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1 Intrafish Seafood Investment Forum May 22, 2013 New York Kelly Nelson, EVP & CFO Heather Keeler-Hurshman Director of Investor Relations.

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Presentation on theme: "1 Intrafish Seafood Investment Forum May 22, 2013 New York Kelly Nelson, EVP & CFO Heather Keeler-Hurshman Director of Investor Relations."— Presentation transcript:

1 1 Intrafish Seafood Investment Forum May 22, 2013 New York Kelly Nelson, EVP & CFO Heather Keeler-Hurshman Director of Investor Relations

2 2 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).

3 3 Presentation Currencies HLF is traded on the Toronto Stock Exchange and references to stock price and dividends are in Canadian dollars. Effective with the company’s 2012 annual report all financial statements are presented in USD. –2010, 2011 and 2012 are fully converted and restated under IFRS rules to USD –Previous years Canadian GAAP statements are converted from Canadian dollars at the annual period end & average USD/CAD exchange rates and remain under Canadian GAAP.

4 4 Listings Data - CAD* TSX:HLF Recent Price:$ Week Range$ $39.00 Shares Outstanding~15.1million Quarterly Dividend 1 $0.18 Current Yield 1 2.3% Total Market Cap $473 million * Recent prices as at May 17, Based on the dividend rate effective June 1, 2013

5 5 High Liner Foods Corporate History (1) Icelandic Brand under license (1)

6 6 Business Profile

7 7

8 8 Our Business Model Broadest market reach in industry Market leading brandsDiversified global procurementFrozen food logistics expertiseInnovative product development

9 9 Foodservice Overview Leading Foodservice Brands –FPI, Icelandic, Maribel and Viking Strengths –Leading Innovation –Dominant Supplier Position –Diverse Product Line –Cover All segments – Chain Restaurants, Food Services Distributors, Healthcare, and Education –Private Label Key Customers –Sysco, US Foods, GFS, Reinhart, PFG –Arby’s, Carl’s JR, Nestle, Omaha Steaks, Schwann’s, MacDonald’s

10 10 Retail Overview Leading Brands –Sea Cuisine, Fisher Boy, and High Liner Strengths –Sell to all retailers –Sell to every area of store –Recognized brands –Leading Innovation –Private Label Customers –Grocery – Wal*mart, Target, Whole Foods, Safeway, Kroger, Sobeys, Loblaw –Club - Costco, Sam’s, BJ’s

11 11 Rationalized Production Capacity Reduced from 6 plants to 4 Reduced from 6 plants to 4 Low cost manufacturing Low cost manufacturingfootprint

12 12 Achieving Our Vision Financial Highlights: Strong sales, adjusted EBITDA, and adjusted net income Creating value for shareholders – increased share price /dividends Operational Highlights: Completed the acquisition of Icelandic USA in December 2011 Completed integration of Icelandic USA in November 2012 Closed two plants Dec 12/ Jan 13 Recognition for New Products: Voted Best New Product by Canadian Living (4 years in a row) Frozen Fish / Prepared Meal Category Pan Sear, Market Cuts, Flame Savours

13 Financial Review 13

14 14 Sales in US$000s $943 mm

15 15 EBITDA in US$000s Standardized EBITDA Adjusted EBITDA (1) : Standardized EBITDA, excluding impairment of PPE, business acquisition and integration expenses, gains or losses on disposal of assets, and the increase in cost of goods sold relating to inventory acquired from business acquisitions, above its book value Adjusted EBITDA (2) : Adjusted EBITDA (1) excluding stock-based compensation expense $91.7 mm *Proforma includes additional $9 mm of synergies

16 16 Dividend History (Cdn$) Annual Equity Dividends per Share Current run rate $0.72 1/4 year

17 17 YTD 2012 – Strong Momentum Integration of Icelandic USA completed ahead of schedule Now expecting annual ongoing synergies of at least $18 million, the high end of original estimate of $16-$18 million Plant consolidation completed Strong sales, Adjusted EBITDA and Adjusted EPS growth Canadian Retail operations turnaround continues 9.9% sales volume growth New Flame Savours product contributed to sales growth

18 Q A Challenging Quarter Decline in selling prices for commodity products Weak private label sales Soft U.S. restaurant sales and early Lent Production and distribution challenges with move to Newport News On track for annual projected synergies Reduced interest expense and leverage ratio 18 Q A Challenging Quarter

19 Decline in selling prices for commodity products Weak private label sales Soft U.S. restaurant sales and early Lent Production and distribution challenges with move to Newport News On track for annual projected synergies Reduced interest expense and leverage ratio 19 Financial Review – Q EBITDA (in US$ millions) Standardized EBITDA (1) Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization, excluding impairment of property, plant and equipment, business acquisition and integration expenses, stock compensation expense, gains or losses on disposal of assets, and the increase in cost of goods sold relating to inventory acquired from business acquisitions, above its book value, as part of the fair value requirements of purchase price accounting. Adjusted EBITDA : same definition as (1) except including non-cash stock compensation expense

20 Q A Challenging Quarter Decline in selling prices for commodity products Weak private label sales Soft U.S. restaurant sales and early Lent Production and distribution challenges with move to Newport News On track for annual projected synergies Reduced interest expense and leverage ratio 20 Diluted EPS Diluted EPS is Net income divided by the average diluted number of shares EPS, based on Adjusted Net Income(1) except including non-cash stock compensation expense EPS, based on Adjusted Net Income, see note (1) (1) Adjusted Net Income is net income excluding the after-tax impairment of property, plant and equipment, business acquisition and integration expenses, stock compensation expense, the increase in cost of goods sold relating to inventory acquired from business acquisitions over its book value, non-cash expense from revaluing an embedded derivative associated with the long-term debt LIBOR floor, marking to market an interest rate swap related to the embedded derivative, the write-off of deferred financing charges on the re-pricing of the Term Loan and withholding tax related inter-company dividends. Financial Review – Q1 2013

21 Q A Challenging Quarter Decline in selling prices for commodity products Weak private label sales Soft U.S. restaurant sales and early Lent Production and distribution challenges with move to Newport News On track for annual projected synergies Reduced interest expense and leverage ratio 21 Decline in selling prices for commodity products Weak private label sales Soft U.S. restaurant sales and early Lent Production and distribution challenges with move to Newport News On track for annual projected synergies Reduced interest expense and leverage ratio Q A Challenging Quarter

22 – Deleveraging $40-50 mm free cash flow PF = Proforma for $9mm of Icelandic synergies + $2mm for Burin plant closure

23 – Debt Amendments Term Loan ($233 mm) Reduced rates 5.5% LIBOR floor to 3.5% LIBOR floor Less restrictive financial covenants More room for dividends More flexible for acquisitions ABL ($180 mm Working capital facility) Improved pricing grid More flexible for acquisitions Cost savings 2013 $4.7 cash, $6.2 total ($30 cents per share)

24 Outlook & Growth Strategy 24

25 25 Our Vision

26 26 Industry Drivers Long-term growth influenced by strong North American demographics An aging, health-conscious population 45+ years of age account for half of seafood consumption Health benefits tied to eating fish

27 27 Fisheries recovering around the world Growth from aquaculture species Demand growth still greater than supply Positive outlook for 2013 Short-term cost declines but long-term fundamentals signal increasing costs Seafood cost increasing less than other proteins Industry Forces

28 28 Areas of Strategic Focus #1: PROFITABLE GROWTH Icelandic Synergies Supply Chain Cost savings (Goal #3) Organic Growth Leverage scale Product innovation Acquisitions Expand product portfolio Strengthen market leadership Achieve $150 million in EBITDA by 2015 (1) (1) Run rate

29 29 Areas of Strategic Focus #2: SUSTAINABILITY Source all seafood from certifiable or sustainable or responsible fisheries and aquaculture farms by the end of 2013

30 30 Investment Rationale

31 31 Investor Presentation Questions?


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