High Liner Foods Incorporated · TSX:HLF
High Liner Foods — Q4 2023 Earnings Presentation
31 slides from High Liner Foods's earnings presentation, February 2024
Slide 1: Investor Presentation
Investor Presentation February 2024
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 — c y ch ¢ 7 * a. q yy LINER FOODS . Ss rf} ;
Slide 5: High Liner Foods at a Glance
High Liner Foods at a Glance A publicly-traded Canadian company, listed on the RETAIL Toronto Stock Exchange under the symbol ‘HLF’ A leading North American processor and marketer of value-added frozen seafood to the foodservice and retail channels Over 125 years of seafood expertise Our core brands
Slide 6: Investment Thesis
Investment Thesis Why Now? Why Seafood? Why High Liner Foods? Proven ability to deliver strong financial results Healthy - for both people and the A North American leader in value-added despite unprecedented challenges in recent environment frozen seafood with over 125 years of years, including cont
Slide 7: A North American Leader in Value-Added Frozen Seafood with a Diversified Portfolio
A North American Leader in Value-Added Frozen Seafood with a Diversified Portfolio Based on 2023 Sales lbs • #1 frozen fish manufacturer and #1 frozen value-added seafood manufacturer in Canadian retail market(1) • #1 branded prepared frozen fish manufacturer and #4 branded frozen value-added seafoo
Slide 8: Our Purpose - Reimagining Seafood to Nourish Life
Our Purpose - Reimagining Seafood to Nourish Life At High Liner Foods, we recognize our responsibility to support healthy oceans, planets and communities. This is the foundation of our purpose, Reimagining Seafood to Nourish Life, which guides every decision we make and every action we take. Nothing
Slide 9: Sustainability
Sustainability For over 120 years we have operated as a responsible corporate citizen and in the past two decades we have deeply embedded sustainability practices into our DNA. We are committed to continuous improvement and to build on our progress to date. Please visit www.highlinerfoods.com for mo
Slide 10: Financial Review & 2024 Outlook
Financial Review & 2024 Outlook
Slide 11: Q4 2023 Performance
Q4 2023 Performance In Q4 2023, the Company generated in excess of $66 million in cash flow from operations. The Company improved its leverage ratio to 2.6x at the end of Q4 2023 (3.7x at the end of Fiscal 2022) due to the improvement in its working capital during Fiscal 2023. In Q4 2023, the Compan
Slide 12: YTD 2023 Performance
YTD 2023 Performance In 2023, the Company generated in excess of $179 million in cash flow from operations. Overall YTD 2023 had increased sales volumes, but a decreased gross profit and EBITDA compared to prior year due to softer demand and impact of higher inventory levels which led to higher carr
Slide 13: 2024 Outlook
2024 Outlook The Company is optimistic about the outlook for the business in 2024 and beyond, as the Company has a proven strategy and track record of consistent execution. HLF is focused on profitable growth and is well-positioned to generate Adjusted EBITDA growth and continued strong free cash fl
Slide 14: Q4 2023 YTD Sales Volume and Net Sales
Q4 2023 YTD Sales Volume and Net Sales Sales volume increased 6.1M lbs (2.4%) to 257.0M lbs ▪ Foodservice: sales volume is higher due to increased contract manufacturing business, increased sales in newer product lines, new business, and improved customer service levels. The Company achieved strong
Slide 15: Q4 2023 YTD Adjusted EBITDA
Q4 2023 YTD Adjusted EBITDA Earnings before Interest, Taxes, Depreciation and Amortization * 2022 Standardized EBITDA includes $10.0M of insurance proceeds ** Please refer to the Company’s MD&A for Q4 2023 for the definition of non-IFRS financial measures “Standardized EBITDA” and “Adjusted EBITDA”
Slide 16: Q4 2023 YTD Earnings Per Share (EPS)
Q4 2023 YTD Earnings Per Share (EPS) * Please refer to the Company’s MD&A for Q4 2023 for the definition of non-IFRS financial measure “Adjusted Diluted EPS” and “Adjusted Net Income.” Adjusted Diluted EPS decreased by $0.34 (23.0%) to $1.14 ▪ Adjusted Net Income decreased by $13.0M (25.1%) to $38.7
Slide 17: Debt Leverage Ratio
Debt Leverage Ratio Net Debt* to Trailing 12-Month Adjusted EBITDA* Target (3.0x) *Please refer to the Company’s MD&A for Q4 2023 for the definition of non-IFRS financial measures “Net Debt” and “Adjusted EBITDA” • Net Debt* to Rolling Twelve-Month Adjusted EBITDA* was 2.6x at the end of Fiscal 2023
Slide 18: Dividend History
Dividend History * Reflects Q1/Q2/Q3/Q4 dividend of CAD$0.15 per share On February 21, 2024, the Board approved a quarterly dividend of CAD$0.15 per common share. 18
Slide 19: Appendix #1: Miscellaneous Company Information
Appendix #1: Miscellaneous Company Information
Slide 20: High Liner Foods
High Liner Foods Canadian public company since the 1960s, TSX- listed in 1971 Current price CAD$12.90* Shares outstanding ~32.9M Market capitalization ~CAD$424.8M 52-week range CAD$10.11 - $15.87* Insider Holding %*** 38% Annual dividend CAD$0.60 per share** Current yield 4.7% * Source TSX, as of Fe
Slide 21: High Liner Foods
High Liner Foods Over 120 years of seafood expertise 2017 Rubicon 2023 2013 Resources acquisition American Pride Seafood acquisition 2010 2014 1999 Viking Atlantic Trading Name Change acquisition Company to High Liner Foods 2011 acquisition 1986 Icelandic USA acquisition 1926 Fisher Boy acquisition
Slide 22: Flexible, Integrated Operations
Flexible, Integrated Operations Three value-added seafood manufacturing facilities in North America Increased demand for value-added products increases plant efficiency Current manufacturing footprint: aggregate production Lunenburg, NS capacity of ~172M LBS based on current shift patterns (Canada)
Slide 23: Species Diversity
Species Diversity Based on 2023 Purchases (in USD) • In 2023, the Company purchased approximately 155M lbs of seafood with an approximate value of $511.4M, reflecting approximately 24 species from 20 different countries. • Major species (7) accounted for ~94% of the total dollar purchases. 23
Slide 24: ESG at High Liner Foods
ESG at High Liner Foods High Liner Foods began our responsible sourcing journey over a decade ago and has made steady gains since that time, working toward a goal of delivering products that are 100% responsibly sourced. In 2021, High Liner Foods took its next step in the ESG journey and completed a
Slide 25: Appendix #2: Historical Financial Performance
Appendix #2: Historical Financial Performance 25
Slide 26: 10 Year Sales History - Volume and USD
10 Year Sales History - Volume and USD Sold New Bedford Scallop business 26
Slide 27: 10 Year EBITDA History
10 Year EBITDA History Earnings before Interest, Taxes, Depreciation & Amortization Sold New Bedford Scallop business *Please refer to the Company’s MD&A for Fiscal 2023 for definition of non-IFRS measures “Standardized EBITDA” and “Adjusted EBITDA” 27
Slide 28: 10 Year EPS and ROE History
10 Year EPS and ROE* History Earnings per Share (EPS) and Return on Equity (ROE) Sold New Bedford Scallop business *Please refer to the Company’s MD&A for Fiscal 2023 for definition of non-IFRS measures “Adjusted Diluted EPS” and “Return on Equity” 28
Slide 29: 10 Year Debt Leverage Ratio
10 Year Debt Leverage Ratio Net Debt* to Trailing 12-Month Adjusted EBITDA* Sold New Bedford Scallop business Target (3.0x) *Please refer to the Company’s MD&A for Fiscal 2023 for the definition of non-IFRS measures “Adjusted EBITDA” and “Net Debt”. **Does not include trailing 12-month Adjusted EBIT
Slide 30: Thank you!
Thank you! The Company’s news release, MD&A and Financial Statements can be found in the Investor Center section of the High Liner Foods website. Please visit www.highlinerfoods.com for more details.
Slide 31: HIGH LINER FOODS | Changing the way we see food
9 9 HIGH LINER FOODS 4 | Changing the way we see food