High Liner Foods Incorporated · TSX:HLF
High Liner Foods — Investor Presentation (March 2015)
29 slides from High Liner Foods's investor presentation, March 2015
Slide 1: Investor Presentation
INVESTOR PRESENTATION KEITH DECKER, PRESIDENT & COO / PAUL JEWER, CFO March 2015
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 began reporting its financial statements in USD in 2012, however its common shares trade on the TSX and are quoted in CAD and therefore references in this presentation to share price, dividends and market cap are in CAD. Investors are remi
Slide 4: Company Overview
HIGH LINER FOODS COMPANY OVERVIEW
Slide 5: Company Overview: TSX Listings Data
COMPANY OVERVIEW TSX LISTINGS DATA TSX symbol1 HLF Recent price2 CAD$25.82 52-week range2 CAD$19.10 - $26.50 Shares outstanding ~30.69M Total market cap2 ~CAD$792M 1 Public company since the 1960’s; listed on TSX in 1971 2 Source: TSX March 2nd, 2015 closing price Quarterly dividend3 CAD$0.105 per s
Slide 6: High Liner Foods Corporate History
COMPANY OVERVIEW HIGH LINER FOODS CORPORATE HISTORY 1945 1999 2013 2014 1899 1986 2011 National Name 2007 2010 American Atlantic WC Smith Icelandic Sea Fisher Boy change to FPI Viking Pride Trading founded USA Products acquisition High Liner acquisition1 acquisition Seafoods Company (salt fish) crea
Slide 7: Business Overview
COMPANY OVERVIEW BUSINESS OVERVIEW Geography Branding Channel Product Form 20% 29% 33% 33% 67% 67% 71% 80% USA (incl. Mexico) Value-added Other HLF Brands Other Foodservice Retail Canada * The charts above reflect the Company’s business profile based on sales and on a proforma basis including Atlant
Slide 8: Advanced Business Model with Market Breadth
COMPANY OVERVIEW ADVANCED BUSINESS MODEL WITH MARKET BREADTH Broadest Market Market Leading Diversified Global Frozen Food Innovative Product Reach in Industry Brands Procurement Logistics Expertise Development 2X the size of largest Strong global Logistics expertise competitor in retail & procureme
Slide 9: Leader in Sustainability
COMPANY OVERVIEW LEADER IN SUSTAINABILITY • Committed to sourcing all our seafood from “certified sustainable or responsible” fisheries and aquaculture • In cooperation with NGOs, industry partners and other like-minded businesses, we have assumed a leadership role in substantial fishery and aquacul
Slide 10: Manufacturing Footprint
COMPANY OVERVIEW MANUFACTURING FOOTPRINT Lunenburg, NS (Can) • Continuous assessment of Capacity p.a.: 50m lbs manufacturing capabilities vs. current Utilization: 65% and future requirements to ensure low- cost and efficient operations Portsmouth, NH (U.S.) Malden, MA (U.S.) (1) Capacity p.a.: 84m l
Slide 11: Financial Review
FINANCIAL REVIEW
Slide 12: Fiscal 2014 Highlights
FINANCIAL REVIEW FISCAL 2014 HIGHLIGHTS Strategic: • Acquired Atlantic Trading Company in October • Commenced supply chain optimization initiative • Significant progress made with succession planning at the executive level of the Company Financial: • Achieved $1B in sales for the first time reflecti
Slide 13: Sales History
FINANCIAL REVIEW SALES HISTORY $1,200 $1,051.6M $1,000 $800 USD millions $600 $400 $200 $- 2006 2007 2008 2009 2010 2011 2012 2013 2014 © 2015 High Liner Foods – CONFIDENTIAL 13
Slide 14: EBITDA History
FINANCIAL REVIEW EBITDA HISTORY $100 $90 $83.3M $80 $70 USD millions $60 $50 $40 $30 $20 $10 $- 2006 2007 2008 2009 2010 2011 2012 2013 2014 Standardized EBITDA: Earnings before interest, taxes, depreciation and amortization as reported in the Company’s annual audited financial statements Partially
Slide 15: Diluted EPS and ROE History
FINANCIAL REVIEW DILUTED EPS AND ROE HISTORY $1.75 30% $1.50 25% Diluted Earnings per Share $1.24 $1.25 Return on Equity 20% $1.00 15% $0.75 10% $0.50 $0.25 5% $0.00 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Diluted EPS Partially Adjusted Diluted EPS Adjusted Diluted EPS Return on Equity Dilut
Slide 16: Dividend History
FINANCIAL REVIEW DIVIDEND HISTORY $0.45 $0.41 Annual Dividend paid per Share ($CAD) $0.40 $0.35 $0.35 $0.30 11-year CAGR (2003 to 2014): 29% $0.25 $0.20 $0.15 $0.10 $0.05 $0.00 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Common shares up to September 15, 2007; Common and non-voting s
Slide 17: Debt Leverage Ratio
FINANCIAL REVIEW DEBT LEVERAGE RATIO Net interest-bearing debt / rolling 12 month Adjusted EBITDA 5.0x 4.4x 4.4x 3.9x 4.0x 3.4x 3.2x 3.0x 3.0x 2.0x 1.0x 0.0x Dec 31/11 Dec 29/12 Sep 28/13 Dec 28/13 Jan 3/15 Target Pro Forma Pre-American Icelandic Pride Acquisition © 2015 High Liner Foods – CONFIDENT
Slide 18: Debt Amendments – Q2 2015
FINANCIAL REVIEW DEBT AMENDMENTS – Q2 2015 • Favourable amendments to the Company’s debt facilities – term loan and asset based loan (ABL) • Term loan and ABL: • Increased capacity and flexibility for acquisitions, investments, distributions, capital expenditures and operational matters • Extended t
Slide 19: Atlantic Trading Company Acquisition – October 7, 2014
FINANCIAL REVIEW ATLANTIC TRADING COMPANY ACQUISITION – OCTOBER 7, 2014 • One of the largest importers of frozen Atlantic salmon into the U.S. • Premium quality salmon sustainably sourced from Chile and Norway • Sold primarily to the U.S. retail market in frozen raw (unprocessed) and value-added for
Slide 20: 2014 Sales (USD Millions)
2014 SALES (USD MILLIONS) $1,200 • American Pride and Atlantic Trading $1,051.6M added $150.8M in sales (45.6M $1,000 $947.3M pounds) compared to American Pride sales of $39.7M (12.6M pounds) in 2013 $800 • Sales in domestic currency were $1,083.5M in 2014 and $956.3M in $600 2013 • Weaker Canadian
Slide 21: EBITDA (USD Millions)
FINANCIAL REVIEW EBITDA (USD MILLIONS) $90 • American Pride and Atlantic Trading added $4.9M in Adjusted EBITDA $85.3 compared to American Pride Adjusted $85 EBITDA of $1.5M in 2013 $83.3 • Strong operational performance in Q1 $80 2014 through the busy Lenten period vs. operating challenges in the U
Slide 22: Diluted EPS (USD)
DILUTED EPS (USD) $1.40 $1.32 $1.24 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 2013 2014 Diluted EPS Partially Adjusted Diluted EPS Adjusted Diluted EPS © 2015 High Liner Foods – CONFIDENTIAL 22
Slide 23: Vision and Growth Strategy
HIGH LINER FOODS Se = VISIONAND GROWTH STRATEGY {______ as Ca
Slide 24: Vision, Mission and Values
VISION AND GROWTH STRATEGY Our vision: Our mission: Our values: To be the leading To radically simplify Customer-focused supplier of frozen selecting, preparing and Innovative seafood in North enjoying seafood at its Responsible America best Deliciously Simple Seafood TM © 2015 High Liner Foods – CO
Slide 25: Industry Drivers
VISION AND GROWTH STRATEGY INDUSTRY DRIVERS Long-term growth influenced by strong North American demographics 45+ years of age An aging, account for half of seafood health-conscious population consumption Health benefits tied to eating fish • Fisheries recovering around the world largely due to the
Slide 26: 2015 Strategic Goals
VISION AND GROWTH STRATEGY 2015 STRATEGIC GOALS – Bringing the Best to the Table Profitable growth • Organic growth and acquisitions Supply chain optimization • Optimize our systems in procurement and purchasing, inventory management, product rationalization, and shipping and warehousing Succession
Slide 27: Growth Strategy
VISION AND GROWTH STRATEGY GROWTH STRATEGY Innovation • We are a recognized leader in our industry for introducing new and innovative products and we will continue to focus on developing innovative product offerings that both increase the overall demand for frozen seafood products and grow our marke
Slide 28: Investment Rationale
INVESTMENT RATIONALE Competitively Advantaged North American Platform Unique Strong Global Customer & Sourcing Vendor Network and Relationships Expertise Market Leader in North American Value-Added Seafood Market Attractive Proven & Financial Experienced Profile and Management Strong Free Team Cash
Slide 29: High Liner Foods
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