High Liner Foods Incorporated · TSX:HLF
High Liner Foods — Shareholder Meeting (May 2008)
34 slides from High Liner Foods's shareholder meeting presentation, May 9, 2008
Slide 1: Annual & Special General Meeting
Annual & Special General Meeting Halifax, Nova Scotia - May 9, 2008 A. HicH LINER Foons
Slide 2: David J. Hennigar, Chairman
David J. Hennigar Chairman
Slide 3: Annual & Special General Meeting
Annual & Special General Meeting Halifax, Nova Scotia - May 9, 2008 A. HicH LINER Foons
Slide 4: Henry E. Demone, President and CEO
Henry E. Demone President and Chief Executive Officer
Slide 5: 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 eve
Slide 6: Annual & Special General Meeting
Annual & Special General Meeting Halifax, Nova Scotia - May 9, 2008 A. HicH LINER Foons
Slide 7: 2007 Year In Review: Canadian Operations
2007 Year In Review Canadian Operations • Sales growth of 7.3% • Continued strong performance from retail and food service divisions • Price increases offset rising seafood and other input costs • New products contributed to growth
Slide 8: 2007 Year In Review: U.S. Operations
2007 Year In Review U.S. Operations • Sales in US$ increased 1.6% • Solid growth in Fisher Boy® sales ¾ Customers carried a wider variety of Fisher Boy® products
Slide 9: 2007 Year In Review: Acquisition of M&M Group
2007 Year In Review Acquisition of M&M Group • Transaction closed December 20, 2007 • Bought FPI’s value-added food service and retail frozen seafood businesses • Secondary processing plants in Burin, NL and Danvers, MA • Very complementary to High Liner’s existing businesses
Slide 10: The New High Liner Foods: Strengthened Market Position
The New High Liner Foods Strengthened Market Position • Already the leading frozen seafood brand in Canada private label
Slide 11: The New High Liner Foods: frozen food products
The New High Liner Foods frozen food product in Canada
Slide 12: The New High Liner Foods: Strengthened Market Position
The New High Liner Foods Strengthened Market Position • Already the leading frozen seafood brand in Canada • Now the largest seafood company in Canada private label • Twice the size of our largest competitor in both Canadian retail and food service markets
Slide 13: The New High Liner Foods: Strengthened Market Position
The New High Liner Foods Strengthened Market Position • One of the largest suppliers of value-added seafood to the U.S. food service market • Positioned to be a much stronger player in the North American market private label
Slide 14: The New High Liner Foods: Strengthened Customer Relationships
The New High Liner Foods Strengthened Customer Relationships • Combined entity strengthened position with all customers • Offering a broader seafood product offering to an expanded customer base • Now have relationship with every major grocery retailer and food service company in Canada and the U.S.
Slide 15: The New High Liner Foods: Enhanced Capabilities
The New High Liner Foods Enhanced Capabilities More diversified worldwide procurement • Competitive advantage procuring raw materials and finished goods • Increase in species procured from 20 to 35 • Increase in countries procured from 13 to 30 • Significant strength in both groundfish and shellfish
Slide 16: The New High Liner Foods: Sales By Region
The New High Liner Foods Sales By Region • Pre-transaction • Post-transaction Canada 63% Canada 46% U.S. 36% U.S. 53% Mexico 1% Mexico 1% Note: Based on 2007 invoiced sales dollars
Slide 17: Kelly L. Nelson, Vice President and CFO
Kelly L. Nelson, FCA Vice President, Corporate Services and Chief Financial Officer
Slide 18: Fiscal Year 2007 Sales
Fiscal Year 2007 Sales ($ millions) 300 $275.4 250 200 150 100 50 0 2006 2007
Slide 19: Fiscal Year 2007 EBITDA, Net Income and EPS
Fiscal Year 2007 Operating EBITDA, Net Income EPS from Cont. Ops ($) from Cont. Ops ($ millions) 16 $15.1 0.60 $0.55 14 0.50 12 10 0.40 8 $6.9 0.30 6 0.20 4 2 0.10 0 0.00 2006 2007 2006 2007 EBITDA Net Income
Slide 20: Q1 Fiscal 2008 Sales
Q1 Fiscal 2008 Sales ($ millions) 150 $149.2 125 100 75 50 25 0 Q1 2007 Q1 2008
Slide 21: Q1 Fiscal 2008 EBITDA, Net Income and EPS
Q1 Fiscal 2008 Operating EBITDA, Net Income EPS from Cont. Ops ($) from Cont. Ops ($ millions) 10 0.4 $8.8 9 8 0.3 7 6 $0.20 5 0.2 4 $3.1 3 2 0.1 1 0 0 Q1 2007 Q1 2008 Q1 2007 Q1 2008 EBITDA Net Income
Slide 22: Capital Structure
Capital Structure ($000’s except % data) Dec 29, 2007 Mar 29, 2008 Net debt, less cash $106,787 $101,121 Shareholders’ equity $130,871 $136,237 Total capitalization $237,658 $237,358 Net debt as a % of total capitalization 44.9% 42.6%
Slide 23: Capital Structure
Capital Structure • Redeemed all Second Preference Shares on February 20, 2008 • Majority of the Second Preference Share holders subscribed for 798,620 Series A Preference Shares • Now 1,998,620 Series A Preference Shares with a total value of $50.2 million
Slide 24: Dividends
Dividends $0.05 $0.125 $0.83 18th consecutive Quarterly dividend Final dividend quarterly dividend on Series A per Second on Common Preference Shares Preference Shares paid paid March 15, Shares paid Feb. March 15, 2008 2008 21, 2008
Slide 25: Henry E. Demone, President and CEO
Henry E. Demone President and Chief Executive Officer
Slide 26: 2008 Key Objectives: Integration of the Acquisition
2008 Key Objectives Integration of the Acquisition #1 strategic priority • High Liner and FPI retail, club store and food service businesses in Canada reorganized by 2007 year end • Consolidated sales offices in Toronto and fully integrated Canadian sales forces and U.S. retail sales forces during Q
Slide 27: 2008 Key Objectives: Integration of the Acquisition
2008 Key Objectives Integration of the Acquisition • Consolidated our two U.S. businesses by end of March 2008 • Appointed Keith Decker as President and Chief Operating Officer for High Liner Foods USA • Leverage the strengths of the combined businesses and move forward with our growth plans
Slide 28: 2008 Key Objectives: Integration of the Acquisition
2008 Key Objectives Integration of the Acquisition Additional integration costs expected throughout the year relating to the consolidation of: • Other Canadian sales offices • Cold storage distribution centres • Computer systems
Slide 29: 2008 Key Objectives: Managing Costs
2008 Key Objectives Managing Costs • Achieved expected selling and administrative synergies to date • Synergies from purchasing and distribution expected later in 2008 and into 2009 • Most significant opportunities for cost savings to come from procurement ¾ Leverage increased size to command deeper
Slide 30: 2008 Key Objectives: Guaranteeing Quality
2008 Key Objectives Guaranteeing Quality Continue to use best-in-class traceability and testing protocols to ensure that we and our customers have complete trust in every product and ingredient we procure
Slide 31: Outlook
Outlook • Improvement in results has been muted by increases in non–fish commodity prices • Input costs expected to continue to be high in 2008 • Economic downturn in the U.S. expected to impact financial results in 2008
Slide 32: Outlook
Outlook We are now much stronger to deal with these challenging market conditions, as we: • Expanded our presence in both Canada and the United States • Gained a foothold in the important U.S. food service channel • Are well-positioned, supplying both at-home and away-from-home food options and a fu
Slide 33: Our Vision
Our Vision High Liner will be the leader in value-added frozen seafood in North America
Slide 34: Annual & Special General Meeting
Annual & Special General Meeting Halifax, Nova Scotia - May 9, 2008 A. HicH LINER Foons