Our Purposeful Journey 2019 ANNUAL REPORT ANNUAL REPORT | 2019 | MAPLE LEAF FOODS INC. 2019 Consolidated Financial Highlights Sales(i) 3,522 (In millions of 2017 Canadian dollars) Execution of key strategies in 2018 3,496 meat and plant protein drove 2019 3,942 accelerated growth in 2019 Adjusted 10.8 EBITDA Margin(ii) (iii) 2017 Decline in margins due to (As a % of sales) intentional strategic investment 2018 9.9 in plant protein and unfavourable 2019 8.1 fresh market conditions Capital Expenditure Increased investment in strategic (In millions of 2017 129 13 projects to gain efficiencies Canadian dollars) and build capacity, while base 2018 170 10 investment remains relatively 2019 188 83 stable Base Capital Construction Capital(ii) Dividends per Share 0.44 (In Canadian dollars) 2017 Fifth consecutive year of dividend growth, underscoring 2018 0.52 commitment to shareholder 2019 0.58 return (i) 2017 sales exclude the impact of the adoption of accounting standard International Financial Reporting (“IFRS”) 15 – Revenue from Contracts with Customers (“IFRS 15”). (ii) Refer to section 32 of the 2019 Management’s Discussion and Analysis for a defnition of this Non-IFRS measure. (iii) 2019 Adjusted EBITDA Margin includes the impact of the adoption of the new accounting standard IFRS 16 – Leases (“IFRS 16”). Refer to Note 3(w) of the 2019 annual audited consolidated fnancial statements for further details on the impact of the adoption of new accounting standards. About Maple Leaf Foods Inc. Maple Leaf Foods Inc. is a producer of food products under leading brands including Maple Leaf®, Maple Leaf Prime®, Schneiders®, Mina®, Greenfield Natural Meat Co.®, Swift®, Lightlife® and Field Roast Grain Meat Co.™ The Company’s portfolio includes prepared meats, ready-to-cook and ready-to-serve meals, value-added fresh pork and poultry, and plant protein products. The address of the Company’s registered office is 6985 Financial Dr., Mississauga, Ontario, L5N 0A1, Canada. The Company employs approximately 13,000 people and does business primarily in Canada, the U.S. and Asia. The Company’s shares trade on the Toronto Stock Exchange (MFI). For more information, please visit mapleleaffoods.com i ANNUAL REPORT | 2019 | MAPLE LEAF FOODS INC. Segmented Operating Results Meat Protein Group Sales 3,357 (In millions of 2018 Strong commercial Canadian dollars) performance and contributions 2019 3,778 from acquisitions driving growth Adjusted 9.9 EBITDA Margin(i) (ii) 2018 Strategies delivering structural (As a % of sales) 10.4 2019 margin improvement despite volatile fresh markets Plant Protein Group Sales 139 (In millions of 2018 Canadian dollars) 2019 176 Accelerating growth driven by distribution gains for new products and strong velocities Gross Profit 39 (In millions of 2018 Stable underlying margins Canadian dollars) offset by short-term start-up 2019 35 inefficiencies to support higher growth (i) Refer to section 32 of the 2019 Management’s Discussion and Analysis for a defnition of this Non-IFRS measure. (ii) 2019 Adjusted EBITDA Margin includes the impact of the adoption of the new accounting standard IFRS 16. Refer to Note 3(w) of the 2019 annual audited consolidated fnancial statements for further details on the impact of the adoption of new accounting standards. Table of Contents 2019 Consolidated Financial Highlights i | Segmented Operating Results ii Message to Shareholders iv | Message from the Chairman viii Corporate Governance and Board of Directors ix | Senior Management and Officers x 2019 Financial Review xi | Management’s Discussion & Analysis 1 Independent Auditors’ Report 40 | Audited Consolidated Financial Statements and Notes 42 Corporate Information Last Page ii ANNUAL REPORT | 2019 | MAPLE LEAF FOODS INC. “At Maple Leaf Foods, we have embraced the principle of shared value and are on a purposeful journey to become the most sustainable protein company on earth by Raising the Good in Food.” iii ANNUAL REPORT | 2019 | MAPLE LEAF FOODS INC. Message to Shareholders Michael H. McCain President and CEO Our Purposeful Journey Distinguished Harvard Professor and thought leader health and competitiveness are intertwined with the health Michael Porter observed that “Shared value is not social of local, national and global communities, and with responsibility, philanthropy, or sustainability, but a new way the imperative of supporting a sustainable environment. for companies to achieve economic success.” But, long before Recognizing and leveraging this interdependence is a the concepts of inclusive capital became mainstream, powerful means of creating progress for all stakeholders. Maple Leaf Foods was embracing this ethos as core to our business strategies. We began raising hogs without antibiotics We delivered strong results in an unusually eventful year of nearly 15 years ago, committed to being leaders in open headwinds marked by trade disputes, China’s four-month housing for sows over a decade ago, launched our aggressive suspension of pork imports and the spread of African swine sustainability emissions reduction plans six years ago and fever. These headwinds contributed to unpredictable laid the framework for our leadership in food security fve performance swings throughout the year, which are not years ago. Our roots are embedded in the belief that the path typical in our business. In 2019, we reported sales of of shared value fnds opportunity in the intersection between $3.9 billion, an increase of 13%, which demonstrates our pivot the needs of society and the unique capabilities of the to a growth mindset as we delivered top-line performance in business to create value for all stakeholders. both our platforms: 12.5% in meat protein and 27.3% in plant protein. We have created growth vectors in each of these This transformational thinking highlights the imperative of segments which are exciting and sustainable. integrating social performance into the fabric of business strategy to deliver long-term value for shareholders. At the In 2019, the most signifcant milestones on our purposeful same time, it challenges the conventional obsession with journey included: short-term fnancial results and seeks to displace a narrow • Becoming the frst major food company in the world to be model of value creation. carbon neutral NOW! At Maple Leaf Foods, we have embraced the principle of • Adopting science-based targets for emissions reductions shared value and are on a purposeful journey to become the • Continued growth in our sustainable meat portfolio most sustainable protein company on earth by Raising the • Pivoting to a long-term model of investment for revenue Good in Food. In 2019, we made purposeful and deliberate growth in plant protein business decisions intended to create long-term value for our • Advancing the impact of the Maple Leaf Centre for Action shareholders, for society and for our planet, all aimed at on Food Security delivering shared value. We believe our Company’s fnancial iv ANNUAL REPORT | 2019 | MAPLE LEAF FOODS INC. “In 2019, we made purposeful and deliberate business decisions intended to create long-term value for our shareholders, for society and for our planet, all aimed at delivering shared value. We believe our Company’s financial health and competitiveness are intertwined with the health of local, national and global communities, and with the imperative of supporting a sustainable environment. Recognizing and leveraging this interdependence is a powerful means of creating progress for all stakeholders.” Financially, the pivot to “invest for growth” in plant protein Now with two signifcant platforms, one focused on proftable was a conscious choice to sacrifce short-term proftability in growth in meat protein and one focused on investing for favour of seizing on the opportunities we see in this category revenue growth in plant protein, we began reporting our over time, together with our unique position to take results by segment. We believe segmented reporting provides advantage of those opportunities. We think of it as investment our shareholders with greater understanding of the strategies through the income statement rather than through the and performance in each of these businesses. We encourage balance sheet, but investment nonetheless, and one with the you to look at these two segments distinctively, with diferent prospect of very attractive returns. The opportunity is fnancial metrics and unique business success factors. enormous as our analysis and industry experts predict this category will grow to exceed $25 billion by 2029. Our plant For the year, our meat protein segment delivered 10.4% protein business is uniquely positioned in the category, with Adjusted EBITDA margins, up 50 basis points (bps) over the leading market shares and brands already in distribution prior year, while absorbing the impact of difcult and throughout North America. We are leaders IN the space – not unnaturally volatile market conditions which produced just “thinking about entering” the space! Brand and category headwinds of 110 bps. This speaks to the underlying strength development is in Maple Leaf’s “wheelhouse of skills” and we of the business. Our goal is to expand these margins to will leverage this expertise to build on our market position in 14%–16%, while simultaneously growing the top line. Our plant this exciting new opportunity. Our goal is to organically protein segment logged 27% sales growth for the year, against create a highly proftable $3 billion plant protein business a long-term strategic target of 30% annually. Our category, over the next decade! What a remarkable outcome that brand, innovation and investment strategies are built to would be for all Maple Leaf stakeholders. support this target. On a total company basis, we delivered an 8.1% Adjusted EBITDA margin for the year. However, we believe this is a less relevant fnancial metric today, given the increasing investment and strategy pivot in plant protein. The world of protein production and consumption faces a revolution, and one we are uniquely positioned to lead and leverage. While in some corners, meat production faces attacks for its environmental footprint, we see this as an opportunity to embrace change.