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Maple Leaf Foods December 2015 Investment Thesis Canadas premier meat company with leading brands and market shares Completing transition to low cost, state-of-the-art supply chain A highly competitive and focused protein


  1. Maple Leaf Foods December 2015

  2. Investment Thesis • Canada’s premier meat company with leading brands and market shares • Completing transition to low cost, state-of-the-art supply chain • A highly competitive and focused protein business • Well-positioned to deliver on strategic target of 10% EBITDA margin in 2016 • Strong balance sheet • Attractive opportunities to expand margins and drive growth 2

  3. Change Hardened Company ECONOMIC INVEST Currency Shift Complete Supply Chain Rebuild ACQUISITIONS 30 Completed CRISIS MONO-LINE PROTEIN Food Safety Tragedy COMPANY 3

  4. Our Business Segments Fresh and Prepared Meats Produces high-quality prepared meats and meals, and value-added fresh pork, poultry and turkey products Agribusiness Hog production operations that primarily supply livestock, supporting fresh and processing facilities 4

  5. Core Business: Consumer Protein Products 5

  6. Commitment To Leadership Values Do what’s right Deliver winning results Build collaborative teams Get things done in a fact based, disciplined way Learn and grow, inwardly and outwardly Dare to be transparent, passionate and humble 6

  7. Winning in the Food Business 1 2 3 Competitive Strong Leading Cost Brands Market Structure Shares Maple Maple Maple Leaf Leaf Leaf 7

  8. Strong National & Regional Brands 8

  9. Market Share Leader Category Market Share (%) Share Ranking Wieners 50 #1 Bacon 34 #1 Sliced Meats 27 #1 Frozen Sausages 72 #1 Canned Meats 59 #1 Lunch Kits 99 #1 Meat Snacks 33 #2 Fresh Poultry 13 #1 Frozen Boxed Poultry 7 #2 Source: Nielsen Market Track, 52 week period ending 19 Sept 2015. 9

  10. Investment in Restructuring Complete • Approximately $1 billion in capital invested over the last 5 years • Includes significant investment in scale and technology • 11 prepared meats manufacturing sites consolidated into 4 • 19 prepared meats distribution centres consolidated into 2 • Completed conversion of multiple legacy systems to SAP 10

  11. Restructuring Creates Competitive Cost Structure • Our vision: become the best protein company in the world • Transformation from a food conglomerate to a mono-line protein company Efficiency gains Adjusted EBITDA 1.7x 10% 3.5% 2010 End-State 2005 to 2012 End-State 11

  12. Simplified Distribution Network Old Network: 19 DCs Current Network: 2 DCs Western DC Eastern DC • • Ship zones = 1,746 (DC-to-customer) Ship zones = 323 • • 34 million kilometres 26 million kilometres • • Avg. delivery < 1,000 kgs Avg delivery = 12,000 kgs 12

  13. Steady Trend of EBITDA Margin Expansion 9.0% Quarterly Consolidated Adjusted EBITDA Margin 7.1% 6.0% 6.0% 4.7% 3.0% 0.7% 0.5% 0.5% 1.5% 0.0% Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 -1.3% -1.1% -1.4% -3.0% -4.3% -6.0% 13

  14. Growing Our EBITDA Margin: Elimination of Ramp-up Inefficiencies Delivers 10% Today Remaining Target 7.1% 2.9% 10.0% 14

  15. Ramp-up Inefficiencies Contributing Factors in Ramp-up Excess labour Reduced line production rates Lower yields than anticipated Excess supervisory staff Excess equipment maintenance Higher utility costs than expected Additional SG&A support Indirect consequences: out-of-code; service deficiency; volume limitations Very high confidence in resolving these inefficiencies; unpredictable pace & timelines 15

  16. Growing Our EBITDA Margin: Robust Growth Agenda Provides Opportunities Beyond 10% • Sustainable meat • Growth in value-added poultry • Ethnic offerings • Protein snacking • Alternative proteins • Artisanal meats 16

  17. Building a Powerful Growth Platform in Sustainable Meat A Different Kind of Meat Company All vegetarian Simpler, more No hormones feed; raised Leadership in natural or antibiotics on Canadian animal care products farms Enabled by a Robust Sustainability Strategy 17

  18. Strong Balance Sheet; Focus on Capital Allocation • Dividend was doubled in 2015 • Executing NCIB – invested $175M to buy-back 7.8M shares during the first eleven months of 2015 • Debt-free with cash on hand of $307M as of September 30, 2015 18

  19. Summary • State-of-the art, low cost, manufacturing and distribution network • Leading brands and market position • Well positioned to deliver 10% EBITDA margin in 2016 • Strong balance sheet • Opportunities to expand beyond our target: • High potential growth platforms • Increase asset utilization • Remove non-strategic costs 19

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