Slide 1: Q3 2020 Business & Financial Review
Maple Leaf Foods Q3 2020 Business & Financial Review All dollar amounts are presented in CAD dollars unless otherwise noted.
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
Built for Growth 3
Slide 4: 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 5: Continuing to Execute our Blueprint
Continuing to Execute our Blueprint 55 MAPLE LEAF FOODS – Q3 2020 BUSINESS AND FINANCIAL REVIEW | OCTOBER 27, 2020
Slide 6: Maple Leaf Has Delivered Compelling Growth vs. CPG Peers
Maple Leaf Has Delivered Compelling Growth vs. CPG Peers Average Sales Growth, Last 12 Months excluding acquisitions/divestments 1 Meat Protein Growth Vectors: Building leadership in sustainable meats Rapidly growing U.S. market reach Fueling growth through brand renovation >2x Constructing
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) (in m
Slide 8: Q3 2020 Results
Q3 2020 Results 8
Slide 9: Key Highlights from Q3 2020
Key Highlights from Q3 2020 • Continue to advance strategic agenda in both Meat and Plant Protein Meat Protein delivered double-digit growth in sustainable meats, branded market share expansion and increased U.S. exports Amplified Lightlife renovation and brand restage with bold “Clean Break” ca
Slide 10: Meat Protein Group – Q3 2020 Strategic & Operational Highlights
Meat Protein Group – Q3 2020 Strategic & Operational Highlights Drive Profitable Growth by… Q3 Highlights • Double-digit growth across renovated Maple Leaf and Schneiders retail brands fueled by strong Investing in our brands channel demand and market share expansion1 to build demand & loyalty • C
Slide 11: Meat Protein Group – Q3 2020 Key Financial Metrics
Meat Protein Group – Q3 2020 Key Financial Metrics Q3 2020 vs. LY Drivers • Stronger retail volume more than offsetting lower Sales $1,014.4 6.4% foodservice volume as a result of COVID-19 • Favourable mix towards sustainable meats Gross Profit $160.6 +30.2% • Favourable product and channel mix from
Slide 12: Meat Protein Group – Putting the Q3 Pork Complex in Context
Meat Protein Group – Putting the Q3 Pork Complex in Context Hog Production Margins Pork Processor Margins Pork By-Product Market $20 $55 $8.0 $7.0 $10 $40 US/CWT $6.0 US/CWT US/CWT $0 $25 5-yr avg. $5.0 $4.0 5-yr avg. -$10 $10 $3.0 -$20 Q1 Q2 Q3 Q4 -$5 Q1 Q2 Q3 Q4 $2.0 Q1 Q2 Q3 Q4 Hog production mar
Slide 13: Plant Protein Group – Q3 2020 Strategic & Operational Highlights
Plant Protein Group – Q3 2020 Strategic & Operational Highlights Invest for Growth by… Q3 Highlights • Unsatisfactory sales growth & margins resulting from supply chain disruptions, amplified by COVID-19 Entrenching prominent market share position – Equipment downtime & sub-optimal execution impac
Slide 14: Plant Protein Group – Q3 2020 Key Financial Metrics
Plant Protein Group – Q3 2020 Key Financial Metrics Q3 2020 vs. LY Drivers Sales $51.4 9.3% • Expanded distribution of new products (+8.2% ex-FX) • Continued volume increases in existing portfolio Gross Profit $3.4 (66.1%) • Supply chain disruptions • Incremental COVID-19 costs (labour, PPE) Gross M
Slide 15: Greenleaf Focused on Elevating Lightlife and Field Roast Brands
Greenleaf Focused on Elevating Lightlife and Field Roast Brands by Bringing Consumer-Centric Strategies to Life THE FOUNDATION IS SET Q4 FOCUS ON BRINGING STRATEGIES TO LIFE 1 Completed the most extensive consumer research in the history of U.S. plant-based protein. Renovated the Lightlife brand foc
Slide 16: Plant Protein Group – Gross Margin and SG&A Expense Evolution
Plant Protein Group – Gross Margin and SG&A Expense Evolution Gross Margin SG&A Expenses Confluence of inefficiency headwinds in Q3 2020 SG&A investment outlook unchanged $47 14.6% ~$150 13.0% Ad & $34 6.6% promo: Ad & Ad & $31 ~60% promo: promo: (of SG&A) ~55% ~50% (of SG&A) (of SG&A) Q1/20 Q2/20 Q
Slide 17: Total Company – Q3 2020 Key Financial Metrics
Total Company – Q3 2020 Key Financial Metrics Q3 2020 vs. LY Drivers Sales $1,057.2 +6.2% • High single-digit growth in both Meat and Plant Protein Adj. Operating Earnings $36.9 +280.3% Adj. EBITDA $82.6 +54.6% • Robust margin expansion in Meat Protein • Offset by continued strategic investment in P
Slide 18: COVID-19 Cost Headwinds to Continue into Q4
COVID-19 Cost Headwinds to Continue into Q4 Cost Reductions Gross Costs in Discretionary Net Impact Spend ~$19 million ~$6 million Q3 2020 Impact • Tied to PPE, sanitation, • Reduced spending in travel, $12 million screening & testing training, advertising/promos • Largely reflected in COGS • Reflec
Slide 19: 2020 & Long-term Outlook
2020 & Long-term Outlook 19
Slide 20: Continued Uncertainty and Incremental Costs Related to COVID-19
Continued Uncertainty and Incremental Costs Related to COVID-19 Known Factors for Q4 2020: Unknown Factors for Q4 2020: o Strong demand in retail channel and lower o Volatility in pork & poultry commodity and sales in foodservice foreign exchange markets (+/-) o Continued traction in plant protein (
Slide 21: 2020 Financial Priorities Remain Largely Unchanged
2020 Financial Priorities Remain Largely Unchanged Based on performance YTD and estimated COVID-19 costs, 2020 expectations include: Meat Protein Group Plant Protein Group Total Company 1. Mid-to-high single digit revenue 1. Commitment to a business model that 1. Capital expenditures in the range of
Slide 22: 2020 Strategic & Operational Priorities
2020 Strategic & Operational Priorities Company Wide Leverage our carbon neutral commitment with our brands Maintain a strong balance sheet with ample liquidity Protect people’s safety and operational stability throughout pandemic Meat Protein Group Grow sustainable meats, including continue
Slide 23: Long Term Outlook – Focused on Material Value Creation
Long Term Outlook – Focused on Material Value Creation 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 busin
Slide 24: Appendix
Appendix iA —TTSTIME FOR BETTER iil FOR MEAT THAT TASTES THE WAY IT SHOULD LIKE MEAT, | _ MADE FROM ANIMALS THATHRE RAISED, NOT PRODUCED, IT'S TIME FOR MORE FARIM AND LESS PHARM, _ BECAUSE ANTIBIOTICS ARE FOR THE SICK, NOT THE HUNGRY. IT'S TIMETO LETNATURE DOTS THING) IT’S TIME FOR BETTER MEAT FOR B
Slide 25: Reconciliation of Non-IFRS Metrics – Adjusted EBITDA Margin
Reconciliation of Non-IFRS Metrics – Adjusted EBITDA Margin Three months ended September 30, 2020 Three months ended September 30, 2019 Meat Plant Meat Plant ($ millions)(1) Protein Protein Non- Protein Protein Non- (Unaudited) Group Group allocated(2) Total Group Group allocated(2) Total Earnings (
Slide 26: Reconciliation of Non-IFRS Metrics – Adjusted Earnings per Share
Reconciliation of Non-IFRS Metrics – Adjusted Earnings per Share Three months ended September 30, ($ per share) (Unaudited) 2020 2019 Basic earnings per share $0.54 0.11 Income tax recovery not considered — (0.08) representative of ongoing operations Restructuring and other related costs(1) 0.01 (0.
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