Maple Leaf Foods Inc.

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Maple Leaf's third quarter 2024 financial results conference call. As a reminder, this conference call is being broadcast live on the internet and recorded. All lines have been placed on mute to prevent any background noise. Please note that there will be a question and answer session following the formal remarks. We will go over the instructions for the Q&A following the conclusion of the formal presentation. I would now like to turn a conference call over to Janet Craig, Investor Relations at Maple Leaf Foods. Please go ahead, Ms. Craig.

Thank you, Jenny, and good morning, everyone. Speaking on the call this morning will be Curtis Frank, President and Chief Executive Officer, Dave Smills, Chief Financial Officer, and Dennis Organ, President, Poor Complex, and incoming CEO of Canada Packers. Before I begin... I'd like to remind you that some statements made on today's call may constitute forward-looking information, and our future results may differ materially from what we discussed. Please refer to our third quarter 2024 MD&A and other information on our website for a broader description of operations and risk factors that could affect the company's performance. I've uploaded our third quarter investor deck to our website, which includes support material for the quarter. As always, the Investor Relations team will be available after the call for any follow-up questions you may have. And with that, I'll turn the call over to Curtis.

Okay, thank you, Janet, and good morning, everyone. It's great to be with you here again today. In my comments this morning, I will begin by discussing the progress we are making in executing our strategic priorities and summarizing my thoughts on our Q3 financial and operating performance. I will then turn the call over to Dennis Organ, the president of our pork complex and our incoming CEO of Canada Packers, who will touch on the performance of the pork business. Following Dennis, you'll hear from Maple Leaf's Chief Financial Officer, David Smales, who will provide a more detailed financial update. I will then step back in to close the call, offering a clear picture of what lies between us and our 14 to 16% strategic margin target, along with an update on the spinoff of our pork business, as we have some materially good news to share. And of course, we will reserve time to open up the line to your questions. First and foremost, our top priority continues to be driving adjusted EBITDA growth and expanding our adjusted EBITDA margin towards our 14% to 16% strategic target. In this pursuit, I'm pleased to report that our Q3 sales of approximately $1.3 billion were up nearly 2% year-over-year, fueled by over 3% growth in our CPG prepared meats business. Adjusted EBITDA also grew by over 9% to 141 million in the quarter and has grown by nearly 30% year-to-date. Additionally, we delivered another quarter of improvement in our adjusted EBITDA margin, which increased by 80 basis points in Q3 to 11.2%, driven by improved pork markets and contributions from our capital projects. This progress was partially offset by higher SG&A year-over-year, and the impacts of an inflation-stressed consumer. Our large-scale capital projects at London Poultry and our Bacon Centre of Excellence continued to ramp up successfully this quarter. As we mentioned on our last call, we remain confident that we are fully on track to realize the remaining benefits of these projects in Q4 of this year. And as a result, we do expect some level of sequential margin improvement in the fourth quarter of 2024. As many of you know, the entire North American consumer packaged goods industry continues to face the challenge of navigating an inflation-stressed consumer environment. This environment has a particularly significant impact on a premium portfolio like ours, and I want you to know that we are not sitting still waiting for the macro environment to recover on its own. Instead, our commercial teams are doing incredible work to adapt our brand strategies to the evolving consumer demand environment, leveraging the depth of our CPG capabilities. Through this playbook, we are investing in our portfolio of leading brands to drive consumer demand. A great example is our Maple Leaf Natural Negotiators advertising campaign, which this quarter focused on our prime raised without antibiotics and bacon portfolios. We also completed our most successful season as the official hot dog and sausage partner of the Toronto Blue Jays, selling a record-breaking number of hot dogs this season, including over 725,000 of them on loony dog nights alone. We are accelerating the pace of impactful innovation, highlighted by the launch of 22 new SKUs into the market in Q3. This is the most items we have launched at one time, dating back to 2020. We are already seeing great success with these new innovations, particularly with our new Schneider's brand, line of breakfast sandwiches and breakfast egg bites, which cater to the growing market for savory, convenient, and protein-packed breakfasts. We are leveraging our leadership in sustainable meats, which grew at a double-digit pace in Q3, supported by breakthrough advertising campaigns for the Greenfield Natural Meat Company, and expanded distribution with customers such as Costco USA, where in September, we partnered to launch a Greenfield brand club pack lunch kit item. We are expanding our reach into the U.S. market as a source of incremental growth. Here, too, we achieved double-digit sales growth in prepared meats, winning business with new partners, and expanding distribution for our sustainable meats brand at Greenfield, which saw over 50% sales growth in the U.S. as compared to last year. We are plugging our unique capabilities into our customer strategies by leveraging new assets like our Bacon Center of Excellence and the investments we have made at our Walker Drive facility. And we are executing in-store and at point of sale where our field sales team executed displays in over 4,000 Canadian grocery stores in Q3 alone. Underpinned by the strength of these brand plans and our robust customer partnerships, our prepared meats business demonstrated outstanding resilience this quarter. We achieved our third consecutive quarter of sales growth of 3% or greater and delivered a slight gain in retail market share. In poultry, while overall sales declined slightly year over year due to the repatriation of tray pack volume into the London plant, which as of the start of Q4 is now fully lapped, we delivered 10% growth in the retail channel and grew our retail branded market share of the fresh poultry category. Our focus for our plant protein category remains no different than our other businesses in that we expect to generate profits. In the third quarter, we continued to make strides toward that goal, Our US dollar sales were relatively flat. Our performance outpaced the overall US refrigerated category. And our sustained focus on driving out costs led to a quarter of year over year improvement in profitability. Early within Q4, we implemented our plans to integrate the plant protein business as a category within our prepared foods business, marking a very important milestone to set us up for success in 2025 and beyond. To be clear, While we are very encouraged by our overall prepared foods performance, the higher levels of SG&A and the steps that we have taken to invest in our brands to support volume growth and protect market share are resulting in a short-term margin and slight adjusted EBITDA decline when viewing prepared foods on a standalone basis. However, with inflation easing, interest rates declining, and our brand plans taking hold, we are fully confident that this impact will prove to be transitory. In the port complex, we are thrilled to report that after many quarters of unprecedented market conditions, markets appear to be normalized. As a result, our financial performance has continued to improve, both sequentially and on a year-over-year basis. And in our supporting materials, we estimate a negative market impact of about 14 million for approximately 110 basis points in the third quarter, as compared to normal market conditions, most of which is now attributed to Japan margins being below pre-pandemic levels. Restoring these margins while executing other value-creating levers as it moves forward as a standalone organization is the top priority for our pork team, which Dennis will discuss momentarily. So overall, I think it would be reasonable to say that the quarter unfolded as expected. The financial performance of our business is strengthening year over year, We saw a substantial increase in free cash flow generation in the quarter, and we accelerated the deleveraging of our balance sheet with net debt to adjusted EBITDA reduced to 3.1 times by the end of the quarter. With that as strategic context, I will now pass the call over to Dennis to review the port complex performance in the quarter. Dennis?