Maple Leaf Foods Inc. · TSX:MFI
Maple Leaf Foods — Q3 2021 Earnings Presentation
30 slides from Maple Leaf Foods's earnings presentation, Nov 4, 2021
Slide 1: Q3 2021 Business Built for Growth & Financial Review
Q3 2021 Business All dollar amounts are presented in CAD dollars unless otherwise noted. Built for Growth & Financial Review
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: Maple Leaf at a Glance
MAPLE LEAF Ele Maple Leaf at a Glance
Slide 4: En route to Becoming the Most Sustainable Protein Company on Earth
En route to Becoming the Most Sustainable Protein Company on Earth 13,500 employees Total Sales (2020) $4,304 million Meat Protein Group Plant Protein Group 32 manufacturing facilities* 2020 Adj. 2020 prepared meats, fresh pork, fresh poultry and plant protein 12.4% EBITDA Margin 19.5% Sales Growth
Slide 5: The Maple Leaf Foods Blueprint
The Maple Leaf Foods Blueprint 5 MAPLE LEAF FOODS – Q3 2021 BUSINESS AND FINANCIAL REVIEW | NOVEMBER 4, 2021
Slide 6: 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 7: Built for Growth: 20% of Portfolio now Growing at 3-yr CAGR >25%
Built for Growth: 20% of Portfolio now Growing at 3-yr CAGR* >25% Percentage of Total Company Sales in Sustainable Meats and Plant-based Protein ~10% ~20% High growth 2017 2020 $3.5B Steady growth $4.3B Deliberate repositioning of portfolio towards two high-growth categories, now generating a compou
Slide 8: Our Blueprint is consistently delivering top and bottom-line growth
Our Blueprint is consistently delivering top and bottom-line growth Maple Leaf Total Annual Sales Meat Protein Adjusted EBITDA ($ millions) ($ millions and margin %) 2 3 2 • Driven by growth strategies in Brand Renovation, • Benefits of profitable growth strategies and operational Sustainable Meats
Slide 9: We are uniquely positioned to succeed in a world that has changed following the COVID-19 Pandemic
We are uniquely positioned to succeed in a world that has changed following the COVID-19 Pandemic • Our economy, and business, is Maple Leaf has the necessary skills to thrive in experiencing burgeoning inflation • CPI rate1 2x to 4.4%; Pork1 59% this environment • The global supply chain is bei
Slide 10: Q3 2021 Results
MAPLE LEAF Ele Q3 2021 Results
Slide 11: Key Highlights from Q3 2021
Key Highlights from Q3 2021 • Strong Q3 results highlight the resiliency of our business Exceptional Meat Protein results in a challenging operating environment Delivered another quarter of growth in sustainable meats, branded sales, and growth in the U.S. • Meat Protein generates outstanding gr
Slide 12: Meat Protein Group – Q3 2021 Strategic & Operational Highlights
Meat Protein Group – Q3 2021 Strategic & Operational Highlights Drive Profitable Growth by… Q3 2021 Highlights • Brand renovation driving 10th consecutive quarter Investing in our brands of branded sales growth YoY to build demand & equity • Sustainable meat sales growing at double-digits, and rep
Slide 13: Meat Protein delivered outstanding Q3 2021 financial results
Meat Protein delivered outstanding Q3 2021 financial results Q3 2021 vs. LY Drivers • Pricing action implemented in Q3 2021, higher fresh pork & poultry volumes, and favourable mix-shift to branded & sustainable meats Sales $1,150.3 +13.4% • More than offset lower prepared meats volumes from lapping
Slide 14: Tailwinds in the Pork Complex Offset by Weaker Poultry Markets
Tailwinds in the Pork Complex Offset by Weaker Poultry Markets Hog Production Margins Pork Processor Margins Pork By-Product Markets Hog production margins = live hog cost (CME) less Hog Raising Index Pork processor margins = pork cutout less live hog cost (CME) Notes: Figures shown represent USDA b
Slide 15: Plant Protein Group – Q3 2021 Strategic & Operational Highlights
Plant Protein Group – Q3 2021 Strategic & Operational Highlights Invest for Growth by… Q3 2021 Highlights • Excellent progress advancing the Greenleaf strategic agenda Entrenching prominent • Added over 10,000 TDP’s in Retail & announced new Foodservice partnerships market share position • Rolled
Slide 16: We advanced our Greenleaf strategic agenda in the quarter
We advanced our Greenleaf strategic agenda in the quarter Market-leading innovation gaining traction Growing foodservice with exciting partnerships First-of-a-kind un-breaded, whole-muscle plant- Launched Lightlife Chicken 2.0 at all 575 KFC based chicken launched at Whole Foods Market in Canada
Slide 17: Our investments have created a strong foundation in the category
Our investments have created a strong foundation in the category Two excellent brands in Lightlife and Field Roast Market leading distribution with the most diverse product portfolio in the market today Differentiated growth vectors in Lightlife Tempeh and Field Roast Chao cheese Top-flight
Slide 18: COVID-19 has not been kind to overall category YoY performance
At the same time, COVID-19 has not been kind to overall category YoY performance Growth rates in the refrigerated plant …resulting in disappointing performance protein category have slowed… for Greenleaf as well 2019 2020 2021 2019 2020 2021 We are investigating the drivers of the slowdown and retes
Slide 19: This category slowdown warrants taking the time to assess and potentially revise our investment strategy
This category slowdown warrants taking the time to assess and potentially revise our investment strategy • Maple Leaf’s investment in Plant Protein anticipated sustained high growth within the category • In 2021, the overall category has witnessed declining trends impacting our own products’ perform
Slide 20: Plant Protein – Q3 2021 financial results disappointed
Plant Protein – Q3 2021 financial results disappointed Q3 2021 vs. LY Drivers • Lower volumes in both fresh and core retail products Sales $48.0 (1.2%) offsetting growth in food service volumes and pricing (ex-FX, in USD) actions implemented in Q3 2020 Gross Profit ($3.3) (196.2%) • Lower sales volu
Slide 21: Total Company – Q3 2021 financials demonstrate continued growth
Total Company – Q3 2021 financials demonstrate continued growth Q3 2021 vs. LY Drivers Sales $1,188.6 +12.4% • Solid growth in Meat, partially offset by lower sales in Plant Adj. Operating Earnings $68.0 +84.3% Adj. EBITDA $115.4 +39.7% Adj. EBITDA Margin 9.7% +189 bps Net earnings $44.5 (32.6%) Adj
Slide 22: Summary of Key Construction Capital Projects – Meat Protein
Summary of Key Construction Capital Projects – Meat Protein Bacon Centre of Excellence London Poultry Facility Strategic Rationale Strategic Rationale • Capture growing demand for pre-cooked bacon, improve • Increases processing capacity for value-added, higher margin operating efficiency, and drive
Slide 23: Summary of Key Construction Capital Projects – Plant Protein
Summary of Key Construction Capital Projects – Plant Protein Indianapolis Tempeh Facility Strategic Rationale • Cost effective and scalable approach to meet burgeoning consumer demand for high-growth, high-margin tempeh products • Additional space for future growth opportunities Update • Existing 11
Slide 24: 2021 & Long-Term Outlook
MAPLE LEAF Ele 2021 & Long-Term Outlook
Slide 25: 2021 Financial Outlook
2021 Financial Outlook Mid-to-high single digit sales growth on a 52-week comparable basis, driven by continued momentum in Meat sustainable meats, leveraging brand renovation, and growth into the U.S. market. Protein Adj. EBITDA margin expansion, progressing towards the 2022 target of 14-16%, drive
Slide 26: Our Long-Term Outlook
Our Long-Term Outlook 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 operational efficiencies 2029 ambitious goals for high-growth business: Plant • Reach $3B in sales,
Slide 27: Appendix
MAPLE LEAF 21 Appendix _ BECAUSE ANTIBIOTICS ARE | Tt S TIME FOR BETTER. ‘fh FOR MEAT THAT TASTES THEWAY IT SHOULD LIKE MEAT. | ~ MADE FROM ANIMALS THAT ARE RUsED, NOT PRODUCED, ITS TIME FOR MORE FARM AND LESS PHARM, OR THE SICK, NOT THE HUNGRY. ITS TIME TO LET; NATURE DOITS THING: IT’S TIME FOR BET
Slide 28: Reconciliation of Non-IFRS Metrics – Adjusted EBITDA Margin
Reconciliation of Non-IFRS Metrics – Adjusted EBITDA Margin Three months ended September 30, 2021 Three months ended September 30, 2020 Meat Plant Meat Plant ($ millions)(1) Protein Protein Non- Protein Protein Non- (Unaudited) Group Group allocated(2) Total Group Group allocated(2) Total Earnings (
Slide 29: Reconciliation of Non-IFRS Metrics – Adjusted Earnings per Share
Reconciliation of Non-IFRS Metrics – Adjusted Earnings per Share Three months ended September 30, ($ per share) (Unaudited) 2021 2020 Basic earnings per share $0.36 0.54 Restructuring and other related costs(1) 0.01 0.01 Items included in other expense (income) not — — considered representative of o
Slide 30: Capital Allocation Priorities
Capital Allocation Priorities Grow 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 growth