1

2

Preliminary Results

For the year ended 31 March 2011

19 May 2011

DAIRY CREST GROUP plc

Agenda

20010/11 Mark Allen, Chief Executive

Financial Review Alastair Murray, Finance Director

Innovation Mark Allen, Chief Executive

Looking Forward Mark Allen, Chief Executive

DAIRY CREST GROUP plc

Mark Allen

Chief Executive

2010/11

5

Another year of delivery against strategy

Build market leading positions in branded and added value markets

7% increase in sales of key brands

9% increase in milk sales to major retailers

milk&more weekly sales > £1 million

Focus on cost reduction and efficiency improvements

Efficiency projects set to deliver £20 million

Investment in liquid dairies on track

Improve quality of earnings and reduce commodity risk

Resumed liquid milk sales to Tesco

Balanced product portfolio

Generate growth and focus thebusiness through acquisition& disposals

As suitable value-enhancing opportunities

arise

Adjusted profit before tax up 5% to £87.6 million

Year end net debt down £25 million to £312 million

4% dividend increase

6

Benefiting from being a broadly based business

Strong performance from Cheese

Ongoing delivery from Spreads

Tougher trading in Dairies

Operating Profit by Segment

3860 54 53

3428

27

35 17

328

35

0

20

40

60

80

100

120

07/08 08/09 09/10 10/11

£m

Dairies

Cheese

Spreads

27

105 102 106 108

7

Key brands continue to outperform the market

* DC value sales 12 months to 31 March 2011 v 12 months to 31 March 2010 ** ACN, IRI, TNS data 52 weeks to 19 March 2011*** DC value sales 12 months to 31 March 2011 v 12 months to 31 March 2007

6%

9%

9%

10%

2%

8%

1%8%

8%

3%

0%

79%

26%

1%38%

57%

54%

Core Brand Market Brand Growth10/11*

Market Growth10/11**

4 Year Brand Growth 10/11 v

06/07***

UK Cheese

UK Butter Spreads

Margarine

UK Butter Spreads

Margarine

French Non-Butter Spread

Fresh Flavoured Milk

0%0%

8

Improving quality of earnings

Dairy Crest conventional milk sales

44

45

46

47

48

49

50

51

52

53

54

2008/09 2009/10 2010/11Hal f 1

% o

f to

tal

vo

lum

es b

y

mark

et

Retail Middle ground

Strong growth in 5 key brands (sales up 57% over 4 years)

Innovative new products & services (9% turnover from products and services < 3 years old)

Milk sales to major retailers increase

9

Improving quality of earnings (continued)

Wexford Creamery stake reduced to 30% from June 2010

Ongoing reduction in retailer brand cheese

Reduced exposure to commodity markets

- restrict volumes

- match stocks with sales

- longer term selling contracts

Increasingly selective regarding middle ground customers

10

Workplace Reduced accidents in the workplace by 16%

Community

£900k raised for Macmillan Cancer Support over 2 years

New local community programme launched helping around 100 good causes

Environment

70% of solid waste recycled in 2010/11 up from 10% in 2009/10

Davidstow biomass boilers now operational

On target for polybottles to be made with 30% recycled material by 2015

Marketplace

Introduced an Ethical Supply Chain Policy

Lower fat/healthier variants growing strongly, supported by advertising

Paying market leading milk prices

Dairy Crest is a responsible business

We aim to align corporate responsibility with commercial strategies

Acting responsibly

Alastair Murray

Finance Director

Financial Review

12

Adjusted profit before tax* up 5% to £87.6m (2010: £83.5m)

Adjusted earnings per share* up 6% to 47.1p (2010: 44.5p)

Final dividend up 4% to 14.2p (2010:13.6p)

Net debt reduced by £25.6m to £311.6m (2010: £337.2m)

Financial highlights

* Before exceptional items, amortisation of acquired intangibles and pension interest costs/income

13

Income Statement

* Before exceptional items and amortisation of acquired intangibles

£’m Mar-11 Mar-10

Profit on operations* 108.4 105.8

Finance costs (20.6) (22.4)

Share of associate/JV net (loss)/profit (0.2) 0.1

Adjusted profit before tax* 87.6 83.5

Other finance expenses - pensions - (0.5)

Exceptional items (1.1) 4.0

Amortisation of acquired intangibles (8.7) (9.2)

Profit before tax 77.8 77.8

Taxation (20.3) (25.3)

Profit after tax 57.5 52.5

14

Segmental analysis - Cheese

Revenue down due to disposal of Wexford in June 2010

Cathedral City has 9% share of total retail cheese market – still larger than next 3 cheddar brands combined

Improved whey returns as commodity markets remained strong

£’m Year to

Mar-11

Year to

Mar-10

Revenue 223.1 260.0

Profit 28.0 16.9

Margin 12.6% 6.5%

15

Good performance from key brands

Significant increases in input costs – vegetable oils and cream

Margins broadly maintained

Small adverse exchange impact arising from translation of St Hubert results of circa £1m

£’m Year to

Mar-11

Year to

Mar-10

Revenue 285.5 277.7

Profit 53.3 54.0

Margin 18.7% 19.5%

Segmental analysis - Spreads

16

Segmental analysis - Dairies

Strong volumes in retail milk and successful renewal of key agreements

Improved ingredients realisations

Margins in retail milk lower in second half

Doorstep volume declined although milk&more continues to grow

A competitive year in the middle ground

£’m Year to

Mar-11

Year to

Mar-10

Revenue 1,089.8 1,081.2

Profit 27.1 34.9

Margin 2.5% 3.2%

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£m Mar-11 Mar-10 Change

Fixed assets, goodwill & intangibles 799.6 794.4 5.2

Inventories 164.5 153.7 10.8

Debtors less creditors (124.2) (94.8) (29.4)

Pension deficit (60.1) (142.4) 82.3

Deferred tax (86.3) (65.8) (20.5)

Net debt (311.6) (337.2) 25.6

Other (16.4) (15.1) (1.3)

Net assets 365.5 292.8 72.7

Balance Sheet

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Pensions

Actuarial valuation as of March 2010 resulted in funding deficit of £137 million

Annual contributions of £20m agreed for 2010-2013

IAS-19 deficit as of March 2011 - £60.1m (before tax)

Further risk mitigation projects in hand

19

Operating Cash Flow

* Before exceptional items and amortisation of acquired intangibles** Share based payments and property profits

£’m Mar-11 Mar-10

Adjusted profit on operations* 108.4 105.8

Depreciation & amortisation 33.9 38.1

Exceptional Items (3.7) (2.6)

Pensions (21.7) (20.1)

Other** (0.5) (1.0)

Working capital 11.7 25.7

Cash generated from operations 128.1 145.9

Capital expenditure (net of grants) (48.5) (26.9)

Operating cashflow 79.6 119.0

20

Net Cash Flow£’m Mar-11 Mar-10

Operating cash flow 79.6 119.0

Interest (19.8) (22.1)

Tax (16.1) (10.5)

43.7 86.4

Dividends paid (25.4) (24.3)

Dividends received from associates/JV’s - 0.1

Acquisition/disposal of businesses and assets

Other

6.4

(0.1)

10.7

-

Net cash flow 24.6 72.9

Foreign exchange movements 1.0 5.7

Movement in net debt 25.6 78.6

Opening net debt (337.2) (415.8)

Closing net debt (311.6) (337.2)

21

451 459 475 491

416380

337 336312

200

250

300

350

400

450

500

550

Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 Mar 10 Sep 10 Mar 11

£m

2.1

2.3

2.5

2.7

2.9

3.1

3.3

Net debt

Net Debt / EBITDA

Net Debt history

Covenant – net debt / EBITDA < 3.5 x

Mark Allen

Chief Executive

Innovation

23

Building added value sales

- Lighter variants of key brands

- 1% fat milk

- milk&more

- Jugit

Target 10 % of sales from innovation < 3 years old

- 2009/10 - 7%

- 20010/11 – 9%

Driving efficiencies

- Packaging

- Biomass boilers

- Milk purchasing contracts

Strong pipeline for 2011/12

Innovation – core to Dairy Crest

24

Our research shows that consumers want to cut down on saturated fat without compromising on taste

InnovationExample 1 – lighter products

This has created a strong market for low fat brands

Over the past 5 years we have launched ‘lighter’ variants of our 3 key UK Foods brands

25

Our ‘lighter’ brands are performing well and contributing to total brand strength

In France consumers believe in Omega 3 for better heart health and St Hubert Omega 3 sales up 54% in 4 years

Our sales of 1% fat milk have grown 35% year on year

% of Total brand

Growth2010/11

Cathedral City Lighter 13% 27%

Clover Lighter 15% 26%

Country Life Lighter 11% 7%

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InnovationExample 2 - milk&more

The only top up shop delivery service – ‘Little Store at your Door’

Compliments rather than competes with main store shopping missions

Planned top up, emergency top up, bulky and heavy items

Breakfast and lunch box meal occasions as well as bulky or “hassle” items such as bottled water, soft drinks and garden supplies

Unique features of milk&more online:

- Free delivery every delivery with no minimum order

- Order on line up to 9pm the evening before delivery

- No booking a slot and no need to sign for the order

- Environmentally friendly – fewer car trips, electric vehicles, glass bottles

- Personalised service – your own milk&more milkman

Strong customer numbers

Active customers 180k 350k Unknown 120k 100k unknown

Source: DC estimates

27

Switchers

(125k active customers)

My milkman is now more than

just milk

Average weekly basket £5.70

Milk £4.60

Products £1.10

Drive Product Penetration

New Customers

(55k customers)

I buy what I need when

I need it

Average weekly basket £10.30

Milk £3.66

Products £6.47

Retain and drive Regular Order

Offline

(1million active customers)

My milkman is my milkman

Average weekly basket £4.69

Milk £4.13

Products £0.56

Switch to Online

Source: Average weekly trading, April 2011

New customers are greatest incremental value potentialto milk&more buying 81%81% more than Switchers

Comparing customers

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milk&more advert will run

29

Starting from a good base…………Starting from a good base…………

Critical mass of customers and weekly turnover above £1 million

milk&more on television for the first time

New customers are buying into the proposition of the top-up shop shopping across the product range and spending 80% more than a customer switching from the offline service

But more opportunities…………But more opportunities…………

To recruit new customers faster

To switch offline customers to milk&more

To drive basket size through targeted promotions

To stabilise residential margins

In summary our forecasts show milk&more has the potential to stabilise residential margins and milk&more will account for 40% of total residential margin by H2 2012/13

milk&more - looking forward

Mark Allen

Chief Executive

Looking Forward

31

Dairy Crest is a UK based dairy food company with a significant profit stream from continental Europe

Reduced exposure to commodities

Strong and growing brands, a world class cheese supply chain, cost-efficient dairies, sound finances

Benefits from being broadly based

Dairy Crest today

32

Focus on cost reduction and efficiency improvements

Improve quality of earnings and reduce commodity risk

Generate growth and focus the business through acquisitions and disposals

Build market leading positions in branded and added value markets

Looking forward

…we will continue to pursue the same strategy

33

Keep driving cheese sales

- Increase market share of Cathedral City(currently 9% of total retail cheese)

- Launch relevant new products

Drive efficiencies in Spreads

Continue to grow milk sales to major retailers and reduce exposure to middle ground

Grow milk&more sales

Deal with inflation

Key priorities

Acquisitions to accelerate growth and bring synergies

34

Broadly based business

- Cheese benefits when milk prices increase

- Customer Direct benefits when milk prices fall

Milk price increases of around £40 million offset by ‘pass through’ and cheese delay

Other commodity cost + 10% (£25 million)

Offset by ongoing cost reduction programme (£20 million pa)

Strong relationship with retailers

Dealing with inflation

35

Cost savings are essential to deliver value to customers and consumers

£800 million cost base (excluding milk and commodity ingredients)

Target £20 million (2½%) each year

A real ongoing focus on costs

£million 09/10 10/11 11/12

Production efficiencies 10 5

Overheads 5 5

Purchasing 4 5

Distribution 2 5

Total 21 20

36

Markets are tough and consumers are under increasing pressure

Commodity input costs have increased – we have a track record of being able to deal with this

We will continue doing the things that have contributed to recent success - innovation

- investment in brands

- strong promotional programme

- further efficiency improvements

Trading at start of the year is in line with expectations and we are soundly positioned for the year as a whole

Current year outlook

Questions

A video interview with Mark Allen, Group Chief Executive is available at www.dairycrest.co.uk & www.cantos.com