Maple Leaf Foods Inc. · TSX:MFI
Maple Leaf Foods — Q1 2015 Earnings Presentation
12 slides from Maple Leaf Foods's earnings presentation, Apr 30, 2015
Slide 1: First Quarter Review 2015
FIRST QUARTER REVIEW 2015 MICHAEL McCAIN President and Chief Executive Officer DEBBIE SIMPSON Chief Financial Officer April 30, 2015
Slide 2: Closing gap to EBITDA margin target
Closing gap to EBITDA margin target • Returned to profitability in adjusted EPS at $0.05/share • EBITDA margin improved to 4.7%, up from negative 1.1% last year • Plant closures now complete; duplicate networks eliminated in Q2 • Path to 10% margin target in new plant optimization • Early stages of
Slide 3: EBITDA margin trend is clear
EBITDA margin trend is clear 5% 4.7% QUARTERLY CONSOLIDATED ADJUSTED EBITDA MARGIN 1.5% 0.7% 0.5% 0.5% 0% Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 (1.1%) (1.4%) (1.3%) Q1 2015 Q1 2014 SALES $780.2M $711.3M ADJUSTED OPERATING EARNINGS $10.4M ($29.9M) (4.3%) ADJUSTED EBI
Slide 4: Adjusted operating earnings turnaround of $40M
Adjusted operating earnings turnaround of $40M Figures in millions. Q1 REVIEW 2015 4
Slide 5: Good momentum in commercial performance
Good momentum in commercial performance • Prepared meats volumes improved through the quarter • Maintained strategic gross margins • Strong fresh pork performance • Positive environment in commodities, currency and energy Q1 REVIEW 2015 5
Slide 6: End of duplicative supply chain
End of duplicative supply chain • Integrate • Reduce process • Build new Eastern platforms complexity distribution centre • Realize SAP • Consolidate benefits network from 19 to 2 ERP Processes Distribution • Invest in new, low-cost plants • Hamilton, Winnipeg, Saskatoon and Brampton • Close legacy
Slide 7: Path to 10%: focus on plant optimization
Path to 10%: focus on plant optimization 10% EBITDA TARGET Today Remaining Target 4.7% 5.3% 10% Q1 2015 Adjusted EBITDA 0.9% 4.7% Remaining Duplication Operational Efficiency Variances 4.4% Q1 REVIEW 2015 7
Slide 8: From fix to grow
From fix to grow Work underway in defining growth agenda Disciplined Process • Analytical rigour • Organic acquisitions Creates Opportunities • Focused on long term • Growth in value-added • Appropriate returns plus poultry enhancing shareholder value Rooted in Consumer • Sustainable meat Evolution
Slide 9: Positive free cash flow
Positive free cash flow • Positive free cash flow of $5M • $427M cash on hand at the end of Q1 • Normal seasonal investment in working capital of $50M • Restructuring costs for the quarter were $11M ($7M cash) Q1 REVIEW 2015 9
Slide 10: Defining capital allocation strategy is a priority
Defining capital allocation strategy is a priority • Executed some components of a balanced capital allocation plan: o Dividend doubled to support positioning of the stock appropriately o Normal course issuer bid launched to offset dilution from long term compensation • Focused on final achievement
Slide 11: In conclusion…
In conclusion… • A strong quarter with good margin progression • Momentum on commercial side of business • Closed remaining legacy plants • Clear path to realizing margin target • Focus on total shareholder value Q1 REVIEW 2015 11
Slide 12: Non-IFRS Measures
Non-IFRS Measures Adjusted Operating Earnings: Adjusted Operating Earnings, a non-IFRS measure, is used by Management to evaluate financial operating results. It is defined as earnings before income taxes from continuing operations adjusted for items that are not considered representative of ongoing