Maple Leaf Foods Inc. · TSX:MFI
Maple Leaf Foods — Q1 2021 Earnings Presentation
27 slides from Maple Leaf Foods's earnings presentation, May 5, 2021
Slide 1: Q1 2021 Business & Financial Review
Maple Leaf Foods Q1 2021 Business All dollar amounts are presented in CAD dollars unless otherwise noted. & Financial Review
Slide 2: Forward-looking Statements and non-IFRS Measures
Forward-looking Statements and non-IFRS Measures This presentation contains “forward-looking information” within the meaning of applicable securities law. These statements are based on current expectations, estimates, forecasts, and projections about the industries in which the Company operates, as
Slide 3: Built for Growth
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Slide 4: En route to Becoming the Most Sustainable Protein Company on Earth
Enroute to Becoming the Most Sustainable Protein Company on Earth 13,500 employees Total Sales (2020) $4,304 million Meat Protein Group Plant Protein Group 31 manufacturing facilities* 2020 Adj. 2020 prepared meats, fresh pork, fresh poultry and plant protein 12.4% EBITDA Margin 19.5% Sales Growth 4
Slide 5: The Maple Leaf Foods Blueprint
The Maple Leaf Foods Blueprint 55 MAPLE LEAF FOODS – Q1 2021 BUSINESS AND FINANCIAL REVIEW | MAY 5, 2021
Slide 6: We Built a Profitable Base; Now We're Focused on Profitable Growth
We Built a Profitable Base; Now We’re Focused on Profitable Growth 2010 Transformation 2014 2015 Brand-led Growth Today Exited non-core businesses Expanding sustainable meats platform Rothsay (2013) Olivieri (2013) Canada Bread (2014) Renovated core brands Transformed our supply chain
Slide 7: Well-defined Strategies and the Leading Brands to Support Them
Well-defined Strategies and the Leading Brands to Support Them Two businesses, with two distinct strategies Meat Protein Group Plant Protein Group Strategy: Drive profitable growth Strategy: Invest for growth Our Brands Adjusted EBITDA Dollars & Margin Sales (in millions; margin as % of sales) $508
Slide 8: Built for Growth: 20% of Portfolio now Growing at 3-yr CAGR >25%
Built for Growth: 20% of Portfolio now Growing at 3-yr CAGR* >25% Percentage of Total Company Sales in Sustainable Meats and Plant-based Protein ~10% ~20% 2020 High growth 2017 $3.5B Steady growth $4.3B Deliberate repositioning of portfolio towards two high-growth categories, now generating a compou
Slide 9: Q1 2021 Results
Q1 2021 Results 9
Slide 10: Key Highlights from Q1 2021
Key Highlights from Q1 2021 • Protecting health, safety & security during third wave of COVID-19 Safeguarded the health and safety of our team members through adherence to our COVID-19 protocols All facilities remained fully operational, despite rising community transmission • Meat Protein conti
Slide 11: Meat Protein Group – Q1 2021 Strategic & Operational Highlights
Meat Protein Group – Q1 2021 Strategic & Operational Highlights Drive Profitable Growth by… Q1 2021 Highlights • Excellent results in prepared meats, highlighted Investing in our brands by strong sales growth and market share1 to build demand & loyalty expansion in Schneiders brand • 6th consecuti
Slide 12: Meat Protein Group – Q1 2021 Key Financial Metrics
Meat Protein Group – Q1 2021 Key Financial Metrics Q1 2021 vs. LY Drivers • Pricing implemented in Q4 2020, favourable mix-shift and Sales $1,013.7 3.3% higher fresh pork volumes tied to more hogs processed • Partially offset by FX and lower PM volumes & China sales Gross Profit $166.1 +5.6% • Stron
Slide 13: Meat Protein Group – Putting the Q1 Pork Complex in Context
Meat Protein Group – Putting the Q1 Pork Complex in Context Hog Production Margins Pork Processor Margins Pork By-Product Markets $20 $20 $8.0 $7.0 $10 $15 US/CWT $6.0 US/CWT US/CWT $0 $10 $5.0 5-yr avg. 5-yr avg. $5 $4.0 -$10 $3.0 $0 -$20 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 $2.0 Q1 Q2 Q3 Q4 Hog production marg
Slide 14: Plant Protein Group – Q1 2021 Strategic & Operational Highlights
Plant Protein Group – Q1 2021 Strategic & Operational Highlights Invest for Growth by… Q1 2021 Highlights • Soft start to 2021, as COVID-19 disruptions continued Entrenching prominent market share position COVID-19 restrictions heavily impeded foodservice activity, while delaying fresh innovatio
Slide 15: Core Products Continue to Outperform
Core Products Continue to Outperform Core products continue to outperform market Foodservice activity still impacted by COVID-19 Fresh sub-segment disruption continues • Core products’ POS grew +2%1 in Q1, • Depressed foodservice activity continued • COVID-19 continues to delay roll-out of in
Slide 16: Recent Foodservice Wins Showcase Product Innovation
Recent Foodservice Wins Showcase Product Innovation Field Roast Signature Stadium Dog Field Roast Plant-Based Pepperoni North America’s first pea-based hot dog Market’s first pea-based pepperoni alternative • Launched in February across 20 Wienerschnitzel • Launched in January locations in Californi
Slide 17: Plant Protein Group – Q1 2021 Key Financial Metrics
Plant Protein Group – Q1 2021 Key Financial Metrics Q1 2021 vs. LY Drivers • Lower volumes in fresh retail products more than offset Sales $42.6 (2.5%) continued growth in core retail volumes and pricing (ex-FX) implemented in Q4 2020 to mitigate inflation & higher costs Gross Profit $0.1 (97.9%) •
Slide 18: Total Company – Q1 2021 Key Financial Metrics
Total Company – Q1 2021 Key Financial Metrics Q1 2021 vs. LY Drivers Sales $1,053.1 +3.0% • Solid growth in Meat, partially offset by lower sales in Plant Adj. Operating Earnings $50.4 +11.6% Adj. EBITDA $98.3 +8.6% • Improvement driven by continued structural margin expansion in Meat Protein Adj. E
Slide 19: Summary of our Key Construction Capital Projects
Summary of our Key Construction Capital Projects London Poultry Facility Indianapolis Tempeh Facility • Increases processing capacity for value- • Cost effective and scalable approach to meet Strategic added, higher margin poultry products Strategic burgeoning consumer demand for high- Rationale • G
Slide 20: 2021 & Long-Term Outlook
2021 & Long-Term Outlook 20
Slide 21: No Change to our 2021 Financial Outlook
No Change to our 2021 Financial Outlook Mid-to-high single digit sales growth on a 52-week comparable basis, driven by continued momentum in Meat sustainable meats, leveraging brand renovation, and growth into the U.S. market. Protein Adj. EBITDA margin expansion, progressing towards the 2022 target
Slide 22: Reconfirming our Long-Term Outlook
Reconfirming our Long-Term Outlook 2022 Adjusted EBITDA margin target of 14-16%, driven by: Meat Protein • Growth in sustainable meats • Mix-shift benefits from our brand and food renovation work Group • Cost and operational efficiencies 2029 ambitious goals for high-growth business: Plant Protein •
Slide 23: Unexpected surge in grain & hog prices leading to meat inflation
Unexpected surge in grain & hog prices leading to meat inflation Higher grain and lean hog prices have driven While we are executing price pork costs 50% above 2020 levels adjustments in Q2 to compensate… $120 11.50 $110 10.50 $100 9.50 …, we expect there to be a lag given US $/bushel US $/CWT $90 8
Slide 24: Appendix
MAPLE LEAF Appendix _ BECAUSE ANTIBIOTICS ARE | Tt S TIME FOR BETTER. ‘fh FOR MEAT THAT TASTES THEWAY IT SHOULD LIKE MEAT. | ~ MADE FROM ANIMALS THAT ARE RUsED, NOT PRODUCED, ITS TIME FOR MORE FARM AND LESS PHARM, OR THE SICK, NOT THE HUNGRY. ITS TIME TO LET; NATURE DOITS THING: IT’S TIME FOR BETTER
Slide 25: Reconciliation of Non-IFRS Metrics – Adjusted EBITDA Margin
Reconciliation of Non-IFRS Metrics – Adjusted EBITDA Margin Three months ended March 31, 2021 Three months ended March 31, 2020 Meat Plant Meat Plant ($ millions)(1) Protein Protein Non- Protein Protein Non- (Unaudited) Group Group allocated(2) Total Group Group allocated(2) Total Earnings (loss) be
Slide 26: Reconciliation of Non-IFRS Metrics – Adjusted Earnings per Share
Reconciliation of Non-IFRS Metrics – Adjusted Earnings per Share Three months ended March 31, ($ per share) (Unaudited) 2021 2020 Basic earnings per share $0.39 (0.03) Restructuring and other related costs(1) 0.01 — Items included in other expense (income) not 0.02 0.02 considered representative of
Slide 27: Capital Allocation Priorities
Capital Allocation Priorities Growth capacity and efficiency initiatives 1 Reinvest in the Business with a focus on returns metrics & timing Capitalize on inorganic opportunities 2 Accretive Acquisitions with financial and strategic appeal 3 Dividend Appreciation Deliver consistent predictable growt