High Liner Foods Incorporated · TSX:HLF
High Liner Foods — CIBC 2017 Retail and Consumer Small Cap Forum
20 slides from High Liner Foods's conference presentation, Jun 14, 2017
Slide 1: High Liner Foods - CIBC 2017 Retail and Consumer Small Cap Forum
HIGH LINER FOODS CIBC 2017 RETAIL AND CONSUMER SMALL CAP FORUM June 14, 2017 Keith Decker, President & CEO
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”) began reporting its financial statements in USD in 2012, however its common shares trade on the TSX and are quoted in CAD and therefore any references in this presentation to share price, dividends and market cap are in CAD. I
Slide 4: High Liner Foods
HIGH LINER FOODS Canadian public company since the 1960’s, TSX-listed in 1971 Ticker symbol Current price(1) CAD$19.54 Shares outstanding(1)(2) ~33.3 million Market capitalization(1) ~CAD$651 million 52-week range(1) CAD$17.01 - $27.62 Annual dividend(3) CAD$0.56 per share Current yield ~2.9% (1) So
Slide 5: Tasting Seafood for a Better Life
TASTING SEAFOOD FORA BETTER LIFE With the customer at the center of all we do, we are ona mission to drive seafood consumption by providing innovative solutions to a world looking for healthy, easy to prepare, delicious seafood options.
Slide 6: Investment Thesis: Why Seafood?
INVESTMENT THESIS Why Seafood? • Healthy protein – for humans and the planet • North Americans, on average, consume substantially less seafood than suggested in recommended dietary guidelines • Long-term growth influenced by North America’s demographics – a growing and aging population, with an incr
Slide 7: Investment Thesis: Why High Liner Foods?
INVESTMENT THESIS Why High Liner Foods? • North American leader in value-added frozen seafood, with 115+ years of seafood expertise • Broad market reach and market-leading brands • Customer-focused, innovative and responsible • Global seafood procurement and frozen food logistics expertise • Consoli
Slide 8: Business Overview
BUSINESS OVERVIEW Focused on the frozen seafood market in North America Geography Branding Channel Product Form 22% 30% 42% 50% 50% 58% 70% 78% US (incl. Mexico) Canada HLF Brands Other Foodservice Retail Value-added Other Based on 2016 sales (in USD) and shown on a proforma basis to include the imp
Slide 9: Seafood Is Complex
SEAFOOD IS COMPLEX We simplify the seafood category for our customers • Global supply chain with 100+ commercial species • People believe preparing seafood is difficult and time consuming • By leveraging the full extent of our seafood expertise, from procurement through to preparation, our customers
Slide 10: Organic Growth Strategy
ORGANIC GROWTH STRATEGY Customer-focused, innovative seafood solutions • Product development efforts are focused on what today’s seafood consumer wants when selecting seafood products and appealing to Millennials in a more meaningful way • Innovation must be a core competency and an ingrained part o
Slide 11: Organic Growth Strategy: Species Diversification
ORGANIC GROWTH STRATEGY Focused on species diversification to aquaculture species experiencing stronger growth rates in North America 7% 7% 24% Alaska Pollock Cod 8% Shrimp Other Salmon 16% Haddock 21% Tilapia 17% Based on 2016 sales (in Lbs) and shown on a proforma basis to include the impact of ac
Slide 12: Organic Growth Strategy: Commercial Excellence
ORGANIC GROWTH STRATEGY Commercial excellence also a key factor for organic sales growth • Working more closely with customers to gain better insight into how to leverage the full extent of our seafood expertise to help customers win in seafood • Demonstrations by our highly trained chefs that focus
Slide 13: Consolidated Operations
CONSOLIDATED OPERATIONS Three value-added seafood manufacturing facilities in North America • New Bedford facility closed in Q3 2016 marking the last significant initiative planned as part of a multi-year supply chain optimization project Lunenburg, NS (Can) which removed $20+ million in annual cost
Slide 14: Corporate Social Responsibility
CORPORATE SOCIAL RESPONSIBILITY The Company’s first CSR report will be released in 2017 • 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 aquacultur
Slide 15: Role of Acquisitions
ROLE OF ACQUISITIONS Acquisition of Rubicon supports our organic growth strategy through expediting species diversification • Acquisition of Rubicon Resources, LLC completed on May 30, 2017 for $107 million • Primary business is the import and distribution of sustainably sourced frozen shrimp produc
Slide 16: Debt Leverage Ratio
DEBT LEVERAGE RATIO Net Interest-Bearing Debt to Adjusted EBITDA Ratio 5.0x 4.4x 4.4x 4.0x 4.0x 4.0x 3.7x 3.2x 3.1x 3.0x 3.0x 2.0x 1.0x 0.0x Dec 31/11 Sep 28/13 Sep 28/14 Jan 3/15 Jan 2/16 Dec 31/16 Apr 1/17 Target Pro forma Pre-American Pre-Atlantic End of End of End of End of Icelandic Pride Tradi
Slide 17: Dividend History
DIVIDEND HISTORY $0.60 $0.560 $0.55 $0.520 Annual Dividend Paid per Share ($CAD) $0.50 14-year CAGR: 25% $0.45 $0.465 $0.40 $0.35 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $0.00 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* * Annual dividends to be paid in 2017 estimated at C
Slide 18: 2017 Outlook
2017 OUTLOOK • Trend of lower demand for traditional breaded and battered products is expected to continue in 2017, but optimistic that sales from new and improved product offerings can offset this decline by the end of 2017 • This improvement in sales trend and a return to typical plant production
Slide 19: Thank You!
THANK YOU! Aa HIGH LINER FOODS
Slide 20: Great Tasting Seafood for a Better Life
GREAT TASTING SEAFOOD FOR A BETTER LIFE
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