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Richard LanPresident/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 2000
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Maple Leaf FoodsBakery Portfolio Pro Forma Results LTM September 30, 2004
Sales: $6.5 billionEBITDA: $405.3 million
Operating Earnings: $273.3 million
Meat Products Group Agribusiness Group Bakery Products GroupSales: $4.3 billion
EBITDA: $163.6 millionOperating Earnings: $97.0 million
Sales: $0.9 billionEBITDA: $118.5 million
Operating Earnings: $95.6 million
Canada Bread: 86.6% Ownership Sales: $1.3 billion
EBITDA: $123.2 millionOperating Earnings: $80.7 million
Fresh Bakery Fresh PastaFrozen Bakery Maple Leaf Bakery U.K.
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Fresh BakeryExtensive Distribution Network
DeltaDelta
Maple Leaf Fresh Bakery
Pasta Plants
EdmontonEdmontonVancouverVancouver
HamiltonToronto
St. John’s
Halifax
WoodstockWoodstockMoncton
MontrealQuebec City
St. Come
Grand FallsGrand Falls
Levis
BeauportBeauport
North BayNorth Bay
5
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North American Frozen BakeryOnly True North American Par-Bake Network
CalgaryCalgary
RoanokeRoanoke
LavalLaval
ViceroyViceroy TorontoBagelTorontoBagel
RivermedeRivermede
Maple Leaf Frozen Bakery
OxnardOxnard
RichmondRichmond
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UK BakeryLeading Position in Bagel Market
Cumbria
Pretzels, Hand-held Snacks
Peterborough
Fresh Steamed Bagels
Rotherham
Fresh & Frozen Boiled Bagels
Southend
Authentic Pretzels
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Financial PerformanceBakery Products Group
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
1999 2000 2001 2002 2003 2004
LTM Operating Earnings (1)
CAGR: 25.7%
Quebecbakery strike
Increased 25% ownershipin Multi-Marques to 100%
Purchased remaining40% share of Ben's Limited
(1) Excludes restructuring charges
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Investing in World Class AssetsOver $340 million invested since 1997
1997 Roanoke construction
2001 Roanoke expansion
2003 Roanoke expansion
2003 London plant closure,Hamilton fresh bakery expansion
2004 Viau plant roll capacity expansion
2004/2005 Rotherham UK expansion
(1)
Capital Investments
Acquisitions
2001 UK Bagel business
2001 Multi-Marques Inc.
2002 Ben’s Bakery Limited
2002 Olafson’s Baking Company Inc.
2002 Grace Baking Company
2003 Parisco Limited acquired
Bakery Products Group Capital Expenditure
25.1 27.1 30.1 31.6 34.5 38.5 40.4 32.0Depreciation
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
1997 1998 1999 2000 2001 2002 2003 2004$
milli
on C
AD
Frozen
Fresh
77.8
45.9
34.9
14.6
35.6
24.8
64.8
46.1
(1) Nine months (January to September 2004)
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Bakery Products GroupTransformed 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)
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Key Business Trends
Key Bakery Industry Trends Result Our Strategy
Retail and food service customers are consolidating
Food service channel growing faster than retail
Par-bake and artisan growth
Industry consolidation inCanada with two major players
Highly disciplined market with high capacity utilization
Better able to pass through input cost increases
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
Customer poweris increasing
Major growth opportunity
Customers moving to par-bake; laddering up to artisan
Rising importance of nutritionConsumers shift from white to grains and specialty
Continue to invest andlead premium categories
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Bread ConsumptionNorth America vs. the World
104 103
52
132132
150152
186
Germany Austria Italy France Netherlands UK Belgium N.A.
Pounds Consumed Per Individual Annually
Source: Bakers Federation U.K./Wheat Foods Council
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North American Bread ConsumptionDinner Biggest Opportunity
8
40
2724
4
21
3838
Breakfast Lunch Dinner Snacks
Total EatingsTotal Bread
Dinner is main meal of the day: 40%Bread is under-represented at dinner: 21%
Source: NPD
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Fresh Growth Opportunities
Base Business
New Categories
New Customers/Channels
New Geographies
New Business
Strategic Acquisitions
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Fresh Growth OpportunitiesCost 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
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Frozen Growth OpportunitiesThe Bread Ladder
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.
Artisan Breads
Retail $1.99-$2.99 (income generators)Wheat, Grain, Bagels, Raisin. Planned purchase.
Value-Added 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.
Mainstream Pan Breads
Crusty BreadsRetail 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.
22
UK Growth OpportunitiesCapacity Expansion
High Speed Bagel Line Rotherham Facility – September 2004
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