Slide 1: Long-Term Value Creation At Inflection Point
Long-Term Value Creation At Inflection Point Q4 2022 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: Maple Leaf Foods is an iconic, purpose-driven Canadian food company
Maple Leaf Foods is an iconic, purpose-driven Canadian food company
Slide 4: Our ambitious Blueprint guides us on our journey
Our ambitious Blueprint guides us on our journey MAPLE LEAF FOODS – Q4 2022 BUSINESS AND FINANCIAL REVIEW | MARCH 9, 2023 4
Slide 5: Our journey is creating long-term value
Our journey is creating long-term value ✓ Iconic portfolio of Brands, with growing value-added production and US exposure ✓ Industry-leading sustainability practices, with long-term commitment to sustainable food production ✓ Growing sustainable meat production, drawing on powerful consumer trends r
Slide 6: Q4 2022 Highlights
Q4 2022 Highlights Cyber quarter; broad impacts deeper than expected 10-year lows in market conditions persist Brand and value-added performance is outstanding in Meat Protein New assets pivoting into start-up successfully Plant Protein transition to profitability on track Maintaining focus on long-
Slide 7: The Cyber Quarter
The Cyber Quarter Cyber incident detail Impact • Experienced cybersecurity incident on • Direct and indirect financial impact of at least November 4th, 2022 $23 million, resulting from: • Worked alongside world class experts to resolve o Additional labour and overtime costs the situation and ensure
Slide 8: Q4 2022 - Meat Protein
Q4 2022 - Meat Protein Operating within Adjusted EBITDA target margins, excluding short-term factors Underlying business remains healthy • Cyber attack delayed resolution of supply-chain inefficiencies • Pork markets and inflation impacted the quarter • Brands remain resilient • Re-approved to ship
Slide 9: Q4 2022 Meat Protein Financial Results
Q4 2022 Meat Protein Financial Results Q4 2022 vs. LY Drivers • Pricing action implemented in prior quarters to mitigate inflation and structural cost increases, Sales growth Sales $1,149.6 +5.9% growth in sustainable meats, and favourable FX • Partially offset by lower volumes, including the met im
Slide 10: Top-line momentum in Meat Protein business continued
Top-line momentum in the underlying health of our Meat Protein business continued, with world class assets now ramping up Driving Branded Leading in Broadening Delivering Growth Sustainable Meats our reach Operational Excellence ✓ 15 consecutive quarters of ✓ Double-digit sales growth in ✓ 4 consecu
Slide 11: "One Profit in a Pig" levels at a 10-year low
“One Profit in a Pig” levels at a 10-year low USDA Pork Cutout – Hog Production Cost Spread US$ (CWT) Price US$ (CWT) Cost of Hog Production: US$96/CWT Pork Cutout: US$81/CWT Negative spread between cutout price and cost of hog production has been pressuring the entire industry Source: USDA; CME Gro
Slide 12: Examining the EBITDA margin bridge relative to our expectations
Examining the EBITDA margin bridge relative to our expectations Q4 Impact What Happened in Q4 Actions ∆ Q3 Cyber • Cyber attack resulted in system restoration costs, lost • Anticipate some insurance recovery later in 2023 ~200 bps ~200 bps, sales, overtime, spoiled inventory, and professional ~$23M
Slide 13: Excluding these factors, Adjusted EBITDA delivering on track
Excluding these factors, Adjusted EBITDA delivering on track 16%+ Adj. EBITDA Margin MAPLE LEAF FOODS – Q4 2022 BUSINESS AND FINANCIAL REVIEW | MARCH 9, 2023 13
Slide 14: Looking forward, we are closing in on a significant Inflection Point
Looking forward, we are closing in on a significant Inflection Point From ... To ... • Pandemic and pandemic-induced • Supply chain stability by the end of Q2 supply chain instability 2023 • Prices lagging rapid rise in inflation • Pricing to mitigate inflation fully in place by the end of Q2 2023 •
Slide 15: "Green shoots" to support a market normalization are emerging
“Green shoots” to support a market normalization are emerging ... “The cure for low prices are low prices” China Pork Import volumes up 44% in Dec 2022 ✓ Industry-wide poor financial performance a leading indicator ✓ Domestic and international data does point to US$ M +44% supply contraction in hog
Slide 16: New organizational design aligns world-class talent with strategic initiatives
New organizational design aligns world-class talent with strategic initiatives to drive long-term value Adam Grogan Casey Richards Iain Stewart President, Greenleaf Foods and Jumoke Fagbemi Dennis Organ President & Chief Growth Officer Chief Supply Chain Officer Alternative Proteins Senior Vice Pres
Slide 17: Focusing on the things that are going really well as we advance our vision
Focusing on the things that are going really well as we advance our vision Strategic Priority Driver Execution Status Status Stabilizing the supply chain and restoring service ✓ Have closed the vacancy gap. Expecting Supply Chain 1 levels to be fully normalized by the end of Q2 2023 Deploying Revenu
Slide 18: $1.2B investment in organic projects to add $130M to annual Adj. EBITDA
$1.2B investment in organic projects to add $130M to annual Adj. EBITDA Incremental Capital Project Benefits Adj. EBITDA London Poultry facility ➢ More profitable product mix: through improved processing ➢ Annual Adj. EBITDA The new 660,000 sq. ft. facility is one of the most capabilities $100M tech
Slide 19: London Poultry: commercial production has started
London Poultry: commercial production has started and the transition from St. Mary’s facility has been completed Completed Current Remaining • Construction completed in Sept 2022 • Transitioning production volumes • Execute against the production plan • Equipment installation & Dry testing and emplo
Slide 20: Bacon Centre of Excellence ramping up commercial production
Bacon Centre of Excellence ramping up commercial production Completed Current Remaining • Construction completed in Oct 2021 • Producing saleable product since • Transition from co-manufacturers and • Dry testing completed early 2022 ramp-up to be complete in H2 2023 • Commissioning remaining lines
Slide 21: Q4 2022 – Plant Protein
Q4 2022 – Plant Protein On track for Adjusted EBITDA neutral in H2 2023 We have rapidly shifted our playbook to pursue profitable growth • Q4 Adj. EBITDA a 57%* improvement over prior year • Ongoing cost reductions • Pricing action implemented successfully • Anticipate continued improvement in Q1 20
Slide 22: Q4 2022 Plant Protein Financial Results
Q4 2022 Plant Protein Financial Results Q4 2022 vs. LY Drivers Lower retail and foodservice volumes (18.2%) more than offsetting pricing action Sales $40.0 implemented to mitigate inflation and (ex-FX, in USD) structural cost increases Gross Profit ($10.3) Inflationary costs and lower capacity ($0.3
Slide 23: On track to achieve Plant Protein Adj. EBITDA neutral in H2 2023
On track to achieve Plant Protein Adj. EBITDA neutral in H2 2023 Completed In 2023 Target ✓ SG&A reduced by 60% in Q4 2022 • Repurpose excess plant-based footprint to ✓ Supply chain optimization, incl. right- further processed poultry production ✓ Achieve Adjusted EBITDA sizing legacy facilities • P
Slide 24: Production ramp-up at Indiana Tempeh plant exceeding expectations
Production ramp-up at Indiana Tempeh plant exceeding expectations Strategic Rationale Completed Current Status • Cost effective, scalable approach to meet • Existing 118,000 sq. ft. food facility • Product is available on shelves consumer demand • US$97 million for acquisition & build-out • Plant is
Slide 25: Total Company – Q4 2022 financial results
Total Company – Q4 2022 financial results Q4 2022 vs. LY Drivers • Growth in Meat, partially offset by Sales $1,185.5 +5.8% lower sales in Plant Adj. Operating Earnings $1.8 (93.8%) Adj. EBITDA $55.3 (27.6%) • Challenging operating environment Sales growth due to pork market headwinds, inflation, la
Slide 26: Long-term outlook focused on delivering profitable growth
Long-term outlook focused on delivering profitable growth Meat Protein Plant Protein Capital Mid-to-high - - single digit sales Adjusted EBITDA improvement in Capital expenditures for 2023 to growth in 2023, driven by Q1 2023 of at least 50% compared be less than $250 million, with up continued mome
Slide 27: Capital allocation focused on long-term growth and shareholder return
Capital allocation focused on long-term growth and shareholder return Capital Allocation Priorities Up to $120M for Maintenance... Maintenance Capital: Non-discretionary - – maintains existing Less than $250M operations and competitiveness in Total Capex Balance Sheet Optimization: Investment grade
Slide 28: Balance sheet reflects projects in start-up phase
Balance sheet reflects projects in start-up phase, at an inflection point of transitioning from “Cash OUT” to “Cash IN” ~ $1.6B • Nearly two-thirds of debt attributable to our three new manufacturing facilities ~ $0.6B • Construction is completed at these facilities, and they are at various stages o
Slide 29: Appendix
Appendix MAPLE LEAF FOODS – Q4 2022 BUSINESS AND FINANCIAL REVIEW | MARCH 9, 2023
Slide 30: Reconciliation of non-IFRS metrics – Adjusted EBITDA Margin
Reconciliation of non-IFRS metrics – Adjusted EBITDA Margin Three months ended December 31, 2022 Three months ended December 31, 2021 Meat Plant Meat Plant ($ millions)(1) Protein Protein Non- Protein Protein Non- (Unaudited) Group Group allocated(2) Total Group Group allocated(2) Total Earnings (lo
Slide 31: Reconciliation of non-IFRS metrics – Adjusted Earnings per Share
Reconciliation of non-IFRS metrics – Adjusted Earnings per Share Three months ended December 31, ($ per share) (Unaudited) 2022 2021 Basic (loss) earnings per share ($0.34) 0.02 Restructuring and other related costs(1) 0.04 0.01 Items included in other expense not considered 0.03 0.02 representative