Maple Leaf Foods Inc. · TSX:MFI
Maple Leaf Foods — Investor Day (November 2017)
107 slides from Maple Leaf Foods's investor day presentation, Nov 8, 2017
Slide 1: Investor Day 2017
Investor Day 2017 mn hal i)
Slide 2: Safe Harbor
Safe Harbor 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 beliefs and assumptions made
Slide 3: Safe Harbor
Safe Harbor Factors that could cause actual results or outcomes to differ materially from the results expressed, implied, or forecasted by forward looking information include, among other things: risks associated with the Company focusing solely on the protein business; risks related to the Company'
Slide 4: Non-IFRS Financial Measures and Basis of Presentation
Non-IFRS Financial Measures and Basis of Presentation Adjusted Operating Earnings: Defined as earnings before income taxes adjusted for items that are not considered representative of ongoing operational activities of the business, and items where the economic impact of the transactions will be refl
Slide 5: Welcome and agenda
Welcome and agenda Time Topic Presenter Title 9:00 am Becoming the most sustainable protein company on earth Michael H. McCain President & Chief Executive Officer 9:20 am Activating our vision Gary Maksymetz Chief Operating Officer 9:40 am Why sustainability matters Randy Huffman Chief Food Safety &
Slide 6: Becoming the most sustainable protein company on earth
Becoming the most sustainable protein company on earth Michael H. McCain, President & Chief Executive Officer 6 | November 8, 2017 | Investor Day | Michael H. McCain
Slide 7: Maple Leaf's transformational journey
Maple Leaf’s transformational journey Transforming the business Building the foundation Pre-2014 2014–2015 2016–2017 2018+ • Broad meat • Focused branded • Defined strategic • 10% EBITDA • Launched purpose and bakery protein company growth platforms milestone and vision portfolio achieved • Prepared
Slide 8: Our journey has significantly rewarded shareholders
Our journey has significantly rewarded shareholders Total shareholder return vs. indices – last five years S&P 500 TSX 260.0% +218% 230.0% 200.0% 170.0% 140.0% +79% 110.0% 80.0% 50.0% +28% 20.0% (10.0%) Oct 12 Oct 13 Oct 14 Oct 15 Oct 16 Oct 17 8 | November 8, 2017 | Investor Day | Michael H. McCain
Slide 9: Five mega trends are shaping the food industry
What’s next? Five mega trends are shaping the food industry Big foods, big brands under attack Growth in responsible consumption FOOD INDUSTRY Digital disruption MEGA TRENDS Cost reduction imperative Global food security 9 | November 8, 2017 | Investor Day | Michael H. McCain
Slide 10: The path forward: creating shared value
The path forward: creating shared value WHAT THE BUSINESS WORLD NEEDS SHARED OPPORTUNITY A sustainable food system VALUE Creating high-growth, profitable markets 10 | November 8, 2017 | Investor Day | Michael H. McCain
Slide 11: We arrived at a clear vision for Maple Leaf
We arrived at a clear vision for Maple Leaf 11 | November 8, 2017 | Investor Day | Michael H. McCain
Slide 12: This is not a new direction: building the foundation for many years
This is not a new direction: building the foundation for many years • Sustainability elevated from strategy to company purpose and vision • Expanding into alternative proteins • Established North American leadership in raised without antibiotics • Aggressive environmental footprint reduction • Build
Slide 13: Pursuing our vision will accelerate profitable growth
Pursuing our vision will accelerate profitable growth Driving profitability Driving growth Five-year goal • Attracting and inspiring great talent 14% to 16% • Commercializing our leadership in sustainability 2016 • Activating purpose through our brands • Building our U.S. growth platform • Expanding
Slide 14: What we would like to accomplish with you today
What we would like to accomplish with you today • Understand our vision and plans • Understand how shared value translates into profitable growth • Understand where we expect to deploy capital to support our vision 14 | November 8, 2017 | Investor Day | Michael H. McCain
Slide 15: Activating our vision
Activating our vision Gary Maksymetz, Chief Operating Officer 15 | November 8, 2017 | Investor Day | Gary Maksymetz
Slide 16: First… some context on who we are
First… some context on who we are Employing more than 11,000 people, we are: Canada’s leading • Canada’s largest prepared meats and poultry producer branded protein • Top 10 pork producer in North America, largest in pork raised company, with without antibiotics sales exceeding • Leading refrigerate
Slide 17: Unparalleled breadth of leading brands with #1 and #2 market shares
We have an unparalleled breadth of leading brands with #1 and #2 market shares 17 | November 8, 2017 | Investor Day | Gary Maksymetz
Slide 18: We have built a tremendous value-added business
We have built a tremendous value-added business Virtually all Canadian households A portfolio of value-added purchase Maple Leaf products consumer products ~10% ~20% ~80% ~90% MLF products Other Value-added Other 18 | November 8, 2017 | Investor Day | Gary Maksymetz
Slide 19: Competitive advantage from scale vertical integration
Competitive advantage from scale vertical integration Processing and Delivers competitive market advantage for our brands Raising distribution and customer relationships • Company-owned • Top 10 pork producer Market-leading brands farms supply 40%+ of in North America processed pork • State-of-the-a
Slide 20: Our six core strategies fuel our vision
Our six core strategies fuel our vision 20 | November 8, 2017 | Investor Day | Gary Maksymetz
Slide 21: Our broad sustainability platform is a catalyst for growth
Our broad sustainability platform is a catalyst for growth • Leading the industry in health and nutrition • Advancing food security • Executing animal wellness strategy • Reducing environmental footprint by 50% 21 | November 8, 2017 | Investor Day | Gary Maksymetz
Slide 22: Creating shared value requires talented and passionate people
Creating shared value requires extraordinarily talented and passionate people • Purpose and vision are magnets for top talent who can make a difference • Being a purpose-driven company drives high engagement • Continuing to lead our industry in workplace safety • Fostering a workplace that deeply em
Slide 23: A food movement is underway at Maple Leaf
A food movement is underway at Maple Leaf • Deeply connecting with our consumers by offering great food choices and options • Directly connecting our brands to our vision and strategic advantages • Reformulating our portfolio to Raise the Good in Food across multiple dimensions, including taste, nut
Slide 24: Expanding into new markets led by sustainable protein
Expanding into new markets led by sustainable protein • Broadening our leadership in alternative plant-based proteins • Building out our U.S. growth platform with sustainable meat a core diffentiator • Strategic, accretive acquisitions that align with our vision 24 | November 8, 2017 | Investor Day
Slide 25: Sustainability enabled by exciting digital opportunities
Sustainability enabled by exciting digital opportunities • New ways of working – enabling seamless collaboration “anywhere” • New ways of operating – unleashing the potential of new technologies • New ways of engaging customers – leveraging data visualization, machine learning and streamlined custom
Slide 26: Eliminating waste in all forms; sustainability a key enabler
Eliminating waste in all forms; sustainability a key enabler • Embedded cost culture • Standardizing best-in-class operating processes • Driving tangible benefits from our environmental action plan • Continuing to invest in our assets to support continued margin growth 26 | November 8, 2017 | Invest
Slide 27: A proven track record of execution
A proven track record of execution • Successful execution of network transformation • Delivered on our previous 10%+ margin target • Strong governance and management rhythms • Culture of accountability and delivering results • Disciplined approach to investment • Resilient, fast paced and adept at c
Slide 28: Why sustainability matters
Why sustainability matters Randy Huffman, Chief Food Safety & Sustainability Officer 28 | November 8, 2017 | Investor Day | Randy Huffman
Slide 29: A unique opportunity to create shared value
We have a unique opportunity to create shared value WHAT THE BUSINESS WORLD NEEDS SHARED OPPORTUNITY A sustainable food system VALUE Creating high-growth, profitable markets 29 | November 8, 2017 | Investor Day | Randy Huffman
Slide 30: The food system is at the epicentre of critical global issues
The food system is at the epicentre of critical global issues; meat production and consumption is a core contributor • 800 million • Food system contributes • North American meat • Rising lack of trust in the undernourished, ~30% of greenhouse gas consumption 4x that of food industry 2 billion overw
Slide 31: Addressing these needs is creating high-growth profitable markets
Addressing these needs is creating high-growth profitable markets • “Responsible product” consumption vastly outpacing conventional retail growth • Reducing antibiotic use creating a fast-growing market • Rise in “flexitarianism” means more demand for plant-based proteins and fusion foods • Sustaina
Slide 32: Responsible consumption driving fastest-growing, highest-margin segments
Consumer interest in responsible consumption is driving fastest-growing and highest-margin segments in the food sector Responsible consumption (RC) …and price premiums out-index conventional products account for 15% of U.S. protein by 10-50% retail chain sales but 70% of growth SALES 15% GROWTH 25 –
Slide 33: Sustainability is becoming mainstream in how people think about food
Sustainability is becoming mainstream in how people think about food Chain restaurants are driving awareness with their high profile Sustainable protein increasingly part of the digital consumer conversation raised without antibiotics (RWA) options Seafood sustainabilty +97% Animal welfare +120% Mea
Slide 34: We define sustainable meat very broadly through our principles
We define sustainable meat very broadly through our principles Sustainable meat is produced with respect, within environmental limits, and consumed in moderation as part of a healthy balanced diet. • Sustainable meat is nutritious, healthy and safe. • Sustainable meat is accessible, affordable and e
Slide 35: Thinking big about the most sustainable protein company in the world
We are thinking big about what it will take to be the most sustainable protein company in the world and how we can accelerate change Better Food Better Care Better Communities Better Planet • Making better, more natural food • Showing leadership in crate- • Reducing food insecurity by 50% • Becoming
Slide 36: With some groundbreaking accomplishments…
With some groundbreaking accomplishments… One of the first North American scale producers to commit to transitioning sows to open housing and the only scale producer in North America to implement an enhanced system that provides 100% gestation crate-free housing. 36 | November 8, 2017 | Investor Day
Slide 37: Video
VIDEO 37 | November 8, 2017 | Investor Day | Randy Huffman
Slide 38: With some groundbreaking accomplishments…
With some groundbreaking accomplishments… One of the first North American scale We have an aggressive goal to reduce Bold goal to reduce food insecurity by producers to commit to transitioning sows our environmental footprint by 50% by 50% by 2030 through the Maple Leaf to open housing and the only
Slide 39: Video
VIDEO 39 | November 8, 2017 | Investor Day | Randy Huffman
Slide 40: 40 | November 8, 2017 | Investor Day | Randy Huffman
40 | November 8, 2017 | Investor Day | Randy Huffman
Slide 41: Brand strategies to Raise the Good in Food
Brand strategies to Raise the Good in Food Adam Grogan, SVP Marketing & Innovation 41 | November 8, 2017 | Investor Day | Adam Grogan
Slide 42: How our vision comes to life is unique to each brand strategy
How our vision comes to life in our food is unique to each of our brand strategies 42 | November 8, 2017 | Investor Day | Adam Grogan
Slide 43: Targeting higher-growth demand spaces in total food landscape
Targeting higher-growth demand spaces in total food landscape Total annual food Making our categories top of mind for consumers when feeding children, consumption in Canada: entertaining and needing a quick fix, $64B to drive growth in prepared meats. All it takes is two extra occasions per year fro
Slide 44: Positioning our brands to win across demand spaces
We are positioning our brands to win across demand spaces; most ambitious brand and product reformulation in our history • Brand strategy target 85% of prepared meats demand spaces • Sweeping reformulation effort of 900 SKUs to meet strict brand specifications Responsible Parenting Connect & Savour
Slide 45: Raising the good in food by aligning brand attributes to demand spaces
Raising the good in food by aligning brand attributes to demand spaces • Brand strategy target 85% of prepared meats demand spaces • Sweeping reformulation effort of 900 SKUs to meet strict brand specifications Responsible Parenting Connect & Savour Quick Fix • Changing the way we • Natural with not
Slide 46: Maple Leaf will lead a real food movement with Canadian parents
Maple Leaf will lead a real food movement with Canadian parents REAL, SIMPLE INGREDIENTS All ingredients parents recognize. No unpronounceables ALL NATURAL – NOTHING ARTIFICIAL No artificial ingredients in any of our products OUR PREMIUM CUTS OF MEAT Pork. Chicken. Beef. Turkey. FLAVOURS THE WHOLE F
Slide 47: To spark this real food movement, Maple Leaf will show up differently
To spark this real food movement, Maple Leaf will show up differently 47 | November 8, 2017 | Investor Day | Adam Grogan
Slide 48: Video
VIDEO 48 | November 8, 2017 | Investor Day | Adam Grogan
Slide 49: Schneiders will stand for craftsmanship, authenticity and provenance
Schneiders will stand for craftsmanship, authenticity and provenance to deliver irresistible-tasting food BEST TASTING Best-tasting, most irresistible meat products in Canada ORIGINAL RECIPES All products use original recipes, each with an enticing provenance story MEATS AND INGREDIENTS Premium cuts
Slide 50: Relaunching Schneiders to be the leading crafted meats brand
Relaunching Schneiders to be the leading crafted meats brand in the market Craftsmanship Worth Sharing 50 | November 8, 2017 | Investor Day | Adam Grogan
Slide 51: Video
VIDEO 51 | November 8, 2017 | Investor Day | Adam Grogan
Slide 52: Swift makes good food accessible to all Canadians
Swift makes good food accessible to all Canadians AFFORDABILITY Priced for everyday value PRODUCT DESIGN High levels of protein at low cost TASTE Satisfies consumer expectations with good taste PACKAGING Packaging stands out with appealing food photography 52 | November 8, 2017 | Investor Day | Adam
Slide 53: Standing out on shelf with breakthrough packaging and graphics
Standing out on shelf with breakthrough packaging and graphics #MakeItSwift 53 | November 8, 2017 | Investor Day | Adam Grogan
Slide 54: 54 | November 8, 2017 | Investor Day | Adam Grogan
54 | November 8, 2017 | Investor Day | Adam Grogan
Slide 55: Greenfield brand represents the true north of our sustainable meat platform
Greenfield brand represents the true north of our sustainable meat platform BETTER FOOD Without any antibiotics, hormones or anything artificial BETTER CARE Humanely, more naturally raised, grain-fed animals BETTER COMMUNITIES Deeply committed to advancing food security BETTER PLANET Raising animals
Slide 56: Greenfield is a start-up brand building great momentum as a disrupter
Greenfield is a start-up brand within Maple Leaf and is building great momentum as a disrupter • Launched in 2015 • #1 new brand in Canada in 2016 • Double-digit sales growth BREAKTHROUGH GREENFIELD LAUNCHED NEW, in Canada and the U.S. CONSUMER COMMUNICATION DISRUPTIVE PACKAGING • Expanding retail l
Slide 57: 57 | November 8, 2017 | Investor Day | Adam Grogan
57 | November 8, 2017 | Investor Day | Adam Grogan
Slide 58: Prime raised without antibiotics meets changing consumer needs
Prime raised without antibiotics meets changing consumer needs and extends our sustainability leadership 58 | November 8, 2017 | Investor Day | Adam Grogan
Slide 59: Raising the bar on sustainability
Raising the bar on sustainability, so that consumers can feel good about the food they’re eating 59 | November 8, 2017 | Investor Day | Adam Grogan
Slide 60: Video
VIDEO 60 | November 8, 2017 | Investor Day | Adam Grogan
Slide 61: Raising the good in food through our brand strategies
Raising the good in food through our brand strategies • Most ambitious brand and product reformulation in our history • Clearly differentiates our flagship prepared meats brands • Aligns brands to distinct demand spaces • Raises the good in food through nutrition, taste, affordability and sustainabi
Slide 62: Broadening our reach: U.S. growth platform
Broadening our reach: U.S. growth platform Curtis Frank, SVP Retail Sales 62 | November 8, 2017 | Investor Day | Curtis Frank
Slide 63: Our sales organization is energized by Maple Leaf's vision
Our sales organization is energized by Maple Leaf’s vision and market differentiating capabilities • Leading brands in Canadian market • Focused on executing growth agenda • Cost-competitive network to support market expansion • Compelling and diverse sustainable meat platform 63 | November 8, 2017
Slide 64: Strategy provides credentials to broaden reach into high-growth U.S. segments
Our strategy provides credentials to broaden our reach into high-growth segments within a large U.S. market U.S. grocery composite Perimeter outpacing total food and 11x size of Canadian retail beverage growth New entrants changing the retail market 3.8% Challenger brands ~11X (4-year CAGR) capturin
Slide 65: Market demand for sustainable meat increasing rapidly in the U.S.
Market demand for sustainable meat increasing rapidly in the U.S. High consumer awareness… …is driving purchasing Households behaviour… 47% 86% Buying of consumers no antibiotics want RWA choice …is translating into higher …resulting in average basket… Average basket with no antibiotics rapid catego
Slide 66: We will succeed in the U.S. due to our differentiated platform
We will succeed in the U.S. due to our differentiated sustainable meat platform and capabilities • Breadth and scale of sustainable meat platform differentiates us • Vertical integration to meet scale demand • World-class scale assets and end-to-end supply chain assurance • On-the-ground sales team
Slide 67: Deepening our on-the-ground U.S. sales team and capabilities
Deepening our on-the-ground U.S. sales team and capabilities • Integrated cross-functional group with full end-to-end accountability • Balance of seasoned Maple Leaf and U.S.-based sales leaders who bring deep U.S. industry and customer relationships • Average tenure of 20 years • Top Maple Leaf tal
Slide 68: Leveraging scale and vertical integration
Leveraging scale and vertical integration • Network is cost competitive with North American peers • Vertical integration provides consistent and growing supply of sustainable pork to meet scale demand from farm to fork • Strategically located manufacturing assets enable efficient distribution • Adva
Slide 69: Greenfield Natural Meat Co. leads our U.S. branded platform
Greenfield Natural Meat Co. leads our U.S. branded platform and is outpacing the category • Greenfield U.S. growth significantly outpacing broader sustainable meat category • Leveraging our competitive advantage as North America’s largest producer of pork raised without antibiotics • Robust innovati
Slide 70: Working with majority of the largest U.S. retailers
Working with majority of the largest U.S. retailers Maple Leaf brands distributed in over 3,300 stores across the U.S. North America–wide Deepening relationships with relationships major U.S. chains 70 | November 8, 2017 | Investor Day | Curtis Frank
Slide 71: We are proving our ability to win in sustainable meat
We are proving our ability to win in sustainable meat • Greenfield brand distributed in 1100+ stores, • Ahold has 800+ stores in northeast U.S. primarily southeast U.S. • Excellent strategic partnership • Delivered high double-digit growth • Listings across the Ahold network 71 | November 8, 2017 |
Slide 72: Excellent progress on our U.S. platform to date
Excellent progress on our U.S. platform to date, delivering a significant growth trajectory • Breadth of our sustainable meat platform is differentiated and provides a competitive moat • Leveraging our cost-competitive scale manufacturing network • Building U.S. sales organization with deep experien
Slide 73: Expanding our reach in alternative proteins
Expanding our reach in alternative proteins Dan Curtin, President, Alternative Protein 73 | November 8, 2017 | Investor Day | Dan Curtin
Slide 74: Alternative protein is the sweet spot of macro trends
Alternative protein advances our vision and is the sweet spot of macro trends Focus on health Increased and wellness protein intake • Appeals to millennials; category benefiting from purchasing power demographic shift • Offers nutritious protein alternative to meat ALTERNATIVE offering dietary choic
Slide 75: Purchasing power shifting to millennials
Purchasing power shifting to millennials – the largest demographic segment of alternative protein Millennials’ purchasing power is increasing… …with radically different interests in food Purchasing Power High-Frequency Meal Alternative Consumption (% Change of CPG Colume L52W) (% of consumers who co
Slide 76: High-growth emerging platform, a compelling opportunity
High-growth emerging platform, a compelling opportunity to create shared value Refrigerated meat alternatives category growth (Retail Sales; Canada1,3 and U.S.2) $645 million(1) Plant-based food category +14.8% $460 million(3) Frozen meat alternatives category $159 million(3) +8.7% Refrigerated meat
Slide 77: Lightlife is the clear U.S. market leader
Lightlife is the clear U.S. market leader, delivering double-digit growth across its categories Refrigerated meat alternatives retail sales market share Retail Sales growth by product category Trailing 52-week Retail Sale Product Category ($M)(1) Tempeh Dogs Sausage/Breakfast Other Refrigerated 22%
Slide 78: Broadest portfolio in the market with leading market shares
Broadest portfolio in the market with leading market shares across all core categories Tempeh Dogs Sausage/Breakfast Other Refrigerated New Platforms • 78 78 | November 8, 2017 | Investor Day | Dan Curtin
Slide 79: Acquisition exceeding expectations with capacity to support growth
Acquisition exceeding expectations with capacity to support growth • Manufacturing capacity to support growth • Integration exceeding expectations, strong cultural and values alignment • Excellent financial and sales Plant certifications contributions post-acquisition 79 | November 8, 2017 | Investo
Slide 80: Compelling opportunities to build on Lightlife's leadership
Compelling opportunities to build on Lightlife’s leadership Expand existing platform Innovation pipeline Product extensions Broaden the platform The opportunity Expand into other high- Plant protein space is highly Broaden channels and listing Accelerate our innovation growth categories through frag
Slide 81: Growing oh naturel! in the Canadian frozen segment
Growing oh naturel! in the Canadian frozen segment to complement broadened Canadian Lightlife distribution • Reformulated to deliver great taste and convenience with vibrant new packaging • Provides both soy-based and vegetable-based options • Listings at all major national Canadian retailers. Will
Slide 82: Broadening market leadership in alternative proteins
Broadening market leadership in emerging, high-growth alternative proteins is a core growth platform • Leveraging the strong Lightlife brand across North America • Renewed focus on oh naturel! • Increasing household penetration, driving demand and targeting new customers • Expanding meat substitutes
Slide 83: Eliminating waste to fuel our growth
Eliminating waste to fuel our growth Gary Maksymetz, Chief Operating Officer 83 | November 8, 2017 | Investor Day | Gary Maksymetz
Slide 84: Eliminating waste advances our purpose and adds to profitability
Eliminating waste advances our purpose and adds to profitability 84 | November 8, 2017 | Investor Day | Gary Maksymetz
Slide 85: Driving out costs in all forms
Driving out costs in all forms… • Deeply embedded cost culture • Aggressive elimination of process waste • Reduction of environmental footprint • Strategic supplier relationships • Operating efficiencies throughout our network • Investing capital to reduce operating costs 85 | November 8, 2017 | Inv
Slide 86: Tight controls on SG&A
Tight controls on SG&A • Adhering to zero-based budgeting Savings enable • Cost control embedded in short-term increased investment incentive plans in growth • Aggressively targeting non-strategic spend • Delivering SG&A within the range of 9.5% to 10% of sales • Reinvesting SG&A savings in growth d
Slide 87: Driving continuous improvement in our plant network
Driving continuous improvement in our plant network • Operating our plants “the Maple Leaf way” with standardized best-in-class processes • Leveraging real-time data to lower costs • Lower direct-product costs - Reduced electrical and mechanical downtime - Reduced change-over times - Improved yields
Slide 88: Sustainability reduces costs and environmental footprint
Sustainability reduces costs and environmental footprint Driving a conservation mindset across our network Anticipated to generate • Reducing energy and water usage • Heat recovery initiatives millions of dollars in annualized savings • Diverting product waste to energy by 2025 88 | November 8, 2017
Slide 89: Anticipated future investments to reduce costs and enable growth
Anticipated future investments to reduce costs and enable growth Establishing scale efficiencies in our Investing in new technology value-added fresh poultry network • Significant cost take-out opportunity • Increase capacity in bacon, sausage and Italian meats to meet demand • Adding capacity in va
Slide 90: Cost reduction a key enabler to growth
Cost reduction a key enabler to growth • A core part of our culture, vision and strategies • Embedded in all our business processes • Well-defined action plans to eliminate waste in all forms • Significant efficiency gains from future capital investments • A low-risk/high-return path to deploy capit
Slide 91: Our vision of shared value for shareholders
Our vision of shared value for shareholders Debbie Simpson, Chief Financial Officer 91 | November 8, 2017 | Investor Day | Debbie Simpson
Slide 92: We have step-changed structural profitability
We have step-changed structural profitability • Consistent, sustained earnings growth • Balanced portfolio significantly reducing market impacts • ~$1 billion of strategic investments made in the last five years • Strong operating cash flow and balance sheet • Excellent return to shareholders 92 | N
Slide 93: Accelerating growth and profitability
Accelerating growth and profitability • Rationalized manufacturing/distribution footprint …and strong earnings growth • State-of-the-art manufacturing facilities in prepared meats and fresh pork operations Adjusted EPS ($/share) • Transformation into a pure-play protein company $2.00 Significant mar
Slide 94: Accelerating margin performance consistent with best-in-class CPG
Accelerating margin performance consistent with best-in-class CPG Five-year goal 14% to 16% 2016 10%+ 2005–2012 3.5% 94 | November 8, 2017 | Investor Day | Debbie Simpson
Slide 95: Strategies to deliver next phase of margin expansion
Well-defined strategies to deliver next phase of margin expansion Operating efficiencies 1. 2. Investment in poultry network Tight cost controls in SG&A/plant efficiencies ~60% Bridging from 14% to 16% today’s 10%+ Adjusted EBITDA Margin adjusted EBITDA margin Strategic growth initiatives Five-year
Slide 96: Balanced, disciplined approach to capital allocation
Taking a balanced, disciplined approach to capital allocation Returning value to shareholders Investing in growth Dividends Capital Acquisitions Share buybacks Continued growth in dividends Investment in core and Disciplined approach to Buybacks considered for as earnings grow strategic capital spen
Slide 97: Generating steady cash flow and returning value to shareholders
Generating steady cash flow and returning value to shareholders Free cash flow Dividends per share Share buyback through NCIB ($M) ($/share) ($M) Total 15.7M shares for $409M $244 +40% $204 $12 0.44 + 183 154 ($621) 0.36 0.32 72 0.16 2014 2015 2016 2017 YTD 2014 2015 2016 2017E 2015 2016 2017 Q3 YTD
Slide 98: Flexible balance sheet enabling investment in growth
Flexible balance sheet enabling investment in growth Cash on hand of $210 million (Q3 2017) Strategic investments creating value + • Investing in capital projects that are Revolving credit facility of productivity and growth enablers $400 million • Investing in strategic acquisition opportunities +
Slide 99: Disciplined approach to acquisitions to accelerate growth
Disciplined approach to acquisitions to accelerate growth • Selectively targeting value creation opportunities in attractive categories to supplement our product portfolio and improve our growth and margin profile • Prudent and rigorous assessment with high return on capital requirements: - Alignmen
Slide 100: Executing on our strategies to drive future value creation
Executing on our strategies to drive future value creation • Delivered structural margin expansion • Compelling opportunity to drive profitable growth and generate additional cost savings • Significant cash generation and capacity to invest in growth • Disciplined and balanced capital allocation • E
Slide 101: Becoming the most sustainable protein company on earth
Becoming the most sustainable protein company on earth Michael H. McCain, President & Chief Executive Officer 101 | November 8, 2017 | Investor Day | Michael H. McCain
Slide 102: Recapping what we set out to accomplish with you today
Recapping what we set out to accomplish with you today • Understand our vision and plans • Understand how “shared value” translates into profitable growth • Understand where we expect to deploy capital to support our vision 102 | November 8, 2017 | Investor Day | Michael H. McCain
Slide 103: Our vision and strategies are the path to profitable growth
Our vision and strategies are the path to profitable growth 103 | November 8, 2017 | Investor Day | Michael H. McCain
Slide 104: 104 | November 8, 2017 | Investor Day | Michael H. McCain
104 | November 8, 2017 | Investor Day | Michael H. McCain
Slide 105: Investor Day 2017
Investor Day 2017 mn hal i)
Slide 106: Reconciliation of non-IFRS financial measures
Reconciliation of non-IFRS financial measures Adjusted EBITDA ($ millions) 2014 2015 2016 Q3 YTD 2017 New earnings (loss) (213.8) 41.6 181.7 105 Income taxes (74.6) 11.1 67.9 143.1 Earnings (loss) before income taxes(i) (288.4) 52.7 249.6 143.1 Interest expense and other financing costs 126.9 4.7 6.
Slide 107: Reconciliation of non-IFRS financial measures, continued
Reconciliation of non-IFRS financial measures, continued Adjusted EPS($ per share) 2014 2015 2016 Q3 YTD 2017 Basic earnings per share (1.51) 0.30 1.35 0.81 Restructuring and other realted costs 0.36 0.18 0.04 0.10 Items in other expense (income) not considered representative of ongoing operations 0