Investor Presentation

September 2019

Katie Brine, Director Finance, Investor Relations

Phone: 905-238-7124 x2092

Email: katie.brine@sobeys.com

2

Disclaimers

Forward-Looking Information

This document contains forward-looking statements which are presented for the purpose of assisting the reader to contextualize Empire Company Limited’s

(“Empire” or the “Company”) financial position and understand management’s expectations regarding the Company’s strategic priorities, objectives and plans.

These forward-looking statements may not be appropriate for other purposes. Forward-looking statements are identified by words or phrases such as “estimates”,

“plans”, “predicts”, “anticipates” and other similar expressions or the negative of these terms.

These forward-looking statements include, but are not limited to, the following items:

The Company’s expectations regarding the impact of Project Sunrise, including expected cost savings and efficiencies, the expected timing of the

realization of overall and fiscal 2020 in-year incremental benefits, and the expected $50 million overachievement of the initial $500 million target which could

be impacted by several factors, including the execution and completion of category resets, time required by the Company to complete the project as well as

the factors identified under the heading “Risk Management” in the fiscal 2019 annual Management’s Discussion & Analysis (“MD&A”);

The FreshCo expansion in Western Canada and Farm Boy expansion in Ontario, including the Company’s expectations regarding future operating results

and profitability, the amount and timing of expenses, and the number, location, feasibility and timing of construction and conversions, all of which may be

impacted by construction schedules and permits, the economic environment and labour relations;

The Company’s plans to purchase for cancellation Non-Voting Class A shares under the normal course issuer bid (“NCIB”) which may be impacted by

market and economic conditions, and the results of operations; and

The Company’s expectations regarding the implementation of its online grocery home delivery service which may be impacted by the timing of launching

the business, the customer response to the service and the performance of its business partner, Ocado.

By its nature, forward-looking information requires the Company to make assumptions and is subject to inherent risks, uncertainties and other factors which may

cause actual results to differ materially from forward-looking statements made. For more information on risks, uncertainties and assumptions that may impact the

Company’s forward-looking statements, please refer to the Company’s materials filed with the Canadian securities regulatory authorities, including the “Risk

Management” section of Empire’s fiscal 2019 annual MD&A.

Non-GAAP Financial Measures & Financial Metrics

There are measures and metrics included in this earnings call presentation, such as adjusted EBITDA, adjusted earnings per share, same-store sales, free cash

flow, funded debt and total capital that do not have a standardized meaning under generally accepted accounting principles (“GAAP”) and therefore may not be

comparable to similarly titled measures and metrics presented by other publicly traded companies. The Company includes these measures and metrics because

it believes certain investors use these measures and metrics as a means of assessing financial performance.

For a more complete description of Empire’s non-GAAP measures and metrics, please see Empire’s MD&A for the first quarter ended August 3, 2019.

3

CEO’s Direct Reports

Michael Medline President &

Chief Executive Officer

Vivek Sood

Executive Vice

President, Related

Businesses

Mike Venton

General Manager, Discount Format

Pierre St-Laurent

Executive Vice President, Chief Operating

Officer, Full Service

Sarah Joyce

Senior Vice President,

E-commerce

Vittoria Varalli

Vice President, Sustainability, Chief of Staff, Office of the

CEO

Mike Vels

Chief Financial Officer

Simon Gagné

Executive Vice

President, Human

Resources

Doug Nathanson

Senior Vice President,

General Counsel & Corporate

Secretary

Sandra Sanderson

Senior Vice President, Marketing

Mohit Grover

Senior Vice President,

Innovation & Strategy

Empire Company Limited – Who are we?

• Canadian company headquartered in Stellarton,

Nova Scotia.

• Key businesses include food retailing and related

real estate through wholly owned subsidiary Sobeys

Inc. and a 41.5% equity accounted interest in

Crombie REIT.

• Sobeys is a national Canadian grocery retailer,

serving the food shopping needs of Canadians under

retail banners that include Sobeys, Safeway, IGA,

Foodland, FreshCo, Thrifty Foods, Farm Boy and

Lawtons Drugs.

• In addition to food retail we are:

• Pharmacy retailers with in-store pharmacy

banners and free-standing locations through

Lawton’s Drug Stores;

• Wholesalers, distributing to our corporate and

franchised stores and over 8,000 retail stores

and independent wholesale accounts; and

• Owner and operator of fuel and convenience

stores, and liquor operations.

Quick Facts – Empire*

Share price (CAN$)** $36.01

52-Week High ** $37.36

52-Week Low ** $22.69

30-day Average daily trading volume** 664,379

Shares outstanding (diluted) 272.9M

Quarterly dividend $0.12

Number of Stores*** > 1,500

Number of Retail fuel locations > 350

Employees ~123,000

Total Square footage ~40.0 M

Communities served > 900

*As at Q1, Fiscal 2020 (August 3, 2019) unless noted otherwise

**As of September 13, 2019

*** See http://corporate.sobeys.com/at-a-glance/ for details of

stores per banner and location

4

Key Achievements – Last twelve months

December • Completed the acquisition of Farm Boy, Ontario’s fastest growing food retailer

January • Announced progress implementing a labour decision provided by a Special Officer appointed by the Government in B.C.

• Decision sets terms that provide a framework to improve store profitability and enable conventional Safeway stores to compete on a

level playing field in B.C.

• Enabled Empire to move forward with Discount expansion strategy in B.C.

April • Opened first Western Canada FreshCo store in in Mission B.C.

May • Unveiled Voilà by Sobeys and Voilà par IGA – the name and brand for the Company’s online grocery home delivery service for the

Greater Toronto Area, Ottawa and major cities in the province of Quebec

• Announced changes to Executive Committee, as the Company sets its sights on stronger execution, innovation and growth

June • Announced full year results reflecting fourth consecutive quarter of tonnage growth

• Project Sunrise exceeded targets for fiscal 2019 – achieved $200 million of incremental savings in fiscal 2019, and increased total

savings target to $550 million

• Annual dividend per share increased 9% to $0.48

• Capital investment program for fiscal 2020 expected to be $600 million

• Announced intent to repurchase approximately $100 million of Non-Voting Class A shares

July • With announcement of additional FreshCo store investments in Western Canada, one-third (22) of Western FreshCo locations confirmed

• DBRS Upgrades Ratings on Sobeys Inc. to BBB (low) and changes trend to Stable; S&P revises outlook to Positive

September • Announced first quarter results reflecting increased earnings

• Same-store sales excluding fuel increased by 2.4%

• Store closure and conversion costs of $21.0 million ($0.06 per share, after tax) included in results

• Repurchased 547,300 shares for a total consideration of $18.9 million

2019

2018

5

Strategic Focus

Successful completion of

Sunrise by end

of fiscal 2020.

Reset our Foundation

Strengthen the emotional

connection to our banner

brands.

Bolster our Brand

Expand discount to Western

Canada and refine our

FreshCo model.

Enhance Discount

Launch home delivery and

rapidly grow the number of Farm

Boy stores.

Fill the Urban Gap

Win in our Stores

Improve service and offering in

our conventional stores.

6

Leverage digital and data to accelerate

growth.

Invest in Innovation

Project Sunrise Update

In the fourth quarter of fiscal 2017, the Company launched Project Sunrise, a comprehensive, three year

transformation initiative intended to simplify organizational structures and reduce costs. The initiative is now

expected to generate at least $550 million in annualized benefits by the end of fiscal 2020 and will be achieved

through three phases:

1) Organizational realignment – from a regional to a national structure, is complete.

2) Operational efficiencies – store operations, labour standards and other operational process initiatives

continue to progress as planned, with increased benefits achieved in fiscal 2019 and planned for 2020.

3) Cost of goods sold – harmonization of costs with suppliers; more competitive net acquisition costs achieved;

category resets are providing an improved, simplified and in some cases more innovative assortment for

customers.

Financial benefits from Phases one and two largely impacted selling and administrative expenses. Phase

three financial benefits will be reflected mostly in gross margin expansion. As at Q1 F20, Project Sunrise is

on track.

7

Year Approximate In-Year

Savings break-down ($M) Achieved Through

1 F2018 (completed) ~100 Organizational design, indirect sourcing cost reductions and improvements in store

operations.

2 F2019 (completed) ~200 Initial rollout of category resets, continued cost reductions and operational improvements.

3 F2020 (expected) ~250 Completion of category resets rollout, continued cost reductions and operational

improvements.

Total ~550

Initial Target (set May 2017) 500

Expected to exceed by ~50

Significant improvement in Empire’s key metrics since the launch of Project Sunrise.

Project Sunrise Update

8

Fiscal

2019 2017 Change

52 weeks

4-May-19¹ 52 weeks

6-May-17 +/-

Sales $25,142.0 $23,806.2 + 5.6%

Same-store sales, excluding fuel 4.3% 3.3% + 100 bps

Gross margin 24.2% 24.0% + 20 bps

Adjusted EBITDA $1,076.2 $769.9 + 39.8%

Adjusted EBITDA margin 4.3% 3.3% + 100 bps

Selling and Administrative margin (adjusted)² 22.1% 22.9% - 80 bps

Adjusted EPS $1.50 $0.70 + 114.3%

$23

$24

$24

$25

$25

$26

2017 2018 2019

+1.8% CAGR³

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

2017 2018 2019

+11.8% CAGR

$0.00

$0.50

$1.00

$1.50

$2.00

2017 2018 2019

+28.9% CAGR

Sales ($B) Adjusted EBITDA ($M) Adjusted EPS ($/share)

¹ Empire’s results for the fiscal year ended May 4, 2019 include Farm Boy operations as of December 10, 2018.

² Selling and Administrative costs, excluding the impact from adjustments made to operating income during the fiscal year. See Empire’s fiscal 2019 MD&A.

³ Compound annual growth rate.

9

Farm Boy Acquisition Advances Ontario Strategy, Accelerating Ontario Presence and GTA Growth

Farm Boy Stores acquired

Farm Boy Stores opened

Existing Farm Boy Distribution Centre

Announced Farm Boy Distribution Centre Opening

• Farm Boy acquired on December

10th, 2018.

• Farm Boy contributed to Company

results for 21 weeks of fiscal 2019;

sales of $212.7 million and net

earnings of $7.9 million.

• For fiscal 2020, the Company

expects to spend approximately $70

million in capital for the expansion of

the Farm Boy store network in

Ontario.

• Since the acquisition, the Company

has opened two new Farm Boy

stores in Ontario. Three further

stores will open in fiscal 2020 and

two more in the first quarter of fiscal

2021.

• Farm Boy Private Label will be part of

the Voilà by Sobeys offering when it

launches in Spring 2020.

Farm Boy Stores announced to open

Note – For further company and transaction information, please see Appendix A

10

Ocado Solutions

With more than 15 years at the forefront of innovation and success in grocery ecommerce,

Ocado will partner exclusively in Canada with Sobeys on our end-to-end e-commerce solution.

Key facts:

• Canadian online grocery market is

growing 30%+ per year

• Greater Toronto Area Customer

Fulfilment Centre (“CFC”) complete

in 2 years

• Soft launch in Spring 2020

Ocado by the numbers*:

• 99% order accuracy

• 95% delivery punctuality

• 0.7% product waste

• 318,000 orders a week (average)

• 741,000 active customers *Per Ocado Group’s 2019 Half Year Report

This is a link to a video showing the Ocado’s Andover facility.

https://youtu.be/EeMTZd68fOU

Financial Results – Annual

11

¹ Empire’s results for the fiscal year ended May 4, 2019 include Farm Boy operations as of December 10, 2018. All metrics, including same-store sales, include the

consolidation of Farm Boy operations

² The Company revised the definition of free cash flow in Q4 F19 as cash flows from operating activities, plus proceeds on disposal of property, equipment and

investment property, less acquisitions of property, equipment, investment property and intangibles. All amounts in the chart have been restated to reflect the new

definition.

Fiscal

F2019 F2018 F2017 F2016

52 weeks 52 weeks 52 weeks 53 weeks

4-May-19¹ 5-May-18 6-May-17 7-May-16

Sales $25,142.0 $24,214.6 $23,806.2 $24,618.8

Same store sales growth (decline), excluding fuel 2.7% 0.5% (2.2)% 0.3%

Inflation (deflation) at quarter end – internal 2.2% 0.8% (1.9)% 2.2%

Gross profit $6,083.6 $5,900.5 $5,707.2 $5,957.6

Gross margin 24.2% 24.4% 24.0% 24.2%

Adjusted EBITDA $1,076.2 $1,014.7 $796.9 $1,161.4

Adjusted EBITDA margin 4.3% 4.2% 3.3% 4.7%

Adjusted earnings per share $1.50 $1.27 $0.70 $1.50

Free cash flow ² $540.7 $808.9 $619.7 $367.3

Capital expenditures $434.6 $288.0 $514.5 $672.0

Dividends per share $0.44 $0.42 $0.41 $0.40

Share price $29.94 $25.01 $21.50 $21.09

Fiscal

2020(2)(3)

Fiscal

2019

Fiscal

2018

Fiscal

2017

Q1 F20 Q4 F19 Q3 F19(4)

Q2 F19 Q1 F19 Q4 F18 Q3 F18 Q2 F18 Q1 F18 Q4 F17 Q3 F17 Q2 F17

Aug. 3 May 4 Feb. 2 Nov. 3 Aug. 4 May 5, Feb. 3, Nov. 4, Aug. 5, May 6, Feb. 4, Nov. 5,

2019 2019 2019 2018 2018 2018 2018 2017 2017 2017 2017 2016

Sales $6,744.1 $6,220.4 $6,247.3 $6,214.0 $6,460.3 $5,886.1 $6,029.2 $6,026.1 $6,273.2 $5,798.9 $5,889.8 $5,930.9

Same store sales, excluding fuel 2.4% 3.8% 3.3% 2.5% 1.3% 0.0% 1.1% 0.4% 0.5% (1.6)% (3.7)% (2.6)%

Inflation (deflation) – internal 3.0% 2.2% 1.8% 1.3% 0.0% 0.8% 1.6% 0.7% 0.5% (1.9)% (2.2)% (0.1)%

Gross profit $1,660.4 $1,577.5 $1,511.7 $1,482.1 $1,512.3 $1,451.3 $1,444.7 $1,473.5 $1,531.0 $1,420.9 $1,394.8 $1,400.7

Gross margin 24.6% 25.4% 24.2% 23.9% 23.4% 24.7% 24.0% 24.5% 24.4% 24.5% 23.7% 23.6%

Adjusted EBITDA $460.0 $300.1 $218.3 $279.1 $278.7 $240.4 $253.3 $242.2 $278.8 $193.9 $178.7 $181.2

Adjusted EBITDA margin 6.8% 4.8% 3.5% 4.5% 4.3% 4.1% 4.2% 4.0% 4.4% 3.3% 3.0% 3.1%

Adjusted EBITDA margin (Pre-IFRS 16) 4.9% 4.8% 3.5% 4.5% 4.3% 4.1% 4.2% 4.0% 4.4% 3.3% 3.0% 3.1%

Adjusted EPS $0.49 $0.46 $0.27 $0.40 $0.37 $0.35 $0.33 $0.27 $0.32 $0.18 $0.13 $0.12

Free cash flow (1)

$224.2 $175.6 $179.2 $58.4 $127.5 $342.7 $248.4 $111.2 $106.6 $150.7 $15.5 $6.6

Capital expenditures $91.4 $227.1 $86.5 $73.4 $47.6 $84.0 $70.9 $58.5 $74.6 $111.9 $96.3 $171.3

Dividends per share $0.120 $0.110 $0.110 $0.110 $0.110 $0.105 $0.105 $0.105 $0.105 $0.1025 $0.1025 $0.1025

Share price $35.52 $29.94 $29.75 $23.43 $26.12 $25.01 $23.31 $23.73 $20.39 $21.50 $16.24 $18.51

Financial Results – 12 Quarter Review

12

1 Amounts have been restated to be consistent with the pre-IFRS 16 definitions. See “Non-GAAP Financial Measures & Financial metrics" section of Empire’s News Release for the first

quarter ended August 3, 2019. 2 In the first quarter of fiscal 2020, the Company expensed $21 million in closure and conversion costs. These costs relate to the announced conversion of ten Safeway locations to

FreshCo stores and the conversion of two Company locations to Farm Boy stores that were announced in the first quarter. 3 Certain financial metrics were impacted by the implementation of IFRS 16 in the first quarter of fiscal 2020. See Appendix B for additional details. 4 Q3 F19 results include $45 million in costs related to the B.C. labour buyouts and FreshCo conversion store closures which impacted selling and administrative costs

Appendices A – D

Farm Boy – Company Overview

Founded in 1981, Farm Boy Inc., (“Farm Boy”) is an Ontario-

based retail grocer that has a focus on high quality and locally-

sourced meat and produce and offers a wide range of

exceptional private label and prepared foods and renowned

customer service

Farm Boy is led by Jean-Louis Bellemare (founder and co-CEO)

and Jeff York (co-CEO), both are continuing their leadership

roles with Farm Boy

Farm Boy operates a unique and compelling brand that

resonates with Canadians and has a passionate and loyal

customer base

Scalable platform with infrastructure in place to support future

long-term growth

Over the last 5 years, Farm Boy has approximately doubled

store count and delivered strong revenue, EBITDA and free

cash flow growth

Today, Farm Boy has 28 stores with defined plans for continued

expansion into the GTA

Appendix A

14

Farm Boy – Key Investment Highlights

Aligned with Empire’s Strategic Priorities

Leading Specialty Food Retailer with Strong Brand

Loyalty

Attractive, Scalable Platform Primed for Growth

Enhances Presence in Urban Markets with

Established, Well-Known Brand in Ontario

Exceptional Private Label Offering

Retention of Strong and Driven Management Team

1

2

3

4

5

6

15

Farm Boy – Transaction Overview

Purchase

Price & Timing

Empire, through a subsidiary, signed an agreement on September 24, 2018, to acquire the business of Farm Boy for

a total purchase price of $800 million; transaction closed on December 10, 2018

Farm Boy is set up as a separate company within Empire’s structure

Farm Boy’s Co-CEOs, together with members of their senior management team, have reinvested for a 12% interest

of the continuing Farm Boy business

Financial

Profile

Accretive to adjusted earnings per share and operating cash flow per share in the first full fiscal year after closing

Empire’s fourth quarter of fiscal 2019 was the first full quarter including contributions from Farm Boy

Empire’s fiscal year 2020 will be the first year including a full year of contributions from Farm Boy

Historical EBITDA CAGR of 21% with compelling EBITDA margin profile(1)

Plan to double store count, sales and EBITDA in the next 5 years

Free cash flow generation sufficient to self-fund growth

Three year average same-store sales growth of 5.3%(2)

Financial

Flexibility

The acquisition was financed through a combination of cash on hand and a new $400 million senior, unsecured, non-

revolving two-year credit facility

Rapid deleveraging profile

(1) For the period from FY2014 through the 52 weeks ended July 14, 2018

(2) FY2015 through FY2017.

16

• IFRS 16 intends to align the presentation of leased assets more closely to owned assets.

• Impact of the standard has been reflected in the financial statements for first quarter of 2020 (from May 5, 2019).

• This standard will not impact Empire's strategy, business operations, or cash flow generation.

• The adoption of IFRS 16 had a material impact on balance sheet classifications.

• The Company expects the adoption of IFRS 16 will not have a material impact on fiscal 2020 EPS.

13 Weeks Ended

($ in millions, except

per share amounts)

Aug. 3,

2019

Aug. 4,

2018 Change

Impact of

IFRS 16(1)

Change

(excl. IFRS 16)

EBITDA $460.0 $278.7 $181.3 $129.0 $52.3

Adjusted EBITDA $460.0 $278.7 $181.3 $129.0 $52.3

EBITDA margin 6.8% 4.3% 2.5% 1.9% 0.6%

Finance costs, net $71.7 $23.1 $48.6 $46.3 $2.3

Net earnings $130.6 $95.6 $35.0 $(0.9) $35.9

Adjusted net earnings $133.9 $100.2 $33.7 $(2.0) $35.7

Adjusted EPS (fully diluted) $0.49 $0.37 $0.12 $(0.01) $0.13

INCOME STATEMENT IMPACT BALANCE SHEET IMPACT

(1) Reflects the impact of changing accounting standards from IAS 17 to IFRS

16 in the first quarter of fiscal 2020, including the add back of $3.5 million

($2.5 million after tax) in historical straight-line expense under IAS 17.

As at May 5, 2019 ($ in millions)

Asset increase (decrease):

Prepaid expenses $(43.4)

Current loans and other receivables 53.6

Non-current loans and other receivables 519.0

Other assets (7.3)

Property and equipment (22.3)

Right-of-use assets 3,800.7

Intangibles (126.7)

Deferred tax assets 127.3

Total assets $4,300.9

Liabilities and equity (increase) decrease:

Current provisions $7.4

Long-term debt due within one year 6.5

Lease liabilities due within one year (424.4)

Long-term provisions 23.7

Long-term debt 22.6

Long-term lease liabilities (4,569.6)

Other long-term liabilities 164.4

Deferred tax liabilities 36.5

Retained earnings 432.0

Total liabilities and equity $(4,300.9)

Adjustments to opening balances resulting from the initial adoption of IFRS 16:

IFRS 16 Update

Appendix B

17

18

Appendix C

FreshCo 2.0

19

FreshCo 2.0

Appendix D

Voilà – Canada’s best online grocery home delivery service

Voilà by Sobeys promises to help Canadians stay one step ahead of their busy lives.

Key Facts:

• Powered by Ocado’s world-leading online grocery engine, Voilà by

Sobeys will offer an expansive product selection of up to 39,000

products, including high quality fresh produce, at prices comparable to

Sobeys and IGA.

• Construction of CFC in Vaughan, Ontario is on track to roll out

testing and soft launch in the GTA in late Spring 2020.

• Ocado is building the grid in the ambient & chilled portions of the

warehouse

• On-boarding suppliers has begun

• Robots are arriving soon for testing

• Delivery trucks are ordered

• Team on-boarding ongoing

• Second CFC announced to open in Montreal in 2021, serving major

cities in Quebec and the Ottawa Area.

• Empire has partnered with Crombie REIT to develop the second CFC in

Montreal.

20

21

Voilà by Sobeys – Vaughan CFC

Voilà by Sobeys – Vaughan CFC

Ocado’s live CFC in

Erith, UK

Vaughan

CFC

22