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

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HighlightsBuilding 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

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Financial Review

Alastair Murray

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Income Statement

* All items include share of joint ventures** Before exceptional items and amortisation of acquired intangibles

£’m Year March 06

Year March 05

Profit on operations** 82.0 91.9

Net finance costs (14.3) (16.2)

Profit after interest** 67.7 75.7

Exceptional items (22.2) (4.4)

Intangible amortisation (1.0) -

Profit before tax 44.5 71.3

Taxation (9.7) (19.7)

Profit after tax 34.8 51.6

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Exceptional Items

£’m Year March 06

  Cash Non Cash

Total

Midlands Co-op Dairies (11.7) (1.0) (12.7)

Arla London Foodservice (2.6) - (2.6)

Sale of Newport IOW Dairy 1.4 - 1.4

Impairment of assets - (9.3) (9.3)

(12.9) (10.3) (23.2)

Share of JV sale of Enfield* 1.0 - 1.0

Total (11.9) (10.3) (22.2)

* Profit on sale before tax

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Earnings and Dividends

Pence per share Year March 06

Year March 05

Change%

Adjusted EPS 40.3 43.9 - 8.2

Basic EPS 27.1 41.4 - 34.5

Dividend declared 21.5 20.2 + 6.4

Shares in issue: m 124.8 123.4

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Segmental Analysis

* Including pre tax and interest share of jvs and before exceptional items

£’m YearMarch 06

YearMarch 05

Revenue

Foods excl jvs 539 518

Joint ventures 69 88

Foods 608 606

Dairies 816 743

Total 1,424 1,349

Profit on operations *

Foods excl jvs 54.9 49.2

Joint ventures 9.3 7.5

Foods 64.2 56.7

Dairies 16.8 35.2

Total 81.0 91.9

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Operating Margin*

* Including share of joint ventures and before exceptional items

% YearMarch 06

YearMarch 05

Foods excl jvs 10.2 9.5

Joint ventures 13.5 8.5

Foods 10.6 9.4

Dairies 2.1 4.7

Total 5.7 6.8

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Balance Sheet

£’m YearMarch 06

YearMarch 05

Net operating assets 558.6 466.4

Tax (20.4) (18.3)

538.2 448.1

Net debt (280.2) (227.5)

Net assets employed 258.0 220.6

Gearing 109% 103%

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Operating Cash Flow

* Including share of joint ventures and before exceptional items** Net of grants

£’m YearMarch 06

YearMarch 05

Adjusted profit on operations* 81.0 91.9

Depreciation and amortisation** 38.6 33.1

Exceptional items (14.3) (1.3)

Pensions (1.3) 7.4

Joint ventures and other (14.3) (10.5)

Working capital (16.3) 22.4

Operating cash flow 73.4 143.0

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Cash Flow

£’m YearMarch 06

YearMarch 05

Operating cash flow 73.4 143.0

Capital expenditure (net of grants) (44.0) (37.7)

Interest, tax and dividends (57.5) (54.2)

Dividends received from jvs 9.0 -

Acquisitions (43.7) (9.9)

Disposals 9.4 8.4

Other 0.7 2.6

Movement in net debt (52.7) 52.2

Net debt at 31 March 2005 227.5

Net debt at 31 March 2006 280.2

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Pensions Summary

• IAS19 gross deficit at 31 March 2006 of £62.0m (2005:£102.7m)

- 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

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Business Review

Drummond Hall

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Total Shareholder Return since IPO• TSR = Share price + dividends

0.0

100.0

200.0

300.0

400.0

500.0

600.0

Aug-96 Aug-97 Aug-98 Aug-99 Aug-00 Aug-01 Aug-02 Aug-03 Aug-04 Aug-05

Dairy Crest (TSR) FTSE 250 (TSR)

Source: Datastream (May 2006)

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0 100 200 300 400

Country Life

Petits Filous

Our brands are getting bigger

Source: Dairy Crest Annual Sales Volumes (Country Life 100% since Sept 2004) – 1996/97 indexed to 100

0 100 200 300 400

Clover

Cathedral City + 248%1996/97

2005/06

1996/97

1996/97

1996/97

2005/06

2005/06

2005/06+ 36%

+ 210%

+ 317%

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£106m

£41m

£52m

£66m

Our brands are getting bigger

Source: TNS / AC Nielsen / IRI 52 week ended March 2006

bigger than

bigger than

bigger than

bigger than

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We’ve been active with new product development

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Spreads

• Spreads business continues to be biggest profit contributor

• Marketing continues to focus on four key brands

- simplified portfolio with fewer brands and sku’s

• 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

25,000

30,000

35,000

40,000

45,000

50,000

55,000

60,000

65,000

70,000

Jan-0

2

Apr-02

Jul-0

2

Oct

-02

Dec-0

2

Mar

-03

Jun-0

3

Sep-0

3

Nov-03

Feb-04

May

-04

Aug-04

Nov-04

Jan-0

5

Apr-05

Jul-0

5

Oct

-05

Dec-0

5

Mar

-06

Clover ICBINB Utterly Butterly

DC acquired UB

Source: AC Nielsen (MAT) 26 March 2006

MAT Value: £000’s

Clover and UB outperform ICBINB

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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

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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

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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

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Cathedral City Growth

£0m

£20m

£40m

£60m

£80m

£100m

£120m

Cathedral City Seriously Strong Pilgrims Choice

Source: TNS (MAT) 26 March 2006

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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

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Cheese Stocks

British Cheese Board cheddar stocks12 month moving averageK tonnes

85.0

90.0

95.0

100.0

105.0

110.0

115.0

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• 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

Yoplait Dairy Crest

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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

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Other Liquid Products

• Strong growth in organic milk

- own label milk sales up 49% by value

- Rachel’s 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

- M&S sole supply position from August 2006

• St. Ivel advance encouraging performance so far

- good levels of trade distribution

- annualised retail sales of approximately £13m

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Household• Overall household volumes up 31% year on year

- volume gained in middle ground- Midlands Co-op Dairies acquisition May 2005- Arla’s 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

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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

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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

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DAIRY CREST GROUP PLC

PRELIMINARY RESULTS For the year ended 31 March 2006