Investor Presentation March 2014 Henry Demone, CEO Paul Jewer, CFO Keith Decker, COO
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 events may differ materially from those predicted. Certain material factors or assumptions were applied in drawing the conclusions as reflected in the forward-looking information. Additional information about these material factors or assumptions is contained in High Liner's annual MD&A and is available on SEDAR (www.sedar.com). 2
Presentation Currencies CAD presentation: • High Liner Foods is traded on the Toronto Stock Exchange and references to stock price, dividends and market cap are presented in CAD USD presentation: • Beginning with the 2012 annual report, the Company began to present its financial statements in USD • 2010, 2011 and 2012 are fully converted and restated under IFRS rules to USD • Previous years Canadian GAAP statements are converted from CAD at the annual period-end and average USD/CAD exchange rates and remain under Canadian GAAP 3
Company Overview 4
TSX Listings Data TSX symbol 1 HLF Recent price 2 $48.50 52-week range 2 $29.70 - $49.80 Shares outstanding ~15.3M Total market cap ~$742M Quarterly dividend 3 $0.19 Current yield 3 ~1.6% HLF Three Year Share Price History 2 1 Public company since the 1960’s; listed on the TSX in 1971 2 Source: TSX March 14 th , 2014 3 Effective February 19 th , 2014 5
High Liner Foods Corporate History 1945 1999 2013 1899 2011 1986 2007 National Name 2010 American WC Smith Icelandic Sea Fisher Boy change to FPI Viking Pride founded USA acquisition Products acquisition High Liner acquisition 1 Seafoods (salt fish) acquisition 2 created Foods acquisition 3 2003/04 1926 1982 1992 2014 High Liner High Liner Commodore Northern Today’s sells its brand private label Cod High Liner fishing created acquisition moratorium Foods assets 1 Acquired FPI’s North American marketing and manufacturing businesses 2 In 2005, Icelandic and Samband of Iceland merged 3 Acquired on October 1 st , 2013 (see Slide 22) 6
Business Profile Product Form Branded 26% 39% 61% 74% Value-added Other HFL Brands Other * The charts above reflect the Company’s business profile on a proforma basis after its acquisition of American Pride Seafoods on October 1 st , 2013 (see Slide 22) We are the North American leader in value-added frozen seafood 7
Business Profile (cont’d) Geography Retail / Food Service 30% 31% 70% 69% USA (incl. Mexico) Food Service Retail Canada * The charts above reflect the Company’s business profile on a proforma basis after its acquisition of American Pride Seafoods on October 1 st , 2013 (see Slide 22) Vision: To be the leading frozen seafood supplier in North America 8
Our Business Model Broadest market reach in industry Market leading brands Diversified global procurement Frozen food logistics expertise Innovative product development 9
Food Service Business Overview Leading foodservice brands • High Liner , FPI , Icelandic Seafood , Viking , America Pride Seafood Strengths • Cover all segments: chain restaurants, food service distributors, healthcare and education • Diverse product line • Private label • Dominant supplier position • Leading innovation Examples of key customers • Food distributors: Sysco, US Foods, GFS, Reinhart, PFG • Restaurant chains: Arby’s, Carl’s JR, Long John Silver’s, MacDonald’s • Other: Nestle, Omaha Steaks, Schwann’s 10
Retail Business Overview Leading retail brands • High Liner , Sea Cuisine , Fisher Boy Strengths • Sell to all retailers • Sell to multiple areas of the store • Recognized brands • Private label • Leading innovation Examples of key customers • Grocery: Walmart, Target, Whole Foods, Safeway, Kroger, Sobey’s, Loblaw • Club: Costco, Sam’s, BJ’s 11
Rationalized Production Capacity • As part of the American Pride Seafoods acquisition on October 1 st , 2013, we acquired a plant in New Bedford, MA, bring our plant count to five • In late 2012/early 2013 we reduced our manufacturing footprint from six plants to four with the closure of our plants in Burin, NL (Nov 2012) and Danvers, MA (Jan 2013) Portsmouth, NH (USA) Lunenburg, NS (Canada) Capacity p.a.: 80m lbs Capacity p.a.: 40m lbs Utilization: 83% Utilization: 81% Newport News, VA (USA) Capacity p.a.: 90m lbs New Bedford, MA (USA) Utilization: 77% Value-added Scallop Processing Capacity p.a.: 87m lbs Capacity p.a.: 12m lbs Utilization: 61% Utilization: 67% Malden, MA (USA) (leased facility) Capacity p.a.: 41m lbs Utilization: 32% 12
Financial Review 13
Fiscal 2013 Highlights Strategic highlights: • Acquired American Pride Seafoods (“American Pride”) on October 1 st • Achieved 99% of our strategic goal to sustainably source 100% of our seafood Financial highlights: • Created value for shareholders – increased share price and dividends • Reported record sales and net earnings; however, these were lower than expected due to challenges in 2013, including weak consumer spending in the U.S. casual dining segment and issues encountered with our plant consolidation in the U.S • Amended our debt in Q1 2013 resulting in significant interest savings • Significant deleveraging with strong free cash flow in the first three quarters of 2013, prior to the American Pride acquisition Operational highlights: • Completed the Icelandic USA integration and related plant consolidation and relocation of our U.S. food service distribution center in Q1 2013 • Related to the closure of our Danvers plant, production issues were encountered by our remaining U.S. plants and resulted in additional operating costs in 2013 • The total annual synergies achieved related to the Icelandic USA acquisition are approximately $18M; however, the additional operating costs incurred in 2013 had the effect of deferring the realization of the full impact of these synergies to 2014 14
Sales Growth (US$ millions) $947M $1,200 $1,000 $800 $600 $400 $200 $- 2006 2007 2008 2009 2010 2011 2012 2013* * The American Pride acquisition added $39.7M to sales in 2013 for the period October 1 st to December 28 th , 2013 15 15
EBITDA Growth (US$ millions) $85.3M $120 $100 $80 $60 $40 $20 $0 2006 2007 2008 2009 2010 2011 2012 2013* * The American Pride acquisition added $1.5M to Adjusted EBITDA in 2013 for the period October 1 st to December 28 th , 2013 Standardized EBITDA: Earnings before interest, taxes, depreciation and amortization as reported in the Company’s annual audited financial statements Partially Adjusted EBITDA: Standardized EBITDA as defined above, adjusted to exclude the impact of impairment of property, plant and equipment; business acquisition and integration expenses; gains or losses on disposal of assets; and the increase in cost of goods sold relating to inventory acquired as part of a business acquisition and recorded above its book value as part of the fair value reporting requirements of purchase price accounting Adjusted EBITDA: Partially Adjusted EBITDA as defined above, further adjusted to exclude the impact of non-cash 16 stock compensation expense
Dividend History (Cdn$) Annual Dividends per Share $0.80 10-year CAGR: 30.4% $0.70 $0.70 Current run rate: $0.76 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Common shares up to September 15, 2007; Common and Non-Voting shares from December 15 th , 2007 to December 17 th , 2012; Common shares from December 18, 2012 to present 17
Fiscal 2013 Highlights Sales in USD decreased $4.7M to $947.3M Sales • American Pride added $39.7M in sales • Unfavourable change in the FX rate used to convert CAD-denominated sales to USD for reporting purposes • Decreases in certain seafood commodity prices led to a reduction in the selling prices for some products in 2013 • Lower overall sales volume in 2013 • Weak sales being experienced by the U.S. restaurant industry as a whole • An earlier Lent resulted in a shorter selling period in 2013 • Lower private label retail sales in the U.S. and Canada • Higher branded retail sales and strong club store sales in the U.S. and Canada offset some of the impact Sales in domestic currency increased $14.0M to $956.3M 18
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