Slide 1: Investor Presentation
Investor Presentation March 30, 2021
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: Today's Presenters
Today’s Presenters • George Paleologou President & Chief Executive Officer • Will Kalutycz Chief Financial Officer Great People and Great Culture – Our Points of Difference 4
Slide 5: 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 5
Slide 6: 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 7: Company Profile
Company Profile 2004 Current Revenue $0.2 billion $4.1 billion EBITDA $14.1 million $312.6 million Business platforms 2 6 Geographic reach Western Canada North America Operating facilities 8 98 Employees 900 11,000 Free cash flow per share $0.78 $4.87 Annualized dividend rate $ nil $2.54 / share Cum
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: 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 10: Product and Commodity Diversification
Product and Commodity Diversification Specialty Foods (65.6%) Premium Foods Distribution (34.4%) Others, 1.6% Baked goods, 1.2% Commodity % Sales Seafood, 15.2% Beef 21.5% Sandwiches, Seafood 17.7% 19.3% Pork 13.4% Poultry 5.2% Protein, 18.5% Bread 2.6% Eggs 2.4% Turkey 2.3% Freight costs 2.3% Chees
Slide 11: Channel and Customer Diversification
Channel and Customer Diversification Specialty Foods (65.6%) Premium Food Distribution (34.4%) Customer % Sales Others, 2.6% Chains and large Independent and Specialty Retailers, format retailers, 9.3% Customer A 14.0% 5.7% Trading, 3.0% Customer B 13.1% Foodservice Foodservice Customer C 6.9% opera
Slide 12: Geographical Diversification
Geographical Diversification 2020 Region Sales % Sales Canada $2,366.9m 58.2% U.S. $1,601.5m 39.4% Export $100.5m 2.4% $4,068.9m 100.0% Represents regions in which PBH has one or more operating facilities Great People and Great Culture – Our Points of Difference 12
Slide 13: Acquisitions Activity
Acquisitions Activity 2005/6 2007 2008 2009 2010 2011 2013 2014 2015 2016 2017 2018 2019 2020 2021 $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 $489.2m Harlan Centennial B&C Foods SJ Fine Maximum Piller’s Freybe Ocean Expresco C&C Raybern Ober
Slide 14: 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 • Conte
Slide 15: Seafood Platform
Seafood Platform Setup of new Acadia buying station Construction of new Construction 40,000 Sf of new Saco facility 105,000 sf Acquired ON facility Acquired Acquired Maximum Hancock Gourmet, Starboard Seafood and Acquired Acquired Acquired L Walker, Acquired Seafood and Hub City Ocean Diana’s Ready
Slide 16: Seafood Platform
Seafood Platform Historic transaction with Mi’kmaq First Nations to acquire Clearwater Seafoods – closed in Jan 2021 Transformational transaction Combined Seafood Platform annual sales run rate of $1.2 billion LICENSES HARVESTING PROCESSING VALUE-ADD DISTRIBUTION RETAIL Great People and Great Cultur
Slide 17: Seafood Platform
Seafood Platform Allseas Fisheries acquisition closed in November 2020 Starboard Seafood acquisition closed in February 2021 Hosted two-day virtual Seafood Summit in February 2021 Great People and Great Culture – Our Points of Difference 17
Slide 18: Seafood Platform
Seafood Platform Priority Initiatives 1. Leverage PB distribution businesses 2. Develop new branded packaging formats for North American retail and club 3. Develop new value-added opportunities 4. Leverage operational synergies Great People and Great Culture – Our Points of Difference 18
Slide 19: Protein Platform
Protein Platform Acquired Oberto Acquired Concord Premium Meats Acquired Country Prime Meats Acquired Grimm’s Invested in Acquired The Fine Acquired McLean’s Second Meat Factory Foods Made-RIte Hempler’s and constructed Acquired plant Acquired Acquired Acquired new plant Acquired Freybe expansion Be
Slide 20: Protein Platform
Protein Platform Great progress in growing and diversifying sales of US Protein Platform Meat stick sales up 45% for the year and projected to grow to US$100 million in 2021 Operational and business improvement initiatives remain on target Great People and Great Culture – Our Points of Difference 20
Slide 21: Great People and Great Culture – Our Points of Difference
Great People and Great Culture – Our Points of Difference 21
Slide 22: 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 22
Slide 23: Sandwich Platform
Sandwich Platform Acquired Buddy’s Rationalized Quality Acquired and Hygaard Raybern;s plants Constructed Acquired Acquired Acquired Acquired Constructed Constructed new 212,000 sf Acquired Installation Installation Quality Hygaard SK Food Les Aliments new Deli Chef new 180,000 sf sandwich Select of
Slide 24: Sandwich Platform
Sandwich Platform Record 2020 sales despite Q2 COVID-19 related challenges Continued investment in technology and automation – two new Gen-3 lines on order Charcuterie and panino assembly investments gaining traction Investing in single serve meals capacity Plant-based breakfast sandwich sales movin
Slide 25: Bakery Platform
Bakery Platform Acquired Island City baking Invested in Acquired Partners Constructed Conte Foods Crackers 42,000 sf Stuyver’s new expansion of state-of-the-art Acquired Invested in Stuyver’s Acquired artisan Larosa Fine Shaw artisan Stuyver’s bakery Foods Bakers bakery 2007 2012 2016 2017 2021 Grea
Slide 26: Great People and Great Culture – Our Points of Difference
Great People and Great Culture – Our Points of Difference 26
Slide 27: Great People and Great Culture – Our Points of Difference
Great People and Great Culture – Our Points of Difference 27
Slide 28: Culinary Platform
Culinary Platform Acquired Mrs. Willman’s Baking Merged Creekside operations Acquired Acquired Acquired Mrs. Willman’s Acquired Gourmet Global Gourmet Creekside facility Duso’s Chef Foods 2006 2008 2010 2013 2020 Great People and Great Culture – Our Points of Difference 28
Slide 29: 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 30: Acquisition Opportunities
Acquisition Opportunities (millions of dollars except transactions) Platform Advanced Active Early Stage Opportunity Inactive Total # Sales # Sales # Sales # Sales # Sales # Sales Seafood 1 130 3 101 5 1,206 - - 8 659 17 2,096 Distribution 4 85 5 243 4 1,070 1 941 3 65 17 2,404 Protein 1 121 - - 11
Slide 31: ESG Update
ESG Update Food People Environment Governance Great People and Great Culture – Our Points of Difference 31
Slide 32: Financial Update
Financial Update Great People and Great Culture – Our Points of Difference 32
Slide 33: Quarter Revenue Performance
Quarter Revenue Performance (millions of dollars except percentages) 1,400.0 70.0% Long-term targeted Major positive drivers: 1,200.0 growth rate (6% - 8%) 60.0% 1,109.0 • Acquisitions driven mainly by 1,056.2 Allseas and Global Gourmet 959.1 1,000.0 50.0% • Meat snacks, dry cured and 843.9 cooked m
Slide 34: Revenue Trend
Revenue Trend (millions of dollars except percentages) 2010 to 2020 CAGR is 22.5% 4,500.0 4,281.1 70.0% 4,068.9 4,000.0 3,649.4 60.0% 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 Long-term targeted 2,198.3 growth rate (6% - 8%) 2,000.0 1,857.5 30.0% 1,4
Slide 35: Growth Rates
Growth Rates Organic Volume Growth Rate 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% Q1-2019 Q2-2019 Q3-2019 Q4-2019 Q1-2020 Q2-2020 Q3-2020 Q4-2020 PBH Total Normalized for Covid impact Great People and Great Culture – Our Points of Difference 35
Slide 36: 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 37: 2021 Significant Opportunities
2021 Significant Opportunities 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 synergies initiatives • Viandex p
Slide 38: Quarter EBITDA Performance
Quarter EBITDA Performance (millions of dollars except percentages) Major positive drivers: • Organic sales growth 120.0 12.0% • Production efficiency improvements 95.4 11.0% • Selling price inflation net of 100.0 87.7 commodity cost inflation 10.0% 75.1 • Acquisitions 80.0 71.0 9.0% • COVID non-sal
Slide 39: EBITDA Trend
EBITDA Trend (millions of dollars except percentages) 2010 to 2020 CAGR is 22.2% (Pre IFRS-16: 20.5%) 400.0 12.0% 363.1 11.0% 312.6 307.7 300.0 10.0% 280.2 Previous 2020 EBITDA guidance (including 9.0% ASF impact) of $320m to $345m ($335m to $360m excluding ASF impact) 190.2 200.0 8.0% 154.8 7.0% 11
Slide 40: 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 41: Quarter Adjusted Earnings Performance
Quarter Adjusted Earnings Performance (millions of dollars except per share amounts and percentages) Major factors: • EBITDA growth • Increased depreciation driven by recent capex and acquisitions 50.0 $1.50 • Increased income taxes 45.0 42.1 $1.40 • COVID-19 40.0 36.4 $1.30 Other considerations: 35
Slide 42: Adjusted Earnings Trend
Adjusted Earnings Trend (millions of dollars except per share amounts) 2010 to 2020 CAGR is 22.3% (2020N is 26.0%) 180.0 164.6 $5.00 160.0 140.0 121.4 122.5 122.7 $4.00 120.0 99.2 100.0 $3.00 80.0 80.5 $2.00 60.0 53.2 40.0 26.6 $1.00 24.5 24.9 20.0 19.6 - $- 2011 2012 2013 2014 2015 2016 2017 2018 2
Slide 43: Capital Allocations
Capital Allocations (in millions of dollars) Capital Q4-2020 Group Expected IRR Allocation Investment During the Quarter Acquired Allseas Seafood 61.2 61.2 Piller’s Brantford expansion Protein 19.1 1.0 Harvest Yorkton meat snack capacity expansion Protein 5.1 0.5 Concord Montreal cooking (oven) line
Slide 44: RONA
RONA (millions of dollars except percentages) 300.0 24.0% 250.0 19.0% 200.0 150.0 14.0% 100.0 9.0% 50.0 - 4.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Free Cash Flow (LHS) RONA (RHS) WACC 11.0% Targeted RONA 15% Avg RONA Great People and Great Culture – Our Points of Difference 44
Slide 45: Normalized RONA
Normalized RONA (millions of dollars except percentages) Capital COVID-19 Projects 2020 2020N Impact Under Construction Average net assets 2,403.8 - (15.3) 2,388.5 Free cash flow EBITDA adjusted for IFRS-16 lease payments 271.9 50.5 - 322.4 Maintenance capex (27.1) - - (27.1) Free cash flow 244.8 50
Slide 46: Liquidity
Liquidity (millions of dollars except ratios) Q1-2021: • Increased senior credit facility by $200m to $1.2b • Pro-forma recent 1,020.0 5.5 acquisitions, senior Targeted total debt to EBITDA and 920.0 debt to EBITDA 5.0 available credit are ratio range 1.9:1 and $600m, respectively 820.0 4.5 Q4-2020:
Slide 47: 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 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% Dividend per share $1.18 $1.18 $1.18 $
Slide 48: 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 49: 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 $18 per share $600 $356 million in equity has been raised $500 from the conversion of
Slide 50: Questions
Questions Great People and Great Culture – Our Points of Difference 50