons pw
• Non-milk products per round 55 to 206 pw
• Underlying doorstep decline maintained at around
  8
• - investment in canvassing
• - first class service initiatives
• Non-milk product sales up by 30
• Doorstep price increase from September 2005 of 2
  pence per pint

31
Milk Procurement

• Strong working relationship with Dairy Crest
  Direct
• over 70 of raw milk sourced from Dairy Crest
  Direct
• Dairy Crest continues to pay market leading
  prices
• Waitrose and Marks Spencer
• Davidstow
• Price reductions on cheese contracts following
  0.8 ppl increase in summer 2005
• 0.5ppl from March 2006 (excluding Davidstow)
• Announced 0.5ppl from June 2006 (0.25ppl for
  Davidstow)
• Price reduction on liquids contracts of 0.5ppl
  from April 2006 reflecting lower commodity cream
  prices

32
Outlook

• Our brand portfolio continues to make good
  progress
• - further new product launches
• Markets for own label and commodity products
  continue to be challenging
• Improved performance from Dairies division
• Trading at the start of the new financial year is
  on track

33
DAIRY CREST GROUP PLC PRELIMINARY RESULTS For
the year ended 31 March 2006