High Liner Foods Incorporated · TSX:HLF
High Liner Foods — Investor Presentation (November 2015)
25 slides from High Liner Foods's investor presentation, November 2015
Slide 1: Investor Presentation
INVESTOR PRESENTATION KEITH DECKER, PRESIDENT & CEO HEATHER KEELER-HURSHMAN, DIRECTOR, IR November 2015 PAUL JEWER, EVP & CFO
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$12.98 52-week range2 CAD$10.10 - $26.50 Shares outstanding ~30.84M Total market cap2 ~CAD$400M 1 Public company since the 1960’s; listed on TSX in 1971 2 Source: TSX November 10, 2015 closing price Annual dividend3 CAD$0.48 per sha
Slide 6: Vision, Mission and Values
COMPANY OVERVIEW VISIONS, 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 6
Slide 7: Industry Drivers
COMPANY OVERVIEW INDUSTRY DRIVERS Long-term growth influenced by strong North American demographics Health benefits tied to eating fish An aging, health-conscious 45+ years of age population account for half of seafood consumption • Fisheries recovering around the world largely due to the sustainabi
Slide 8: 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 9: Business 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 10: 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 11: 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 lbs
Slide 12: 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 13: Financial Review
FINANCIAL REVIEW
Slide 14: Fiscal 2014 Highlights
FINANCIAL REVIEW FISCAL 2014 HIGHLIGHTS Strategic: • Acquired Atlantic Trading Company (“ATC”) 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
Slide 15: Sales History
FINANCIAL REVIEW SALES HISTORY $1,200 $1.05B $1,000 USD millions $800 $600 $400 $200 $- 2006 2007 2008 2009 2010 2011 2012 2013 2014 2014 Highlights: • Total pounds (“lbs”) sold were 307.6M in 2014 (2013: 281.3M) • APS and ATC added $150.8M (45.6M lbs) to sales (2013: APS sales of $39.7M (12.6M lbs)
Slide 16: EBITDA History
FINANCIAL REVIEW EBITDA HISTORY $100 $90 $83.3M 2014 Highlights: $80 • APS and ATC added $4.9M in Adjusted EBITDA (2013: $1.5M) $70 • Strong operational performance USD millions $60 Q1 2014 through the busy Lenten period vs. operating $50 challenges in the U.S. in Q1 2013 $40 • Lower sales volume (e
Slide 17: 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 18: Dividend History
FINANCIAL REVIEW DIVIDEND HISTORY $0.50 $0.465* Annual Dividend paid per Share ($CAD) $0.45 $0.40 $0.35 11-year CAGR (2003 to 2014): 29% $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 *Assumes Q4 dividend at same rate approved for Q3 of CAD
Slide 19: 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 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 Oct 3/15 Target Pro Forma Pre-American Icelandic Pride Acquisition © 2015 High Liner Foo
Slide 20: Financial Review – YTD 2015 Highlights
FINANCIAL REVIEW – YTD 2015 HIGHLIGHTS • Sales volume decline of 5.5% as a result of higher pricing (to recover increased seafood raw material costs and increased FX expense in Canada), partially offset by sales from Atlantic Trading • Increased promotional spending in Q3 helped to improve year-over
Slide 21: Outlook
FINANCIAL REVIEW – YTD 2015 OUTLOOK • Despite on-going challenges with demand, the Company will continue to focus on increasing sales volume in the remainder of 2015 and into 2016 to achieve the benefits related to its supply chain optimization initiatives and to improve earnings • These efforts wil
Slide 22: Sales (USD Millions)
FINANCIAL REVIEW – YTD 2015 SALES (USD MILLIONS) $900 $784.7 $776.6 $800 $700 • Sales in domestic currency were $600 $828.9M in 2015 and $805.9M in 2014 $500 • Weaker Canadian dollar decreased reported USD sales $400 by $30.7M relative to the $300 conversion impact last year $200 • Pounds sold were
Slide 23: EBITDA (USD Millions)
FINANCIAL REVIEW – YTD 2015 EBITDA (USD MILLIONS) $64 $62.9 $62 $60.5 $60 • Adjusted EBITDA in domestic currency was $64.1M in 2015 and $58 $64.4M in 2014 $56 • Adjusted EBITDA as a % of sales $54 (domestic currency) was 7.7% in $52 2015 and 8.0% in 2014 $50 • Lower overall sales volume and lower gr
Slide 24: Diluted EPS (USD)
FINANCIAL REVIEW – YTD 2015 DILUTED EPS (USD) $1.00 $0.95 $0.90 $0.87 $0.80 $0.70 $0.60 $0.50 $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 24
Slide 25: High Liner Foods
_2B HIGH LINER FOODS
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