TSX: MFI
www.mapleleaffoods.com
Investment Community Conference Call
April 8, 2019 at 10:00 AM EST
MISSISSAUGA, ON, April 8, 2019 /CNW/ - Maple Leaf Foods Inc.
("Maple Leaf" or the "Company") (TSX: MFI) and its wholly owned
subsidiary, Greenleaf Foods, SPC, today announced plans to
construct a US$310 million
plant-based protein food processing facility in Shelbyville, Indiana. At approximately 230,000
square feet, it will be the largest facility and investment of its
kind in North America. The Company
will also invest approximately US$26
million to keep pace with ongoing growth in demand at
its existing facilities. This strategic initiative will support
Maple Leaf's continued growth and leadership in the rapidly
expanding market for plant-based protein.
"With Lightlife and Field Roast, we own the leading brands in
the North American refrigerated plant-based protein market," said
Michael H. McCain, President and
CEO. "This investment will secure our ongoing leadership in this
rapidly expanding market. By establishing a large-scale North
American network, we will continue to meet rapidly growing demand
for delicious protein alternatives and create a centre of
excellence for innovation. It will escalate the financial
contribution of this business and advance Maple Leaf's vision to be
the most sustainable protein company on earth."
The new Shelbyville facility
will be supported by approximately US$50
million in government and utility grants and incentives,
including US$9.6 million toward
capital and one-time start-up costs, and approximately US$40 million in 10-year operational
support. Maple Leaf expects to incur one-time start-up costs
of US$34 million and will fund this
strategic initiative through a combination of cash flow from
operations and debt.
This expanded network will support the Company's growth
expectations through 2024, with future expansion expected. It will
deliver an excellent return on capital for shareholders, in the
range of
13% - 16%, based on underlying long-term growth estimates. By 2022,
the Adjusted EBITDA margin of the Company's plant-based protein
network will be in line with Maple Leaf's overall EBITDA margin
target of 14% - 16% and will continue to grow in the following
years as capacity utilization increases.
The acquisitions of Lightlife Foods Holding Inc. in Turners Falls, Massachusetts and the Field
Roast Grain Meat Company in Seattle,
Washington provided Maple Leaf with the #1 and #2 brands, a
diversified product portfolio and an extensive customer base for
refrigerated plant-based protein. These businesses have
consistently outperformed expectations and are expected to reach
full capacity utilization in 2020.
Plant-based protein represent a US$1
billion North American market. Refrigerated products
represent approximately 24% of the total market and delivered
approximately 40% sales growth in 2018, significantly outpacing the
broader category. High growth rates are expected to continue
as people increasingly seek more protein in their diet and
delicious options, and as innovation continues to increase product
appeal and variety.
The new Shelbyville facility
will be the largest and most modern of its kind in North America, solidifying Maple Leaf's
leadership in the fast-growing plant-based protein market. It
will double the Company's current production capacity and support a
rich pipeline of innovation to meet increasing consumer demand and
fuel market growth. The facility will produce tempeh, franks,
sausages and raw foods. This includes the recently launched
Lightlife™ Burger, which offers a superior product that
leverages the Company's decades of culinary and market
expertise. The new facility will service customers across
North America, expanding and
complementing the Company's existing, extensive supply chain
network.
Construction on the 57-acre property is expected to start in
late spring of 2019, with production start-up expected in the
fourth quarter of 2020. The site is well located with easy
access for freight traffic and labour recruitment. The site
supports future expansion with multiple phases of investment
expected over the next decade to meet forecasted market growth. The
Company expects to employ approximately 460 people at the new
facility once start-up is completed.
Conference Call
An investor webcast and conference
call will be held at 10:00 am EDT on
April 8, 2019. To participate
in the call, please dial 416-764-8609 or 1-888-390-0605. For
those unable to participate, playback will be made available an
hour after the event at 416-764-8677 or 1-888-390-0541, passcode:
469360#. An investor presentation will be available at
www.mapleleaffoods.com and can be found under the Investor
Relations Section under the presentations & webcasts
tab.
A webcast presentation will also be available at:
https://edge.media-server.com/m6/p/oyrdwbkt
Non-IFRS Financial Measures
This news release uses the
following non-IFRS measures: Adjusted Earnings Before Interest,
Income Taxes, Depreciation and Amortization (EBITDA) margins and
Return on Capital. Maple Leaf believes that these non-IFRS measures
provide useful information to management and investors in measuring
financial performance.
These measures do not have a standard meaning prescribed by IFRS
and therefore they may not be comparable to similarly titled
measures presented by other publicly traded companies and should
not be construed as an alternative to financial measures determined
in accordance with IFRS. More information regarding these non-IFRS
measures is available in Maple Leaf's most recent management's
discussion and analysis filed on SEDAR (www.sedar.com).
Forward–Looking Statements
This release contains
statements, made by representatives of the Company in connection
with this release, may contain forward-looking statements within
the meaning of applicable securities law. These statements are
based on current expectations, estimates, forecasts, and
projections about the industries in which the Company operates, as
well as beliefs and assumptions made by Management of the
Company.
Such statements include, but are not limited to, statements with
respect to the investments in existing and the new plant-based
protein facility and the Company's strategies, plans, actions and
expectations including, among other things, expectations about
technical capabilities of the new plant and production levels,
expected shareholder value creation, future earnings, Adjusted
EBITDA margins, Return on Capital, job creation potential and other
expected benefits from the project, as well as project costs,
project approvals, construction timelines, other execution
variables, the availability and impact of grants, incentives and
credits, and future expansion opportunities. Words such as
"expect," "anticipate," "intend," "attempt," "may," "will," "plan,"
"believe," "seek," "estimate," and variations of such words and
similar expressions are intended to identify such forward-looking
information. These statements are not guarantees of future
performance and involve assumptions, risks and uncertainties that
are difficult to predict.
These statements are based on and were developed using a number
of factors and assumptions including, but not limited to: stability
in the Canadian, U.S. economies; stability in prevailing exchange
rates among the Canadian dollar and the U.S. dollar; stability in
the availability and pricing of raw materials, energy and supplies;
the ability to implement price increases successfully; stability in
the competitive environment; no future product recalls; the
continued ability of the Company to access cost effective capital
when needed; and no unexpected or unforeseen events occurring that
would materially alter the Company's current plans. All of these
assumptions have been derived from information currently available
to the Company including information obtained by the Company from
third-party sources. Although these assumptions were considered
reasonable by the Company at the time of preparation they may prove
to be incorrect in whole or in part. In addition, actual results
may differ materially from those expressed, implied or forecasted
in such forward-looking statements, which reflect the Company's
expectations only as of the date hereof. Readers are
cautioned not to place undue reliance on forward-looking
statements, as such statements are not guarantees of future
performance.
Factors that could cause actual results or outcomes to differ
materially from the results expressed, implied or forecasted by the
forward-looking statements include risks associated with
implementing and executing complex projects and plans including the
availability and price of engineering and design resources, labour
and construction materials, the ability to secure approvals on a
timely basis and the risk of cost over runs or schedule delays;
risks posed by food contamination and product recalls; risks
associated with the price of commodities and the inability of the
Company to control commodity prices; risks associated with exchange
rate fluctuations; risks associated with changing consumer tastes,
preferences and buying patterns; risk related to impact of
extensive environmental regulation and potential environmental
liabilities; risks posed by competition; and the risks of
attracting and maintaining sufficient labour and resources for the
plant. Additional factors that could cause actual results or
outcomes to differ materially from the results expressed, implied
or forecasted by the forward-looking statements are discussed more
fully in the Company's filings made with the Canadian securities
regulators including in the section entitled "Risk Factors" in the
Company's Management's Discussion and Analysis for the year ended
December 31, 2018. All of such
filings are available on SEDAR at www.sedar.com.
Some of the forward-looking statements may be considered to be
financial outlooks for purposes of applicable securities
legislation including, but not limited to, statements concerning
future Adjusted EBITDA and Adjusted EBITDA margins, Return on
Capital, project costs and other costs and forecasted plant-based
protein market growth rates. These financial outlooks are presented
in order to provide measurable targets that the Company aims to
achieve and for which the Company can use to benchmark its results.
These financial outlooks may not be appropriate for other purposes
and readers should not assume they will be achieved.
The Company does not intend to, and the Company disclaims any
obligation to, update any forward-looking statements (including any
financial outlooks), whether written or oral, or whether as a
result of new information, future events or otherwise, except as
required by law.
About Maple Leaf Foods
Maple Leaf Foods Inc. is a
producer of food products under leading brands including Maple
Leaf®, Maple Leaf Prime®, Maple Leaf Natural Selections®,
Schneiders®, Schneiders® Country Naturals®, Mina®, Greenfield
Natural Meat Co.™, LightlifeTM, Field Roast Grain Meat
Co.™ and Swift®. Maple Leaf employs approximately 12,000 people and
does business in Canada, the U.S.
and Asia. The Company is
headquartered in Mississauga,
Ontario and its shares trade on the Toronto Stock Exchange
under the ticker symbol MFI.
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SOURCE Maple Leaf Foods Inc.