Premium Brands Holdings Corporation · TSX:PBH
Premium Brands — Investor Presentation (September 2023)
44 slides from Premium Brands's investor presentation, Sep 20, 2023
Slide 1: Investor Presentation
Investor Presentation September 2023
Slide 2: Disclaimer
Disclaimer This presentation is not intended to form the basis of any investment decision and should not be considered as a recommendation by Premium Brands Holdings Corporation (the “Company”) or any other person in relation to the Company’s business or the securities of the Company. This presentat
Slide 3: Forward Looking Statements
Forward Looking Statements This presentation contains forward looking statements with respect to the Company, including, without limitation, statements regarding its business operations, strategy and financial performance and condition, acquisition opportunities, capital projects and plans, outlook
Slide 4: Company Profile
Company Profile Q2-2023 2004 2022 TTM Revenue $0.2 billion $6.0 billion $6.3 billion Adjusted EBITDA $14.1 million $504.2 million $540.7 million Business platforms 2 6 6 Geographic reach Western Canada North America North America Operating facilities 8 115 115 Employees 900 12,600 12,600 Free cash f
Slide 5: Our Vision
Our Vision To invest in specialty food businesses featuring: Entrepreneurial cultures Great tasting foods made with wholesome ingredients A passion for both their local communities and what is best for our planet The Next Five Years – Accelerating Growth 5
Slide 6: Share Price and Accumulated Dividends
Share Price Closing Share Accumulated Date Price Dividends Per Share Dec 31, 2003 $8.60 Nil Sep 18, 2023 $103.68 $29.09 4500.00 7.00 2003 to Sep 18, 2023 CAGR = 19.6% 4000.00 6.00 3500.00 5.00 3000.00 Index 2500.00 4.00 2000.00 3.00 1500.00 2.00 1000.00 1.00 500.00 0.00 0.00 PBH share value (LHS) S&
Slide 7: Premium Brands
Premium Brands To provide talented proven entrepreneurs with the resources they need to transform their good food businesses into bigger great food businesses ENTREPRENEURSHIP with ACCOUNTABILITY The Next Five Years – Accelerating Growth 7
Slide 8: Core Business Strategies
Core Business Strategies • Emerging trends • Niche product categories 1. Targeted segments of the food industry • Leading regional brands focused on authenticity and differentiation • Unique distribution solutions • Significant organic growth opportunities • Dedicated to maintaining an entrepreneuri
Slide 9: Platform Progress
Platform Progress (in millions except percentages) 2022 Revenue 2022 2022 Business group Overview 2004 Revenue Including Revenue Revenue % Clearwater Formed in 1997 / 1998 with the Protein acquisitions of Grimm’s Fine Foods, 125.5 2,289.2 38.0% 2,289.2 McSweeney’s and Harvest Meats Formed in 1999 wi
Slide 10: Platform Businesses
Platform Businesses Seafood Distribution Protein Sandwich Bakery Culinary Canadian Seafood Group Centennial Group Oberto Group Sandwich Group PB Bakery Group Kettle Group • Medex Group • Worldsource • Hempler’s • Quality Fast Foods • Stuyver’s • Global Gourmet • Ocean Miracle • Eleven • Isernio’s •
Slide 11: Premium Brands Eco-system
Premium Brands Eco-system Financial and business analysis Access to capital Disciplined capital allocation Real estate investment fund Global and strategic procurement, Buying power Logistics Internal selling opportunities Helping small good specialty food businesses Tax resources Peer network becom
Slide 12: Strategically Located Manufacturing Network
Strategically Located Manufacturing Network BC AB SK QC MB ON NB ME NS WA MN MA PA OH NV CA AZ MS The Next Five Years – Accelerating Growth 12
Slide 13: Diversification – Channels and Customers
Diversification – Channels and Customers SF (61.9%) PFD (38.1%) Foodservice Chains and large Others distributors format retailers Customer % Sales ISR 0.8% 2.8% 9.2% 6.7% Trading Customer A 13.6% 2.6% Customer B 13.0% Customer C 5.4% Foodservice operators Foodservice operators 11.2% Customer D 5.3%
Slide 14: Diversification – Geographically
Diversification – Geographically SF (61.9%) PFD (38.1%) SF (56.2%) PFD including Clearwater (43.8%) Export, 0.2% Export, 0.2% United States, Canada, 26.5% United States, Canada, 28.4% 32.7% 36.0% United States, United States, 8.7% 8.0% Export, 1.7% Export, 8.6% Canada, 25.7% Canada, 23.3% The Next F
Slide 15: Diversification – Products and Procured Commodities
Diversification – Products and Procured Commodities SF (61.9%) PFD (38.1%) Baked goods, 1.7% Others, 1.3% Sandwiches, 19.1% Seafood, 20.2% Commodity % Sales Seafood 19.5% Beef 14.7% Pork 10.2% Poultry 6.5% Protein, 16.0% Bread 2.9% Eggs 2.7% Turkey 2.2% Others, 1.9% Cheese 1.7% Protein, 39.8% The Ne
Slide 16: Diversification – Procurement Sources
Diversification – Procurement Sources PB GLOBAL PROCUREMENT TEAMS • Buyers travel the globe searching for new supply opportunities • Consolidated buying power used to source the highest quality competitively price raw materials • On-site experience with suppliers and their operations • A source of n
Slide 17: Organic Growth Strategies
Organic Growth Strategies • On trend product categories • Emerging trends • History of demand exceeding supply • “White space” • U.S. roll out strategy • Leading innovation in high growth categories • Differentiation • Brand development • Green shoots in new export markets The Next Five Years – Acce
Slide 18: Major Organic Growth Initiatives
Major Organic Growth Initiatives Seafood Distribution Protein Sandwich Bakery Culinary Processed lobster and crab Non-distributive foodservice Branded meat snack sticks Leveraging IP and North Naturally fermented / clean Product solution provider for initiatives in foodservice and sales of different
Slide 19: Acquisitions Growth Strategy
Acquisitions Growth Strategy Considerations Resources • Management team strength • Comprehensive in-house financial modeling, due diligence and • Cultural fit – core entrepreneurial focused values transaction closing capabilities • Differentiation of products and / or services • Access to a range of
Slide 20: Acquisitions Activity
Acquisitions Activity 2005 to 2008 2009 2010 2011 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2007 $127.7m $16.7m $3.1m $67.3m $121.8m $63.7m $8.1m $51.9m $244.0m $246.2m $753.0m $118.6m $168.2m $858.0m $125.0m Harlan B&C Foods SJ Fine Maximum Piller’s Freybe Ocean Expresco C&C Raybern Oberto
Slide 21: Acquisition Opportunities
Acquisition Opportunities (millions of dollars except transactions) Agreed to terms and in Identified future Past discussions and In negotiations In discussions due diligence opportunity currently on hold Platform Advanced Active Early Stage Opportunity Inactive Total # Sales # Sales # Sales # Sales
Slide 22: A Leader in Environmental, Social, and Governance
A Leader in Environmental, Social, and Governance Nutritious Food • Natural ingredients, sustainable and responsible supply chains, robust labelling practices, excellence in food safety People • Employee safety-first culture, prioritizing mental health and well-being, embracing diversity and workpla
Slide 23: The Next Five Years – Accelerating Growth
The Next Five Years – Accelerating Growth 23
Slide 24: The Next Five Years – Accelerating Growth
The Next Five Years – Accelerating Growth 24
Slide 25: The Next Five Years – Accelerating Growth
The Next Five Years – Accelerating Growth 25
Slide 26: Financial Update
Financial Update The Next Five Years – Accelerating Growth 26
Slide 27: Revenue Trend
Revenue Trend (millions of dollars except percentages) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023P Revenue 535.2 794.3 960.1 1,043.0 1,221.8 1,484.5 1,857.5 2,198.3 3,025.8 3,649.4 4,068.9 4,931.7 6,029.8 6,500.0 OGR 2.6% 6.0% 4.8% 4.9% 13.5% 18.0% 6.1% 4.7% 6.7% 5.9% 7.6%
Slide 28: Organic Volume Growth Rate
Organic Volume Growth Rate Long-term targeted organic volume growth rate range of 4% - 6% 20.0% Factors impacting the Company’s Q2-2023 OVGR: 16.0% • Chicken sandwich launched in Q2-2022 and 12.0% recalled in Q3-2022 – normalized for this OVGR 8.0% is 5.2% • PFD’s challenges on the 4.0% sale of prem
Slide 29: Specialty Foods – Organic Volume Growth Rate
Specialty Foods – Organic Volume Growth Rate Long-term targeted organic volume growth rate range of 4% - 6% 28.0% Factors impacting the SF’s Q2-2023 OVGR: 24.0% • Chicken sandwich 20.0% launched in Q2-2022 and recalled in Q3-2022 – normalized for this OVGR 16.0% is 10.2% 12.0% • Lack of capacity in
Slide 30: EBITDA Trend
EBITDA Trend (millions of dollars except percentages) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023P EBITDA 42.0 54.9 66.8 69.3 77.6 111.6 154.8 190.2 280.2 307.7 312.6 430.7 504.2 600.0 Margin 7.8% 6.9% 7.0% 6.6% 6.4% 7.5% 8.3% 8.7% 9.3% 8.4% 7.7% 8.7% 8.4% 9.2% 700.0 12.0%
Slide 31: Adjusted EBITDA Margin
Adjusted EBITDA Margin 11.0% 10.5% 10.0% Factors impacting the 9.5% Company’s Q2-2023 EBITDA margin relative to 10% target: 9.0% • Unutilized production 8.5% capacity 8.0% • Lost overhead absorption due to inventory reduction 7.5% initiatives – 22 bps 7.0% • Inventory write-off resulting from custom
Slide 32: Specialty Foods – Adjusted EBITDA Margin
Specialty Foods – Adjusted EBITDA Margin 14.0% 13.0% Factors impacting SF’s Q2- 12.0% 2023 EBITDA margin: • Unutilized production 11.0% capacity 10.0% • Lost overhead absorption due to inventory reduction 9.0% initiatives – 30 bps • Inventory write-off resulting 8.0% from customer bankruptcy filing
Slide 33: 2023 Major EBITDA Margin Drivers
2023 Major EBITDA Margin Drivers Seafood Distribution Protein Sandwich Bakery Culinary Positive Factors • Sales leveraging – • Sales mix • Commodity cost • Sales leveraging – • Sales leveraging – • Commodity cost production capacity • Improved pricing stabilization production capacity production cap
Slide 34: Margin Recovery
Margin Recovery (millions of dollars except percentages) Q1-2022 Q2-2022 Q3-2022 Q4-2022 Q1-2023 Q2-2023 Selling price increases 122.6 134.4 89.5 61.9 42.6 3.9 Raw material, wage and freight costs (124.5) (130.9) (77.5) (45.8) (24.7) 21.0 Margin dollar impact (1.9) 3.5 12.0 16.1 17.9 24.9 Margin imp
Slide 35: Recent Capacity Expansions
Recent Capacity Expansions (millions of dollars) Unutilized Sales Platform Project Products Capacity in 2022 • CFG Ontario facility • Seafood and value-added protein Seafood 50 • Ready Saco plant • Processed lobster • Piller’s Brantford plant expansion • Meat snacks and dry cured Protein 30 • Oberto
Slide 36: Adjusted Earnings and EPS
Adjusted Earnings and EPS (millions of dollars except per share amounts) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Adj earnings 19.6 24.5 24.9 26.6 53.2 80.5 99.2 117.6 118.4 118.5 194.8 215.0 Adj EPS 1.04 1.19 1.16 1.21 2.18 2.80 3.33 3.62 3.31 3.05 4.48 4.82 Reflects IFRS-16 $6.0
Slide 37: Liquidity
Liquidity (millions of dollars except ratios) 1,020.0 5.5 Top end of targeted 920.0 Top end of targeted total debt to EBITDA 5.0 total senior debt to ratio EBITDA ratio 820.0 4.5 720.0 4.0 620.0 3.5 520.0 3.0 420.0 2.5 320.0 2.0 220.0 1.5 120.0 1.0 20.0 0.5 Available Credit (LHS) Total Debt to EBITD
Slide 38: Inventory Trend Analysis
Inventory Trend Analysis (millions of dollars unless noted otherwise) Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Inventory 388.2 372.5 358.6 396.2 464.3 430.5 417.0 448.8 481.5 483.0 513.6 645.2 740.5 836.2 821.1 786.1 829.7 760.9 DPI
Slide 39: Free Cash Flow
Free Cash Flow (millions of dollars except per share amounts and percentages) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023P Payout ratio 106.4% 77.7% 69.6% 70.6% 65.2% 59.4% 53.0% 53.9% 48.4% 43.2% 36.6% 38.5% 38.1% 43.1% 48.7% 42.3% 43.8% Dividend per sh
Slide 40: Capital Allocations – Project Capex
Capital Allocations – Project Capex (millions of dollars except percentages) Investment To- Investment Q2-2023 YTD-2023 Expected IRR Date Expected Project capital expenditures 87.5 149.6 325.6 692.5 15% or greater Maintenance capital expenditures 13.4 25.6 25.6 52.5 - 100.9 175.2 351.2 745.0 Based o
Slide 41: Capital Allocations – Project Capex
Capital Allocations – Project Capex (millions of dollars except percentages) Investment To- Investment Group Expected IRR Date Expected Viandex facility expansion Distribution 5.5 9.5 Hempler’s Ferndale facility expansion Protein US59.1 US84.1 Piller’s Wismer facility replacement Protein 5.4 47.2 Ki
Slide 42: 5-Year Plan
5-Year Plan (millions of dollars except percentages) 5 Year 5 Year 5 Year Target Base Year Base Year Base Year Targeted Targeted Year Sales EBITDA Sales EBITDA 2010 2015 535 42 1,000 2014 2019 1,222 78 2,000 2018 2023 3,026 251 6,000 600 2022 2027 6,030 504 10,000 1,000 2023P – no new acquisitions 6
Slide 43: 5-Year Major Project Capex
5-Year Major Project Capex Platform Major Projects Products Distribution • Viandex Quebec City plant expansion • Value-added seafood and protein • Piller’s Waterloo project • Dry cured and European deli meats • Hempler’s Ferndale plant expansion • Meat snacks and premium processed meats • Oberto Ken
Slide 44: Questions
Questions The Next Five Years – Accelerating Growth 44
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