Maple Leaf Foods : Investor Webcast Transcript

FINAL TRANSCRIPT

Maple Leaf Foods Inc.

Second Quarter 2023 Financial Results Conference Call

Event Date/Time: August 3, 2023 - 8:00 a.m. E.T.

Length: 52 minutes

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CORPORATE PARTICIPANTS

Mike Rawle

Maple Leaf Foods Inc. - Vice President, Investor Relations and Treasury

Curtis Frank

Maple Leaf Foods Inc. - President and Chief Executive Officer

Geert Verellen

Maple Leaf Foods Inc. - Chief Financial Officer

CONFERENCE CALL PARTICIPANTS

Irene Nattel

RBC Capital Markets - Analyst

Mark Petrie

CIBC - Analyst

Michael Van Aelst

TD Cowen - Analyst

Tamy Chen

BMO Capital Markets - Analyst

Derek Dley

Canaccord - Analyst

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PRESENTATION

Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Maple Leaf's second quarter 2023 financial results conference call.

As a reminder, this conference call is being broadcast live on the internet and recorded. All lines have been placed on mute to prevent any background noise.

Please note that there will be a question-and-answer session following the formal remarks. We will go over the instructions for the question-and-answer session following the conclusion of the formal presentation.

I would now like to turn the conference call over to Mike Rawle, Investor Relations at Maple Leaf Foods. Please go ahead, Mr. Rawle.

Mike Rawle - Vice President, Investor Relations and Treasury, Maple Leaf Foods Inc.

Thank you, Chris, and good morning, everyone. Speaking on the call this morning will be Curtis Frank, President and Chief Executive Officer, and Geert Verellen, Chief Financial Officer.

Before we begin, I would like to remind you that some statements made on today's call may constitute forward-looking information, and our future results may differ materially from what we discuss. Please refer to our Q2 2023 MD&A and other information on our website for a broader description of operations and risk factors that could affect the Company's performance.

We have also uploaded our Q2 investor deck to our website, which includes support material for the quarter. As always, the Investor Relations team will be available after the call for any follow-up questions that you might have.

And with that, I will now turn the call over to Curtis Frank. Curtis?

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Curtis Frank - President and Chief Executive Officer, Maple Leaf Foods Inc.

Thank you, Mike, and good morning, everyone. As you know, this is my first official earnings call since stepping into the role of CEO of Maple Leaf Foods, and I can tell you I'm super energized and excited about leading our team into the next chapter of delivering shared value.

With our leading portfolio of consumer packaged goods brands, world-class assets, a values- based culture grounded in extraordinary people, and a purpose that is creating both business and social value, we will build on Michael's remarkable legacy of establishing Maple Leaf Foods as an iconic Canadian food company.

Today, we are closing in on the next inflection point in our journey as we take another step forward towards delivering on the 14 percent-to-16 percent adjusted EBITDA Meat margin target that we established back in 2017 while executing our playbook on our journey as a purpose-driven, globally admired, and brand-led CPG company.

Let me expand on this. As the balance of the year plays out, we are firmly focused on stabilizing and improving the financial performance of our business in this post-pandemic economy. We are making excellent progress, which you will hear about as we unpack our Q2 results here today, and we expect to continue to make further progress in the second half of this year.

At the same time, we are ready to realize the benefits of the multiyear capital investments we have made to build two world-class facilities, one at London Poultry, and one at our Bacon Centre of Excellence in Winnipeg. With the ramp-up of these two facilities expected to be fully complete by the end of this year, they will contribute $130 million of incremental adjusted EBITDA on an annualized basis.

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Now, let's not forget, we're also on track in our Plant Protein business to meet our goal of achieving adjusted EBITDA neutral or better by the end of 2023 as we close out the pivot in our Plant Protein business from investing for growth to delivering profitable growth.

And as we finish putting all of these building blocks together, that is, executing on our strategy to deliver financial results, completing the London Poultry start-up and completing the Bacon Centre of Excellence start-up, as well as delivering adjusted EBITDA neutral or better in our Plant Protein business, we will naturally deleverage and demonstrate the strength and resilience of our balance sheet as well.

Looking out beyond this year and into 2024 and the years that follow, we will turn our attention to capitalizing on the strength of the platform that we have built. To accomplish this, we will win with our leading brands via constant innovation and renovation, including continuous new product development and investing in our portfolio of brands.

We will leverage our supply chain as a competitive advantage with a relentless focus on driving efficiency in our business, achieving operational excellence across our network, optimizing our capacity utilization, and driving our costs through technology and automation, all as a continued source of fuel for profitable growth.

We will broaden our reach and continue our geographic expansion into the US, building on our success to date with our Greenfield Natural Meat Company brand and our enviable position in sustainable meat production as well as pursuing strategic, tuck-in acquisitions with discipline and tactical precision to deliver value to our stakeholders.

We will leverage and monetize our leadership and sustainability, which is embedded in everything that we do, including growing our sustainable meats portfolio, making simpler food with more natural ingredients, leading in animal welfare, reducing food insecurity in Canada, achieving 100 percent

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