Maple Leaf Foods to merge meat, plant-based divisions

CANADA – Maple Leaf Foods, a prominent Canadian food company, has announced plans to merge its meat and plant-based protein businesses following a successful performance in its plant protein division, achieving a better adjusted EBITDA within the targeted 18 months.

The decision to restructure was disclosed alongside the company’s full-year results for 2023.

In the fourth quarter, the meat group revealed that it attained its goal in the plant protein division, with plant-adjusted EBITDA reaching C$95,000 (US$70283.38), compared to a loss of C$20.4 million (US$15.09 million) in the same quarter of the previous year.

However, plant protein sales experienced a decline, totaling C$36.5 million (US$27.003 million) in the fourth quarter, marking a 9.1% decrease from the corresponding quarter in the previous year. Annual plant protein sales for 2023 slid by 13.2% to C$147 million (US$108.75 million).

While the plant-protein division achieved its EBITDA neutral target for the fourth quarter, the full twelve months still resulted in an adjusted EBITDA loss of C$33 million (US$24.4 million), an improvement from C$105 million (US$77.5 million) in 2022.

Maple Leaf Foods’ CEO, Curtis Frank, explained that the company aims to simplify its business operations by merging the meat and plant-based divisions.

The strategic move is part of the company’s plan to focus on growing its Canadian business while leveraging a combined platform to accelerate growth in the United States.

Frank highlighted the potential benefits of consolidating the two divisions, citing synergies in customer relationships, distribution networks, supply chain management, and marketing efforts.

He emphasized that the integration of meat and plant-based platforms in the U.S. market is expected to yield long-term advantages for the company.

Despite positive results in the plant protein division, Maple Leaf Foods expressed frustration with the performance of its meat business in the fourth quarter.

The group attributed the disappointment to factors including prolonged global pork market dislocations and a challenging consumer demand environment.

For the full twelve months, Maple Leaf Foods reported total company sales growth of 2.7% to C$4.87 billion, with an adjusted EBITDA margin of 8.8%.

However, the year concluded with a net loss of C$125 million, an improvement compared to the net loss of US$311.9 million recorded in the previous year.

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