INVESTOR PRESENTATION August 2016
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 Foods’ Annual Report available on SEDAR (www.sedar.com ) and the Investor Center section of High Liner Foods’ website (www.highlinerfoods.com). PRESENTATION CURRENCY: • High Liner Foods (“the Company”) began reporting its financial statements in USD in 2012, however its common shares trade on the TSX and are quoted in CAD and therefore any references in this presentation to share price, dividends and market cap are in CAD. NON-IFRS MEASURES: • Certain non- IFRS financial measures and ratios are used when discussing the Company’s financial performance that do not have a standardized meaning prescribed by IFRS, but which management believes provide useful information to both management and investors in measuring the financial performance and condition of the Company. 2
COMPANY OVERVIEW
COMPANY OVERVIEW TSX LISTINGS DATA TSX symbol 1 HLF Recent price 2 CAD$19.95 52-week range 2 CAD$10.10 - $20.31 Shares outstanding ~30.9M Total market cap 2 ~CAD$616M 1 Public company since the 1960’s; listed on TSX in 1971 2 Source: TSX August 12, 2016 Annual dividend 3 CAD$0.52 per share 3 Effective: June 15, 2016 Current yield 3 ~2.6% HLF Three Year Share Price History 2 4
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 5
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 sustainability efforts over the last ten years • Growth from aquaculture species • Long-term demand growth still greater than supply 6
COMPANY OVERVIEW HIGH LINER FOODS CORPORATE HISTORY 1945 1999 2013 2014 1899 2011 National 1986 2007 Name 2010 American Atlantic WC Smith Icelandic Sea Fisher Boy change to FPI Viking Pride Trading founded USA Products acquisition acquisition 1 acquisition High Liner Seafoods Company (salt fish) acquisition 2 created Foods acquisition 3 acquisition 4 2003/04 1926 1982 1992 2016 High Liner High Liner Commodore Northern Today’s sells its brand private label Cod High Liner fishing acquisition created moratorium assets Foods 1 Acquired FPI’s North American marketing & manufacturing businesses 2 In 2005, Icelandic & Samband of Iceland merged 3 Acquired October 1 st , 2013 4 Acquired October 7 th , 2014 7
COMPANY OVERVIEW BUSINESS OVERVIEW Geography Branding Channel Product Form 21% 27% 34% 37% 63% 66% 73% 79% USA (incl. Mexico) HLF Brands Other Value-added Other Foodservice Retail Canada * The charts above reflect the Company’s business profile based on 2015 sales • The North American leader in value-added frozen seafood • In Canada, #1 market position in retail and largest foodservice supplier • In the U.S., estimated #2 in retail value-added (including private label) on a volume basis and the leading supplier of value-added products in foodservice • Vision is to be the leading supplier of frozen seafood in North America 8
COMPANY OVERVIEW ADVANCED BUSINESS MODEL WITH MARKET BREADTH Broadest Market Diversified Global Frozen Food Innovative Product Market Leading Reach in Industry Procurement Logistics Expertise Development Brands Strong global Logistics expertise 2X the size of largest procurement built on allows timely delivery competitor in retail & long-term relationships of raw materials and food service channels with network of quality (100% ACV) in finished goods from suppliers over 20 countries to Canada all key customers Full-time procurement Largest grocery-chain and quality assurance Seamless logistics supplier of private personnel oversee process approach label value-added procurement activities tailored to be cost- seafood in U.S. and in Asia effective and Canada customer oriented Geographically diverse The largest food procurement territory Scheduled deliveries service suppliers of mitigates changes in value-added seafood to major customers the cost of raw on regular basis in U.S. materials Estimated #2 supplier State-of-the-art web- of seafood by volume based IT system to in U.S. retail channel manage logistics and including private label quality for overseas and niche brands suppliers 9
COMPANY OVERVIEW MANUFACTURING FOOTPRINT • Continuous assessment of manufacturing capabilities vs. current Lunenburg, NS (Can) and future requirements to ensure low- Capacity p.a.: 50M lbs cost and efficient operations Utilization: 65% Portsmouth, NH (U.S.) • Value-added fish operations at New Capacity p.a.: 84M lbs New Bedford, MA (U.S.) Utilization: 71% Bedford facility ceased in mid-July 2016 Scallop Processing to eliminate excess manufacturing Capacity p.a.: 12M lbs capacity, with expected annual pre-tax Utilization: 41% savings of ~ $7.0M New Bedford, MA (U.S.) Value-Added Fish Processing • On August 16, 2016, entered into a Capacity p.a.: 87M lbs purchase and sale agreement to sell the Utilization: 50% scallop business and the New Bedford facility (deal to close in Q3 2016) Newport News, VA (U.S.) Capacity p.a.: 94M lbs Utilization: 64% Aggregate production capacity of ~327M lbs per annum (228M lbs excluding the New Bedford facility), with the ability to increase 12M lbs p.a. with minimal capital investment 10
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 aquaculture improvements around the world • Recognized as a global leader in driving best practice improvements in wild fisheries and aquaculture In late 2015, High Liner Foods ranked top seafood company in North American and one of the top ten worldwide in • a comprehensive benchmark report by SeafoodIntelligence.com that examined seafood companies’ sustainability reporting and transparency In early 2015, High Liner Foods and Bill DiMento, VP of Quality Assurance, Sustainability and Government Affairs, • awarded “Grand Champion Award” by SeaWeb, an award SeaWeb created to recognize outstanding contribution across all four of the key areas of global sustainability that it looks to recognize parties for: leadership, vision, innovation and advocacy • Continued focus on improved sustainability across our supply chain beyond the seafood we source and other areas of corporate social responsibility. 11
2016 PERFORMANCE HIGHLIGHTS
2016 PERFORMANCE STRATEGIC GOALS The current year’s 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 – primary focus in 2016 Strive for commercial excellence • Innovation • 2) Operating efficiency and cost management Annual operating cost savings of at least $20M on a run rate basis by the end of 2016 • (full benefit to be realized in 2017) “High Liner Foods Operating System” – creating a culture of operational excellence • 3) Talent management Acquiring, developing and retaining the best talent are critical to the success of the • business Active development of future leaders • 13
2016 PERFORMANCE YTD HIGHLIGHTS (COMPARED TO YTD Q2 2015) • Sales volume: • Q1 decreased by 1.3.M lbs (1.5%) - impact of shorter promotional period associated with Lent in 2016 and lower demand for traditional breaded and battered frozen seafood products • Q2 increased by 1.0M lbs (1.6%) – higher sales volume from our U.S. foodservice business • Sales decreased by $21.4 (4.0%) - price decreases (related to lower raw material costs), change in product mix, the impact of a weaker Canadian dollar on the conversion of our CAD- denominated operations to the USD presentation currency and lower YTD sales volume • Adjusted EBITDA as a percentage of sales increased 110 basis points to 9.2% reflecting lower raw material costs and higher supply chain optimization savings • Strong free cash flow from operations used to lower debt and improve debt-to-Adjusted EBITDA ratio to 3.4x (compared to 4.0x at the end of Fiscal 2015) • On August 16, entered into purchase and sale agreement with Blue Harvest Fisheries, whereby Blue Harvest will acquire the assets of our scallop business, along with our facility in New Bedford (deal expected to close in Q3 2016) 14
Recommend
More recommend
