Slide 1: Delivering Results; Building a Sustainable Future
Delivering Results; Building a Sustainable Future Q2 2016 REVIEW July 28, 2016 Michael McCain, President and Chief Executive Officer Debbie Simpson, Chief Financial Officer
Slide 2: Q2 highlights
Q2 highlights Financial Commercial Operations Innovation Robust results Adjusted EPS of across the $0.32 business Continued Most active performance product and improvements category at the new innovation in Ramped up Heritage facility our history Adjusted EBITDA branding, margin of 10.3% advertising
Slide 3: Strong performance improvement across the board
Strong performance improvement across the board Sales Adjusted Operating Earnings ($ millions) ($ millions) +4% +177% $855 $61 $821 $22 Q2 2015 Q2 2016 Q2 2015 Q2 2016 Adjusted Earnings per Share Adjusted EBITDA ($ per share) ($ millions) +146% +80% $0.32 $88 $49 $0.13 Q2 2015 Q2 2016 Q2 2015 Q2 201
Slide 4: Continued earnings progression and momentum
Continued earnings progression and momentum Adjusted Earnings per Share Adjusted Operating Earnings Q2 2016 Review 4
Slide 5: Continued achievement of EBITDA margin target
Continued achievement of EBITDA margin target 10.3% Strategic Target 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 -1.3% -1.1% -1.4% -4.3% Q2 2016 Review 5
Slide 6: Strong commercial results across the business
Strong commercial results across the business • Increased prepared meats margins due to lower operating costs and improved sales mix • Increased North American volume in ‘raised without antibiotics’ meat • Building on our leading position in foodservice sustainable meat • Increased retail branded po
Slide 7: Sustainable meat
Sustainable meat • Sustainable meat creates competitive advantage and enables market differentiation for Maple Leaf as an emerging growth platform • Building out the sustainable meat proposition and expanding commercial advantage • Concentrated push on ‘Raised Without Antibiotic’ (RWA) market • Furt
Slide 8: Significant product innovation: Canadian Craft & Prime Turkey
Significant product innovation: Canadian Craft & Prime Turkey Responding to consumer demand for Appealing to growing consumer artisanal prepared meats interest in poultry. Q2 2016 Review 8
Slide 9: Active consumer activity: Branding and Promotion
Active consumer activity Branding Promotion Q2 2016 Review 9
Slide 10: Active product pipeline: Q3 launch of new Devour Jerky
Active product pipeline: Q3 launch of new Devour Jerky • Targeting customers looking for a different Jerky experience. Fundamentally different taste experience in texture, flavour and quality in the fast growing Snacking category . Q2 2016 Review 10
Slide 11: Structural margin improvement
Structural margin improvement Q2 2016 % of sales Q2 2015 % of sales Sales 854.6 820.8 Adjusted Cost of Goods Sold(1) 714.6 718.5 Adjusted Gross Margin 140.0 16.4% 102.3 12.5% SG&A 79.5 9.3% 80.5 9.8% Adjusted Operating Earnings 60.5 7.1% 21.8 2.7% Adjusted EBITDA 87.9 10.3% 49.0 6.0% Adjusted EPS 0.
Slide 12: Continued improvement in cash flow and liquidity
Continued improvement in cash flow and liquidity Cash Flow From Operations ($ millions) $109 • Cash on hand of $313 $75 $63 million at the end of the $40 second quarter Q2 2015 YTD 2015 Q2 2016 YTD 2016 • Refinanced credit facility; expanded to $400 million Free Cash Flow ($ millions) • Capital spen
Slide 13: Summary
Summary • Delivered second consecutive double digit EBITDA margin performance • Commercial strength across our all our businesses • Continued progress in advancing operational efficiencies in our new plant network • Significant innovation activity supporting our foundation for profitable growth Buil
Slide 14: 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