1

DAIRY CREST GROUP PLC

INTERIM RESULTS For the period ended 30 September 2008

2

Key Highlights

• Continued to successfully deliver strategy of building market leading brands

• Foods and Liquids businesses performed strongly with growth across all brands and successful implementation of price increases

• Dairies profits adversely affected by lower ingredients realisations and reduced Household sales

• Continuing to drive efficiencies and focus on cost reduction

• Trading conditions continue to toughen and become more difficult to predict

• Full year adjusted profit before tax expected to be 10% below last year

3

Financial Review

Alastair Murray

4

Financial Highlights

• Group Revenue up 6% to £808.2m (2007: £761.4m)

• Adjusted profit before tax* up 4% to £38.5m (2007: £37.1m)

• Adjusted earnings per share* down 3% to 21.6p (2007: 22.2p)

• Interim dividend unchanged at 7.1p

• Net debt £490.6m (2007: £458.5m)

* Before exceptional items and amortisation of acquired intangibles

5

Income Statement

* Before exceptional items and amortisation of acquired intangibles

Year

Mar 08

£’m Half year

Sept 08

Half Year

Sept 07

104.5 Profit on operations* 46.4 42.2

(26.2) Finance costs (14.3) (13.0)

10.1 Other finance income: pensions 3.4 4.8

7.7 Share of JV net profit* 3.0 3.1

96.1 Adjusted profit before tax* 38.5 37.1

(21.1) Exceptional items (5.5) (2.4)

(9.0) Amortisation of acquired intangibles (4.6) (4.1)

66.0 Profit before tax 28.4 30.6

(12.5) Taxation (incl. exceptional tax) (21.9) (3.7)

1.2 Discontinued operations - -

54.7 Group profit after tax 6.5 26.9

6

Segmental Analysis

YearMar 08

£’m Half YearSept 08

Half YearSept 07

Revenue

499.6 Foods excl JV 266.7 248.8

66.9 Share of JV 37.3 34.9

566.5 Foods 304.0 283.7

1,070.1 Dairies 541.5 512.6

1,636.6 Total 845.5 796.3

Profit on operations *

72.9 Foods excl JV 43.7 28.7

7.7 Share of JV (post tax) 3.0 3.1

80.6 Foods 46.7 31.8

31.6 Dairies 2.7 13.5

112.2 Total 49.4 45.3

* Before exceptional items and amortisation of acquired intangibles

7

Exceptional Items

£’m Half Year Sep 08

  Cash Non Cash Total

Dairies restructure - (1.1) (1.1)

Stilton disposal* 3.4 (7.8) (4.4)

3.4 (8.9) (5.5)

* Includes £1.4 million cash received after the period end

8

Balance Sheet

YearMar 08

£’m Half Year Sept 08

Half YearSept 07

960.1 Net operating assets 899.0 873.2

(97.6) Tax (94.3) (79.2)

862.5 804.7 794.0

(474.8) Net debt (490.6) (458.5)

387.7 Net assets employed 314.1 335.5

122% Gearing 156% 137%

9

Operating Cash Flow

* Before exceptional items and amortisation of acquired intangibles** Net of grant amortisation*** Operating property profits and share based payments charges

YearMar 08

£’m Half Year Sept 08

Half YearSept 07

104.5 Adjusted profit on operations* 46.4 42.2

39.2 Depreciation and amortisation** 19.8 19.6

(13.6) Exceptional items (1.9) (7.4)

(11.5) Pensions (5.5) (4.9)

(2.8) Other *** (2.4) (2.7)

(7.4) Working capital (16.8) (10.0)

108.4 Operating cash flow 39.6 36.8

10

Cash Flow

YearMar 08

£’m Half Year Sept 08

Half YearSept 07

108.4 Operating cash flow 39.6 36.8

(34.0) Capital expenditure (26.3) (14.2)

(60.4) Interest, tax and dividends (41.8) (35.7)

7.3 Dividends received from joint venture 2.9 2.4

(7.8) Acquisition of businesses (1.2) (0.6)

16.2 Disposal of business and assets 7.3 11.3

(46.2) Foreign exchange movement 3.7 (7.9)

(7.3) Other - 0.4

(23.8) Movement in net debt (15.8) (7.5)

Net debt at 31 March 2008 (474.8)

Net debt at 30 September 2008 (490.6)

11

Pensions Summary

• Financial markets have been highly volatile in the first half

• Gross pension deficit of £32.4m reported at the half year under IAS19

• Fall in asset valuations partially offset by increased discount rate

• Under existing agreement with Trustee, DC paying £12m of additional cash contributions in 08/09

12

Financing Update

• New £225m multi-currency revolving credit facility signed in July 2008

• Facility split between Sterling (£85m) and Euros (€175m)

• Same financial covenants as 2004 and 2006 facilities

• Margin significantly increased

• Next facility to mature is in November 2011

• Comfortably within covenants at half year

13

Business Review

Mark Allen

14

A Consistent and Successful Strategy

• Build market leading positions in branded and added value markets

• Invest in industry leading facilities to create competitive advantage

• Downsize commodity risk to improve quality of earnings

• Strategic acquisitions

- Branded and added value markets

- Opportunities for synergistic acquisitions in Dairies division

• Deliver excellent value to our shareholders and other stakeholders

15

Strong Brand Performance

Brand Market Market growth* Brand growth†

UK Cheese 15% 31%UK Dairy Spreads 22% 35%UK Dairy Spreads 22% 36%

UK Spreadable Butters 20% 82%

French non butter spreads 2 % 2%

Chilled Yogurts and desserts 9% 8%

Chilled Yogurts and desserts 9% 27%

Flavoured Milk 4% 12%Source: †DC sales growth by value, * AC Nielsen or IRI or TNS 52 week MAT value growth to March 2008

16

Ongoing Brand Strength in Foods Division

• Foods Division has performed strongly in tough retail environment

• Continue to simplify supply chain – fewer sites and fewer brands

• Disposal of Commodity Cheese business in 2006 and Stilton this year has allowed real focus on brands

17

• UK butter and spreads market is showing year on year value growth of 17%,

but with volume decline of (1%)

• Dairy Crest market share of dairy spreads category up to 67% from 64% last

year

• Utterly Butterly continues to perform strongly (+11% by volume, 31% by value)

• Country Life has benefited from major advertising campaign

• Country Life packet butter up 9% by volume and 23% by

value in a declining market

• Country Life spreadable up 104% by volume and 82% by value

Increased market share in UK Spreads

18

19

• Clover recovering from last year’s product recall

Sales volumes in H1 2008/09 exceed those in H1 2006/7

• Good prospects for Clover Lighter following launch in August

with strong distribution

UK Spreads – Clover Recovering Strongly

6 months to 30th September

2006 2007 2008

Tonnes 12,900 10,700 13,100Source: DC

20

25

30

35

40

45

50

55

60

65

70

Oct-02

Mar-03

Aug-03Jan-04

Jun-04

Nov-04Apr-0

5

Sep-05Feb-06

Jul-06

Dec-06May-07

Oct-07

Mar-08

Aug-08

Clover (DC) ICBINB (Unilever) Utterly Butterly (DC)

Leading Dairy Spreads

£66m

£67m

£30m

£58m

£38m

£43m£m

Source: AC Nielsen, September 2008, MAT

21

St Hubert – Strong in Difficult Market

• French retail food volumes in decline, by between 1% and 4%

• St Hubert overall performance in line with our expectations

- Maintained market share of French spreads at 36%

- New sales to Lidl

• Continued strong growth from St Hubert Omega 3 up 3% by volume and 10% by value

- Clear number one brand variant in French spreads

• Total St Hubert sales up 3% by value but down (4%) by volume year on year

• Italian sales up 6% by volume and 20% by value

22

10

15

20

25

30

35

40

45

50

55

St Hubert Unilever Lactalis

French Spreads Market Share Stable

%

Source: IRI (by value)

51%

31%

13%

41%

36%

16%

23

Cheese – Cathedral City Marches On

• UK cheese markets showing no volume growth but value +12% yoy (TNS)

• Strong growth from Cathedral City with sales up 31% by value and 11% by volume

- £182m brand at retail sales price (TNS 7/9/08)

- Cathedral City Lighter now over 10% of total sales

- Cathedral City Vintage launched in H1

• Cathedral City still less than 30% of total mature/extra mature cheddar sales

• Retailer-branded Davidstow cheddar down by 34% volume and 12% value due to reduced promotions

24

Cheese Business – Simplified Supply Chain

• Investment in Nuneaton cheese packing on time and budget- Project cost c.£25 million- Initial packing capacity c.33,000 tonnes- On track for first commercial production early 2009

• Stilton business disposal completed despite referral to Competition Commission

• UK cheese business now comprises Davidstow Creamery and Nuneaton maturation store, packing and despatch

• Limited exposure to commodity cheese market

25

• Maintained leading position in children's sector with market share back over 50%

• Overall Yoplait brand sales up 9% by value and volume

• Petits Filous and Frubes continue to show strong growth

- Petits Filous up 10% by volume (8% by value)

- Frubes up 24% by volume (27% by value)

- increased promotional and marketing activity with emphasis on Vitamin D and Calcium

Yoplait Dairy Crest – Continuing Growth

26

• Dairies Division comprises Liquids (Retail), Household and Ingredients

• Liquids business continues to make progress

• Ingredients realisations sharply lower due to weaker markets

• Household business adversely affected by consumer slowdown

• Focus on efficiency and cost control

Dairies Division is Challenging

27

• UK milk prices have continued to increase due to shortage in supply

• 2008/09 production is 150 million litres behind 2007/08 (to September) (RPA)

• Dairy Crest milk prices have risen this year by 1.7ppl (milk for cheese) and 1.3ppl (milk for liquid) broadly in line with market (Source: milkprices.com)

• Increases to farmers have been offset by on-farm cost increases but there are strong signs that on-farm costs are starting to abate

Dairy Market Pressures

Source: RPA12.8

13

13.2

13.4

13.6

13.8

14

2002 2003 2004 2005 2006 2007 2008

UK Milk Production (Billion Litres)

28

Liquid Products – Volume Growth

• Retail milk market volumes are flat year on year but up 16% by value

• Dairy Crest volumes up 3% and value up 18%

• Increased business with Sainsburys and Morrisons and Lidl business win

• Frijj performing strongly with volumes +5% and value +12%

• Continued focus on cost base

29

Ingredients Business – Prices Down

• Turnaround from last year’s sharp increases in dairy commodity

prices

• Ingredients stocks to be reduced in H2

French Butter

€/kg April Sept

2007 2.6 4.1

2008 2.7 2.5

German SMP

€/kg April Sept

2007 2.6 3.8

2008 2.2 2.0

Source: DairyCo

30

Household – addressing consumer downturn

• Price increases implemented to offset cost increases

• Sales impacted with underlying decline up to 10%

• Milk & More and stronger promotional programmes offsetting further decline

• Milk & More trial now operating in 30 depots- Growing strongly- Increased average spend- Good feedback- New system solution underway

• Good progress with depot closures, although difficult property market impacting realisations

31

Cost Reduction Measures

• Necessary to counteract pressure of higher input costs and

increasingly hard-pressed consumers

• RDC project for liquid milk progressing well – reducing costs and

increasing dairy capacity

• Nottingham dairy closure consultation initiated in September 2008

• Head Office reorganisation completed October 2008

• Expected to deliver significant savings in 2009/10

32

First Half Summary

• Continued to successfully deliver strategy of building market leading brands in first half

• Foods and Liquids businesses performed strongly with growth across all brands and successful implementation of price increases

• Dairies profits adversely affected by lower ingredients realisations and reduced Household sales

• Continuing to drive efficiencies and focus on cost reduction

33

Outlook

• Trading conditions continue to toughen and become more difficult to predict

• Consumers increasingly driven by value

• Essential to maintain investment in marketing and operating facilities

• Weaker ingredients markets will have adverse effect in second half

• Lower property realisations and delayed transactions will also impact

• Full year adjusted profit before tax expected to be approximately 10% below last year

34

DAIRY CREST GROUP PLC

INTERIM RESULTS For the period ended 30 September 2008