Highlights Final Phase of Strategic Projects to Deliver 2015 Margin Targets
TSX: MFI www.mapleleaffoods.com
TORONTO, June 20, 2013 /PRNewswire/ - Maple Leaf Foods (MFI: TSX) hosted its 2013 Investor Day today, updating attendees on initiatives underway to continue to increase profitability and reach the Company's 2015 EBITDA margin target.
"Our trend line of EBITDA margin expansion shows that our strategies are working," said Michael H. McCain, President and CEO. "Driving this improvement are a material cost reduction in primary processing, early returns from our prepared meats strategy, and the increased contribution from innovation and brand building. We are in the final intense phase of increasing scale and productivity in our manufacturing and distribution network, which along with other projects is expected to substantially increase our profitability and global competitiveness."Maple Leaf has increased Earnings before Tax and Depreciation (EBITDA) by 144 percent since 2003 and EBITDA in its Protein operations by 50 percent since it launched its protein restructuring in 2007. The Company is targeting to deliver an EBITDA margin of 11.7 percent in 2015 (restated due to changes in pension accounting) compared to 7.9 percent in 2012. The Company outlined the significant benefits, valued at over $100 million in EBITDA, of productivity and other cost reductions that it expects to generate as a result of its investments in new facilities and manufacturing technologies. Commissioning of major expansions at the Company's prepared meats facilities in Winnipeg, Saskatoon and Brampton is well underway, utilizing advanced technologies that will significantly enhance output and yields. Construction is on schedule to establish one of the most advanced prepared meats manufacturing facility in North America, which will commence production later this year in Hamilton, Ontario. A new eastern Canada distribution centre will also open this month that will consolidate operations from 19 Company owned and third party facilities by the end of 2014. These and other projects included in the Company's value creation strategy, which was launched in 2010, represent a total capital investment of over $780 million. Management also updated investors on progress in restoring volumes and growth in its prepared meats business after a challenging first quarter, which was impacted by volatile commodity market conditions and price increases to offset these higher costs. The Company has achieved a significant strengthening in volumes and continues to expect year-over year growth. Other presentations included updates on the bakery business and insights into innovation and brand strategies that build on the Company's leading brands and market shares.