DAIRY CREST GROUP PLC

INTERIM RESULTS

For the period ended 30 September 09

DAIRY CREST GROUP PLC

INTERIM RESULTS 2009/10

Agenda

H1 2009/10 Mark Allen, Chief Executive

Financial Review Alastair Murray, Finance Director

Current Trading & Outlook Mark Allen, Chief Executive

Mark Allen

Chief Executive

H1 2009/10

4

Delivering on a clear and consistent strategy…

Build market leading positions in branded and added value markets

Invest in advertising and promotions

Focus on Innovation

Focus on cost reduction and efficiency improvements

Continue to drive efficiencies to finance marketing investment and grow profits

Build on decisive action last year

Reduce commodity risk to improve quality of earnings

Minimise exposure to dairy commodity markets

Reduce risk associated with pension scheme

Business acquisitions and disposals to generate growth and focus on the business

Short term focus on cash generation

Medium term return to acquisitions

5

A strong first half with good cash generation - adjusted profit before tax up 9% to £38 million- debt down 22% to £380 million

Brand Growth5 key brands grew by 10%

Cathedral City retail sales through £200 million

Other GrowthMilk sales to major retailers up 10% v last year

Over 125,000 registered milk&more customers

New ProductsKey areas of focus health and environment

Lighter brands and 1% fat milk growing strongly

Cost ReductionContracted out Davidstow milk collection

In consultation to close glass bottling operations at Fenstanton

Cash Generation Operating cash flow improved by £45 million

Half year debt lowest for 3 years

Risk Reduction Closing defined benefit pension scheme

Reduced milk volumes into Ingredients

6

Benefiting from being a broadly based business

Dairies profits rebound after difficult 2008/09

UK cheese market challenging

H1 Operating Profits by Segment

1425 27

18 8

15

13

3 14

4246 49

0

10

20

30

40

50

60

07/08 08/09 09/10

£m

Spreads Cheese Dairies Group (excl JVs)

7

Brands continue to outperform market

* DC value sales 6 months to 30 September 2009 v 6 months to 30 September 2008** ACN, IRI, TNS data 24 weeks to 4 October 2009 v 24 weeks to 5 October 2008*** DC value sales 6 months to 30 September 2009 v 6 months to 30 September 2006

8%

13%

4%

14%

21%

4%

-2%

-2%

-4%

19%

74%

29%

63%

48%

41%

Core Brand MarketBrand Growth

H1 v H1*

Market Growth

H1 v H1**

Brand Growth

3 Year***

UK Cheese

UK Butter, Spreads,

Margarine

UK Butter, Spreads, Margarine

French non-butter spread

Flavoured Milk

8

Sales to major retailers up 10% v last year

Strong sales of conventional milk to existing and new customers

New customers for organic milk

New customers and strong market growth for retailer own-label fresh flavoured milk – up 50%

milk&more customer base growing strongly

125,000 customers now registered

Good progress in Dairies

9

Healthy innovation high on our agenda

Key focus on lower fat variants of brands

Cathedral City Lighter

Country Life Lighter Combined sales +41%

Clover Lighter

Developing French spreads brands recipes to improve health credentials

1% fat milk sales growing strongly

Now 8% of Sainsbury’s total milk sales

Plans to launch with milk&more in H2

Gluten Free bakery and Equilibrium

Through Fayrefield FoodTec subsidiary

10

Looking after the environment

Jugit™ - milk in a recyclable bag, which reduces plastic milk bottle packaging waste by 75%

1.6 million bags sold since launch

New improved jug ready

Recycled milk bottles Development of UK’s first polybottle containing 10% recycled material, saving up to 13,000 tonnes of virgin HDPE plastic

Working to increase percentage of recycledmaterial to deliver even greater savings

11

Ongoing focus on cost and risk reduction

Driving efficiency to finance marketing investment and grow profits

Contracted out Davidstow milk collection

Changed media buying agency

In consultation to close glass bottling operation at Fenstanton (30 jobs)

Reduced milk volumes into Ingredients

H1 2009/10 volumes down 49% v H1 2008/09

Defined benefit contribution scheme to be closed to future accrual from 31 March 2010

Closed to new entrants in 2006

Insurance policies in place for most pensions in payment

12

Cash Generation

Operating cash flow* £59 million v £13 million 2008

£110 million repaid in year

Half year net debt lowest for 3 years

0

50

100

150

200

250

300

350

400

450

500

Sep 2006 Mar 2007 Sep 2007 Mar 2008 Sep 2008 Mar 2009 Sep 2009

£ m

illi

on

* Cash generated from operation less capital expenditure

Alastair Murray

Finance Director

Financial Review

14

Group Revenue down 1% to £803.7m (2008: £808.2m)

Adjusted profit before tax* up 9% to £38.1m (2008: £35.1m)

Adjusted earnings per share* up 2% to 20.1p (2008: 19.7p)

Interim dividend rebased as previously announced – 5.3 pence (2008: 7.1 pence)

Net debt £380.4m (2008: £490.6m)

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

Financial Highlights

15

Income Statement

Year £'m Half Year Half YearMarch 09 Sept 09 Sept 08 % Change

101.7 Profit on operations* 49.2 46.4 6%

(29.5) Finance costs (11.2) (14.3) -22%

7.3 Share of JV net profit 0.1 3.0

79.5 Adjusted profit before tax* 38.1 35.1 9%

6.9 Other finance (expense)/income - pensions (0.2) 3.4

26.4 Exceptional items 0.8 (5.5)

(9.6) Amortisation of acquired intangibles (4.7) (4.6)

103.2 Profit before tax 34.0 28.4 20%

(28.9) Taxation (incl. exceptional tax) (9.1) (21.9)

74.3 Group profit after tax 24.9 6.5

16

Segmental Analysis - Cheese

Higher cost of sales following milk price increases in 2007 and 2008

UK cheese market highly competitive – increased import penetration and higher levels of promotion

Continue to invest in promotional activity and marketing – Cathedral City re-launch in second half

Year

March 09

£’m Half Year

Sept 09

Half Year

Sept 08

244.2 Revenue 131.8 127.1

34.3 Profit 7.9 18.4

14.0% Margin 6.0% 14.5%

17

Includes UK Spreads and St Hubert

Strong performance from 3 key brands – Clover, St Hubert Omega 3 & Country Life – offset by lower sales of non-branded & other brands which have not been advertised and promoted as heavily

Translation benefit on St Hubert profits (approx £1.5m)

Year

March 09

£’m Half Year

Sept 09

Half Year

Sept 08

284.2 Revenue 137.9 135.1

59.5 Profit 27.0 25.3

20.9% Margin 19.6% 18.7%

Segmental Analysis - Spreads

18

Segmental Analysis - Dairies

Good progress in our retail milk business – volumes up 10%

Strong performance by FRijj

Improved operating efficiencies, lower raw milk costs and lower balancing volumes

Doorstep sales have declined

Decline rate of 8.5% lower than last year

aggressive milk&more customer acquisition target in H2

Year

March 09

£’m Half Year

Sept 09

Half Year

Sept 08

1,108.2 Revenue 528.7 540.4

7.9 Profit 14.3 2.7

0.7% Margin 2.7% 0.5%

19

Exceptional Items

£m P&L Cash

Nuneaton prepack (1.5) (1.5)Onerous contract - (0.6)

(1.5) (2.1)Nottingham property sale 1.0 2.5 *YDC disposal 1.3 0.3 *

0.8

* Included in acquisition / disposal of business & assets

20

Balance Sheet

£m Sep 09 Mar 09 Change

Fixed assets, goodwill &intangibles 812.7 834.2 (21.5)

Stocks 195.8 197.8 (2.0)Debtors less creditors (99.1) (91.6) (7.5)

Pension deficit (178.0) (63.3) (114.7)Deferred tax (58.4) (90.8) 32.4 Net debt (380.4) (415.8) 35.4 Other (18.1) (13.5) (4.6)

Net assets 274.5 357.0 (82.5)

Pension and related deferred tax (128.2) (46.1) (82.1)

21

Operating Cash Flow

Year £m Half Year Half YearMar 09 Sep 09 Sep 08101.7 Adjusted profit on operations * 49.2 46.4 40.6 Depreciation & amortisation ** 19.7 19.8

(12.8) Exceptional items (2.1) (1.9)(16.0) Pensions (8.1) (5.5)(3.5) Other *** (1.3) (2.4)19.1 Working capital 13.1 (16.8)

129.1 Cash generated from operations 70.5 39.6 (49.3) Capital expenditure (11.9) (26.3)79.8 Operating cash flow 58.6 13.3

* Before exceptional items and amortisation of acquired intangibles

** Net of grant amortisation

*** 0perating property profits and share based payment charges

22

Net Cash Flow

Year £m Half Year Half YearMar 09 Sep 09 Sep 08

79.8 Operating cash flow 58.6 13.3 (30.3) Interest (11.7) (15.7)(9.2) Tax (3.8) (3.2)

(32.3) Dividends paid (17.3) (22.9)2.9 Dividends received from JVs 0.1 2.9

Acquisition / disposal of businesses84.2 and assets 7.8 6.1 95.1 Net cash flow 33.7 (19.5)

(36.1) Foreign exchange movements 1.7 3.7 59.0 Movement in net debt 35.4 (15.8)

(474.8) Opening net debt (415.8) (474.8)(415.8) Closing net debt (380.4) (490.6)

23

Pensions Summary

Reported deficit under IAS19 £178.0m at September 2009

Significant increase from March 2009 (£63.3m deficit) due to declines in credit spreads and impact on liability discount rate

Partly offset by strong equity returns in the half

IAS19 deficit more reflective of actuarial (funding) deficit

24

Pensions Summary

Range of actions taken to de-risk the scheme:

2nd tranche of insurance taken out in June 2009 – almost all retired members hedged through insurance contracts

Scheme closing to future service accrual in 2nd half – will be effective from April 2010

£20m per annum agreed as additional scheme contributions going forward

Equity exposure reduced since September 2009 following strong returns

Mark Allen

Chief Executive

Current Trading and Outlook

26

Challenging but relatively stable

Consumers continue to look for “value”

Some signs of consumer confidence returning, but fragile

Own label share of cheese and butter, spreads, margarine markets falling as brands continue to promote strongly

Signs that dairy commodity markets are improving but recovery not yet conclusive

Trading environment

27

Responding effectively to the challenges

Consumers are at the heart of our business – we understand their needs and align ourselves with them

Advertising and innovation are fundamental to ensure we continue to drive our key brands forward

In addition the current environment requires a powerful promotional programme

An ongoing focus on cost reduction is essential to fund marketing expenditure and grow profits

28

Consumers needs – at the heart of our business

Reassurance of familiar brands

Help navigating the healthy eating agenda

Products that help create simple, wholesome meals and snacks

Affordable indulgences and little luxuries

To support British products for emotional and ethical reasons

The reassurance of heritage and tradition

And a growing number are starting to recognise the importance of sustainable production and packaging

Source: Opinion Leader/Dragon Rouge/Haygarth

29

Our products meet consumer needs

Heritage & Tradition

Sustainable Health

Pleasure ConvenienceBritish

30

Cathedral City: The Nation’s Favourite Cheese Brand

N°1 brand in UK retail Cheese

Annual retail sales : £201 million

New pack designs, new media strategy, new advert – on television now

Cathedral City

TV 60 and 30 secs 48 & 96 Sheet National Posters

31

Clover, churned like butter with only half the saturated fat.

No1 brand in Dairy Spreads

Retail sales: £81 million

New advert –”in the middle” positioning Clover as

healthy and tasty – on television now

Clover

32

Source: Nielsen 52 week-ending 4th October 2009

Country Life: The only leading British butter brand

N°3 butter brand – but fastest growing

Annual retail sales £63 million

John Lydon TV and radio campaign resumed in

November 2009 – on television now

Country Life

33

St Hubert Oméga3, Good for heart, Good for life!

N°1 brand in French retail non butter spreads market

Retail sales : € 78 million

New advert “thank you” - on television now

St Hubert Oméga 3

34

FRijj – the thicker, the slower, the better

•FRijj is unashamed satisfaction. The thickest, tastiest milkshake in the UK and the treat to be seen with by 16 – 24 yr old men!

‘The thicker, the slower, the better’.

•FRijj is the no.1 flavoured milk in the UK

•Value sales of £43.7 million (+21%), total market share 28%.

•Latest activity

•£2 million sponsorship of Soccer AM with new ‘swamp football creative’

•New packaging now in-store.

35

Continuing with a powerful promotional programme

Consumers remain heavily focussed on value

This strategy is growing brand sales at the expense of own label

We continue to promote more heavily than our competitors providing good growth

Although there are some sign of improving consumer confidence we anticipate that we will continue to promote our brands into next year

Sept 08 Sept 09 Clover Country Life Cathedral City

Butter & Spreads

Brand Volume on deal

Own label share

30%

22%

45%

19%

52% 60%

Cheddar

Brand Volume on deal

Own label share

61%

63%

65%

57%

72%

36

Over the past 6 months dairy commodity prices have increased and are now higher than last year

Fonterra and NI milk auctions have also risen, reflecting this trend

However there are significant volumes of commodity stocks in Europe and US and these may make it difficult for higher prices to be sustained

Source: DairyCo

0

0.5

1

1.5

2

2.5

3

A M J J A S O

SMP (German) Butter (France)

2009 2009

Dairy commodity prices increasing

37

Milk production has increased in Great Britain over the first half of 2009/10 milk year

More cows in pipeline and some signs that farmer confidence is improving

Although there are environmental and financial challenges in the near future, the medium-long term outlook is positive

Some pressure for liquid milk price increases, but overall direction unclear

We have agreed to a “floor” for our suppliers through to February 2010 and continue to monitor the situation with them

Stability valued by milk market

38

milk&more

Progressing to plan

Customer numbers growing towards our target of 250,000 registered customers by 31 March 2010

New customers are spending in line with our estimates (weekly spend £6.20 v traditional £4.50)

Direct mailshot and door drop to 3 million potential new customers planned before Christmas

Customers are notified of attractive promotionsvia a weekly email

39

Summary and outlook

Successful first half

Adjusted profit before tax up 9%

Net debt down £110 million from September 2008

Sales of key brands up 10%

Strategy remains appropriate given challenging economic environment

Continue to make progress with the same focus in H2

Cash management

Development of key brands

Cost reduction