Slide 1: Delivering Results; Building a Sustainable Future
Delivering Results; Building a Sustainable Future Q3 2016 REVIEW November 2, 2016 Michael McCain, President and Chief Executive Officer Debbie Simpson, Chief Financial Officer
Slide 2: Q3 summary highlights
Q3 summary highlights Financial Commercial Operations Innovation Adjusted EPS(1) of $0.32 Continued Commercial progress in Building our performance improving innovation and driving solid supply chain growth pipeline results cost efficiencies Adjusted EBITDA in new network margin(1) of 10.3% (1) Refe
Slide 3: Strong results vs. last year
Strong results vs. last year Sales Adjusted Operating Earnings(1) ($ millions) ($ millions) +4% +106% 852 62 30 819 Q3 2015 Q3 2016 Q3 2015 Q3 2016 Adjusted Earnings per Share(1) Adjusted EBITDA(1) ($ per share) ($ millions) +100% +51% 0.32 88 58 0.16 Q3 2015 Q3 2016 Q3 2015 Q3 2016 (1) Refer to sli
Slide 4: Continued strong earnings performance
Continued strong earnings performance Adjusted Earnings per Share(1) Adjusted Operating Earnings(1) $ per share 0.32 0.32 $ millions 61 62 0.25 0.28 48 54 0.13 0.16 30 0.05 22 10 -0.08 -0.12-0.12 -12 -14 -0.19 -20 -20 -0.24-0.25 -0.24 -28 -32 -30 -0.41 -56 2013 2014 2015 2016 2013 2014 2015 2016 (1)
Slide 5: Exceeding strategic adjusted EBITDA margin target
Exceeding strategic adjusted EBITDA margin(1) target 10.3% Strategic Target 10.3% 10.2% 10.0% 8.7% 7.1% 6.0% 4.7% 0.5% 0.7% 0.5% 1.5% Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 -1.3% -1.1% -1.4% -4.3% (1) Refer to slides 12
Slide 6: Strong execution across our business
Strong execution across our business Innovation & Commercial Operations Growth Substantial YOY Actively building efficiency gains at our portfolio Heritage pipeline Improved margins driven by lower Launch of Devour operating costs Material supply Jerky brand chain cost Strong performance improvement
Slide 7: Advancing sustainability as a differentiator
Advancing sustainability as a differentiator Five Elements of Sustainable Meat Unique advantages Sustainable protein is nutritious, healthy and safe Maple Leaf is uniquely positioned in the space of sustainability – and Accessible and affordable, and eaten in sustainable meat – by moderation as part
Slide 8: Q3 launch of new Devour Jerky
Q3 launch of new Devour Jerky • Fundamentally different taste experience in texture, flavour and quality in the fast growing Snacking category . Q3 2016 Review 8
Slide 9: Structural margin improvement
Structural margin improvement ($ millions) Q3 2016 % of sales Q3 2015 % of sales Sales 852.1 818.8 Adjusted Cost of Goods Sold(2) 712.0 720.1 Adjusted Gross Margin 140.1 16.4% 98.7 12.0% SG&A 78.6 9.2% 68.9 8.4% Adjusted Operating Earnings(1) 61.5 7.2% 29.8 3.6% Adjusted EBITDA(1) 87.8 10.3% 58.2 7.
Slide 10: Significant increase in free cash flow
Significant increase in free cash flow Cash Flow From Operations ($ millions) $285 $176 • Generated $147 million in $75 $82 $45 $63 free cash flow(1) in the $42 quarter, $208 million YTD -$35 • Cash on hand of $444 Q1 2015 Q2 2015 Q3 2015 YTD Q1 2016 Q2 2016 Q3 2016 YTD 2015 2016 million at the end
Slide 11: Summary
Summary • Delivered third consecutive quarter of double-digit EBITDA margin performance Improved margins, reduced operating costs Strong commercial performance in fresh value-added pork and poultry, prepared meat volume trend line improving Substantial YOY efficiency gains and cost improvement
Slide 12: Forward-looking and non-IFRS information
Forward-looking and non-IFRS information This presentation contains “forward-looking information” within the meaning of applicable securities law. These statements are based on current expectations, estimates, forecasts, and projections about the industries in which the Company operates, as well as
Slide 13: Reconciliation of non-IFRS financial measures
Reconciliation of non-IFRS financial measures Adjusted Operating Earnings Q3 2016 Q3 2015 ($ millions) Net earnings 31.8 18.7 Income taxes 11.8 6.0 Earnings before income taxes 43.6 24.7 Interest expense and other financing costs 2.8 1.2 Other (income) expense (4.6) 1.1 Restructuring and other relat
Slide 14: Reconciliation of non-IFRS financial measures continued
Reconciliation of non-IFRS financial measures continued Adjusted EBITDA Q3 2016 Q3 2015 ($ millions) Net earnings 31.8 18.7 Income taxes 11.8 6.0 Earnings before income taxes 43.6 24.7 Interest expense and other financing costs 2.8 1.2 Items in other income not considered representative of ongoing (
Slide 15: Reconciliation of non-IFRS financial measures continued
Reconciliation of non-IFRS financial measures continued Adjusted EPS Q3 2016 Q3 2015 ($ per share) Basic earnings per share 0.24 0.13 Restructuring and other related costs 0.01 0.02 Items in other income not considered representative of (0.03) 0.01 ongoing operations Change in the fair value of unre