Slide 1: Investor Presentation December 2020
Investor Presentation December 2020 Great People and Great Culture – Our Points of Difference 1
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. This presentation is not, and nothing in it sho
Slide 3: Forward Looking Statements
Forward Looking Statements This presentation contains forward looking statements with respect to the Company, including its business operations, strategy and financial performance and condition, proposed acquisitions and plans and objectives of or involving the Company. While management believes tha
Slide 4: Premium Brands
Premium Brands To provide talented proven entrepreneurs with the resources they need to transform their good food businesses into bigger great food businesses ENTREPRENEURSHIP with ACCOUNTABILITY Great People and Great Culture – Our Points of Difference 4
Slide 5: Core Business Strategies
Core Business Strategies • Specialty / authentic / differentiated products and services Targeted segments of the food industry • Leading regional brands • Emerging trends • Dedicated to maintaining an entrepreneurial environment Unique culture • Decentralized / flat organizational structure • Suppor
Slide 6: Company Profile
Company Profile 2004 Current Revenue $0.2 billion $4.0 billion (1) EBITDA $14.1 million $300.0 million (1) Business platforms 2 6 Geographic reach Western Canada North America Operating facilities 8 66 Employees 900 Approx. 9,000 Free cash flow per share $0.78 $4.73 (1) Annualized dividend rate $ ni
Slide 7: Share Price
Share Price Closing Share Accumulated Date Price Dividends Per Share Dec 31, 2003 $8.60 Nil Dec 7, 2020 $104.04 $21.61 4000.00 6 2003 to Dec 7, 2020 CAGR = 22.7% 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)
Slide 8: 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 Great People and Great Culture – Our Points of Difference 8
Slide 9: Guiding Principles
Guiding Principles Authenticity Giving back to the community Respect for the environment Corporate humility Animal welfare Resilience Great People and Great Culture – Our Points of Difference 9
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Slide 11: Clearwater Investment
Clearwater Investment Great People and Great Culture – Our Points of Difference 11
Slide 12: Transaction Highlights
Transaction Highlights Transaction Highlights Creation of an Industry-Leading Global Seafood Group 1 The combined seafood operations of Clearwater, Premium Brands and the Participating Communities is expected to generate more than $1.3 billion(1) in annual sales, with the majority of Clearwater’s sa
Slide 13: Strategic Rationale
Strategic Rationale Transaction is structured to marry Premium Brands’ long-term objectives of generating stable and growing cash flows and margins with Clearwater’s long-term value creation opportunity ▪ 50% ownership interest in Clearwater ▪ Interest and management fees will result in stable cash
Slide 14: Synergies
Synergies Synergies • Value maximization of products by • Proprietary access by distribution • Strategic long-term relationship leveraging Premium Brands’ businesses to Clearwater’s highly expanding role in, and marketing value-add manufacturing capacity sought-after products of Atlantic fisheries a
Slide 15: Structure Summary
Structure Summary Structure Summary Initial contribution: Initial contribution: • ~$450 MM of • ~$250 MM from subordinated debt purchase of Canadian • Nominal equity seafood licences contribution • Nominal equity contribution 50% 50% • In addition to its 50% equity interest, Premium Brands will have
Slide 16: Crisis Management - COVID-19 Pandemic
Crisis Management - COVID-19 Pandemic Great People and Great Culture – Our Points of Difference 16
Slide 17: Weekly Sales Trend
Weekly Sales Trend 100,000 90,000 80,000 70,000 60,000 $000's 50,000 40,000 30,000 20,000 10,000 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 Week # 2019 PBH Total 2020 PBH Total Great People and Great Cultur
Slide 18: Weekly Commodities Cost Trend
Weekly Commodities Cost Trend Pork Index Chart 7.0 6.0 5.0 4.0 USD Based 3.0 Index Per lbs 2.0 1.0 Beef Index Chart 19.0 17.0 15.0 13.0 11.0 USD Based Index Per lbs 9.0 7.0 5.0 week 13 week 26 week 39 week 52 2020 2019 Great People and Great Culture – Our Points of Difference 18
Slide 19: 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 • Acquisition expertise • Financial and business analysis • Information sharing among businesses: Helping small good spec
Slide 20: Product and Commodity Diversification
Product and Commodity Diversification Specialty Foods (66.2%) Premium Foods Distribution (33.8%) Baked goods, 1.3% Others, 1.1% Commodity % Sales Seafood, 15.0% Beef 21.0% Sandwiches, 20.7% Seafood 13.3% Pork 11.9% Poultry 7.3% Bread 2.9% Protein, 17.1% Freight costs 2.2% Cheese 1.7% Corrugated 1.3%
Slide 21: Channel and Customer Diversification
Channel and Customer Diversification SPECIALTY FOODS (66.2%) PREMIUM FOOD DISTRIBUTION (33.8%) Chains and large Others, 0.7% format retailers, 4.6% Customer % Sales ISR, 7.5% Trading, 3.9% Customer A 13.6% Customer B 12.4% Foodservice Foodservice operators, 12.5% Operators, 18.2% Customer C 6.2% Cus
Slide 22: Geographical Diversification
Geographical Diversification 2019 Region Sales % Sales Canada $2,193.1m 60.1% U.S. $1,380.7m 37.8% Export $75.6m 2.1% $3,649.4m 100.0% Represents regions in which PBH has one or more operating facilities Great People and Great Culture – Our Points of Difference 22
Slide 23: Acquisitions Activity
Acquisitions Activity 2005/6 2007 2008 2009 2010 2011 2013 2014 2015 2016 2017 2018 2019 2020 $35.9m $91.8m $16.7m $3.1m $67.3m $121.8m $63.7m $8.1m $51.9m $244.0m $246.2m $753.0m $118.6m $168.2m Harlan Centen- B&C SJ Fine Maximum Piller’s Freybe Ocean Expresco C&C Raybern Oberto Mavros Inform Fairb
Slide 24: Business Groups
Business Groups Seafood Distribution Protein Sandwich Bakery Culinary • Maximum Seafood • Centennial • Hempler’s • HQ Fine Foods • Stuyver’s • Creekside Foods • Ocean Miracle Foodservice • Isernio’s • Deli Chef • Island City • Duso’s • Diana’s Seafood • Worldsource • Harvest • SK Food Group • Shaw B
Slide 25: Protein Platform
Protein Platform Acquired Oberto Acquired Concord Premium Meats Acquired Country Prime Meats Invested in Acquired The Acquired McLean’s Second Meat Factory Made-RIte Hempler’s and constructed Acquired plant Acquired Acquired Acquired new plant Acquired Freybe expansion Belmont Yorkshire Acquired Inv
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Slide 27: New Charcuterie, Jerky and Cooked Sausages
NEW CHARCUTERIE NEW WOOD SMOKED JERKY NEW COOKED SAUSAGES Dry Sausage Update Year-to-date growth continues to be strong +59% or +$9.4M. NEW SIGNATURE SNACKS Great People and Great Culture – Our Points of Difference 27
Slide 28: Cattleman's category leading Innovation
Cattleman’s category leading Innovation Flank Steak Old Fashioned 12 oz sticks ➢ Our #1 growth item +$7M ➢ #1 XL stick in the category ➢ 16% distribution ➢ #1 Velocity stick in the category ➢ $8M ytd ➢ $8M ytd $ vol Double Smoked 12 oz 3 oz Stick Line ➢ $1.5M consumption in only 12 ➢ +$1.0M growth i
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Slide 32: Coming Soon! Frozen
Coming Soon! FROZEN FRESH Great People and Great Culture – Our Points of Difference 32
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Slide 34: A Taste of Europe
Introducing A Taste of Europe A Taste of Europe is a premium quality, German-style charcuterie collection that explores the flavours of Europe and is inspired by Freybe’s rich German heritage Great People and Great Culture – Our Points of Difference 34
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Slide 37: 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 sf Select Fast Foods Fine Foods Group Deli Chef
Slide 38: Production of Gen 2
Production of Gen 2 Great People and Great Culture – Our Points of Difference 38
Slide 39: Production of Gen 2
Production of Gen 2 Great People and Great Culture – Our Points of Difference 39
Slide 40: Production of Gen 2
Production of Gen 2 Great People and Great Culture – Our Points of Difference 40
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Slide 42: Seafood Platform
Seafood Platform Setup of new Acadia buying station Construction of new Construction 40,000 sf Acquired of new Saco facility Hub City 105,000 sf Fisheries ON facility Acquired Hancock Gourmet, Acquired Acquired Acquired Acquired L Walker, Acquired Maximum Ocean Diana’s Ready North Delta and Allseas
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Slide 44: Ready Seafood
Ready Seafood New 40,000 square foot Saco, ME facility Great People and Great Culture – Our Points of Difference 44
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Slide 47: Distribution Platform
Distribution Platform Acquired Ravensberg Acquired Acquired Acquired C&C IMS Frandon Packing SeafoodAcquired Acquired Expanded Centennial Mavros Acquired Acquired Multi- Centennial Acquired Acquired enters Acquired Acquired Harlan Acquired B&C Food National Acquired Calgary Reddi Premier Ontario Pen
Slide 48: Frandon Seafoods
Frandon Seafoods New 45,000 square foot Montreal, QC facility Great People and Great Culture – Our Points of Difference 48
Slide 49: Centennial Food Group
Centennial Food Group New 105,000 square foot Richmond Hill, ON facility Great People and Great Culture – Our Points of Difference 49
Slide 50: Viandex
Viandex 65,000 square foot Quebec City, QC facility Great People and Great Culture – Our Points of Difference 50
Slide 51: Bakery and Culinary Platforms
Bakery and Culinary Platforms Acquired Island City Acquired Baking Mrs. Willman’s Acquired Baking Acquired Partners Constructed Conte Foods Crackers Merged Creekside Stuyver’s new operations state-of-the-art Acquired Acquired Acquired Acquired Acquired Acquired Mrs. Willman’s Acquired artisan Gourme
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Slide 54: Financial Overview
Financial Overview Great People and Great Culture – Our Points of Difference 54
Slide 55: Revenue Trend
Revenue Trend (millions of dollars except percentages) 2010 to 2020TTM CAGR is 22.8% 4,500.0 70.0% 4,134.2 3,971.8 4,000.0 3,649.4 60.0% Long-term targeted growth rate (6% - 8%) 3,500.0 Previous revenue guidance of $3,975m to $4,075m 3,025.8 50.0% 3,000.0 40.0% 2,500.0 2,198.3 2,000.0 1,857.5 30.0%
Slide 56: EBITDA Trend
EBITDA Trend (millions of dollars except percentages) 2010 to 2020TTM CAGR is 22.3% (Pre IFRS-16: 20.6%) 400.0 12.0% 354.9 350.0 11.0% 307.7 300.0 300.0 280.2 10.0% Previous 2020 post ASF EBITDA guidance of $320m to $345m 250.0 9.0% 190.2 200.0 8.0% 154.8 150.0 7.0% 111.6 100.0 77.6 6.0% 66.8 69.3 5
Slide 57: Adjusted Earnings and EPS
Adjusted Earnings and EPS (millions of dollars except per share amounts) 2010 to 2020TTM CAGR is 22.3% (2020TTM-N is 26.1%) 180.0 $4.50 160.0 156.9 $4.00 2019 has been adjusted to exclude the impact of IFRS-16 140.0 $3.50 121.4 122.5 120.0 116.5 $3.00 99.2 100.0 $2.50 80.0 80.5 $2.00 60.0 $1.50 53.2
Slide 58: Growth Drivers
Growth Drivers • Focus on current and developing consumer trends • Differentiation • Premium quality – organic, natural, cleaner ingredients, ABF • Convenience • Better for you – shift from carbohydrates to protein • Local Organic • Authenticity • Social awareness • Dynamic entrepreneurial managemen
Slide 59: 2021 Significant Opportunities
2021 Significant Opportunities Major Growth Initiatives Seafood Distribution Protein Sandwich Bakery Culinary • Ready lobster • Frandon capacity • US meat snack sticks • Leveraging IP and • Entry into the US • Gourmet Chef procurement expansion • Italian charcuterie in North American market synergie
Slide 60: Building Momentum
Building Momentum Organic Growth Rate 18.0% Total Sales 16.0% 14.0% Q3-2020 $1,101.1 million 12.0% Q3-2019 $968.3 million 10.0% Quarterly Organic 8.0% Rate 6.0% 4.0% 2.0% 0.0% Q1-2019 Q2-2019 Q3-2019 Q4-2019 Q1-2020 Q2-2020 Q3-2020 PBH Total Normalized for Covid impact Great People and Great Culture
Slide 61: Margin Drivers
Margin Drivers Recent Infrastructure Investments Primary Margin Drivers • Saco Facility • Sales deleveraging • GTA facility • Sales mix – value add activities Seafood • L Walker facility • Production efficiency investments • Acadia buying station • Acquisition synergies • Sales and distribution • Fr
Slide 62: Acquisitions
Acquisitions • Targeted segments of the food industry PB acquisitions • Proven entrepreneurs with long-term outlook • Targeted minimum 15% IRR before leverage and after tax • Driven by management teams and includes bolt-on, turn around and consolidation transactions Business acquisitions • Supported
Slide 63: Acquisition Pipeline
Acquisition Pipeline (millions of dollars except transactions) Status # of Transactions Sales Advanced 9 342 Active 10 1,115 Early stages 26 4,930 Opportunity 13 3,350 Inactive 28 2,798 86 12,535 Great People and Great Culture – Our Points of Difference 63
Slide 64: 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 65: 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 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% Dividend per share $1.18 $1.18 $1.18 $1.18 $1.18
Slide 66: Investments
Investments (millions of dollars except percentages) • Investments include acquisitions and project capex • The minimum hurdle rate for acquisitions and project Capex is a 15% IRR after tax and before leverage 900.0 19.0% 809.6 800.0 18.0% 700.0 17.0% 600.0 16.0% 500.0 15.0% 400.0 14.0% 304.1 300.0
Slide 67: Investments
Investments (millions of dollars except FCF per share) $/share 6.00 900.0 809.6 800.0 5.00 700.0 4.00 600.0 500.0 3.00 400.0 304.1 2.00 275.1 300.0 175.6 200.0 145.2 1.00 70.7 87.7 70.0 77.7 100.0 32.6 0.00 0.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Investments (RHS) FCF per share (LHS) G
Slide 68: Liquidity
Liquidity (millions of dollars except ratios) 820.0 5.5 Top end of targeted total debt to EBITDA ratio 5.0 720.0 4.5 620.0 4.0 520.0 Top end of targeted senior debt to EBITDA ratio 3.5 420.0 3.0 2.5 320.0 2.0 220.0 1.5 120.0 1.0 20.0 0.5 Available Credit ($millions) (LHS) Total Debt to EBITDA (RHS)
Slide 69: Convertible Debentures
Convertible Debentures (millions of dollars except percentages and unit prices) Trading Maturity Convert O/S Coupon Issuance Converted Symbol Date Price Balance PBH.DB Dec 2014 7.00% 14.50 40.3 39.2 - Debenture Details PBH.DB.A Dec 2015 5.75% 22.40 57.5 56.3 - • No principal payments until maturity
Slide 70: Convertible Debentures
Convertible Debentures (millions of dollars) $900 $804 million raised through the issuance $800 of convertible debentures Estimated anti-dilutive impact of convertible debenture based equity strategy is almost $700 $19 per share $600 $356 million in equity has been raised $500 from the conversion of
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