High Liner Foods Incorporated · TSX:HLF
High Liner Foods — Shareholder Meeting (May 2015)
31 slides from High Liner Foods's shareholder meeting presentation, May 12, 2015
Slide 1: 2015 Annual General Meeting of Shareholders
2015 ANNUAL GENERAL MEETING OF SHAREHOLDERS May 12, 2015
Slide 2: Tim Rorabeck, VP Corporate Affairs & General Counsel
TIM RORABECK VICE PRESIDENT CORPORATE AFFAIRS & GENERAL COUNSEL
Slide 3: 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 4: 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 references in this presentation to share price, dividends and market cap are in CAD. •
Slide 5: David J. Hennigar, Chairman of the Board
DAVID J. HENNIGAR CHAIRMAN OF THE BOARD
Slide 6: Henry Demone, Chief Executive Officer
HENRY DEMONE CHIEF EXECUTIVE OFFICER
Slide 7: Fiscal 2014 Highlights
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 reflecting recent acquisi
Slide 8: Review of 2014 Strategic Goals
REVIEW OF 2014 STRATEGIC GOALS 1. PROFITABLE GROWTH • Multi-year goal, focused on increasing EBITDA through a combination of organic growth, acquisitions and supply chain optimization • Internal growth to come from product innovation and expansion (new species, new formats) • Substantial growth must
Slide 9: Review of 2014 Strategic Goals
REVIEW OF 2014 STRATEGIC GOALS 2. SUPPLY CHAIN OPTIMIZATION • Reduce annual operating costs by $20M to $25M through plant and supply chain efficiencies • Take advantage of our larger scale of business • Progress in 2014 includes: • Engagement of outside expertise • Project officially kicked-off in Q
Slide 10: Review of 2014 Strategic Goals
REVIEW OF 2014 STRATEGIC GOALS 3. SUCCESSION PLANNING • Talent is key to support our growth strategy – capacity and expertise • Significant number of retirements over the next few years - focus on developing and recruiting the next generation of leaders • Progress in 2014 includes: • Paul Jewer, CFO
Slide 11: Keith Decker, President & Chief Operating Officer
KEITH DECKER PRESIDENT & CHIEF OPERATING OFFICER
Slide 12: Company Overview
COMPANY OVERVIEW BUSINESS OVERVIEW Geography Branding Channel Product Form 20% 29% 33% 33% 67% 67% 71% 80% USA (incl. Mexico) HLF Brands Other Foodservice Retail Value-added Other Canada * The charts above reflect the Company’s business profile based on sales and on a proforma basis including Atlant
Slide 13: Vision, Mission and Values
VISION, MISSION AND VALUES VISION MISSION VALUES To be the leading supplier To radically simplify Customer-focused of frozen seafood in North selecting, preparing and Innovative America enjoying seafood at its Responsible best © 2015 High Liner Foods – CONFIDENTIAL 13
Slide 14: Recognition and Awards
RECOGNITION AND AWARDS BJ’S WHOLESALE CLUB PINNACLE MCDONALD’S CANADA VENDOR OF THE YEAR SUPPLIER OF THE YEAR 2014 SUSTAINABILITY AWARD AWARD AWARD Awarded each year to only one Awarded by Foodservice and Awarded for demonstration of real supplier across all of the company’s Hospitality Magazine in
Slide 15: Recognition and Awards (Continued)
RECOGNITION AND AWARDS (CONTINUED) WWF CANADA SEAWEB SEAFOOD EXCELLENCE 2014 ENVIRONMENTAL SEAFOOD “GRAND 2015 BEST NEW FOOD- LEADER AWARD CHAMPION” AWARD SERVICE PRODUCT AWARD Awarded to leaders who, through a SeaWeb created the “grand Awarded annually at Seafood Expo precedent-setting commitment t
Slide 16: Paul Jewer, EVP & Chief Financial Officer
PAUL JEWER EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER
Slide 17: Fiscal 2014 Financial Review
FISCAL 2014 FINANCIAL REVIEW • Achieved sales in excess of $1B reflecting recent acquisitions • Organic growth remained challenging in U.S. foodservice, and combined with significant cost increases for certain key species and a weaker Canadian dollar, profitability (gross margin, EBITDA and net inco
Slide 18: Financial Review: Sales History
FINANCIAL REVIEW SALES HISTORY $1,200 $1.05B $1,000 $800 USD millions $600 $400 $200 $- 2006 2007 2008 2009 2010 2011 2012 2013 2014 © 2015 High Liner Foods – CONFIDENTIAL 18
Slide 19: Financial Review: 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 20: Financial Review: 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 21: Financial Review: 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 22: Financial Review - Q1 2015
FINANCIAL REVIEW - Q1 2015 • Sales bolstered by Atlantic Trading, partially offsetting impact of volume declines in remainder of the business and weaker Canadian dollar • Adjusted EBITDA and Adjusted Net Income improvements of $3.4M and $1.8M, respectively • Lower distribution costs and SG&A expense
Slide 23: Financial Review – Q1 2015: Sales
FINANCIAL REVIEW – Q1 2015 2015 SALES (USD MILLIONS) $350 $302.6M $310.2M $300 • Sales in domestic currency were $326.9M in 2015 and $310.1M in 2014 $250 • Weaker Canadian dollar $200 decreased reported USD sales by $8.7M compared to last year $150 • Pounds sold were 89.5M in 2015 and 94.2M in 2014
Slide 24: Financial Review – Q1 2015: EBITDA
FINANCIAL REVIEW – Q1 2015 EBITDA (USD MILLIONS) $32 $31 $30.7M $30 • Adjusted EBITDA in domestic currency was $31.6M in 2015 and $28.0M in $29 2014. $28 $27.2M • Lower SG&A and distribution expenses, $27 partially offset by lower overall sales volume and lower overall gross profit $26 margin as a p
Slide 25: Financial Review – Q1 2015: Diluted EPS
FINANCIAL REVIEW – Q1 2015 DILUTED EPS (USD) $0.60 0.50 $0.50 0.44 $0.40 $0.30 $0.20 $0.10 $0.00 2014 2015 Diluted EPS Partially Adjusted Diluted EPS Adjusted Diluted EPS © 2015 High Liner Foods – CONFIDENTIAL 25
Slide 26: Henry Demone, Chief Executive Officer
HENRY DEMONE CHIEF EXECUTIVE OFFICER
Slide 27: Bringing the Sea to the Table
BRINGING THE TO ThEsTABLE oo HIGH LINER FOODS
Slide 28: Review of 2015 Strategic Goals
REVIEW OF 2015 STRATEGIC GOALS 1. PROFITABLE GROWTH • Increase EBITDA through a combination of: • Organic growth - product innovation and expansion • Acquisitions – seafood category remains highly fragmented relative to other proteins 2. SUPPLY CHAIN OPTIMIZATION • Annual operating costs by $20M to
Slide 29: Review of 2015 Strategic Goals
REVIEW OF 2015 STRATEGIC GOALS 3. SUCCESSION PLANNING • Talent is key to support our growth strategy – capacity and expertise • Focus on developing and recruiting the next generation of leaders • Effective following conclusion of today’s AGM: • Keith Decker named Chief Executive Officer and appointe
Slide 30: Thank You
THANK YOU © 2015 High Liner Foods – CONFIDENTIAL
Slide 31: High Liner Foods
_2B HIGH LINER FOODS