High Liner Foods Incorporated · TSX:HLF
High Liner Foods — RBC Capital Markets Consolidators Conference 2016
24 slides from High Liner Foods's conference presentation, Mar 29, 2016
Slide 1: Investor Presentation – RBC Capital Markets Consolidators Conference
INVESTOR PRESENTATION – RBC CAPITAL MARKETS CONSOLIDATORS CONFERENCE KEITH DECKER, PRESIDENT & CEO HEATHER KEELER-HURSHMAN, DIRECTOR, IR March 29, 2016 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: TSX Listings Data
COMPANY OVERVIEW TSX LISTINGS DATA TSX symbol1 HLF Recent price2 CAD$15.00 52-week range2 CAD$10.10 - $25.20 Shares outstanding ~30.87M Total market cap2 ~CAD$463M 1 Public company since the 1960’s; listed on TSX in 1971 2 Source: TSX March 23, 2016 closing price Annual dividend3 CAD$0.48 per share
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 21% 27% 34% 37% 63% 66% 73% 79% USA (incl. Mexico) HLF Brands Other Foodservice Retail Value-added Other Canada * The charts above reflect the Company’s business profile based on 2015 sales • The North American leader in valu
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) Capacity p.a.: 50M lbs Utilization: 65% • Continuous assessment of Portsmouth, NH (U.S.) manufacturing capabilities vs. current and future requirements to ensure low- Capacity p.a.: 84M lbs New Bedford, MA (U.S.) Utilization: 71% cost and
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: Performance
HIGH LINER FOODS
Slide 14: Fiscal 2015 Highlights
PERFORMANCE FISCAL 2015 HIGHLIGHTS Strategic: • Significant progress made on supply chain optimization initiatives focused on improved efficiency and cost savings at both the plant and entity level ($6M+ savings realized in 2015 related to these initiatives) • Organic growth challenges due to a numb
Slide 15: 2016 Strategic Goals
PERFORMANCE 2016 STRATEGIC GOALS 2016 strategic goals set a strategic direction consistent with the prior year, which is to grow our business, operate it as efficiently as possible and ensure that we have the right talent: 1. Organic sales growth • Growing our base business is the primary focus in 2
Slide 16: Sales History
PERFORMANCE SALES HISTORY $1,200 $1.0B $1,000 USD millions $800 $600 $400 $200 $- 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 © 2015 High Liner Foods – CONFIDENTIAL 16
Slide 17: EBITDA History
PERFORMANCE EBITDA HISTORY $100 $90 $78.2M $80 $70 USD millions $60 $50 $40 $30 $20 $10 $- 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Standardized EBITDA: Earnings before interest, taxes, depreciation and amortization as reported in the Company’s annual audited financial statements Adjusted E
Slide 18: Diluted EPS and ROE History
PERFORMANCE DILUTED EPS AND ROE HISTORY $1.75 30% $1.50 25% Diluted Earnings per Share $1.14 $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 2015 Diluted EPS Adjusted Diluted EPS Return on Equity Diluted EPS is net income as reporte
Slide 19: Dividend History
PERFORMANCE DIVIDEND HISTORY $0.50 $0.465 Annual Dividend paid per Share ($CAD) $0.45 $0.40 $0.35 12-year CAGR (2003 to 2015): 28% $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 © 2015 High Liner Foods – CONFIDENTIAL 19
Slide 20: Debt Leverage Ratio
PERFORMANCE DEBT LEVERAGE RATIO Net interest-bearing debt / rolling 12 month Adjusted EBITDA 5.0x 4.4x 4.4x 3.9x 4.0x 4.0x 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 Sep 28/14 Jan 3/15 Jan 2/16 Target Pro forma Pre-American Pre-Atlantic Icelandic Pride Trading Ac
Slide 21: 2015 Sales (USD Millions)
PERFORMANCE 2015 SALES (USD MILLIONS) $1,200 $1,051.6 $1,001.5 • The estimated benefit associated with an $1,000 additional week of sales in Fiscal 2014 was $20M (5.5M lbs) $800 • Sales in domestic currency were $1,073.8M in 2015 and $1,083.5M in $600 2014 • Weaker CAD decreased reported USD $400 sa
Slide 22: 2015 EBITDA (USD Millions)
PERFORMANCE 2015 EBITDA (USD MILLIONS) $90 $83.3 $78.2 • The estimated benefit associated with an $80 additional week of sales in Fiscal 2014 was $1.6M of Adjusted EBITDA $70 • Adjusted EBITDA in domestic currency $60 was $83.9M in 2015 (7.8% of sales) and $85.4M in 2014 (7.9% of sales) $50 • Lower
Slide 23: 2015 Diluted EPS (USD)
PERFORMANCE 2015 DILUTED EPS (USD) $1.40 $1.24 $1.20 $1.14 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 2014 2015 Diluted EPS Adjusted Diluted EPS © 2015 High Liner Foods – CONFIDENTIAL 23
Slide 24: High Liner Foods
_2B HIGH LINER FOODS
High Liner Foods — RBC Capital Markets Consolidators Conference 2016 on 6ix