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Maple Leaf Foods

Q2 2021 Business & Financial Review

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 well as beliefs and assumptions made by the Management of the Company. The COVID-19 pandemic creates a very fluid situation with many uncertainties. Based on its experience to date, the Company has made certain assumptions about the implications of COVID-19 for its business, including:

  • The shifting demand balance between retail and foodservice channels, product mix, productivity, supply chain disruptions, operating cost pressures and business continuity.
  • The Company's expectations with respect to future sales and returns associated with the anticipated growth of its plant protein business are based on a number of assumptions, estimates and projections, including but not limited to: the impact of COVID-19 (including expected increase in demand in foodservice channels in the back half of 2021), market growth assumptions, market share assumptions, new product innovation and commercialization, results of brand renovation initiatives, foreign exchange rates, supply chain effectiveness, customer and consumer behaviour and competition.
  • The Company's expectations with respect to the growth of its meat protein business, such as anticipated growth in sales, adjusted EBITDA margin and gross margin, are based on a number of assumptions, estimates and projections, including but not limited to: the impact of COVID-19 (including expected increase in demand in foodservice channels in the last half of 2021), commodity prices, hog and pork processor margins, demand for pork and access to export markets, poultry markets and supply management, foreign exchange rates, growth in demand for sustainable meats and branded products; supply chain effectiveness, customer and consumer behaviour and competition.
  • The Company's assumptions about capital project expenditures and timing are based on a number of assumptions, including but not limited to: the impact of COVID-19, availability and cost of materials, labour, productivity levels, quality of estimating, weather conditions, and project scope.
  • These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. These assumptions have been derived from information currently available to the Company, including information obtained by the Company from third-party sources. These assumptions may prove to be incorrect in whole or in part. In addition, actual results may differ materially from those expressed, implied, or forecasted in such forward-looking information, which reflect the Company's expectations only as of the date hereof. Please refer to the sections entitled "Risk Factors" and "Forward-Looking Statements" in the Company's Management Discussion and Analysis for the quarter ended June 30, 2021 and year ended December 31, 2020 for additional detail.

In addition, this presentation contains the following non-IFRS measures:

Adjusted Operating Earnings: Earnings before income taxes and interest expenses 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 reflected in earnings in future periods when the underlying asset is sold or transferred.

Adjusted Earnings per Share: Defined as basic earnings per share adjusted for all items that are not considered representative of ongoing operational activities of the business, and items where the economic impact of the transactions will be reflected in earnings in future periods when the underlying asset is sold or transferred.

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization: Defined as Adjusted Operating Earnings plus depreciation and intangible asset amortization, adjusted for items included in other expense that are not considered representative of ongoing operational activities. Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by sales.

Net (Debt) Cash: Defined as cash and cash equivalents, less long-term debt and bank indebtedness.

Construction Capital: Defined as investments and related financing charges in projects over $50.0 million that are related to longer-term strategic initiatives, with no returns expected for at least 12 months in the future and the asset will be re-categorized from Construction Capital once operational.

Please refer to the Company's Management and Discussion and Analysis for the quarter ended June 30, 2021 (as filed on SEDAR) for additional information on non-IFRS financial measures.

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MAPLE LEAF FOODS - Q2 2021 BUSINESS AND FINANCIAL REVIEW | AUGUST 5, 2021

Enroute to Becoming the Most Sustainable Protein Company on Earth

13,500 employees

32 manufacturing facilities* prepared meats, fresh pork, fresh poultry and plant protein

4M hogs processed annually

(40% are raised in ~200 company-operated barns with leading animal care practices)

Largest producer of RWA pork in North America and poultry in Canada

Leading presence in North American plant-based protein

Total Sales (2020) $4,304 million

Meat Protein Group

Plant Protein Group

2020 Adj.

19.5%

2020

12.4% EBITDAMargin

GrowthSales

Iconic

National &

Regional

Brand

Portfolio

*Includes 5 feed mills and 3 chicken hatcheries.

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Notes: RWA: raised without antibiotics.

MAPLE LEAF FOODS - Q2 2021 BUSINESS AND FINANCIAL REVIEW | AUGUST 5, 2021

The Maple Leaf Foods Blueprint

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MAPLE LEAF FOODS - Q2 2021 BUSINESS AND FINANCIAL REVIEW | AUGUST 5, 2021

We Built a Profitable Base; Now We're Focused on Profitable Growth

2010 Transformation 2014

  • Exited non-core businesses
    • Rothsay (2013)
    • Olivieri (2013)
    • Canada Bread (2014)
  • Transformed our supply chain
    • Established scale prepared meats network, consolidating fragmented supply chain
    • Delivered significant efficiency and margin improvements
  • Invested in technology
    • Deployed SAP

2015 Brand-led Growth Today

  • Expanding sustainable meats platform
  • Renovated core brands
  • Establishing leadership in plant protein

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MAPLE LEAF FOODS - Q2 2021 BUSINESS AND FINANCIAL REVIEW | AUGUST 5, 2021

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Maple Leaf Foods Inc. published this content on 12 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 August 2021 12:41:11 UTC.