TSX: MFI

Maple Leaf Foods delivers Adjusted EBITDA of $129 million at a margin of 12.5%, Earnings of $22 million

MISSISSAUGA, ON, Nov. 4, 2026 /CNW/ -- Maple Leaf Foods Inc. ("Maple Leaf Foods" or "the Company") (TSX: MFI) today reported its financial results for the third quarter ended September 30, 2026.

Third Quarter 2026 Highlights

• Sales were $1,035 million compared to $1,011 million for the same period last year, an increase of 2.4%.
• Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA")⁽ⁱ⁾ grew to $129 million, a 15.4% increase from the same period last year, with Adjusted EBITDA Margin increasing by 140 basis points to 12.5%.
• Earnings before taxes were $36 million compared to $35 million for the same period last year.
• Earnings from continuing operations were $22 million ($0.18 basic earnings per share) compared to $23 million ($0.19 basic earnings per share) for the same period last year.
• Adjusted Basic Earnings per Share⁽ⁱ⁾ was $0.36 for the quarter compared to $0.21 for the same period last year.
• Year to date returned $119 million in capital to shareholders through dividends and shares repurchased under the Normal Course Issuer Bid.
• Reaffirms outlook for mid-single-digit revenue growth in fiscal 2026, commitment to maintaining an investment-grade balance sheet⁽ⁱⁱ⁾, and dividend growth of approximately 10%, updates Adjusted EBITDA to around the bottom of the Company's previous 2026 outlook of $520 million - $540 million and capital expenditure outlook to $130 - $150 million.
• Reaffirms 2030 targets of approximately $5 billion in Revenue, approximately $750 million in Adjusted EBITDA, and cumulative Free Cash Flow of $1.7 to $1.8 billion, while maintaining an investment-grade balance sheet with leverage⁽ⁱⁱ⁾ below 3.0x.

Executive Commentary

"Our third-quarter results reflect disciplined execution of our strategy. We delivered our eighth consecutive quarter of year-over-year revenue growth. Sales increased 2.4%, Adjusted EBITDA grew 15.4% to $129 million, and Adjusted EBITDA margin expanded 140 basis points to 12.5%," said Curtis Frank, President and Chief Executive Officer of Maple Leaf Foods. "Branded sales and volume growth in Prepared Foods were strong, and a favourable sales mix and cost management improved profitability. We generated $175 million in free cash flow, further strengthening our balance sheet and giving us significant financial flexibility."

"We entered 2026 expecting a relatively stable external environment. That has not been the case. Renewed inflation in food production worldwide has raised costs and pressured consumers, particularly in the second half," continued Mr. Frank. "We began the year expecting Adjusted EBITDA of approximately $520 million to $540 million. While we continue to expect revenue and profit growth over last year in the fourth quarter, increased pressure on consumers and more persistent cost inflation mean we now expect full-year Adjusted EBITDA to be around the bottom of that range, given the normal time lag in mitigating inflation. Growing revenue and profit in this environment reflects the resilience of our business and the strength of our execution, and it reinforces our confidence in our strategic blueprint and our ability to achieve our 2030 financial targets."

Financial and Operating Highlights

Maple Leaf Foods consists of two operating units; Prepared Foods and Poultry. As a final move in the previously announced re-organization of the Company's commercial and supply chain operations, the Poultry operating unit now includes both the fresh and further processed poultry categories. The Poultry operating unit represents approximately 40% of sales, and the Prepared Foods operating unit represents approximately 60% of sales.

Sales for the third quarter of 2026 were $1,034.7 million compared to $1,010.5 million last year, an increase of 2.4%. Poultry sales increased by 4.3% driven by improved channel mix and pricing. These factors were partially offset by the impact of lower industrial channel volumes which more than offset volume growth in the foodservice and retail channels. Prepared Foods sales increased by 1.3% driven by improved product mix and related party revenue, which were partially offset by the impact of lower volume and increased trade promotion spending.

Year-to-date sales for 2026 were $3,017.7 million compared to $2,921.4 million last year, an increase of 3.3%. Poultry sales increased by 7.6% driven by improved channel mix, growth in retail and foodservice volumes, and pricing, which were partially offset by increased trade promotion spending. Sales for Prepared Foods increased by 0.4% driven by pricing, related party revenue, and improved sales mix. These factors were partially offset by the impact of lower volume and increased trade promotion spending.

Gross profit for the third quarter of 2026 increased to $175.8 million (gross margin⁽ⁱ⁾ of 17.0%) compared to $162.8 million (gross margin⁽ⁱ⁾ of 16.1%) last year. The increase in gross profit was driven by favourable mix in Poultry and Prepared Foods, and improved operating efficiency.

Year-to-date gross profit for 2026 increased to $548.4 million (gross margin⁽ⁱ⁾ of 18.2%) compared to $504.4 million (gross margin⁽ⁱ⁾ of 17.3%) last year. The increase in gross profit was driven by improved operating efficiency and favourable mix, with pricing offset by higher input cost inflation. These factors were partially offset by the impact of lower volume.

Selling, general and administrative ("SG&A") expenses for the third quarter of 2026 were $96.0 million compared to $101.5 million last year. The decrease was driven by lower variable compensation and timing of advertising and promotional expenses.

Year-to-date SG&A expenses for 2026 were $302.3 million compared to $304.2 million last year. The decrease was driven by lower variable compensation and lower amortization, partially offset by higher consulting fees and inflation.

Earnings before income taxes for the third quarter of 2026 were $36.4 million compared to $35.0 million last year. The increase was driven by the same factors as noted above for gross profit and SG&A, partially offset by higher restructuring costs.

Year-to-date earnings before income taxes for 2026 were $158.4 million compared to $113.4 million last year. The increase was driven by the same factors as noted above for gross profit and SG&A, as well as reduced interest expense due to lower debt levels as a result of the spin-off of the pork operations in the fourth quarter of 2025 and lower interest rates, partly offset by higher gains on long-term asset disposals in the prior year and higher current year restructuring costs.

Earnings from continuing operations for the third quarter of 2026 were $22.3 million ($0.18 basic earnings per share from continuing operations) compared to $23.3 million ($0.19 basic earnings per share from continuing operations) last year. Earnings from continuing operations were impacted by the same factors as noted above for earnings before tax, as well as an increase in income tax expense due to the increase in earnings before income taxes.

Year-to-date earnings from continuing operations for 2026 were $109.2 million ($0.88 basic earnings per share from continuing operations) compared to $78.4 million ($0.63 basic earnings per share from continuing operations) last year. Earnings from continuing operations were impacted by the same factors as noted above for earnings before tax, as well as an increase in income tax expense due to the increase in earnings before income taxes.

Earnings for the third quarter of 2026 were $22.3 million ($0.18 basic earnings per share) compared to $43.1 million ($0.35 basic earnings per share) last year. The decrease was driven by the forgone earnings from the divested pork operations.

Year-to-date earnings for 2026 were $109.2 million ($0.88 basic earnings per share) compared to $150.4 million ($1.21 basic earnings per share) last year. The decrease was driven by the forgone earnings from the divested pork operations offset by higher earnings from continuing operations driven by the factors noted above.

Adjusted Operating Earnings⁽ⁱⁱ⁾ for the third quarter of 2026 were $80.8 million compared to $62.4 million last year, and Adjusted Basic Earnings per Share⁽ⁱⁱ⁾ for the third quarter of 2026 was $0.36 compared to $0.21 last year. The increase was driven by factors consistent with those noted above for gross profit and SG&A, excluding the impact of unrealized gains and losses on commodity futures contracts.

Year-to-date Adjusted Operating Earnings⁽ⁱⁱ⁾ for 2026 were $249.8 million compared to $203.1 million last year, and Adjusted Basic Earnings per Share⁽ⁱⁱ⁾ was $1.13 compared to $0.77 last year. The increase was driven by factors consistent with those noted above for gross profit and SG&A, excluding the impact of unrealized gains and losses on commodity futures contracts.

Adjusted EBITDA⁽ⁱⁱ⁾ for the third quarter of 2026 was $128.9 million compared to $111.7 million last year, driven by factors consistent with those noted above for gross profit and SG&A, excluding the impact of unrealized gains and losses on commodity futures contracts. Adjusted EBITDA Margin was 12.5% compared to 11.1% last year, also driven by factors consistent with those noted above.

Year-to-date Adjusted EBITDA⁽ⁱⁱ⁾ for 2026 was $388.4 million compared to $358.4 million last year, driven by factors consistent with those noted above for gross profit and SG&A, excluding the impact of unrealized gains and losses on commodity futures contracts, partly offset by higher other expense, largely as a result of higher gains on long-term asset disposals in the prior year. Adjusted EBITDA Margin was 12.9% compared to 12.3% last year, also driven by factors consistent with those noted above.

Adjusted Earnings Before Taxes ("Adjusted EBT")⁽ⁱⁱ⁾ for the third quarter of 2026 was $62.8 million compared to $40.0 million last year, due to similar factors as noted above for Adjusted EBITDA, along with a reduction in interest expense.

Year-to-date Adjusted EBT⁽ⁱⁱ⁾ for 2026  was $197.2 million compared to $135.0 million last year, due to similar factors as noted above for Adjusted EBITDA, along with a reduction in interest expense.

Cash provided by operating activities for the third quarter of 2026 was $200.2 million compared to $72.4 million  last year. For discussion of changes in cash provided by operating activities see section 7. Cash Flow and Financing of the Company's Management's Discussion and Analysis for the quarter ended September 30, 2026 as filed on SEDAR+.

Year-to-date cash provided by operating activities for 2026 was $259.6 million compared to $321.9 million last year. For discussion of changes in cash provided by operating activities see section 7. Cash Flow and Financing of the Company's Management's Discussion and Analysis for the quarter ended September 30, 2026 as filed on SEDAR+.

Free Cash Flow⁽ⁱⁱ⁾ for the third quarter of 2026 was an inflow of $174.9 million compared to an inflow of $46.2 million in the prior year. Removing the impacts of discontinued operations which contributed $28.5 million of Free Cash inflow in the prior year, Free Cash Flow increased largely as a result of timing of investment in working capital as well as $35.0 million of incremental receivables sold under the expanded accounts receivable securitization program, partially offset by higher income tax payments and maintenance capital expenditures.

Year-to-date Free Cash Flow⁽ⁱⁱ⁾ for 2026 was an inflow of $192.6 million compared to an inflow of $248.6 million in the prior year. Removing the impacts of discontinued operations which contributed $125.9 million of Free Cash inflow in the prior year, Free Cash Flow increased largely as a result of timing of investment in working capital compared to the prior year as well as $35.0 million of incremental receivables sold under the expanded accounts receivable securitization program, increased earnings net of non-cash items and lower interest payments, partially offset by higher income tax payments and maintenance capital expenditures.

Net Debt⁽ⁱⁱ⁾ as at September 30, 2026 was $940.3 million, a decrease of $414.6 million compared to the prior year. Net Debt to Trailing Twelve Months Adjusted EBITDA decreased by 0.1x. For discussion of changes in Net Debt see section 7. Cash Flow and Financing of the Company's Management's Discussion and Analysis for the quarter ended September 30, 2026 as filed on SEDAR+.

Other Matters

On November 3, 2026, the Board of Directors approved a quarterly dividend of $0.21 per share, $0.84 per share on an annual basis, payable December 31, 2026 to shareholders of record at the close of business December 17, 2026. Unless indicated otherwise by the Company at or before the time the dividend is paid, the dividend will be considered an eligible dividend for the purposes of the "Enhanced Dividend Tax Credit System". The Company's Dividend Reinvestment Plan ("DRIP") permits eligible shareholders to direct their cash dividends to be reinvested in additional common shares of the Company. For those who wish to reinvest their dividends under the DRIP, Maple Leaf Foods intends to issue common shares from treasury at a price equal to 100% of the weighted average closing price of the shares for the five trading days preceding the dividend payment date. Full details of the DRIP, including how to enroll in the program, are available at https://www.mapleleaffoods.com.

Conference Call

A conference call will be held at 8:00 a.m. ET on November 4, 2026, to review Maple Leaf Foods' third quarter financial results. To participate in the call, please dial 1-416-945-7677 or 1-888-699-1199. For those unable to participate, a playback will be made available an hour after the event at 1-289-819-1450 or 1-888-660-6345 (Passcode: 63604#).

A webcast of the third quarter conference call will also be available at: https://app.webinar.net/A7EVqR8jl1k.

The Company's full unaudited interim condensed consolidated financial statements ("Consolidated Interim Financial Statements") and related Management's Discussion and Analysis are available on the Company's website and on SEDAR+ at www.sedarplus.ca.

An investor presentation related to the Company's third quarter financial results will be available at www.mapleleaffoods.com/investors.

Non-IFRS Financial Measures

The Company uses the following non-IFRS measures and ratios: Adjusted Operating Earnings, Adjusted Earnings, Adjusted Basic Earnings per Share, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBT, Construction Capital, Net Debt, Net Debt to Trailing Twelve Months Adjusted EBITDA and Free Cash Flow. Management believes that these non-IFRS measures provide useful information to investors in measuring the financial performance of the Company for the reasons outlined below. These measures do not have a standardized meaning prescribed by IFRS and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS. 

Adjusted Operating Earnings, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EBT

Adjusted Operating Earnings, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EBT are non-IFRS measures and ratios used by Management to evaluate financial operating results. Adjusted Operating Earnings is defined as earnings before other income, interest expense and income taxes adjusted for items that are not considered representative of ongoing operational activities of the business and certain items where the economic impact of the transactions will be reflected in earnings in future periods when the underlying asset is sold or transferred. Adjusted EBITDA is defined as Adjusted Operating Earnings plus depreciation and intangible asset amortization, plus items included in other expense that are considered representative of ongoing operational activities of the business. Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by sales. Adjusted EBT is used annually by the Company to evaluate its performance and is a component of calculating bonus entitlements under the Company's short term incentive plan. It is defined as Adjusted EBITDA plus interest income, less depreciation and amortization, and interest expense and other financing costs.

The table below provides a reconciliation of earnings before income taxes as reported under IFRS in the Consolidated Interim Financial Statements to Adjusted Operating Earnings, Adjusted EBITDA and Adjusted EBT for the three and nine months ended September 30, 2026, as indicated below. Management believes that these non-IFRS measures are useful in assessing the performance of the Company's ongoing operations and its ability to generate cash flows to fund its requirements.    

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