In a press release dated February 22nd Maple Leaf Foods Inc. (MFI-TO) announced results for Q4 and FY 2023 ended December 31st 2023.
The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS (conversion of CAN$1=US$0.74)
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4th Quarter Ending December 31st.
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2023
|
2022
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Difference (%)
|
|
Sales:
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$882,634
|
$877,286
|
+0.6
|
|
Gross profit:
|
$100,252
|
$74,425
|
+34.7
|
|
Operating income:
|
$24,663
|
$(608)
|
+4,156
|
|
Pre-tax Income
Net Income/ (Loss)1
|
$(6,451)
$(6,897)
|
$(21,875)
$(30,704)
|
+70.5
+77.5
|
|
Diluted earnings per share:
|
$(0.06)
|
$(0.25)
|
+76.0
|
|
Gross Margin (%)
|
11.3
|
8.5
|
+32.9
|
|
Operating Margin (%)
|
2.8
|
-0.1
|
+2,900
|
|
Profit Margin (%)
|
-0.8
|
-3.5
|
+122.9
|
|
Long-term Debt and lease obligations2:
|
$1,253,183
|
$1,373,368
|
-8.8
|
|
12 Months Trailing:
|
|
|
|
|
Return on Assets (%)
|
0.5
|
|
|
|
Return on Equity (%)
|
-7.9
|
|
|
|
Operating Margin (%)
|
2.8
|
|
|
|
Profit Margin (%)
|
-2.6
|
|
|
|
Total Assets
Intangibles and goodwill as % of assets
|
$3,406,310
17.8
|
$3,287,717
18.9
|
+3.6
|
|
Market Capitalization February 22nd.
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$2,820,000
|
|
|
- Restructuring charge Q4 2023 $6.1 million; Q4 2022 $4.2 million
- December 31st. 2022/2021
For FY 2023 Maple Leaf Foods lost $(92.48) million on revenue of $3,602 million with a negative diluted EPS of $(0.76). Comparable values for FY 2023 were a net loss of $(230.80) million on revenue of $3,507 million with a negative diluted EPS of $(1.86)
Q4 2022 Meat Protein Segment:
Sales, $858 million, down 2.8% from Q2 2022.
Adjusted operating earnings $45.0 million down 33.8% from Q2 2022.
Q4 2022 Plant Protein Segment:
Sales, $27.0 million, down 8.8% from Q4 2022.
Adjusted operating loss $(3.5) million 81.7% improvement from Q4 2022.
52-Week Range in Share Price: $15.92 to $23.41 50-day Moving average $18.99
Forward P/E 15.2 Beta 0.5
Market Close pre-release February 21st $19.11
Market Open post-release February 22nd $17.03
Insider shareholding 40.0%. Institutional shareholding 25.8%
In commenting on Q4 results Curtis Frank president and CEO stated “In 2023 we made great progress in advancing our strategic Blueprint, delivering top-line growth of 2.7 percent, recording an increase of US$115 million in Adjusted EBITDA to US$317 million for the year, and meeting our commitment to achieve Adjusted EBITDA neutral or better in our Plant Protein business as we exited the year.” He added “While these are important achievements, and we are pleased with our relative performance in challenging market conditions, we acknowledge that we still have work to do to realize our full potential.”
In addressing the two operating segments Frank noted “In the fourth quarter, our Meat Protein results fell below our expectations, as a result of global pork market dislocations that have persisted longer and deeper than we anticipated, and a challenging consumer demand environment, plus we still have a short distance to go to bring home the full benefits from our London Poultry and Bacon Centre of Excellence projects.” He concluded “With our refreshed strategic Blueprint announced today, we are sharpening our execution focus, bringing together our Meat Protein and Plant Protein businesses to build a powerful platform from which to grow in the U.S. market, and aligning the talents of our team to leverage the strength of our portfolio of leading brands, leadership in sustainability and world-class assets."
The Company provided the following comments on strategy and guidance:-
- Meat Protein: The Meat Protein Group is comprised of prepared meats, ready-to-cook and ready-to-serve meals, snack kits, value-added fresh pork and poultry products that are sold to retail, foodservice and industrial channels, and agricultural operations in pork and poultry. The Meat Protein Group includes leading brands such as Maple Leaf®, Maple Leaf Prime®, Maple Leaf Natural Selections®, Schneiders®, Schneiders® Country Naturals®, Mina®, Greenfield Natural Meat Co.®, and other leading regional brands.
Sales for the fourth quarter increased 0.8% to $1,159.0 million compared to $1,149.6 million last year. Sales growth was driven by volume growth, pricing action implemented in prior quarters to mitigate the impact of inflation, and favourable mix shift. Prior year sales volumes were also impacted by the cybersecurity incident.
- Plant Protein: “The Plant Protein Group is comprised of refrigerated plant protein products, premium grain-based protein, and vegan cheese products sold to retail, foodservice and industrial channels. The Plant Protein Group includes the leading brands Lightlife® and Field RoastTM.
Sales for the fourth quarter were US$27 million compared to US$29.6 million last year, representing a decline of 8.9 percent. Sales decline was driven by lower retail volumes, partially offset by pricing action implemented in prior quarters to mitigate inflation”.
In late 2021, the Company announced that it was re-evaluating its outlook for the Plant Protein Group and launching a comprehensive review of the overall plant protein category. This decision was driven by a pronounced slowdown in growth rates in the category, Estimates at the time suggested that the category would grow at an average annual rate of 10 to 15 percent, making it an US$8 billion market by 2030”. This prediction has not been realized and the market has contracted in both volume and value.
- The Company statement noted, “In the near term, the Company is realigning its organizational structure to align with the refresh of its strategic blueprint by bringing together its Meat and Plant Protein businesses. This shift supports a clear and consistent focus on driving profitable growth in Canada, the U.S. and internationally across its entire protein and prepared foods portfolio”.