Slide 1: Q4 2019 Business & Financial Review
Maple Leaf Foods Q4 2019 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: Strategic Update
Strategic Update 3 LENDER PRESENTATION – MAPLE LEAF FOODS | APRIL 10, 2019
Slide 4: We continue to be focused on executing our strategic Blueprint
We continue to be focused on executing our strategic Blueprint 44 MAPLE LEAF FOODS – Q4 2019 BUSINESS AND FINANCIAL REVIEW | FEBRUARY 27, 2020
Slide 5: 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 6: Maple Leaf's Growth Vectors Have Delivered Compelling Results
Maple Leaf’s Growth Vectors Have Delivered Compelling Results We have developed growth vectors across our business: 3-year Average Sales Growth excluding acquisitions/divestments 1. Meat Protein Group → Leveraging leadership in sustainable meats → Rapidly growing presence in US → Entrenching impact
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: 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
Slide 9: Q4 2019 Results
Q4 2019 Results 9 LENDER PRESENTATION – MAPLE LEAF FOODS | APRIL 10, 2019
Slide 10: Delivery of Strategic, Financial & Operational Priorities in 2019
Delivery of Strategic, Financial & Operational Priorities in 2019 Strategic Financial Operational Maple Leaf First major food company to be Repurchased 0.8M shares at Successfully executed cost Foods Carbon Neutral $24.21/share for $20.3M efficiency programs Becoming the most sustainable Secur
Slide 11: Meat Protein Group – Q4 2019 Key Financial Metrics
Meat Protein Group – Q4 2019 Key Financial Metrics Q4 2019 Change Drivers Sales $970.3 13.3% • Higher volume/mix tied to brand renovation, growth in sustainable meats and double-digit growth in the US Excl. acquisitions 9.9% • Higher prices (PM pricing action & pork markets) Gross Profit $150.5 +13.
Slide 12: Meat Protein Group – Pork Market Volatility Continued in Q4
Meat Protein Group – Pork Market Volatility Continued in Q4 Hog Production Margins Pork Processor Margins Pork By-Product Market $20 $30 $6.5 $6.0 $10 $20 $5.5 US/CWT US/CWT US/CWT $0 $10 5-yr avg. $5.0 $4.5 -$10 $0 $4.0 -$10 $3.5 -$20 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Hog production margins = liv
Slide 13: Plant Protein Group – Q4 2019 Key Financial Metrics
Plant Protein Group – Q4 2019 Key Financial Metrics Q4 2019 Change Drivers Sales $49.7 31.5% • Expanded distribution of new product innovation • Continued growth in legacy portfolio Gross Profit $7.2 -24.1% • Start-up inefficiencies related to high growth (-1,010 bps) • Other one-time items (-280 bp
Slide 14: Greenleaf Commands a Strong #2 Position in North America
Greenleaf Commands a Strong #2 Position in North America (all figures for Q4 2019) Market growth +82% Y/Y +36% Y/Y #1 New entrant 39% share ( 5% from Q3) #1 Incumbent 57% share ( 5% from Q3) Market Share #2 29% share ( 1% from Q3) #2 16% share (flat from Q3) #3 Incumbent 10% share ( 1% from Q3) #3 N
Slide 15: 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 $44.9M $45.3M Start-up & high-growth Start-up & inefficiencies high-growth -7.6% inefficiencies -10.1% Non-recurring -2.8% Ad & Ad & 21.3% promo: promo: ~70% 14.4% (of SG&A) ~60% (of SG&A) Q3 Q4 Q3 Q4 Notable It
Slide 16: Total Company – Q4 2019 Key Financial Metrics
Total Company – Q4 2019 Key Financial Metrics Q4 2019 Change Drivers Sales $1,016.0 13.7% • Strong growth in Meat Protein • Accelerated growth in Plant Protein Excl. acquisitions 10.4% Adj. EBITDA $75.3 -15.5% • Solid commercial performance across the business • Offset by strategic investment in Pla
Slide 17: Update on Key Large-Scale Capital Projects
Update on Key Large-Scale Capital Projects London Poultry Facility Shelbyville Plant Protein Facility Strategic • Increases processing capacity for value- Strategic • Increases production capacity to meet Rationale added, higher margin poultry products Rationale growing demand with low cost manufact
Slide 18: 2020 & Long Term Outlook
MAPLE LEAF 2020 & Long Term Outlook
Slide 19: 2020 Financial Priorities – Measurable Progress Towards LT Targets
2020 Financial Priorities – Measurable Progress Towards LT Targets Meat Protein Group Plant Protein Group Total Company 1. Mid-to-high single digit sales 1. Sales growth of approximately 1. Capital expenditure of $650-700M. growth, driven by continued 30%, in line with the long term Approximately 70
Slide 20: 2020 Strategic & Operational Priorities
2020 Strategic & Operational Priorities Company Wide Leverage our Carbon Neutral commitment with our brands Maintain a strong balance sheet with ample liquidity Meat Protein Group Grow sustainable meats, including continued momentum in the US Increase development in kits & dry cured meats
Slide 21: Long Term Outlook – Focused on Material Value Creation
Long Term Outlook – Focused on Material Value Creation 2022 Adjusted EBITDA margin target of 14-16%, driven by: Meat Protein • Growth in sustainable meats • Mix-shift benefits from our brand and food renovation work Group • Cost and capital discipline 2029 ambitious goals for high-growth business: P
Slide 22: Appendix
Appendix at S TIME FOR BETTER: iy FOR MEAT THAT TASTES THE.WAY IT SHOULD LIKE MEAT. i |) MADE FROM ANIMALS THAT ARE Rasen, NOT PRODUCED, IT STIME FOR MORE ren AND LESS PHARM. BECAUSE ANTIBIOTICS ARE FOR THE SICK, NOT THE HUNGRY. Irs TIME To LET|NATURE DOITS THING. IT’S TIME FOR BETTER MEAT FORB ‘TER
Slide 23: Reconciliation of Non-IFRS Metrics – Adjusted EBITDA Margin
Reconciliation of Non-IFRS Metrics – Adjusted EBITDA Margin Three months ended Dec. 31, 2019 Three months ended Dec. 31, 2018(1) Meat Plant Meat Plant ($ millions) Protein Protein Non- Protein Protein Non- (Unaudited) Group Group allocated(2) Total Group Group allocated(2) Total Earnings (loss) befo
Slide 24: Reconciliation of Non-IFRS Metrics – Adjusted Earnings per Share
Reconciliation of Non-IFRS Metrics – Adjusted Earnings per Share Three months ended Dec. 31, ($ per share) (Unaudited) 2019 2018 Basic earnings per share $0.14 $0.10 Restructuring and other related costs(2) 0.03 0.25 Items included in other (income) expenses not (0.03) 0.06 considered representative