Investor Presentation Second Quarter Ended June 30, 2004 1 Agenda - PowerPoint PPT Presentation

Investor Presentation Second Quarter Ended June 30, 2004 1

Agenda Highlights � Financial Summary � Operations and Market Overview � Questions � 2

Highlights Excellent performance in second quarter � � Sales up 34% to $1.7 billion (up 6% not including Schneider Foods) � Protein Value Chain operating earnings up 390%; Bakery up 49% Good operational execution � � Operating improvements in fresh pork and Atlantic Canada operations � Increased market share of branded pork and poultry � Continued success of new product innovation Benefited from higher hog and protein prices and volumes � Bakery Group posts strong results despite low carb threat � � Leadership in whole grain and value-added categories Strong early results from Schneider Foods acquisition � 3

Agenda Highlights � Financial Summary � Operations and Market Overview � Questions � 4

Sales of $1.69 Billion Protein Value Chain (1) up 43%; Bakery up 5% Protein Value Chain Bakery Products Group 1,500 375 1,359 331 321 314 315 1,250 311 308 310 304 300 287 1,051 268 1,030 265 1,020 990 992 1,000 958 957 963 944 950 932 891 $ million CAD 891 $ million CAD 225 750 178 174 164 150 500 75 250 0 0 2004 2004 2003 2004 2003 2001 2001 2001 2003 2001 2001 2001 2004 2001 2001 2003 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (1) Protein Value Chain comprises the Company’s Meat Products and Agribusiness Groups 5

Operating Earnings (1) of $64.7 Million …up 184% from last year Protein Value Chain Bakery Products Group 60.0 25.0 21.0 20.5 49.0 50.0 20.0 19.2 44.1 43.7 17.8 42.9 17.7 16.5 $ million CAD 40.0 $ million CAD 15.0 14.6 13.8 13.8 32.1 13.3 31.7 30.3 29.8 28.8 30.0 12.0 10.6 24.6 10.0 19.9 19.6 20.0 7.2 16.3 6.2 5.0 10.0 9.0 0.0 0.0 2001 2004 2001 2004 2001 2003 2001 2003 2001 2004 2001 2003 2001 2003 2001 2004 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (1) All amounts exclude restructuring costs 6

Significant EPS (1) Growth to $0.22 …third consecutive quarter of improvement $0.30 $0.27 $0.25 $0.23 $0.22 $0.22 $0.19 $0.20 $0.16 $0.16 $ CAD $0.15 $0.15 $0.14 $0.12 $0.11 $0.10 $0.07 $0.05 $0.05 $0.01 $0.00 2001 2004 2001 2004 2001 2003 2001 2003 Q1 Q2 Q3 Q4 (1) All amounts exclude restructuring costs 7

Cash Flow and Financial Position Net indebtedness increase due to Schneider Foods � acquisition Credit ratios improving in line with strong earnings � Schneider acquisition debt to be refinanced in second half � of 2004 � Long term debt facilities � Equity as required to maintain investment grade credit quality 8

Agenda Highlights � Financial Summary � Operations and Market Overview � Questions � 9

Protein Value Chain Meat Products Group Sales increased 55% due to the Schneider Foods contribution and � higher protein volumes and prices Operating earnings increased $20 million despite market � challenges � High raw material costs reduced further processed margins � Industry pork processor margins declined 5% from Q2 last year Operations improvements and better protein markets � � Strong poultry margins and branded sales � Increased earnings from Atlantic Canada operations � Improved sales mix and operating performance in fresh pork � Margin growth through new product innovation � Increased profitability of exports to Japan Schneider Foods was accretive to net earnings for the quarter � � Integration on track and business momentum maintained 10

Protein Value Chain Agribusiness Group Sales increased 5% over last year; operating earnings up � 95% Hog production operations benefited from 29% increase in � hog prices � Maple Leaf’s effective hog ownership was 21% at the end of Q2 Excellent performance in rendering operations, driven by � increased volumes and export demand � Biodiesel expansion in Montreal will provide further product and market diversification Canada’s historical feed cost advantage is being restored � � Drought conditions abate and Canadian feed alternatives become more competitive 11

USDA Pork Processor Margins … rapid rise in hog prices pressured margins Live Hog versus Wholesale Pork Price Spread Wholesale Pork Live Hog $100 $90 $80 $70 Live Hog & $60 Wholesale Pork $50 Price $40 (USD /CWT) $30 $20 $10 $(0) Q1-03 Q2-03 Q3-03 Q4-03 Q1-04 Q2-04 1/1/03 4/1/03 7/1/03 10/1/03 1/1/04 4/1/04 7/1/04 $ 53.75 $ 60.98 $ 63.07 $ 57.28 $ 64.51 $ 77.16 Wholesale Pork Live Hog $ 47.59 $ 57.33 $ 58.14 $ 50.26 $ 59.35 $ 73.68 Spread $ 6.16 $ 3.65 $ 4.93 $ 7.02 $ 5.16 $ 3.48 12 Source: USDA

Sharp Increase in Poultry Prices …improved industry processor margins Live Bird versus Wholesale Poultry Price Spread Wholesale Price Live Price (eviscerated) $4.00 $3.50 $3.00 Live Bird $2.50 & Wholesale $2.00 Poultry Price $1.50 ($/kg) $1.00 $0.50 $- Q1-03 Q2-03 Q3-03 Q4-03 Q1-04 Q2-04 1 14 27 40 53 66 79 Wholesale Poultry $ 2.13 $ 2.30 $ 2.46 $ 2.53 $ 2.49 $ 2.84 Live Bird (evisc.) $ 1.56 $ 1.63 $ 1.64 $ 1.64 $ 1.64 $ 1.62 Spread $ 0.57 $ 0.67 $ 0.82 $ 0.89 $ 0.85 $ 1.22 13 Source: Shapiro Consulting

U.S. Meat Production in 2004 … good supply and demand balance forecasted Annual US Commercial Pork, Beef and Chicken Production (metric tonnes) 18,000 37,000 16,000 14,000 35,000 Pork, 12,000 All Beef & Species 10,000 Broiler 33,000 Production Production (metric 8,000 (metric tonnes) 31,000 tonnes) 6,000 , 4,000 29,000 2,000 - 27,000 1998 1999 2000 2001 2002 2003 2004* 8,609 8,744 8,578 8,680 8,920 9,035 9,224 Pork 11,636 11,970 12,146 11,840 12,287 11,900 11,503 Beef % change in 2004 Chicken 12,639 13,490 13,833 14,183 14,621 14,834 15,358 forecast - month over Total all species 32,884 34,205 34,557 34,703 35,829 35,769 36,085 month - 0.6% % of PY 104.0% 101.0% 100.4% 103.2% 99.8% 100.9% Source: USDA, Sparks C 14

Bakery Products Group Sales rose 5%; operating earnings up 49% due largely to � strong Fresh Bakery performance � Growth in higher margin whole grain categories � Resolution of labour dispute which impacted 2003 results � Price increases in late 2003/early 2004 mitigated rising input costs Strong UK Bakery performance � � Continued growth in bagel market � Production expansion underway Par-baked sales in North America increased, although not � to historic levels � Strong Foodservice sales partially offset by slower retail growth due to work stoppage involving several major US customers � Expect return to normal business levels 15

Bakery Products Group Continued to mitigate potential impact of low carb trend � � Strong growth of Dempster’s Stays Fresh despite Canadian market decline in commercial white bread sales � Contrasts to 8% sales growth in whole grain bread market, where Canada Bread has market leadership New product innovation expands par-baked categories � � Clever Carb line of new low-carb par-baked products � Wholesome Harvest branded wheat and grain par-baked products Maintain strategy to increase weighting towards value- � added products � Higher margin whole grain and premium bakery products � Well positioned to benefit from rising importance of nutrition 16

Q2 New Product Launches Two new Maple Leaf Fully Cooked Roast products � � Honey Garlic Pork; Sun Dried Tomato & Basil Turkey Breast Schneiders Oh Naturel Meatless Entrees (Soy) � � Chicken & Beef Strips, Meatballs, Chick’n Burgers, Weiners Nine new Schneiders Hot Rod meat snacks products � Maple Leaf Chili Dogs and Mini Bites snacking wieners � New Prime Naturally sausage flavours � 17

Summary Continued trend of excellent earnings growth � Good execution and improved markets � Bakery leadership in high growth categories � Highly successful product innovation � Solid results from Schneider Foods acquisition � Strong momentum heading into back-half of 2004 � 18

Investor Presentation Second Quarter Ended June 30, 2004 19