Slide 1: Maple Leaf Foods Third Quarter 2019
Maple Leaf Foods Third Quarter 2019 All dollar amounts are presented in Canadian dollars unless otherwise noted. MAPLE LEAF FOODS – Q3 2019 BUSINESS AND FINANCIAL REVIEW | OCTOBER 30. 2019
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: Our objectives today
Our objectives today 1. Describe our new segmented reporting and key financial metrics 2. Explain erratic global pork markets 3. Update you on our progress to deliver on our strategic Blueprint 4. Unpack our significant investment in Plant Protein to drive growth and value creation 3 MAPLE LEAF FOOD
Slide 4: A pivot point in Plant Protein; extraordinary events in global pork markets
A pivot point in Plant Protein; extraordinary events in global pork markets ▪ New reporting reflects two significant segments with different financial goals: Meat Protein with a robust multi-year agenda of profitable growth Plant Protein capitalizing on enormous opportunities for rapid top-line
Slide 5: Q3 Results reflect significant progress in advancing our new segmented operating direction
Q3 Results reflect significant progress in advancing our new segmented operating direction Meat Protein Maple Leaf Consolidated Deliver profitable growth and EBITDA margin target of 14%-16% in 2022 Financial Results Q3 2019 Q3 2019 Sales ($M) $953.3 +13.7% Sales ($M) $995.83 Adjusted EBITDA $85.4 +8
Slide 6: Global pork markets were thrown off balance by extraordinary events… BUT
Global pork markets were thrown off balance by extraordinary events… China North America Hog slaughter The Paradox accelerated ASF dramatically Hog production BUT NA hog prices North American hog Pork prices fall fall as China reduces hog increases first, then rise with puts tariffs on and pork pric
Slide 7: We were on the wrong side of these events for Q3, with offsetting benefits anticipated in Q4
We were on the wrong side of these events for Q3, with offsetting benefits anticipated in Q4 Erratic August Hog Futures Impact to Maple Leaf Locked-in costs and communicated price increases Locked-in summer Trade barriers negatively prepared meats raw impacted North American material costs in April
Slide 8: We continue to be focused on executing our strategic Blueprint
We continue to be focused on executing our strategic Blueprint 8 MAPLE LEAF FOODS – Q3 2019 BUSINESS AND FINANCIAL REVIEW | OCTOBER 30. 2019
Slide 9: …accomplishing several milestones in the third quarter
…accomplishing several milestones in the third quarter Sustainability Strategy Poultry Strategy Food Renovation • Adopted Science Based • Construction of new scale • Brands continued to shift Targets to more aggressively poultry facility underway sales mix toward higher reduce emissions - 1 of only
Slide 10: Pivoting to a plant protein business, we are intentionally investing heavily to drive high revenue growth
Pivoting to a plant protein business, we are intentionally investing heavily to drive high revenue growth Significant SG&A investments in all elements of Brand penetration brand development Winning with product that delivers on all Innovation pipeline consumer needs Across the board investments in t
Slide 11: The End Game: Estimated $25 billion market in 10 years and a $3B Maple Leaf Plant Protein business
The End Game: Estimated $25 billion1 market in 10 years and a $3B Maple Leaf Plant Protein business Refrigerated segment is underpenetrated compared Plant-based protein is expected to reach 10% - 15% of with other plant-based categories the meat protein market by 2029 versus 1% today US household pe
Slide 12: We are prepared for negative EBITDA in the short term enroute to creating significant value
We are prepared for negative EBITDA in the short term enroute to creating significant value Core Gross Margin maintained at ~30% Plant Protein Revenue Growth • Core gross margin adjusts for start-up Key performance metrics production inefficiencies and scale-up costs Q3 19 Q3 18 Change related to hi
Slide 13: Greenleaf's investments have already had big payoffs
Greenleaf’s investments have already had big payoffs Q3-19 (vs Q3-18) ~35X …to drive increased brand awareness and consumer >1B increase in ad & promo… adoption Media impressions1 1 Year-to-date across all channels ~10X …to improve product sensory and greatly expand increase in R&D … innovation pipe
Slide 14: Our wins are accelerating as we dial up the marketing…
Our wins are accelerating as we dial up the marketing… Kristen Bell & Dax Shepard Greenleaf Tailgate Tour Ellen 11 college games across the U.S. Roy Choi Field Roast partnership Over 11 million impressions Over 250 million impressions 14 MAPLE LEAF FOODS – Q3 2019 BUSINESS AND FINANCIAL REVIEW | OCT
Slide 15: ….and our distribution coverage!
….and our distribution coverage! 15 MAPLE LEAF FOODS – Q3 2019 BUSINESS AND FINANCIAL REVIEW | OCTOBER 30. 2019
Slide 16: A steady focus on value creation
A steady focus on value creation ▪ Segmented financials provide greater market visibility to contribution and growth potential of Plant Protein business ▪ Managing through short-term global market impacts with the right strategies ▪ Delivering sales and margin expansion in value-added meats to deliv