Premium Brands Holdings Corporation · TSX:PBH
Premium Brands — Shareholder Meeting (May 2019)
44 slides from Premium Brands's shareholder meeting presentation, May 10, 2019
Slide 1: Annual General Meeting
ANNUAL GENERAL MEETING May 10, 2019
Slide 2: Disclaimer
Disclaimer This presentation is not, and nothing in it should be construed as, an offer, invitation or recommendation in respect of the securities of Premium Brands Holdings Corporation (the “Company”), or an offer, invitation or recommendation to sell, or a solicitation of an offer to buy, any of t
Slide 3: 2018 Message to Shareholders: The Long Game
2018 MESSAGE TO SHAREHOLDERS: “The Long Game” The Long Game 3
Slide 4: Company Profile
Company Profile 2004 Current Revenue $0.2 billion $3.2 billion (1) EBITDA $14.1 million $263.2 million (1) Business platforms 2 6 Geographic reach Western Canada North America Operating facilities 8 59 Employees 900 9,250 Free cash flow per share (1) $0.78 $4.99 Annualized dividend rate $ nil $2.10
Slide 5: Our Vision
Our Vision To invest in specialty food businesses featuring: Entrepreneurial cultures Great tasting foods made with wholesome ingredients A passion for both their local communities and what is best for our planet The Long Game 5
Slide 6: Share Price
Share Price Closing Share Accumulated Date Price Dividends Per Share Dec 31, 2003 $8.60 Nil May 3, 2019 $81.64 $18.28 4000.00 6 2003 to May 3, 2019 CAGR = 23.1% 3500.00 5 3000.00 4 2500.00 2000.00 3 1500.00 2 1000.00 1 500.00 0.00 0 Premium Brands (LHS) S&P/TSX Composite Index - Total Return (LHS) T
Slide 7: Core Business Strategies
Core Business Strategies Business Strategy Benefits Support and development of entrepreneurial cultures • Decentralized management structure • Efficient and dynamic decision making • Tremendous source of innovation • Product / market expertise Specialty food products • Leading regional brands • Prod
Slide 8: Guiding Principles
Guiding Principles Authenticity Giving back to the community Respect for the environment Corporate humility Animal welfare Resilience Disciplined capital allocation (15% minimum IRR) Long-term outlook The Long Game 8
Slide 9: Leveraging the PB Ecosystem
Leveraging the PB Ecosystem • Access to capital • Disciplined capital allocation • Global and strategic procurement • Buying power • Internal selling opportunities • Peer network • IT expertise • Acquisition expertise Helping good specialty food businesses become larger • Information sharing among b
Slide 10: Product and Commodity Diversification
Product and Commodity Diversification Specialty Foods (66.7%) Premium Foods Distribution (33.3%) Others, 0.7% Commodity Purchases % Sales Baked goods, 1.3% Seafood, 13.8% Beef $759.6 21.9% Seafood $479.1 13.8% Sandwiches, Pork $398.2 11.5% 21.1% Poultry $162.8 4.7% Protein, 17.7% Bread $97.5m 2.8% F
Slide 11: Geographical Diversification
Geographical Diversification 2018 Region Sales % Sales Canada $1,916.3m 63.3% U.S. $1,059.4m 35.0% Export $50.1m 1.7% $3,025.8m 100.0% Represents regions in which PBH has one or more operating facilities The Long Game 11
Slide 12: Acquisitions Activity
Acquisitions Activity 2005 2006 2007 2008 2009 2010 2011 2013 2014 2015 2016 2017 2018 2019 $28.2m $7.7m $91.8m $16.7m $3.1m $67.3m $121.8m $63.7m $8.1m $51.9m $244.0m $246.2m $753.0m $47.2m Harlan Hempler’s Centen- B&C SJ Fine Maximum Piller’s Freybe Ocean Expresco C&C Raybern Oberto Mavros Fairban
Slide 13: Distribution Platform
Distribution Platform Acquired Acquired Ravensbergen Acquired C&C Frandon Packing Acquired IMS Seafood Acquired Acquired Acquired Acquired Acquired Expanded Acquired Acquired Centennial Acquired Acquired Harlan Centennial B&C Food Multi- Wescadia Centennial’s Reddi Foods Premier enters Penguin Mavro
Slide 14: Distribution Platform
Distribution Platform C&C Packing Facility Expansion The Long Game 14
Slide 15: Protein Platform
Protein Platform Acquired Oberto Acquired Concord Premium Meats Acquired Country Prime Meats Acquired Made-Rite Invested in Acquired The and McLean’s Second Meat Factory constructed Hempler’s new plant Acquired plant Acquired Acquired Acquired Acquired Freybe Expansion Belmont Yorkshire McSweeney’s
Slide 16: Protein Platform (Video)
Protein Platform (Video) The Long Game 16
Slide 17: Protein Platform (Video)
Protein Platform (Video) The Long Game 17
Slide 18: Protein Platform (Video)
Protein Platform (Video) The Long Game 18
Slide 19: Protein Platform (Video)
Protein Platform (Video) The Long Game 19
Slide 20: Protein Platform
Protein Platform Concord Premium Meats The Long Game 20
Slide 21: Protein Platform
Protein Platform Yorkshire Valley Farms The Long Game 21
Slide 22: Protein Platform
Protein Platform Belmont Meats PURE Veggie Burger Line The Long Game 22
Slide 23: Sandwich Platform
Sandwich Platform Acquired Rationalized Buddy’s Quality and Hygaard Acquired plants Raybern’s Acquired Acquired Acquired Acquired Constructed Constructed Constructed Acquired Quality Hygaard SK Food Les Aliments new Deli Chef new 180,000 sf new 212,000 s Select Fast Foods Fine Foods Group Deli Chef
Slide 24: Sandwich Platform
Sandwich Platform SK Food Group Stovers Kitchen Fresh Packs The Long Game 24
Slide 25: Culinary Platform
Culinary Platform Acquired Conte Foods Acquired Acquired Acquired Acquired Invested in Creekside Duso’s Gourmet Chef Larosa Fine Partners Foods Crackers 2006 2010 2013 2016 2017 The Long Game 25
Slide 26: Culinary Platform
Culinary Platform Gourmet Chef Protein Bites The Long Game 26
Slide 27: Bakery Platform
Bakery Platform Acquired Constructed Acquired Invested in Stuyver’s Stuyver’s new Island City Shaw Bakers state-of-the-art Baking artisan bakery 2007 2012 2016 2017 The Long Game 27
Slide 28: Bakery Platform
Bakery Platform Stuyver’s Bread Shaw Bakers Ciabatta Toscana & Fresh Baked Loaves Croissant Toast The Long Game 28
Slide 29: Seafood Platform
Seafood Platform Acquired Hub City Fisheries Acquired Acquired Acquired Construction Acquired Maximum Ocean Diana’s of new Ready Seafood Miracle Seafood 105,000 sf Seafood ON facility 2010 2014 2016 2017 2018 The Long Game 29
Slide 30: Seafood Platform (Video)
Seafood Platform (Video) The Long Game 30
Slide 31: Seafood Platform
Seafood Platform Ready Seafood New Facility The Long Game 31
Slide 32: 2018 Financial Overview
2018 FINANCIAL OVERVIEW The Long Game 32 32
Slide 33: 2018 Financial Performance
2018 Financial Performance • Record sales – up 37.6% to $3.0 billion • Record EBITDA – up 32.1% to $251.3 million • Record adjusted EPS – up 12.3% to $3.74 per share • Record free cash flow per share – up 15.2% to $5.08 per share • Increased our dividend 13.1% to an annual rate of $1.90 per share •
Slide 34: Revenue Trend
Revenue Trend (millions of dollars except percentages) 2010 to 2019TTM CAGR is 24.3% 4,000.0 70.0% 3,690.0 3,500.0 Long-term targeted 3,217.6 60.0% growth rate (6% - 8%) 3,025.8 3,000.0 50.0% 2,500.0 2,198.3 40.0% 2,000.0 1,857.5 30.0% 1,484.5 1,500.0 1,221.8 1,043.0 20.0% 960.1 1,000.0 794.3 535.2
Slide 35: EBITDA Trend
EBITDA Trend (millions of dollars except percentages) • 2010 to 2019TTM CAGR is 24.9% 400.0 12.0% • All amounts are Pre-IFRS 16 350.0 11.0% 320.0 300.0 10.0% 263.2 251.3 250.0 9.0% 200.0 190.2 8.0% 154.8 150.0 7.0% 111.6 100.0 6.0% 77.6 66.8 69.3 54.9 50.0 42.0 5.0% - 4.0% 2010 2011 2012 2013 2014 2
Slide 36: Adjusted Earnings and EPS
Adjusted Earnings and EPS (millions of dollars except per share amounts) 140.0 $4.00 2010 to 2018 CAGR is 26.6% 120.0 $3.50 $121.3 $3.00 100.0 $99.2 $2.50 80.0 $75.4 $2.00 60.0 $1.50 $50.0 40.0 $1.00 20.0 $23.5 $0.50 $21.2 $21.7 $18.4 - $- 2011 2012 2013 2014 2015 2016 2017 2018 Adjusted Earnings ($
Slide 37: Free Cash Flow
Free Cash Flow (millions of dollars except per share amounts and percentages) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019TTM 2019 Payout ratio 106.4% 77.7% 69.6% 70.6% 65.2% 59.4% 53.0% 53.9% 48.4% 43.2% 36.6% 38.5% 38.1% 39.2% Dividend per share $1.18 $1.18 $1.18 $1.18 $1.
Slide 38: Financial Health
Financial Health • Completed a $172.7 million equity offering • Completed a $172.5 million convertible debenture offering • Increased our senior credit facility by $350 million to approximately $900 million • Included in the S&P/TSX Canadian Dividends Aristocrats Index The Long Game 38
Slide 39: Liquidity
Liquidity (millions of dollars except ratios) 270.0 5.5 Top end of targeted range for Targeted range for total senior debt to EBITDA ratio debt to EBITDA ratio 5.0 220.0 4.5 4.0 170.0 3.5 3.0 120.0 2.5 2.0 70.0 1.5 1.0 20.0 0.5 Available Credit ($millions) (LHS) Total Debt to EBITDA (RHS) Senior Deb
Slide 40: 2018 Activities to Drive Future Value
2018 Activities to Drive Future Value • Invested $753.0 million in business acquisitions, including $609.7 million for 3 transformational transactions • Invested $51.4 million in growth related capital projects • Continued to build on our pipeline of acquisitions setting the stage for 2019 to be ano
Slide 41: Investments
Investments (millions of dollars except percentages) The minimum hurdle rate for all acquisitions and project capital expenditures is 15% after tax and before leverage 900.0 19.0% 809.6 800.0 18.0% 700.0 Long term targeted 17.0% RONA of 15% 600.0 16.0% 500.0 15.0% 400.0 14.0% 278.2 304.1 300.0 13.0%
Slide 42: Investments
Investments (millions of dollars except FCF per share) $/share 6.0 900.0 809.6 800.0 5.0 700.0 4.0 600.0 500.0 3.0 400.0 304.1 2.0 278.2 300.0 145.2 200.0 1.0 70.7 87.7 70.6 77.7 100.0 32.6 0.0 0.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 Investments FCF per share (LHS) The Long Game 42
Slide 43: Long Term Outlook
Long Term Outlook (in millions of dollars except per share amounts and ratios) Senior Debt to 5 Year Sales 5 Year EBITDA Sales EBITDA FCF per Share EBITDA Ratio Target target Fiscal 2010 535.2 42.0 1.81 2.7 1,000.0 n/a Fiscal 2014 1,221.8 77.6 2.60 2.7 2,000.0 n/a Fiscal 2018 3,025.8 251.3 5.08 2.6
Slide 44: Annual General Meeting
ANNUAL GENERAL MEETING May 10, 2019
Premium Brands Holdings — Shareholder Meeting (May 2019) on 6ix