Final Results

The following announcement was issued today to a Regulatory Information Service approved by the Financial Services Authority in the United Kingdom.

DAIRY FARM INTERNATIONAL HOLDINGS LIMITED

2010 PRELIMINARY ANNOUNCEMENT OF RESULTS

Highlights

·; Underlying earnings up 13%

·; Profit growth in all regions

·; Maxim's achieved excellent results

·; Continued business expansion

"Dairy Farm's major businesses enjoy leading positions in their respective market segments. The Group's prospects for 2011 are positive as the economic environments in most of the countries where it operates are expected to remain favourable."

Simon Keswick, Chairman

3rd March 2011

Results 

The final dividend of US¢13.00 per share will be payable on 18th May 2011, subject to approval at the Annual General Meeting to be held on 11th May 2011, to shareholders on the register of members at the close of business on 18th March 2011. The ex-dividend date will be on 16th March 2011, and the share registers will be closed from 21st to 25th March 2011, inclusive.

DAIRY FARM INTERNATIONAL HOLDINGS LIMITED

PRELIMINARY ANNOUNCEMENT OF RESULTS

FOR THE YEAR ENDED 31ST DECEMBER 2010

OVERVIEW

Dairy Farm experienced another good year in 2010 as generally favourable trading conditions persisted in its Asian markets. The Group's core business of selling everyday basic products at competitive prices enjoyed strong recognition and support from consumers.

PERFORMANCE

Sales, including 100% of associates, increased by 13% to US$9.1 billion in 2010, while underlying profit at US$410 million was up 13%. Favourable exchange movements enhanced both sales and profit by some 5%. Underlying earnings per share were US¢30.38, up 12%. The profit attributable to shareholders at US$411 million included US$1 million of net non-trading gain.

The Group continued to generate positive cash flows and ended the year with net cash of US$223 million, compared with US$34 million at the end of 2009. Capital expenditure, including two acquisitions, amounted to US$276 million, while an asset disposal produced an inflow of US$37 million.

The Board is recommending a final dividend of US¢13.00 per share, bringing the total ordinary dividend for 2010 to US¢18.00 per share, up 13% on 2009.

OPERATIONS

Dairy Farm continued to expand organically and through acquisitions in 2010, increasing its total number of outlets by 315 to 5,386. In the larger format segment, the Group operated 113 Giant hypermarkets at the year end, comprising 67 in Malaysia, 38 in Indonesia, seven in Singapore and one in Brunei.

There were mixed performances from the Group's operations in North Asia, with overall sales increasing by 9% and operating profit by 4%. In Hong Kong, Mannings achieved excellent results, as did IKEA which enjoyed a good response to its relocated 13,900 sq. m. store that opened in June. Wellcome traded reasonably, while 7-Eleven had a more challenging year. In Taiwan, Wellcome's earnings declined in a difficult market segment, but IKEA improved its profitability further.

In Southern China, 7-Eleven was adversely affected by the restrictions on sale of tobacco products, although the business stabilized in the second half. Mannings continued to expand its health and beauty business on the Mainland and added 43 outlets to bring its network to 163.

Restaurant associate, Maxim's, produced another excellent result with good performances from all its operations in Hong Kong. Expansion in mainland China continued as, in addition to its cake shop chain, Maxim's opened its first Genki Sushi and SimplyLife outlets in Shenzhen. Maxim's also operated a food hall at the World Expo 2010 in Shanghai.

In South Asia, sales increased by 12% while operating profit rose by 7%. The buoyant economy in Singapore enabled the Group's operations to achieve further growth in sales and trading profit despite some demand moving from supermarkets to dining-out. The overall contribution benefited from the strong Singaporean dollar, but this was offset by employment incentives offered by the government being lower than in 2009. In the Indian joint ventures, the 73-outlet health and beauty business is now trading profitably, while the operating losses have been reduced in the supermarket operation.

Sales in East Asia increased by 22% and operating profit by 27%. In Malaysia, the health and beauty stores produced an excellent result and there was a satisfactory performance from hypermarkets and supermarkets, while the country network grew to over 500 stores by the year end. All formats performed well in Indonesia, with particularly strong results from hypermarkets, and the total number of stores increased to 489 with further expansion planned in 2011. The first two supermarkets were opened in Brunei to complement the existing hypermarket and health and beauty formats.

PEOPLE

Dairy Farm's good results achieved in 2010 reflect the dedication and hard work of all employees. On behalf of the Board, I would like to thank them for their efforts and wish them well in the year ahead.

Alec Tong was appointed as the Group Finance Director in September upon the retirement of Howard Mowlem. We would like to thank Howard for his significant contribution over the past ten years with the Group.

PROSPECTS

Dairy Farm's major businesses enjoy leading positions in their respective market segments. The Group's prospects for 2011 are positive as the economic environments in most of the countries where it operates are expected to remain favourable.

Simon Keswick

Chairman

3rd March 2011

GROUP CHIEF EXECUTIVE'S REVIEW

Dairy Farm achieved further growth in sales and earnings in each of its three operating regions in 2010. The Group's prime strategy is to grow its retailing businesses in Asia, while at the same time introducing new concepts and implementing initiatives to improve operational efficiencies and enhance the attractiveness of stores.

A number of important developments took place in 2010:

·; We added a net 315 stores, to reach a total of 5,386 by the year end.

·; We completed the acquisitions of 16 hypermarkets and supermarkets in Malaysia and eight supermarkets in Singapore.

·; In Hong Kong, IKEA successfully relocated its Kowloon Bay store to the Megabox complex producing enhanced results.

·; In mainland China, we expanded our Mannings health and beauty business to 163 stores.

·; In Malaysia, we opened seven Giant hypermarkets and completed the sale and leaseback of a major hypermarket development. We have crossed the 500 store milestone in the country.

·; In Brunei, we opened our first two supermarkets to complement our existing hypermarket and health and beauty stores.

·; Our restaurant associate, Maxim's, operated a 1,850 sq. m. food hall at the World Expo 2010 in Shanghai where it promoted its brand equity and Hong Kong's unique culinary culture.

·; After the successful implementation of the SAP merchandising systems in Malaysia, the IT modernization programme continued in Indonesia.

·; We increased further the investment in private label development and supply chain management to deliver additional value from these important areas.

REGIONAL REVIEW

NORTH ASIA

Hong Kong

The businesses in Hong Kong faced cost increases as rental levels escalated in a buoyant property market. Wellcome supermarkets experienced very competitive trading conditions, although tight controls over operating costs enabled an acceptable result to be achieved. In a challenging year, 7-Eleven convenience stores focused on driving their ready-to-eat business.

Mannings health and beauty stores produced another good performance with the addition of 29 stores and the benefit of growth in Mainland tourist numbers. The first two health stores under the 'Mannings Plus' banner were opened, offering services ranging from free professional consultations to health tests. Mannings also launched a loyalty card programme which received good responses from customers.

IKEA had an excellent year with encouraging trading results from its newly relocated store at Kowloon Bay.

Our associate, Maxim's, continued its strong progress and made significant gains in sales and profitability in 2010. Several new concept restaurants and products were introduced in Hong Kong, while the important mid-Autumn mooncake sales achieved another record volume with good growth on the Mainland.

Macau

Both 7-Eleven and Mannings in Macau produced satisfactory earnings growth during the year.

Mainland China

In a competitive market, 7-Eleven in Southern China is concentrating on growing its share in the ready-to-eat food business. Mannings achieved good growth in sales as it made progress in its development plan with the addition of 43 stores.

In Southern China, Maxim's launched three Genki Sushi outlets and its first SimplyLife bakery café. Overall, it increased its market penetration by doubling the number of its cake shops and bakeries to 89 stores.

Taiwan

Wellcome supermarkets continued to face keen competition, although steps taken to consolidate the existing business produced positive results and provide a sound platform on which to develop going forward. Building on the progress made in 2009, IKEA achieved good growth in sales and profitability in 2010.

SOUTH ASIA

Singapore

The strong economic recovery that began in 2009 augured well for the retail industry. Businesses had benefited from temporary government subsidies in 2009 and while the subsidy for employment costs was extended to June 2010, it was scaled back significantly.

Cold Storage and Shop N Save supermarkets performed satisfactorily in 2010, achieving higher sales and profit despite a return to more restaurant dining as the Singapore economy improved. Ten supermarkets were added during the year, including eight acquired by Shop N Save. The Giant hypermarkets sustained their strong recovery with increased sales and profit in 2010.

7-Eleven produced improved earnings as it continued its growth momentum, ending the year with 549 stores after a net addition of 65 stores. Guardian maintained a stable profit in a very competitive segment.

India

Foodworld supermarkets made further progress as higher turnover and reduced operating costs led to lower losses, but the trading environment remains challenging.

Health and Glow achieved increases in both sales and profit from its health and beauty stores. The growth momentum is expected to continue as the store network is expanded further.

EAST ASIA

Malaysia

The Giant and Cold Storage hypermarket and supermarket businesses in Malaysia produced satisfactory growth despite customers remaining cautious in discretionary spending, especially in general merchandise. Stores acquired in 2010 were integrated successfully into the network, and eight Giant stores were opened, comprising seven hypermarkets and one supermarket. A dedicated fresh distribution centre was also established in Selangor, which should improve the fresh offer in terms of quality, purchasing and distribution costs.

Guardian, the country's leading health and beauty chain, had another strong year with new stores enhancing the good comparable store sales growth. A net 30 stores were added in 2010.

Brunei

In addition to the first two supermarkets and one hypermarket in Brunei, the Group is well represented with the 21 Guardian outlets in key locations.

Indonesia

The Giant and Hero hypermarket and supermarket operations in Indonesia showed further improvements in their performances. While general merchandise sales slowed, cost controls at both the store and head office levels led to a good increase in earnings. There was a net increase of 22 stores during 2010, and the expansion programme is expected to accelerate in 2011. The upgrading of several Hero stores to provide an enhanced offering was well received, producing improvements in both sales and margins. The Guardian pharmacies recorded a satisfactory result and 11 stores were added.

Vietnam

Wellcome achieved good comparable sales growth, but its small supermarket operation suffered from lack of scale. We continue to explore opportunities to develop our multi-format stores.

THE YEAR AHEAD

While food inflation and labour cost pressures are being seen in Asia, the Group's view for the economic outlook in the Region remains positive as consumer confidence is growing.

This year, Dairy Farm will continue to expand its retailing formats in existing markets and to identify new opportunities, supported by enhanced supply chain and IT systems to deliver added value. Substantial capital expenditure has been allocated to the development of hypermarkets and supermarkets in Indonesia and Malaysia, as well as to the refurbishment of existing store networks.

Our progress to-date has been due to the hard work and commitment of our workforce. I thank them for their efforts and for the success they have achieved for the Group.

Michael Kok

Group Chief Executive

3rd March 2011