The following is a summary of the Maple Leaf Foods Inc. (MLFNF) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Q1 sales for Maple Leaf Foods were 1.5% lower than the previous year due to declining sales in their Poultry, Plant Protein, and Pork businesses.

• The company reported Q1 adjusted EBITDA of $116 million, a 55% improvement from the previous year with an adjusted EBITDA margin of 10.1%.

• The Meat Protein business saw an improvement in its adjusted EBITDA margin by 310 basis points to 10.8%.

• The company reported earnings of $52 million or $0.42 per basic share, compared to a loss of $58 million or $0.48 per basic share in the corresponding period last year.

• The company anticipates a consolidated adjusted EBITDA margin target of 14% to 16% while leverage ratio saw significant improvement over the past four quarters.

• The company expects low-to-mid single-digit revenue growth, expanded adjusted EBITDA margins from 2023, and CapEx of $170 million to $190 million for FY 2024.

Business Progress:

• Plant Protein was integrated as a category into Maple Leaf Foods reporting structure, no longer separating Meat Protein and Plant Protein segments.

• Maple Leaf Foods announced a new strategic plan as it aims to transform into a globally admired consumer packaged goods company.

• The company has structured into Prepared Foods and Pork Complex units; the former accounts for approximately 75% of total sales and houses leading brands in meat, poultry, and plant protein products.

• The company aims to focus on the Plant Protein category with new product innovation and has plans for the complete integration of the Greenleaf business.

• The introduction of $24 million in capital expenditure represented a decrease compared to $53 million last year, meanwhile, the company is launching more than 25 new items that aim to cater to a broad North American consumer base.

• Maple Leaf expects the decline in poultry business revenue to persist into Q2 but abate towards the end of the year and does not expect the contraction in the Pork business to continue impacting future performance.

• Maple Leaf Foods plans to increase in cloud infrastructure investment to support cloud growth and AI platform demand.

• By the end of 2024, Maple Leaf Foods aims to achieve margin accretive status in its Plant-based protein category with increased distribution, especially in the US market, and is also implementing strategies for consumer recovery and distribution expansion for Sustainable Meats.

More details: MAPLE LEAF FOODS IR

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