Lassonde Industries, Inc. Class A · TSX:LAS.A
Lassonde Industries, Inc. Class A — Investor Day (September 2023)
136 slides from Lassonde Industries, Inc. Class A's investor day presentation, Sep 19, 2023
Slide 1: Investor Day: Welcoming Remarks
Investor Day Welcoming Remarks Lassonde Industries Investor Day Éric Gemme, Chief Financial Officer September 19, 2023
Slide 2: Agenda
2 Agenda 9:30 Welcoming remarks Éric Gemme, Chief Financial Officer Nathalie Lassonde, Chief Executive Officer & 9:35 A word from the family Vice-Chair of the Board of Directors 9:45 Overview of Lassonde, our ambition and our strategy to reach it Vince R. Timpano, President & Chief Operating Officer
Slide 3: Forward-Looking Statements and use of financial measures not in accordance with IFRS
3 Forward-Looking Statements and use of financial measures not in accordance with IFRS This document contains “forward-looking information” and the Corporation’s oral and written public communications that do not constitute historical fact may be deemed to be “forward-looking information” within the
Slide 4: Forward-Looking Statements (cont’d)
4 Forward-Looking Statements and use of financial measures not in accordance with IFRS (cont’d) The Corporation’s ability to achieve its environmental targets, and goals is further subject to, among other factors, its ability to access and implement all technology necessary to achieve them as well a
Slide 5: Investor Day: Welcoming Remarks
Investor Day Welcoming Remarks Lassonde Industries Investor Day Nathalie Lassonde, Vice-Chair of the Board & CEO September 19, 2023
Slide 6: A Proud Legacy and a Long-term Vision
6 A Proud Legacy and a Long-term Vision From humble beginnings to a leader in the North American food and beverage industry 1918 Today Aristide Lassonde and Willie Lassonde Pierre-Paul Lassonde Nathalie Lassonde Georgianna Darcy
Slide 7: Board Members
7 Board Members Chantal Bélanger Denis Boudreault Paul Bouthillier Corporate Director Corporate Director Corporate Director Luc Doyon Nathalie Lassonde Pierre-Paul Lassonde Corporate Director CEO & Vice-Chair Chairman of the Board of the Board of Directors of Directors Lassonde Industries Inc. Lasso
Slide 8: Our ESG 2030 Vision
8 Our ESG 2030 Vision To be an influential and committed environmentally aware business that drives the transition to a more sustainable society Our Four ESG Pillars 1. Establishing sound ESG governance 2. Taking care of people 3. Caring for the planet 4. Building a sustainable supply chain
Slide 9: Overview of Lassonde
Overview of Lassonde Our Ambition and Our Strategy to Reach it Vince Timpano, President and Chief Operating Officer September 19, 2023
Slide 10: Presenting Today
10 Presenting Today 1 Amanda Burns 4 Claire Bara US Private Label Beverages Canada Beverages 2 Gabriela Arrillaga 5 Vito Monopoli US Branded Beverages Specialty Foods 3 Stéphane Dubé 6 Eric Gemme Manufacturing North America Chief Financial Officer
Slide 11: Lassonde Industries – Who We Are
11 Lassonde Industries – Who We Are A leader in the North American food and beverage industry • Deep roots in the Well established strength and reputation in beverages community with a proud 105-year history #1 in Canada - Fruit juices and drinks #2 in the U.S. - Store brand shelf-stable fruit juice
Slide 12: Breadth and Depth of Product Offering
12 Breadth and Depth of Product Offering Over 3,500 Unique Products and 200 Formats across Shelf-stable, Chilled and Frozen categories
Slide 13: Sales Distribution
13 Sales Distribution Specialty Foods Snacks Beverages Beverages US - Canada Branded Beverages US - Private Label Industries Lassonde Net sales 2022
Slide 14: Snacks and Alcoholic Beverages
14 Snacks and Alcoholic Beverages SNACKS WINES AND CIDERS Came from the acquisition of Sun-Rype Performed through Arista Wines in Quebec • Focus on 100% fruit strips, bars and bites • Vertically integrated to make fruit purees Investment in Diamond Estates Wines and Spirits in Ontario Go to market w
Slide 15: Sales by Country
15 Sales by Country 2022 % of Sales from the U.S. 70% 60% Clement Pappas August 2011 45% 50% Sales in Canada 40% Old Orchard Apple & Eve May 2018 55% 30% July 2014 20% Sales in the U.S. Sun-Rype 10% January 2020 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Slide 16: Sales by Brand Type
16 Sales by Brand Type National Brands* Sales by Brand Type 2022 Canada 42% 58% Partner Brands National Private Brands Label Products United States * Non exhaustive
Slide 17: Extensive Customer List
17 Extensive Customer List* * Only a sample of Lassonde’s customers are represented on this page
Slide 18: Sales by Market Segment – 2022
18 Sales by Market Segment – 2022 Institutions; directly or 11% Food retailers and Food through wholesalers Service wholesalers • Restaurants 89% • Supermarket chains • Hotels Retail • Independant grocers • Hospitals • Superstores • Schools • Warehouse clubs • Distributors • Major pharmacy chains
Slide 19: Our Multi-Year Strategic Plan – Objectives
19 Our Multi-Year Strategic Plan – Objectives Drive long-term value Accelerate revenue growth Improve overall margins and profitability Confidential
Slide 20: A stronger, more diversified and leading NA agri-food and beverage player
A stronger, more diversified and leading NA agri-food and beverage player Our great tasting products in more hands, serving more needs, across more occasions, every day.
Slide 21: Multi-year Strategy Priorities
21 Multi-year Strategy 1 Priorities Build a Growth-oriented Portfolio 2 3 Drive Improve Sustainable Capacity Performance to Act
Slide 22: Build a Growth-Oriented Portfolio
22 Multi-year Strategy – Build a Growth-Oriented Portfolio Unlock the full potential of our U.S. operations • Reset and optimize private label activities • Build stronger branded operations to capture growth and improve profitability Sustain profitable growth in Canada • Invest in our brands • Stren
Slide 23: Drive Sustainable Performance
23 Multi-year Strategy – Drive Sustainable Performance Increase investment in our manufacturing network • New single-serve line in the U.S. • Higher speed juice box lines in Canada Continue to focus on our NA supply Chain • Network optimization • Best in class purchasing • Efficient delivery of our
Slide 24: Improve Capacity to Act
24 Multi-year Strategy – Improve Capacity to Act Implement a new operating model: The power of global at the speed of local • Operate in a manner that is close and responsive to the market • Leverage scale and common capabilities to capture synergies • Establish common best practices to enable servi
Slide 25: Innovation Center of Excellence
25 Innovation Center of Excellence Importance of innovation giving our exposure to commodities and the mature nature of the market in which we compete Mandate to support the creation of a balanced, diverse and healthy portfolio • To serve more needs and drive expanded appeal to a broader customer ba
Slide 26: Financial Goals
26 Financial Goals Achieve sales of $3 billion by 2026 on a run-rate basis, with an eye to improving margins 3 Organic growth by leveraging existing assets • Improve asset performance by increasing 2.15 and optimizing utilization • Improve business mix towards higher margin products with interesting
Slide 27: lassonde.com
B Lassonde lassonde.com
Slide 28: Unlocking U.S. Business Potential: Market Overview
Unlocking U.S. Business Potential Market Overview Lassonde Industries Investor Day Amanda Burns, President, U.S. Private Label September 19, 2023
Slide 29: Market Overview
29 U.S. Operations Market Overview 2nd largest manufacturer of shelf-stable store Sales by Division – 2022 brand juices and drinks in the U.S. 70% 20% 10% Juices & Drinks Lemonades, Teas Cranberry Sauces & Sports drinks (leading producer of private label brands) Beverages U.S. - Private Label Non-al
Slide 30: Building Our Presence for Over a Decade
30 U.S. Operations Building Our Presence for Over a Decade 2011 Selah & Wapato (WA) Clement Pappas and Company, Inc. • Private Label 2014 Sparta (MI) Cherry Hill (NJ) Apple & Eve Office • Branded Seabrook (NJ) Ontario (CA) Springdale (AR) 2018 Hendersonville (NC) Old Orchard Brands • Branded 2020 Su
Slide 31: Supplying an Extensive Customer List
31 U.S. Operations Supplying an Extensive Customer List* Retail Food Service Lassonde’s products on the shelves of nearly all top 50 U.S. retailers * Logo position on map indicates approximate head-office location
Slide 32: U.S. Private Label
U.S. PRIVATE LABEL UNLOCKING U.S. BUSINESS POTENTIAL
Slide 33: Key points
33 Key points Challenges supplying our customer base at the right cost 1 structure Recognizing the need to review and understand the root cause of 2 the challenges and create a robust plan to regain capacity Reason to believe that we have the right infrastructure and 3 capabilities to grow Focused o
Slide 34: Understanding the Decline in U.S. Performance
34 U.S. Private Label Operations Understanding the Decline in U.S. Performance Profitability erosion between 2018 and 2022 as internal production volume declined nearly 20% Issues Consequences Operational complexity • Sub-optimal volume levels Too many products, formats, formulas • Complexity-relate
Slide 35: Project Eagle to Build Back Operational Excellence
35 U.S. Private Label Operations Project Eagle to Build Back Operational Excellence Dynamic and multifaceted efforts to: • Optimization • Simplify our offerings with the right formula and pack format • Invest in equipment and technology • Align our processes by sharing best practices • Better train
Slide 36: Project Eagle Delivering Significant Results
36 U.S. Private Label Operations Project Eagle Delivering Significant Results PROGRESS BENEFITS Simplified the product portfolio • Reduced downtime associated with changeovers ~15% less SKUs • Able to produce more cases and/or 1. Product Rationalization perform equipment maintenance 2. Pack Harmoniz
Slide 37: Project Eagle Delivering Significant Results (cont’d)
37 U.S. Private Label Operations Project Eagle Delivering Significant Results (cont’d) PROGRESS BENEFITS New Technology Tools • Improved routes and direct negotiations with carriers • Transportation Management System (TMS) • Improved forecast accuracy from • Integrated Planning Tool – Demand, statis
Slide 38: Project Eagle Delivering Significant Results (cont’d)
38 U.S. Private Label Operations Project Eagle Delivering Significant Results (cont’d) PROGRESS BENEFITS Invest in new equipment • Improved line speed • New filler, capper and labeller installed • Increased capacity at the New Jersey facility in July 2023 • Lower costs • Waste reduction from lost ju
Slide 39: Project Eagle Delivering Incremental Capacity and Improved Service
39 U.S. Private Label Operations Project Eagle Delivering Incremental Capacity, Internal Schedule Reliability and Improved Inventory Levels Delivering on the Right Level of Service to Customers BENEFITS U.S. Private Label Case Fill Rate 100% 80% Q3 2022 Q4 2022 Jan Feb Mar Apr May June July August
Slide 40: Build Back Strategy
BUILD BACK STRATEGY U.S. PRIVATE LABEL
Slide 41: Regaining and Expanding Current Distribution
41 Regaining and U.S. Private Label Operations Expanding Build Back Strategy Current Distribution 4 Key Success Factors 1 Service – reliable fulfillment 2 Value – competitive cost structure Trusted supplier – quality, flexibility and proactiveness with insights 4 Differentiation and innovation
Slide 42: North Carolina Single Serve Project
42 U.S. Private Label Operations North Carolina Single Serve Project Installation of a new aseptic single serve line • Commissioning scheduled for summer 2024 • Capacity available for private label and branded products Largest investment ever outside of an acquisition • Approximately US $53 million
Slide 43: Single Serve Delivers Personal Convenience
43 U.S. Private Label Operations Single Serve Delivers Personal Convenience and Allows Lassonde to Capture New Moments of Consumption $64B Single serve beverage market size $17B Single serve bottle market • Growth market • Demand exceeds planned capacity 57% Of consumers said they purchase on-the-go
Slide 44: Our State-of-the-art Single Serve Capabilities
44 U.S. Private Label Operations Our State-of-the-art Single Serve Capabilities Provide North American Distribution and Scale Rougemont Toronto North Carolina California Arkansas
Slide 45: Aseptic Technology Key Advantages
45 U.S. Private Label Operations Aseptic Technology Key Advantages ENHANCE SUSTAINABILITY AND LOWER COSTS PRESERVES PLASTIC REDUCTION A BETTER Hot-Fill Aseptic TASTE FOR 70% JUICE 10oz 42% less PET weight* Less Water* 16oz PET 42% less weight* 30% Energy Reduction* *Than traditional hot fill
Slide 46: Opening Further Opportunities in New Channels
46 U.S. Private Label Operations Opening Further Opportunities in New Channels Channel expansion • Offer more products to the convenience store channel for “at home” consumption Fortify our core capabilities • Grocery and mass-retail pack Foster innovation in adjacent categories • Functional beverag
Slide 47: Key Takeaways
47 U.S. Private Label Operations Key Takeaways • Turning around the U.S. business to unlock its full potential • Project Eagle allowed the reset of this business in the right way • New capabilities in growth categories (single serve) • Build back a sustainable business at better margins • Early wins
Slide 48: lassonde.com
B Lassonde lassonde.com
Slide 49: Unlocking U.S. Business Potential: U.S. National Brands
Unlocking U.S. Business Potential U.S. National Brands Lassonde Industries Investor Day Gabriela Arrillaga, Senior VP and GM, U.S. Brands September 19, 2023
Slide 50: US Branded Product Portfolio
Brand Overview – Product Line-ups US Branded Product Portfolio Strong product portfolio of juices for the whole family #1 Juice Box, Leader in Organic 100% Juice Broad portfolio of ‘Value’ products that appeal to families #2 Position within Frozen Juice & Diet/Light segments Premium antioxidant-rich
Slide 51: Brand Review
B R A N D R E VIE W
Slide 52: Apple & Eve
52 U.S. National Brands Apple & Eve A brand with 45+ years of history of driving innovation and category change Acquired by Lassonde in July 2014 • Entry into the U.S. branded juice business Highly trusted, all-family brand • Emphasis on juice boxes Leading brand in Northeast, #1 juice box in US • S
Slide 53: Apple & Eve, a Long Tradition of Industry Firsts
53 U.S. National Brands Apple & Eve, a Long Tradition of Industry Firsts 1975 1982 1999 2003 2008 2018 Unfiltered apple 100% juice in Exclusive Sesame First to introduce Launch of Relaunched juice sold in aseptic juice Street Partnership Organics 100% Fruitables: First Organics in supermarkets boxes
Slide 54: A Strong Product Portfolio
54 A Strong Product Portfolio Made with real fruit juices Made with real fruit and featuring the Sesame Street Made with real fruit juice and no Made with USDA organic real vegetable juices! And with 39% gang in kid friendly sizes across sugar added fruit juice and no sugar added less sugar than reg
Slide 55: Brand Review
B R A N D R E VIE W
Slide 56: Old Orchard
56 U.S. National Brands Old Orchard A trusted brand anchored in the market since 1985 • Founded by fourth generation growers Acquired by Lassonde in May 2018 Extensive portfolio with over 120 bottled and frozen juice products • Leading brand in the shelf-stable, multi-serve fruit juice category • Se
Slide 57: Brand Identity
57 U.S. National Brands Brand Identity Value brand • Allows for an all-encompassing target consumers Appeals to large, bustling families and to all members • Kids • Organics • Healthy Balance • Low-cal, reduced sugar line • #2 brand in the “diet/light” segment
Slide 58: Brand Review
B R A N D R E VIE W
Slide 59: Northland
59 U.S. National Brands Northland Established more than 30 years ago in Wisconsin • Branded juice division of Northland Cranberries inc. was acquired by Apple & Eve in 2005 Premium price positioning Bold flavored juices that fit with a healthy lifestyle Distribution throughout the U.S. • Multi-serve
Slide 60: Brand Review
B R A N D R E VIE W
Slide 61: Switch Ruby Kist
61 Switch Ruby Kist Sparkling 100% juice for schools • 100% of what you want, 0% of what you don’t want • Healthy alternative to sodas: “Switch from sodas” Strategic brand in the food service market, that Growth potential in the sparkling category complements PL as sole • Building a network to suppo
Slide 62: Strong Portfolio of Brands
62 U.S. National Brands Strong Portfolio of Brands Growth potential with strategic geographic positions Strength in Central and Eastern U.S. regions, with high product development indexes (PDI) • Areas cover approximately 82% of Central US East Coast volume in the shelf stable juices and PDI = 228.7
Slide 63: Future of the Brands
Future of the Brands
Slide 64: We had Challenges…
64 U.S. National Brands We had Challenges… Mostly in protection mode since 2020 • Apple & Eve was struggling to access internal and external capacity partly due to labor-related issues Forced to make trade-offs • Walking away from certain distribution • Managing the business with limited promotions
Slide 65: …But Our Network is Now Stronger and More Efficient
65 U.S. National Brands …But Our Network is Now Stronger and More Efficient A larger part of our core business is now packed within the Lassonde network • In the U.S. and in Canada – Supported by our Centers of Excellence in Manufacturing and Supply Chain • Use selected co-packers Balance between in
Slide 66: Growth Path
66 U.S. National Brands Growth Path Single-serve expansion will provide additional capacity to support the growth of our U.S. brands and expand A&E Stepping up our innovation agenda beyond single-serve Restoring the core and driving share • Focus on strategic distribution pushes across channels and
Slide 67: lassonde.com
B Lassonde lassonde.com
Slide 68: North American Manufacturing Network
North American Manufacturing Network Lassonde Industries Investor Day Stéphane Dubé, Senior VP Manufacturing North America September 19, 2023
Slide 69: Topics to be Covered
69 North American Manufacturing Network Topics to be Covered Mandate of our Manufacturing Center of 1 Excellence 2 Manufacturing network and capabilities 3 Key priorities to support growth
Slide 70: Manufacturing Center of Excellence
70 North American Manufacturing Network Manufacturing Center of Excellence An integrated North • An environment that respects the highest American quality and safety standards manufacturing network • Leveraging scale, synergy and best practices to transform high-quality ingredients Focus on demand a
Slide 71: Plants in North America with Over 1,700 Employees
71 16 Plants in North America with Over 1,700 Employees Dedicated to Manufacturing North American Network Location 1 Rougemont, QC, 5th Avenue 2 Rougemont, QC, Mont-Rouge 3 Rougemont, QC, Cider House CANADA 4 St-Damase, QC (food plant) 9 8 5 Boisbriand, QC (food plant) 10-11 6 Toronto, ON 1-5 7 7 Th
Slide 72: Producing Where It Makes Sense
72 North American Manufacturing Network Producing Where It Makes Sense Lassonde’s plants servicing • The Canadian and U.S. markets • Private label and branded beverage products Production where costs and logistics efficiency are optimized Favors a more optimal capital allocation
Slide 73: Broad Spectrum of Capabilities
73 North American Manufacturing Network Broad Spectrum of Capabilities Fruit pressing capabilities Three main manufacturing processes • Chilled and shelf-stable aseptic • Complete production process done in a sterile environment • Faster process • Hot fill • Use of heat to sterilize juice and packag
Slide 74: Broad Spectrum of Capabilities (cont’d)
74 North American Manufacturing Network Broad Spectrum of Capabilities (cont’d) Juice is packaged in: Tetra Pak PET bottles Gable Cans Cups Glass jars boxes Preform capabilities • 4 different preform sizes for containers ranging from 300 mL to 2.5 L • In-house production at 5th Avenue facility to se
Slide 75: Main Priorities
75 North American Manufacturing Network Main Priorities Safety is #1 priority • Always work to improve safety standards and practices Productivity Network CAPEX improvement optimization deployment • Ensure changeover • Optimize conversion and • Accelerate investments in efficiency transportation cos
Slide 76: Key Takeaways
76 North American Manufacturing Network Key Takeaways Breadth and depth of manufacturing capabilities and expertise Superior execution by our highly talented team across our network • With respect to the highest safety and quality standards, deliver lowest cost possible and best in class customer se
Slide 77: lassonde.com
B Lassonde lassonde.com
Slide 78: Fortifying Our Position: Beverages Canada
Fortifying Our Position Beverages Canada Lassonde Industries Investor Day Claire Bara, President, A. Lassonde Inc. Division September 19, 2023
Slide 79: Keys to Our Growth and Priorities
79 Beverages Canada Keys to Our Growth and Priorities Competitive Advantages Key Priorities • Our scale • Protecting our Core • Diversity of our portfolio • Growing through: • Innovation • Strengths of our brands • New format and channel expansion • Strength of our customer • Customer acquisition pa
Slide 80: Leader in Both Branded and Private Label Products
80 Beverages Canada Leader in Both Branded and Private Label Products Sales by Division – 2022 Retail #1 in Canada in the fruit juices and drinks category Leader in both branded and private label products Food Service Strong position Beverages Canada Sources: Nielsen MarketTrack, JDN+RJ+IT (excl Kom
Slide 81: Customer Portfolio
81 Beverages Canada Customer Portfolio* RETAIL FOOD SERVICE Distributors Commercials Airlines Institutional Other Federated government Co-operatives institutions limited Hospitals Schools * not exhaustive
Slide 82: Canadian Juices and Drinks Market: $3.0B Industry
82 Beverages Canada Canadian Juices and Drinks Market $3.0B Industry Retail market breakdown by sub-category Retail Food service Red $2.7B $340M Juice Carbonated Water Mature market with pockets of growth in some categories Shelf Table • Functional drinks Flat Water • Reduced sugar • Smoothies • Ice
Slide 83: A Solid Leadership Position
83 Beverages Canada A Solid Leadership Position 1 Scope of our portfolio • Private label and branded offering • Multi packaging • Multi brands 2 Regional and national brand strength 3 Strong customer relationships Consumer centric – customer service oriented 4 Local positioning Multi format, multi p
Slide 84: A Strong, Diverse & Complementary Branded Portfolio
84 A Strong, Diverse & Complementary Branded Portfolio Within Multiple Beverage Categories SHELF CHILLED WINE National focus Nectar ** Juice juice Imported Juice ** wines Regional focus ** Cocktail Functional Reduced ** Elaborated calories/ Iced Tea Smoothie wines sugar Drink Organic Organic lemonad
Slide 85: Successes of Our Flagship Brand
85 Successes of Our Flagship Brand
Slide 86: Regional Brands with Strong Market Shares
86 Beverages Canada Regional Brands with Strong Market Shares #1 in Western Canada #1 in Ontario and extends its reach nationally in the cocktail segment #1 in Atlantic Canada Strong position in Québec
Slide 87: Excellence in Customer Service
87 Beverages Canada Excellence in Customer Service LASSONDE # 1 Preferred Supplier Shelf Stable #1 Chilled #2 Private label #2 (all categories) Success Factors • Proximity and close relation • Strong execution at store level • Dedicated regional sales teamsproductivity in key areas of the business i
Slide 88: Operating Close to the Markets We Serve
88 Beverages Canada Operating Close to the Markets We Serve with a Coast-to-coast Network 4 5 1 3 1 Rougemont (QC) 2 5th avenue, Mont-Rouge, Cider House 2 Toronto (ON) 4 Calgary (AB) 3 Thornbury (ON) 5 Kelowna (BC)
Slide 89: Growing in a Mature Market
89 Beverages Canada Growing in a Mature Market Our 3 Strategic Priorities Growing through Protecting our core innovation and channel Increasing productivity expansion
Slide 90: Growing in a Mature Market
90 Beverages Canada Growing in a Mature Market Our 3 Strategic Priorities Growing through Protecting our core innovation and channel Increasing productivity expansion • Continue to invest in our brands and leverage digital shift • Expand presence in store • Reinforce customer relationships through s
Slide 91: Growing in a Mature Market
91 Beverages Canada Growing in a Mature Market Our 3 Strategic Priorities Growing through Protecting our core innovation and channel Increasing productivity expansion • Continue to invest in our • Leverage our Innovation brands and leverage digital Center of Excellence shift • Capture more shelf spa
Slide 92: Focus on Food Service
92 Beverages Canada Focus on Food Service 1 Commercial restaurants 2 Hospitality 3 Transportation
Slide 93: Growing in a Mature Market
93 Beverages Canada Growing in a Mature Market Our 3 Strategic Priorities Growing through Protecting our core innovation and channel Increasing productivity expansion • Continue to invest in our • Leverage our Innovation • Improve supply chain and brands and leverage digital Center of Excellence man
Slide 94: Key Takeaways
94 Beverages Canada Key Takeaways Committed to strengthening our leading position Support our growth story • Protect our core business • Create additional demand • Increase productivity Keys to success • Scale • Diversity of our portfolio and capabilities Canadian • Equity of our brands • Strength o
Slide 95: lassonde.com
B Lassonde lassonde.com
Slide 96: Accelerating Growth: Specialty Food Division
Accelerating Growth Specialty Food Division Lassonde Industries Investor Day Vito Monopoli, President, Lassonde Specialties Inc. September 19, 2023
Slide 97: Key Takeaways
97 Specialty Food Division Key Takeaways Key competitive advantages providing growth opportunities • Deep know-how • Leadership in retort technology Attractive business categories • Size • Growth profile • Accretive margins Growth strategy
Slide 98: Who is Lassonde Specialty Inc.
98 Specialty Food Division Who is Lassonde Specialty Inc. A leading North American producer of specialty food • Pasta sauces • Cream-based (Alfredo, Rose) • Red (Arrabbiata, Marinara, Primavera, etc.) • Organic • Soups • Fondue broth and dipping sauces • Other specialty products • Cooking sauces • B
Slide 99: Who is Lassonde Specialty Inc (cont'd)
99 Specialty Food Division Who is Lassonde Specialty Inc (cont'd) Sold in glass jars, pouches or cartons Sales by Division – 2022 Over 400 SKUs Focused on niche portions of larger categories • « Specialty » niche is defined by the technology or packaging used Mainly sold under private labels or co-m
Slide 100: Our History and Our Plants
100 Specialty Food Division Our History and Our Plants 1981 2007 Sales by product category Division created with the Acquisition of Mondiv Food acquisition of Produits Products Ronald • Diversified offering into the pasta sauce, strong U.S presence and access to new technology Boisbriand Alfredo sau
Slide 101: Supplying all Canadian retailers and 50% of the top U.S. retailers
101 Supplying all Canadian retailers and 50% of the top 10 U.S. retailers
Slide 102: Our Competitive Advantages
102 Specialty Food Division Our Competitive Advantages 1 Product formulation and innovation capabilities • Fosters longstanding customer relationships • Supports private label customers • Able to compete with some of the world largest CPGs • Offer premium and value products 2 Mastering the technolog
Slide 103: Cream-based Sauces Line is Gaining Share in the Category
103 Specialty Food Division Cream-based Sauces Line is Gaining Share in the Category Canada Total pasta U.S. Total pasta sauce market sauce market 65M L (-4% vs LY) 827M L (0% vs LY) Alfredo Alfredo Share +0.2 pts Share +0.6 pts 15% 11% Aim to offer differentiation to our customers with premium sauc
Slide 104: Premium Pasta Sauce rapidly growing in both markets
104 Specialty Food Division Premium Pasta Sauce rapidly growing in both markets with Canadian market underdeveloped Canada Total pasta U.S. Total pasta sauce market sauce market 65M L (-4% vs LY) 827M L (0% vs LY) Premium Premium Share +0.2 pts Share +1.2 pts 4% 9% Partners with established names in
Slide 105: Ready-to-serve, Premium Shelf-stable Soup Market
105 Specialty Food Division Ready-to-serve, Premium Shelf-stable Soup Market U.S. Total RS soup market 427M L (-10% vs LY) Premium glass jar Share +0.3 pts 1% Premium, non-canned, specialty soup market gaining share in US Premium glass jar volume +19% vs LY Sources: Canada : Nielsen; Multi Outlet, L
Slide 106: Focused Differentiation
106 Specialty Food Division Focused Differentiation Growth platforms • Cream-based sauces • Premium glass jar soups • Premium red pasta sauces • Fondue broth & sauces • Other specialty products
Slide 107: Growth Strategy
107 Specialty Food Division Growth Strategy Build a growth-oriented portfolio • Leverage our innovation capabilities to create and develop new products • Optimize retort lines to further benefit from unique capabilities
Slide 108: Growth Strategy
108 Specialty Food Division Growth Strategy Possible scenarios • Acquisitions • Expand existing facility • Greenfield projects
Slide 109: In Conclusion
109 Specialty Food Division In Conclusion • Specialty food a key growth platform • Business protected by high barriers to entry • Favorable industry trends • Attractive margin profile from portfolio and adjacent categories • Solid track record of organic growth
Slide 110: lassonde.com
B Lassonde lassonde.com
Slide 111: Investor Day: Financial Wrap-up
Investor Day Financial Wrap-up Lassonde Industries Investor Day Éric Gemme, Chief Financial Officer September 19, 2023
Slide 112: 2022 Sales Breakdown
112 2022 Sales Breakdown 11% Food Service Limited Customer concentration 45% 42% Sales in National Canada Brands Customer 1 55% 89% 58% 15% Sales in Retail Private the U.S. Label Products All Others 40% By Country By Market By Brand Type By Customer Segment
Slide 113: Reaching $3B run rate by the end of 2026
113 Reaching $3B run rate by the end of 2026 Material Assumptions Inflation rate of ~2.0% over the period. FX ~1.33 USD/CAD over the period. Currently observed capital market and M&A metrics and conditions. Profitability growth prevails over sales growth. 1 2 3 Material Risks The occurrenc
Slide 114: Adjusted EBITDA Margin – Past 10 Years
114 Adjusted EBITDA Margin(1) – Past 10 Years 12,0% Inflection point in U.S. 11.0% (pre U.S. 11,5% divisions performance challenges) 11,0% 10.6% (pre 2020) 10,5% 10,0% 10.2% average 9,5% 9,0% 8,5% 8,0% 7,5% 7,0% FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 YTD FY23 (1) Financial measures not in
Slide 115: EBITDA Margin of NA Peers
115 EBITDA Margin(1) of NA "Peers" – Last 5 Years Average Number of companies observed in the EBITDA% range 10 9 8 7 6 5 4 3 2 1 0 < 5% 5.0% -7.5% 7.5%-10.0% 10.0% - 12.5% 12.5%-15.0% 15.0% - 17.5% 17.5% - 20.0% 20.0% - 22.5% > 22.5% Source: Capital IQ – August 2023 | n=45 (1) Financial measures not
Slide 116: EBITDA Margin of NA Selected Peers
116 EBITDA Margin(1) of NA Selected Peers – Last 5 Years Average LASSONDE’S 10 9.0% YTD Adjusted EBITDA margin (1) Number of companies observed in the EBITDA% range 9 10.2% 10-yr average 8 10.6% pre 2020 average 7 11.0% pre U.S. challenges average 6 5 Peer group 10.6% Average 4 9.3% Median 3 2 1 0 <
Slide 117: Improving our Margin from Current Level
117 Improving our Margin from Current Level Material Assumptions Key factors driving progressive margin improvement Inflation rate of ~2.0% over the period. FX ~1.33 USD/CAD over the period. Profitability growth prevails over sales growth. 1. Building back volume at our U.S. operations 2. Run
Slide 118: Ingredients and packaging represent ~2/3 of COGS
118 Ingredients and packaging represent ~2/3 of COGS 2022 COGS breakdown Packaging Objectives: • Reducing exposure to Ingredients commodities through innovation and diversification • Controlling conversion costs through productivity gains and network-wide efficiencies Conversion costs
Slide 119: CAPEX
119 CAPEX Examples of productivity * CapEx • 3x Tetra A3 Speed (juice boxes) • Project Eagle related elevated vs. historical levels investments Under review but remain 2% to 3% of $3B • Projects associated with Up to 4.5% of sales network optimization • ERPs Examples of growth CapEx • NC single-serv
Slide 120: Solid Financial Position to Finance Expansion Projects
120 Solid Financial Position to Finance Expansion Projects 400 Net Debt (in $M) and 3,00x Net Debt to Adjusted EBITDA (%) 350 2,50x 300 $267.7 $246.7 2,00x 250 $228.4 200 1.57x 1.67x 1,50x 150 1.28x 1,00x 100 0,50x 50 KEEPING THE RATIO BELOW 0 0,00x Dec. 31, 2022 Net Debt (1) Apr. 1, 2023 July 1, 20
Slide 121: Days Operating Working Capital
121 Days Operating Working Capital (1) 100 95 93 90 87 86 82 81 80 80 76 75 73 73 72 71 71 69 69 68 68 68 68 70 65 65 64 64 64 62 60 57 60 50 Days 48 46 46 40 37 36 33 32 32 32 35 31 31 30 Near higher end of 30 30 30 33 29 28 30 27 26 26 pre-Covid range 20 by end of 2023 10 Settle within that range
Slide 122: Capital Structure
122 Capital Structure LASSONDE FAMILY OWNS 55.4% OF 6.82M SHARES OUTSTANDING Want to retain economic control UP TO ≈ 700K SHARES AVAILABLE While maintaining the economic control by the Family DIVIDEND ≈ 25% OF PREVIOUS YEAR’S NET INCOME Current payment of 50 cents per quarter ≈ 1.5% yield based on c
Slide 123: Key Takeaways
123 Key Takeaways 1 Target of $3bn in net sales by 2026 supported by clear growth platforms 2 Beyond top line expansion, opportunities to expand margins 3 Solid balance sheet to finance expansion 4 105-year history with solid track record of performance 5 Strong foundation to win in our markets: por
Slide 124: lassonde.com
B Lassonde lassonde.com
Slide 125: Appendix: Financial Measures Not in Accordance with IFRS
APPENDIX FINANCIAL MEASURES NOT IN ACCORDANCE WITH IFRS
Slide 126: Financial Measures Not in Accordance with IFRS
126 Financial Measures Not in Accordance with IFRS EBITDA and Adjusted EBITDA Net Debt EBITDA is a financial measure used by the Corporation and investors to Net debt represents long-term debt, including the current portion, less the assess the Corporation’s capacity to generate future cash flows fr
Slide 127: Financial Measures Not in Accordance with IFRS (cont’d)
127 Financial Measures Not in Accordance with IFRS (cont’d) Days Operating Working Capital, DSO, DIO and DPO Days operating working capital is a financial efficiency measure used by Days of inventory outstanding (“DIO”) is a financial efficiency measure the Corporation to represent the amount of sal
Slide 128: Appendix: Presenters’ Bio
APPENDIX PRESENTERS’ BIO
Slide 129: Nathalie Lassonde
129 Nathalie Lassonde Chief Executive Officer Nathalie Lassonde has been Chief Executive Officer of Lassonde since 2019 and is also Vice Chair of the Board of Directors. Having been with Lassonde since 2004, she has held the positions of Assistant to the Chair of the Board and Vice President, Organi
Slide 130: Vince Timpano
130 Vince Timpano President and Chief Operating Officer Vincent R. Timpano is President and Chief Operating Officer of Lassonde since October 1, 2021. He joined the Company in September 2020 as President and Chief Executive Officer of the Company’s US subsidiary, Lassonde Pappas and Company Inc. Mr.
Slide 131: Amanda Burns
131 Amanda Burns President, Private Brands Amanda Burns is President, Private Brands at Lassonde since 2023. In this role, she oversees the sales and operations of Lassonde's U.S. private label subsidiary. Prior to joining Lassonde, she served as Chief Financial Officer of Sun-Rype from 2012 to 2019
Slide 132: Gabriela Arrillaga
132 Gabriela Arrillaga Vice President and General Manager, US Brands Division In this role, she oversees the performance of the US branded operations. Previously, she was the Vice President of Marketing at Lassonde Pappas & Company. She joined Lassonde in 2015 as Marketing Director for the Apple & E
Slide 133: Stéphane Dubé
133 Stéphane Dubé Senior Vice President, Manufacturing, North America Stéphane Dubé has been Senior Vice President, Manufacturing, North America at Lassonde since 2022. In this role, he directs manufacturing operations, including quality and engineering, and ensures that the business needs of variou
Slide 134: Claire Bara
134 Claire Bara President, A. Lassonde Division Claire Bara has been the President of A. Lassonde since June 2021. In this capacity, she manages the commercial activities of the A. Lassonde division, which develops, manufactures and markets ready-to-drink juices and drinks for the Canadian market. S
Slide 135: Vito Monopoli
135 Vito Monopoli President, Lassonde Specialties Vito Monopoli is President of Lassonde Specialties since 2021. Lassonde Specialties is a division specializing in the manufacturing and marketing of food products and includes two plants located in Boisbriand and Saint- Damase. Vito joined the Lasson
Slide 136: Éric Gemme
136 Éric Gemme Chief Financial Officer Éric Gemme has been the Chief Financial Officer of Lassonde since 2021. In this capacity, he manages all operations and strategies related to corporate finance and the publication of the Company’s financial information. He also heads all investor relations acti