Premium Brands Holdings Corporation · TSX:PBH
Premium Brands — Q4 2021 Earnings Presentation
34 slides from Premium Brands's earnings presentation, Mar 10, 2022
Slide 1: Fourth Quarter 2021 Conference Call
Fourth Quarter 2021 Conference Call March 10, 2022
Slide 2: Disclaimer
Disclaimer This presentation is not intended to form the basis of any investment decision and should not be considered as a recommendation by Premium Brands Holdings Corporation (the “Company”) or any other person in relation to the Company’s business or the securities of the Company. This presentat
Slide 3: Forward Looking Statements
Forward Looking Statements This presentation contains forward looking statements with respect to the Company, including, without limitation, statements regarding its business operations, strategy and financial performance and condition, proposed acquisitions, capital projects and plans, outlook and
Slide 4: Today's Presenters
Today’s Presenters • George Paleologou President & Chief Executive Officer • Will Kalutycz Chief Financial Officer Extraordinary Times Extraordinary Team 4
Slide 5: Key Messages
Key Messages • Record fourth quarter results despite acute commodity inflation, labor shortages, supply chain challenges and renewed Omicron-related restrictions • Selling price increases of $111 million in the quarter ($125.1 million on a full quarter basis) with more being put through in the first
Slide 6: Sandwich
SANDWICH Extraordinary Times Extraordinary Team 6
Slide 7: Seafood
SEAFOOD Extraordinary Times Extraordinary Team 7
Slide 8: Protein
PROTEIN Extraordinary Times Extraordinary Team 8
Slide 9: Bakery
BAKERY Extraordinary Times Extraordinary Team 9
Slide 10: Acquisition Opportunities
Acquisition Opportunities (millions of dollars except transactions) Platform Advanced Active Early Stage Opportunity Inactive Total # Sales # Sales # Sales # Sales # Sales # Sales Seafood - - 3 990 9 493 4 204 5 389 21 2,076 Distribution - - 4 263 4 1,055 1 879 4 63 13 2,260 Protein 1 88 3 152 12 1,
Slide 11: Q4-2021 Financial Update
Q4-2021 Financial Update Extraordinary Times Extraordinary Team 11
Slide 12: Quarter Sales Performance
Quarter Sales Performance (millions of dollars except percentages) 1,600.0 Long-term targeted organic 50.0% volume growth rate (4% - 6%) 1,345.4 45.0% 1,400.0 Positive factors 40.0% • Acquisitions – $119.3m 1,200.0 1,056.2 35.0% • Selling price inflation – $111.3m 959.1 1,000.0 • Organic volume grow
Slide 13: Growth Rates
Growth Rates Organic Volume Growth Rate 20.0% Factors impacting the Company’s Q4-2021 pandemic adjusted OVGR: 16.0% • Supply chain and labor related disruptions – 12.0% estimated lost sales of ~$39.5m 8.0% • Less retail featuring of branded protein products by 4.0% the Company’s Canadian protein bus
Slide 14: Major Organic Growth Drivers
Major Organic Growth Drivers Seafood Distribution Protein Sandwich Bakery Culinary Processed lobster and crab Increased retail featuring Branded meat snack sticks Leveraging IP and North Branded naturally fermented Product solution provider for initiatives in foodservice and Geographical expansion o
Slide 15: COVID Sales Impact
COVID Sales Impact (millions of dollars) Premium Food Distribution 20.0 - (9.0) (20.0) (12.2) (13.3) PBH Consolidated $ (23.7) (28.2) (31.5) 20.0 (40.0) 6.6 - (42.8) (46.7) (20.0) (60.0) (21.5) (40.0) (33.6) (32.8) (39.2) (47.9) (80.0) (60.0) (52.8) Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 $
Slide 16: Weekly Sales Trend
Weekly Sales Trend 120,000 100,000 80,000 $000's 60,000 40,000 20,000 - 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 Week # 2019 PBH Total 2020 PBH Total 2021 PBH Total 2022 PBH Total Extraordinary Times Extraordinary Team 16
Slide 17: Revenue Trend
Revenue Trend (millions of dollars except percentages) 2010 to 2021 CAGR is 22.4% 70.0% 6,000.0 Long-term targeted growth 5,725.0 rate (6% - 8%) Midpoint of 2022 guidance of $5,600m to $5,850m 60.0% 4,931.7 5,000.0 50.0% 4,068.9 4,000.0 3,649.4 40.0% 3,025.8 3,000.0 30.0% 2,198.3 2,000.0 1,857.5 1,4
Slide 18: Quarter EBITDA Performance
Quarter EBITDA Performance (millions of dollars except percentages) Positive factors • Selling price inflation 160.0 12.0% • Acquisitions 140.0 Reflects IFRS-16 11.0% • Organic sales growth • Incentive based compensation 120.0 113.4 10.0% • Production efficiency improvements 100.0 9.0% • Other 87.7
Slide 19: Quarter Normalized Sales and EBITDA
Quarter Normalized Sales and EBITDA (millions of dollars except percentages and per share amounts) Supply Ongoing Ongoing Selling Price Chain and Q4-2021 COVID COVID Direct Q4-2021N Delays Labor Sales Impact Costs Disruptions Sales: PFD 566.0 13.3 - - 10.1 589.4 SF 779.5 8.2 - 14.1 29.4 831.2 Total
Slide 20: EBITDA Trend
EBITDA Trend (millions of dollars except percentages) 2010 to 2021 TTM CAGR is 23.6% (Pre IFRS-16: 22.2%) 600.0 Reflects IFRS-16 12.0% 520.0 Midpoint of 2022 guidance 11.0% 500.0 of $510m to $530m 430.7 10.0% 400.0 9.0% 307.7 312.6 300.0 280.2 8.0% 190.2 7.0% 200.0 154.8 111.6 6.0% 100.0 66.8 69.3 7
Slide 21: Commodity Trends – Beef
Commodity Trends – Beef Beef Index Chart Demand factors • Significant upward shift in 18.0 consumer demand curve 16.0 • Record exports from the US to China 14.0 Supply factors USD 12.0 Based • Labor shortages – 10.0 particularly impacting value- Index Per lbs 8.0 added inputs • Contracting herds due
Slide 22: Commodity Trends – Pork
Commodity Trends – Pork Pork Index Chart Demand factors 9.0 • Significant upward shift in 8.0 consumer demand curve • Substitution resulting from 7.0 record beef and chicken 6.0 prices USD 5.0 Supply factors Based 4.0 • Labor shortages – Index particularly impacting value- Per lbs 3.0 added inputs 2
Slide 23: Commodity Trends – Chicken
Commodity Trends – Chicken Chicken Index Chart $3.05 Demand • Significant upward shift in consumer demand curve $2.45 • New QSR offerings USD Based • Substitution resulting from Index record beef prices Per lbs $1.85 Supply • Labor shortages – particularly impacting $1.25 value-added inputs • US ind
Slide 24: Commodity Trends – Lobster
Commodity Trends – Lobster Lobster Index Chart Demand factors • Significant upward shift in 40.0 consumer demand curve • Reduced retail featuring of 35.0 live lobster – price related 30.0 • Growing demand for processed lobster products in retail and foodservice 25.0 channels USD 20.0 • Substitution
Slide 25: Commodity Trends – Salmon
Commodity Trends – Salmon Salmon Index Chart 10.0 9.0 Demand factors • Reopening of economies 8.0 • General consumer trends CAD 7.0 Based Supply factors Index 6.0 • Supply chain disruptions Per lbs 5.0 • BC floods • West coast farm 4.0 shutdowns 3.0 • Industry consolidation 2.0 week 13 week 26 week
Slide 26: Quarter Adjusted Earning Performance
Quarter Adjusted Earning Performance (millions of dollars except per share amounts and percentages) Major positive factors: • EBITDA growth • Interest Major negative factors: Reflects IFRS-16 60.0 $1.50 • Income taxes 52.2 $1.40 50.0 • Depreciation and amortization $1.30 40.0 $1.20 Adjusted earnings
Slide 27: Adjusted Earnings and EPS
Adjusted Earnings and EPS (millions of dollars except per share amounts) 300.0 $5.00 Reflects IFRS-16 $4.50 250.0 $4.00 2010 to 2021 CAGR is 25.2% 194.8 $3.50 200.0 $3.00 150.0 $2.50 117.6 118.4 118.5 $2.00 99.2 100.0 80.5 $1.50 53.2 $1.00 50.0 24.5 24.9 26.6 19.6 $0.50 - $- 2011 2012 2013 2014 2015
Slide 28: Five Year (2023) Sales Target
Five Year (2023) Sales Target (millions of dollars except percentages) Sales Notes Fiscal 2021 4,931.7 Fiscal 2021 ongoing pandemic impact 141.4 Includes Starboard, Clearwater, Confederation Freezers, Distribution Côte- Annualization of acquisitions completed in 2021 and 2022 391.6 Nord, Mermax, Mai
Slide 29: Five Year (2023) Adjusted EBITDA Target
Five Year (2023) Adjusted EBITDA Target (millions of dollars except percentages) % of EBITDA Sales Notes Impact Fiscal 2021 430.7 8.7% Fiscal 2021 pandemic impact 29.1 22.2% Includes Starboard, Confederation Freezers, Distribution Côte-Nord, Annualization of acquisitions completed in 2021 and 30.4 7
Slide 30: Liquidity
Liquidity (millions of dollars except ratios) 1,020.0 5.5 Q4-2021: 920.0 5.0 • Redemption of $113.0m in Top end of targeted total debt to EBITDA 4.60% debentures – 820.0 ratio 4.5 $105.0m was converted at $107.25 per share 720.0 4.0 Q3-2021: Top end of targeted • Renegotiated terms on 620.0 senior d
Slide 31: 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 2019 2020 2021 2022P 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% 43.1% 48.7% 42.3% Dividend per share $1.18 $
Slide 32: Capital Allocations
Capital Allocations (in millions of dollars except percentages) Investment Investment Investment Capital Group Expected IRR Q4 2021 To-Date Allocation Acquired 50% interest in Clearwater Seafood Acquired Starboard Seafood Acquired Mermax Seafood Acquired Westmorland Seafood 210.6 713.9 713.9 713.9 A
Slide 33: Capital Allocations
Capital Allocations (in millions of dollars except percentages) Investment Group Capital Allocation Expected IRR Subsequent to the Quarter Acquired Leonetti's Protein Acquired Beechgrove Protein $50.2 15% or greater Increased interest in Shaw Bakers from 50% to 73.72% Bakery Acquired Rocky Mountain
Slide 34: Questions
Questions Extraordinary Times Extraordinary Team 34
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