Maple Leaf Foods

Investor Presentation
June 14, 2004
Maple Leaf Foods
Some of the statements in this presentation
may constitute forward-looking information
and future results could differ materially from
what is included. Please refer to the MD&A
section of the Company’s 2002 Annual
Report and other public filings for a
description of the Company’s operations and
the factors that could impact our financial
results.
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Agenda
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Overview of Maple Leaf Foods
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Industry Environment
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Focus in 2004
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Questions
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Maple Leaf Foods
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Canada’s leading food processor and food exporter
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Balanced portfolio of Protein Value Chain & Bakery operations
ä Higher growth & returns in protein
ä Stability & cash flow in bakery
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Industry leading market shares:
ä Animal nutrition, hog production, pork processing, branded poultry, food
exports, rendering, fresh bakery, North American frozen par-baked
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Approximately 24,000 employees and 120 plants
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Management have a large stake in the business
ä Track record in building highly successful companies
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Create value long term with excellent fundamentals
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Answers To Some Basic Questions
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How Do We Define Success?
High performance financially
Long term EPS growth >15%
RONA >11.5%
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How Will We Accomplish This?
Leadership Edge
Six Sigma
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What Segments Are We Focused On?
Global protein value chain
Global bakery
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What Is Our Strategic Orientation?
Invest in market leadership
Build our brands
Drive costs out
Innovate
Add value to our products
Add value for our customers
Diversify globally
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What Is Our Organizational Bias?
Great execution & operational
excellence drives great
performance
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Maple Leaf Foods
MAPLE LEAF FOODS INC.
PROTEIN VALUE CHAIN
MEAT PRODUCTS GROUP
AGRIBUSINESS GROUP
BAKERY PRODUCTS
GROUP
Maple Leaf Consumer
Foods
Shur-Gain
Fresh Bakery
Schneider Foods
Landmark
Frozen Bakery
Maple Leaf Pork
Elite Swine
Maple Leaf Poultry
Rothsay
Maple Leaf Foods
International
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Financial Results
Last Four Quarters (including Schneider Foods)*
TOTAL SALES BY GROUP
OPERATING INCOME BY GROUP
20.4%
28.7%
31.5%
14.8%
64.9%
39.8%
Domestic sales – 74.4%; International – 25.6%
Meat
Agribusiness
Meat
Bakery
Agribusiness
Bakery
TOTAL ASSETS BY GROUP
7.8%
45.2%
25.6%
21.4%
*Includes Q2 2003 through Q1 2004
Meat
Agribusiness
Bakery
Not Allocated
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Quarterly Earnings Per Share
$0.30
$0.27
$0.25
$0.22
$ CAD
$0.20
$0.23
$0.19
$0.16
$0.15
$0.14
$0.16
$0.15
$0.12
$0.11
$0.10
$0.07
$0.05
$0.05
$0.01
$0.00
2004
2001
Q1
2001
2003
Q2
2001
2003
Q3
2001
2003
Q4
(1) All numbers exclude restructuring costs
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Maple Leaf Share Performance
MFI vs S&P Super Food and TSE 300 Total Return Index
300
250
200
150
100
50
0
Dec-94
Sep-95
May-96
Jan-97
Sep-97
MLF Total Return (daily)
May-98
Jan-99
Sep-99
May-00
Jan-01
TSE Total Return Index (daily)
Oct-01
Jun-02
Feb-03
Oct-03
Jun-04
S&P Super Food (monthly)
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Agenda
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Overview of Maple Leaf Foods
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Industry Environment
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Focus in 2004
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Questions
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Industry Environment
Ø High hog and pork prices driven by strong demand for proteins
Ø USDA forecasts 3.2% year-over-year increase in total protein consumption
Ø Canadian poultry processor margins continue to climb
Ø Increased poultry prices due to BC poultry cull and high protein demand
Ø “Low carb” trend impacting North American bakeries
ü Year-to-date Canadian total commercial white bread sales down 8%
ü Maple Leaf heavily weighted towards healthy bread categories, which
continue to grow sales and market share
ü Maple Leaf expanding production of higher margin “good for you” whole
grain bread products as consumers become more health conscious
ü Very positive for the Meat Products businesses
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USDA Pork Processor Margins
Live Hog versus Wholesale Pork Price
2001-2004
Spread
$80
Live Hog
&
Wholesale
Pork
Price
(USD
/CWT)
Wholesale Pork
Live Hog
$80
$70
$70
$60
$60
$50
$50
$40
Spread
$40 (USD
/CWT)
$30
$30
$20
§
High hog prices resulting in strong hog production earnings
§
Processor margins stabilizing as hog prices level out
$20
$10
$10
$-
$2001
Source: USDA
Q2
Q3
Q4
2002
Q2
Q3
Q4
2003
Q2
Q3
Q4
2004
Q2
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Canadian Poultry Margins
Wholesale Poultry versus Live Prices
2001-2004
Wholesale Poultry
Live Price
3.00
3.00
2.50
2.50
2.00
2.00
Livebird
and
1.50
Wholesale
Price
(dollars /kg)
1.50
1.00
1.00
0.50
0.50
-
2001 Q2
Source: Shapiro Consulting
Q3
Q4 2002 Q2
Q3
Q4 2003 Q2
Q3
Q4 2004 Q2
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Agenda
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Overview of Maple Leaf Foods
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Industry Environment
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Focus in 2004
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Questions
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2004 Focus Of Effort
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Restore base earnings, following challenging year in 2003
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Integrate Schneider Foods
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Continue to execute on our strategies
ä Invest in market leadership
ä Build our brands
ä Drive costs out
ä Innovate
ä Add value to our products
ä Add value for our customers
ä Diversify globally
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Restore Base Earnings
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Protein markets rebounding after difficult 2004
Strong Fresh Bakery execution in the face of low carb threat
Improved performance in Atlantic Canada
Adjusting to the Canadian dollar
Continue to focus on value added fresh pork selling
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Integrate Schneider Foods
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Acquired in April for $500 million (EBITDA multiple 6.6x)
2003 sales $1.2 billion, EBIT of $54 mm, EBITDA of $76 mm
20 plants and over 5,000 employees
Processed meats, grocery products, fresh pork and poultry
Strong track record in product innovation
Premium pricing in Canadian processed meats market
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Integrate Schneider Foods
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Doubles Maple Leaf’s processed meats and grocery products
sales
Rebalances fresh and further processed meat businesses
Improved margin structure and reduces earnings volatility
New product innovation off a larger base allows higher and
more effective investment
Opportunities for re-balancing of production and distribution
No synergies anticipated in 2004
ä Maintaining current momentum is the goal in 2004
ä Synergies anticipated in late 2005 and 2006
ä Early wins in 2004 expected to offset merger costs
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Integrate Schneider Foods
Rebalances Meat Portfolio
MEAT GROUP SALES PRE-SCHNEIDER
Fresh
Processed
MEAT GROUP SALES POST-SCHNEIDER
Fresh
Processed
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Summary
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Market leaders
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Momentum is in our favour; strong market fundamentals
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2003 is firmly behind us
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Continuing to execute against our strategies
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Transformational opportunity with Schneiders acquisition
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