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Interim Management Statement

05/02/2015

Dairy Crest is today issuing its Interim Management Statement for the nine months ended 31 December 2014. Our Cheese and Spreads businesses have performed robustly in a widely- reported difficult environment. Against this background our Dairies business has continued to make losses.

We are pleased with the performance of our four key brands. Taken together, sales of Cathedral City, Country Life, Clover and FRijj have been flat over the nine month period compared to last year. Cathedral City, significantly the UK’s leading cheddar brand, has continued to grow its market share and FRijj has performed strongly. However their growth has been offset by lower Clover and Country Life sales.

Sale of Dairies operations

On 6 November 2014 Dairy Crest announced that it had agreed to sell the assets of its Dairies operations to Müller UK & Ireland Group (“Müller”). The transaction is on track and has received the approval of Dairy Crest shareholders. It remains conditional on the approval of the relevant competition authorities. Dairy Crest and Müller have asked for the transaction to be referred back to the UK for review by the Competition and Markets Authority (“CMA”) and are engaged in constructive talks with the European Commission and the CMA on this application with a view to progressing the merger review as quickly as possible.

Dairies performance

We continue to expect the second half performance of our Dairies business to be better than the first half. Milk costs have fallen but production is higher and selling prices are lower. This has adversely affected profits in this product group. We expect some of the shortfall to be offset by higher property profits, which we now expect to exceed those of the first half.

Cheese and Spreads

The third quarter performance of our Cheese and Spreads businesses, which will be the heart of Dairy Crest after the sale of our Dairies operations, has been more robust than that of Dairies. Lower cream prices have benefitted Spreads profits. However reduced whey realisations in particular and some reduced selling prices on the back of lower input costs have adversely affected Cheese profits. Taken together, trading in these businesses was in line with our expectations despite the challenging environment.

We have made good progress with the major projects that will grow future profits in these businesses. During the third quarter we transferred production to Kirkby and closed our Spreads manufacturing plant at Crudgington. Our innovation team, previously based at Crudgington, has moved to Harper Adams University where we are building a new innovation centre. Our demineralised whey and galacto-oligosaccharide projects at Davidstow which target the growing, global infant formula market, remain on budget and we expect to start manufacturing both products towards the end of this summer.

We continue to anticipate that year end net debt will be significantly lower than at 30 September 2014.

Board change

On 31 March 2015, Martyn Wilks, Executive Managing Director, will leave Dairy Crest to pursue other interests. Martyn has been on the Board for over seven years and has played a key role in building our brands, by increasing our focus on the consumer and developing our innovation capability. At this time he will not be replaced on the Board. Most of his key responsibilities will transfer to Adam Braithwaite. Adam has held the role of Group Commercial Director for the past two years and was appointed to the Management Board earlier this year. He has worked for Dairy Crest for over 13 years in a number of senior customer-facing roles.

Mark Allen, Chief Executive of Dairy Crest, commented:

“Against the background that we operate in, Dairy Crest has delivered a solid performance. Maintaining the sales of our four key brands in line with last year and growing our overall Cheese and Spreads profits is a good result in today’s challenging environment. We continue to strengthen these businesses and are investing for future growth.”

“The performance of our Dairies business reflects the difficulties facing the whole UK dairy sector. The proposed sale of our Dairies operations, which is progressing to plan, will lead to economies of scale. These are necessary to underpin the value currently being offered to consumers and to help the UK dairy sector compete in global markets.”

“I would like to take this opportunity to thank Martyn Wilks for his important contribution to the business over the last seven years. He has made a significant difference to the performance of our brands in that time and leaves with our best wishes for the future.”

Dairy Crest will issue its Preliminary Results for the year ending 31 March 2015 on 21 May 2015.