High Liner Foods Incorporated · TSX:HLF
High Liner Foods — Q1 2021 Earnings Presentation
36 slides from High Liner Foods's earnings presentation, May 2021
Slide 1: High Liner Foods Investor Presentation May 2021
HIGH LINER FOODS Investor Presentation May 2021
Slide 2: Disclaimer
Disclaimer Certain statements made in this presentation are forward-looking and are subject to important risks, uncertainties and assumptions concerning future conditions that may ultimately prove to be inaccurate and may differ materially from actual future events or results. Actual results or even
Slide 3: Presentation Notes
Presentation Notes Presentation Currency High Liner Foods (“the Company”) reports its earnings and financial statements in USD. The Company’s common shares trade on the TSX and are quoted in CAD and therefore references in this presentation to share price, dividends and market capitalization are in
Slide 4: Company Overview & Strategy
Company Overview & @& Strategy a HIGH LINERFOODS
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Slide 6: Investment Thesis
Investment Thesis Why Seafood? + Healthy - for people and the environment + Attractive market demographics + Under consumed vs. dietary guidelines = opportunity + Versatile - the original protein alternative ~~ HIGH LINERFOODS Why High Liner Foods? 121 years of seafood expertise A North American lea
Slide 7: Sales mix by geography, brand and channel
24% 30% 46% 41% 54% 59% 70% 76% US Canada HLF Brands Other Foodservice Retail Value-added Other • • • 7
Slide 8: Reimagining Seafood to Nourish Life
Reimagining Seafood to Nourish Life * In 2021, the Company refreshed its purpose statement to "Reimagining Seafood to Nourish Life“, which more accurately reflects High Liner Foods’ business, its potential for the future and commitment to all its stakeholders. * As we execute against our strategy to
Slide 9: Q1 2021 YTD Financial Review & 2021 Outlook
Q1 2021 YTD Financial Review & 2021 Outlook a HIGH LINERFOODS
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Slide 11: 2021 Outlook
2021 Outlook * The Company continues to operate in unprecedented times with ongoing uncertainty related to consumer behaviour, supply and demand dynamics and government restrictions. However, the Company is seeing promising signs with the Foodservice recovery and remains confident that the execution
Slide 12: Sales lbs (millions) Sales (millions)
$400 150 Sales (millions) Sales lbs (millions) $300 $268.6 $243.4 100 $200 77.3 69.8 50 $100 Sales in USD Sales LBS $0 0 2020 2021 ▪ ▪ ▪ ▪ ▪ 12
Slide 13: EBITDA (millions) EBITDA as a % of Sales
$40 20% $30.7 EBITDA as a % of Sales Standardized EBITDA* $30 $27.8 15% EBITDA (millions) Adjusted EBITDA* 11.4% 11.4% $20 10% Adjusted EBITDA as a % of Sales $10 5% *Please refer to the Company’s MD&A for Q1 2021 for definition of non-IFRS financial measures “Standardized EBITDA” and “Adjusted EBIT
Slide 14: EPS
$0.60 0.51 $0.50 0.41 $0.41 $0.40 $0.40 Reported Diluted EPS Adjusted Diluted EPS* EPS $0.30 $0.20 *Please refer to the Company’s MD&A for Q1 2021 for definition of non-IFRS financial measure “Adjusted Diluted EPS” $0.10 $0.00 2020 2021 ▪ 14
Slide 15: Net Debt to Adjusted EBITDA
5.9x 5.8x 6.0x 5.0x 4.1x 4.0x 3.7x 3.0x 2.9x 3.0x 3.0x 2.0x 1.0x 0.0x Apr 1/17 Dec 30/17 Dec 29/18 Dec 28/19 Jan 2/21 Apr 3/21 Target End of Q1 End of End of End of Fiscal End of Fiscal End of Q1 2017 Fiscal 2017** Fiscal 2018 2019 2020 2021 *Please refer to the Company’s MD&A for Q1 2021 for defini
Slide 16: Annual Dividend Paid per Share
$0.600 $0.565 $0.580 $0.520 Annual Dividend Paid per $0.465 Share ($CAD) $0.410 $0.400 $0.350 $0.295 $0.280 $0.210 $0.220 $0.200 $0.000 2012 2013 2014 2015 2016 2017* 2018 2019** 2020*** 2021 Forecast *Reflects Q1/Q2/Q3 dividend of CAD$0.140 per share and Q4 dividend of CAD$0.145 per share **Reflect
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Slide 18: Share and market information
High Liner Foods Gia= ic company since the 1960s, TSX-listed in 1971 Canadian pub Current price CAD$13.51* Shares outstanding ~33.4M’ Market capitalization ~CAD$451.2M" 52-week range CAD$5.26 - $14.13* Annual dividend CAD$0.28 per share** Current yield ~21%* *Source: TSX, as of May 12, 2021 “Effecti
Slide 19: Over 120 years of seafood expertise
High Liner Foods Over 120 years of seafood expertise 2013 American acquisition Icelandic U acquisition FPI acquisition 2014 Atlantic Trading Company acquisition
Slide 20: Processing facilities and capacity
• • Lunenburg, NS (Canada) Capacity p.a.: 50M lbs • • Newport News, VA Portsmouth, NH (USA) (USA) Capacity p.a.: 64M lbs Capacity p.a.: 61M lbs • 20
Slide 21: Seafood purchases by species
2.5% 8.9% 22.6% 6.8% Cod Shrimp Salmon 12.0% Alaskan pollock Haddock 20.5% Tilapia Sole 15.2% Other 11.5% Based on 2020 Purchases (in USD) • • 21
Slide 22: Corporate Social Responsibility
Corporate Social Responsibility HIGHLINERFOODS —— * Committed to sourcing all our seafood from “certified sustainable or responsible” fisheries and aquaculture + Recognized as a global leader in driving best practice improvements in wild fisheries and aquaculture Za HIGH LINERFOODS
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Slide 24: 2019's Critical Initiative Plan
2019's Critical Initiative Plan Creating a stronger foundation and platform for growth * The Company's Critical Initiative Plan, comprised of five critical initiatives, was designed to turn around the Company's performance and reposition it for growth 1. 2. >$10M+ Net annualized run-rate cost saving
Slide 25: 2019's Critical Initiative Plan
2019's Critical Initiative Plan Creating a stronger foundation and platform for growth 2019 was a transformative year for High Liner Foods due to the successful execution of its Critical Initiative Plan. * 2019's financial performance reflects the significant progress made by the Company: - Adjusted
Slide 26: #1 Organizational Realignment
#1 Organizational Realignment Create One High Liner Foods BEFORE: NOW: High Liner's Canadian and U.S. operations run Aligned by core function rather than geography; as two separate businesses - inefficient, efficient cross-border structure, economies of duplication of efforts, unable to leverage sca
Slide 27: #2 Business Simplification
#2 Business Simplification Reduce complexity; focus on Right Product, Right Customer, Right Price BEFORE: CURRENTLY: MOVING FORWARD: 1500+ products across 30+ 235+ products and 8 Continue to eliminate products that species species eliminated in 2019 no longer make sense and drive focus on most profi
Slide 28: #3 Supply Chain Excellence
#3 Supply Chain Excellence Centralize, standardize and streamline to create efficiencies and lower costs BEFORE: CURRENTLY: MOVING FORWARD: Supply chain fragmented, New, integrated end-to-end Cost saving and efficiency inefficient and costly supply chain structure initiatives identified in 2019 were
Slide 29: #4 Rubicon Alignment & Growth
#4 Rubicon Alignment & Growth Cross pollinate and align to capitalize on opportunity for growth in shrimp 2 HIGH LINERFOODS * Shrimp is the second fastest growth category in seafood and the Company's second largest species by purchase value * Legacy Rubicon business provided unparalleled expertise i
Slide 30: #5 Profitable Organic Growth
#5 Profitable Organic Growth Create customer engagement and innovate to increase demand * The previous critical initiatives were integral to stabilizing the business and work in conjunction with this one to positionthe Company for a return to profitable, sustainable revenue growth. * — Investing in
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Slide 32: Sales in lbs and USD (millions)
$1,200 600 $942.2 $1,000 500 $827.5 Sales in USD (millions) Sales in lbs (millions) $800 400 $600 300 258.8 240.9 $400 200 $200 100 $- 0 2011 2012 2013 2014 2015 2016* 2017 2018 2019 2020 Sales in USD Sales in lbs 32
Slide 33: EBITDA as a % of Sales
20% $100 18% $85.3 $88.0 16% EBITDA as a % of Sales $80 EBITDA (millions) 14% 12% $60 10.6% 10% 9.1% 8% $40 6% $20 4% 2% $- 0% 2011 2012 2013 2014 2015 2016* 2017 2018 2019 2020 Standardized EBITDA** Adjusted EBITDA** Adjusted EBITDA as a Percentage of Sales 33
Slide 34: Diluted Earnings Per Share
$1.50 40% 35% $1.25 Diluted Earnings Per Share 30% $1.02 $1.00 Return on Equity 25% $0.85 $0.75 20% 15% $0.50 11.1% 10% 8.8% $0.25 5% $0.00 0% 2011 2012 2013 2014 2015 2016* 2017 2018 2019 2020 Diluted EPS Adjusted Diluted EPS** Return on Equity** 34
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