In This Article:
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Revenue: Approximately $1.3 billion, up nearly 2% year-over-year.
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Adjusted EBITDA: Grew by over 9% to $141 million in Q3.
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Adjusted EBITDA Margin: Increased by 80 basis points to 11.2% in Q3.
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Net Income: $18 million or $0.14 per basic share, compared to a loss of $4 million or $0.04 per basic share last year.
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Adjusted Earnings Per Share: $0.18 per share, up from $0.13 per share last year.
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Free Cash Flow: Increased by $65 million to $155 million in Q3.
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Net Debt to Adjusted EBITDA Ratio: Reduced to 3.1x by the end of Q3.
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Prepared Meats Sales Growth: 3% or greater for the third consecutive quarter.
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Poultry Sales: Declined slightly year-over-year, but 10% growth in the retail channel.
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Pork Complex Revenue Growth: 1.1% year-over-year.
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Capital Expenditures: $26 million in Q3, down from $51 million last year.
Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Maple Leaf Foods Inc (MLFNF) reported a 2% year-over-year increase in Q3 sales, driven by over 3% growth in the CPG prepared meats business.
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Adjusted EBITDA grew by over 9% to $141 million in the quarter, with a year-to-date growth of nearly 30%.
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The company achieved a substantial increase in free cash flow generation, contributing to a significant reduction in net debt.
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Maple Leaf Foods Inc (MLFNF) launched 22 new SKUs in Q3, marking the most items introduced at one time since 2020.
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The company reported double-digit sales growth in the US market for prepared meats, with over 50% sales growth for its sustainable meats brand, Greenfield.
Negative Points
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Higher SG&A expenses year-over-year created a headwind to adjusted EBITDA performance.
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The inflation-stressed consumer environment negatively impacted the premium portfolio, leading to more trade-down and increased investments to protect market share.
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The plant protein category, while showing improvement, still faces challenges in achieving profitability.
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Pork markets, although improving, continue to operate below normal conditions, with a negative market impact of about $14 million in Q3.
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The spin-off of the pork business is delayed due to the need for a tax ruling, pushing the target closing to mid-2025.
Q & A Highlights
Q: Can you walk us through the factors affecting EBITDA year-to-date and expectations for late 2024 into 2025? A: Curtis Frank, President and CEO, explained that the pro forma Maple Leaf business, excluding the pork business, showed relatively flat margins. Key factors include contributions from capital projects, an uptick in SG&A due to variable compensation, and the impacts of an inflation-stressed consumer environment. Despite these challenges, the company saw 2% growth in Prepared Foods and market share gains across categories.