Bakery Strategy Overview Richard Lan President / COO Bakery Products Group

Transcription

1 Bakery Strategy Overview Richard Lan President / COO Bakery Products Group 1

2 Richard Lan President/COO Bakery Products Group Appointed to current role of President/Chief Operating Officer, Maple Leaf Bakery Products Group in 2002 Founded and operated Dell Products Corp., frozen juice concentrate manufacturer; sold to McCain Foods in 1976 Assumed role as Vice President, Sales, McCain Citrus in 1988; later appointed to CEO/President McCain Citrus Joined Maple Leaf Foods in 1995 as Executive Vice President Built and led development of Maple Leaf Frozen Bakery Assumed role of Chairman, Canada Bread in

3 Agenda MFI Bakery Business Key Business Trends Growth Opportunities 3

4 Maple Leaf Foods Bakery Portfolio Pro Forma Results LTM September 30, 2004 Sales: EBITDA: Operating Earnings: $6.5 billion $405.3 million $273.3 million Meat Products Group Agribusiness Group Bakery Products Group Sales: $4.3 billion Sales: $0.9 billion Canada Bread: 86.6% Ownership EBITDA: $163.6 million EBITDA: $118.5 million Sales: $1.3 billion Operating Earnings: $97.0 million Operating Earnings: $95.6 million EBITDA: $123.2 million Operating Earnings: $80.7 million Fresh Bakery Frozen Bakery Maple Leaf Bakery U.K. Fresh Pasta 4

5 Fresh Bakery Extensive Distribution Network Vancouver Delta Maple Leaf Fresh Bakery Pasta Plants Edmonton North Bay Beauport Grand Falls Woodstock St. Come Levis Quebec City Montreal Toronto Hamilton Moncton Halifax St. John s 5

6 North American Frozen Bakery Only True North American Par-Bake Network Calgary Laval Richmond Oxnard Viceroy Roanoke Toronto Bagel Rivermede Maple Leaf Frozen Bakery 6

7 UK Bakery Leading Position in Bagel Market Cumbria Pretzels, Hand-held Snacks Rotherham Fresh & Frozen Boiled Bagels Peterborough Fresh Steamed Bagels Southend Authentic Pretzels 7

8 Great Brands Offer Great Opportunities Market Leading Commercial Brands 8

9 Great Brands Offer Great Opportunities Premium Par-bake & Pasta 9

10 Financial Performance Bakery Products Group LTM Operating Earnings (1) 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 - CAGR: 25.7% Increased 25% ownership in Multi-Marques to 100% Quebec bakery strike Purchased remaining 40% share of Ben's Limited (1) Excludes restructuring charges 10

11 Investing in World Class Assets Over $340 million invested since 1997 Capital Investments Bakery Products Group Capital Expenditure 1997 Roanoke construction 2001 Roanoke expansion 2003 Roanoke expansion 2003 London plant closure, Hamilton fresh bakery expansion 2004 Viau plant roll capacity expansion 2004/2005 Rotherham UK expansion $ million CAD Frozen Acquisitions 2001 UK Bagel business 2001 Multi-Marques Inc Ben s Bakery Limited 2002 Olafson s Baking Company Inc Grace Baking Company 2003 Parisco Limited acquired Depreciation 14.6 Fresh (1) (1) Nine months (January to September 2004) 11

12 Bakery Products Group Transformed to Market Leader 1995 Today Market Share Position Fresh Bakery 21% 43% Leader (Canada) Frozen Par-Bake 0% 50% Leader (North America) UK Bagels 0% 90% Leader (UK) 12

13 Agenda MFI Bakery Business Key Business Trends Growth Opportunities 13

14 Key Business Trends Key Bakery Industry Trends Result Our Strategy Industry consolidation in Canada with two major players Highly disciplined market with high capacity utilization Better able to pass through input cost increases Retail and food service customers are consolidating Food service channel growing faster than retail Par-bake and artisan growth Customer power is increasing Major growth opportunity Customers moving to parbake; laddering up to artisan Benefit from our national scale and scope Integrated food service strategy that leverages our broad capabilities Offer full suite of par-baked and artisan breads Rising importance of nutrition Consumers shift from white to grains and specialty Continue to invest and lead premium categories 14

15 Agenda MFI Bakery Business Key Business Trends Growth Opportunities 15

16 Bread Consumption North America vs. the World Pounds Consumed Per Individual Annually Germany Austria Italy France Netherlands UK Belgium N.A. Source: Bakers Federation U.K./Wheat Foods Council 16

17 North American Bread Consumption Dinner Biggest Opportunity Total Eatings Total Bread Breakfast Lunch Dinner Snacks Dinner is main meal of the day: 40% Bread is under-represented at dinner: 21% Source: NPD 17

18 Fresh Growth Opportunities Base Business New Categories New Customers/Channels New Geographies New Business Strategic Acquisitions 18

19 Fresh Growth Opportunities Cost Reduction Past Two Years: Consolidated facilities in Ontario, Quebec and Atlantic Significant waste reduction achieved in three major bakeries In Progress Six Sigma project to achieve further cost reductions in 17 out of 22 plants Improving The Basics in all plants Balanced Scorecard (right measurements) Preventative maintenance Standard Operating Procedures Upgrading assets Waste reduction 19

20 Frozen Growth Opportunities The Bread Ladder Crusty Breads Artisan Breads Retail for $2.89-$4.59 (high income earners) Long-fermentation Artisan breads. Exotic flavours, cuts and names. Heavily influenced by sampling/demos. Sun-dried Tomato, Caramelized Onion Rye, Potato & Leek, Fruit. High impulse. Retail for $1.49-$2.99 (income generators) Crusty exterior/soft interior/ largely white and some simple grains- Baguettes, French, Italian, Crusty Sandwich. Mostly impulse, some planned. Value-Added Pan Breads Retail $1.99-$2.99 (income generators) Wheat, Grain, Bagels, Raisin. Planned purchase. Mainstream Pan Breads Retail $1.19-$1.89 (volume/traffic generators) White sandwich and carrier breads. Soft texture and sweet flavour, popular with children. Planned purchase. 20

21 Frozen Growth Opportunities Food Service 21

22 UK Growth Opportunities Capacity Expansion High Speed Bagel Line Rotherham Facility September

23 UK Growth Opportunities Broaden European Exports Ireland England Denmark Netherlands Germany 23

24 Summary Leading infrastructure and distribution networks Fresh, Frozen and U.K. Transformation to market leadership in key markets High capacity utilization and solid industry structure Leading national and regional brands Opportunities for geographic and product line expansion U.K. and Europe Focus growth on nutritious and premium product categories 24

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