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Presentation delivered by High Liner Foods' CEO and CFO during investor meetings in Toronto, October 5th and 6th.
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1
adding valueto seafoodINVESTOR PRESENTATION OCTOBER 2009
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.
Listings Data*
TSX: HLF HLF.A
Recent Price: $7.45 $7.00
52-Week Range $5.51 to $8.45 $4.00 to $7.25
Shares Outstanding ~13.3 million ~5.1 million
Quarterly Dividend $0.07 $0.07
Current Yield 3.8% 4.0%
Total Market Cap: $134 million
* as at September 28, 2009
About High Liner Foods
• Retail & food service markets
• Branded & private label products
One of North America’s largest
value-added frozen seafood companies
A respected name in seafood for more than 100 years
High Liner will be the leader in value-added frozen seafood in North America
Our Vision
2008: A Year of Achievement
Significant growth in sales and earnings
Achieved synergies of $12M
Simplified capital structure
Top strategic goal for fiscal 2008:Successfully integrate the FPI business into High Liner Foods
Leading Market Positions
2X the size of largest competitor in both retail & food service channels
One of the largest food service suppliers of value-added seafood
Largest grocery-chain supplier of private label processed seafood
Leading North American Supplier
Our size strengthens our ability to negotiate price increases to offset higher costs
• Strong customer relationships with every major grocery retailer & food service company
• Ability to act as category manager
• Distribution to every major customer on a regular basis
Core Competencies
Competitive advantage procuring raw materials and finished goods
• Ensures quality, certainty of supply and competitive costs
• Significant strength in groundfish and shellfish
Diversified worldwide
procurement
Core Competencies
Expertise in frozen food logistics• Excellent case fill rates and on-time/order fill
precision• Ability to act as a full category manager• Opportunities for lower cost of shipping
Track record of product innovation• Responsive to demands of customers,
consumers and food service operators• New species – new recipes – creative
packaging
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Financial Review
++124%124%
Fiscal Year 2008
Sales ($ millions)
0
100
200
300
400
500
600
700
2007 2008
FX
Domestic$275.4
$616.0
0
5
10
15
20
25
30
35
40
2007 2008EBITDA Net Income
Adjusted EBITDA, Net Income excluding one-time integration costs & non-operating items ($ millions)
Fully Diluted EPS excluding one-time integration costs & non-operating items ($)
$37.9
$18.3
Fiscal Year 2008
0
0.2
0.4
0.6
0.8
1
1.2
2007 2008
$0.61
$1.00
Year-to-Date Fiscal 2009
++15.7% Cdn $ 15.7% Cdn $
4.9% Domestic $4.9% Domestic $
44%
46%
10%FX
Canada
USA in USD
Sales ($ millions)
04080
120160200240280320360
H12008
H12009
FXDomestic
$289.2
$334.7
0
5
10
15
20
25
H1 2008 H1 2009EBITDA Net Income
Net income and EPS also exclude non-operating items
Year-to-Date Fiscal 2009
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
H1 2008 H1 2009
$0.47
$0.62$22.2
$11.4
Adjusted EBITDA, Net Income excluding one-time integration costs & non-operating items ($ millions)
Fully Diluted EPS excluding one-time integration costs & non-operating items ($)
Performance Against Targets
Actual Target
ROE 14.7% 10.0%
ROAM 13.9% 15.0%
EBIT as % sales 5.4% 6.0%
Debt to EBITDA 2.2x 3.00x
Rolling 4 quarters ended July 4, 2009
Capital Structure
Net debt as a % of total capitalization
January 3, 2009 July 4, 2009
39.5% 36.9%• Impacted by currency translation of US$ debt
and U.S. operations to Canadian $
• Higher seafood costs increased the value of working capital
Increased Dividends
33rdrd
4040%%
2828¢¢ per common & non-voting equity share (annualized)
dividend increase in last 5 quarters
increase in annualized rate since Q2 of last year
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Outlook & Growth Strategy
19
Our Outlook
• Consumer staple• Diversified product offering
Value-priced & premium products
• Solid business model• Strong balance sheet
High Liner is a recession
resistant business
Our Outlook
• Leveling off of some seafood & other input costs
• Continued volatility in currency
• Remain diligent in controlling costs
• Leverage strengths to increase profits
• Ensure our products maintain the highest standards of food safety
Retail (eat at home)• More Canadian and U.S. consumers eating at
home in light of the economy• Benefiting from our strong value-priced offerings
Fisher Boy® and private label
Food Service (away from home)• Increased strength in Canada and the U.S.• U.S. food service – our largest operating segment• Education and health care segments are
recession resistant
Our Outlook
Growth influenced by strong demographics:
North America has an aging,
health-conscious population
• 45+ years of age account for half of seafood consumption
• Health benefits tied to eating fish
• Opportunity to drive greater consumption within 35-44 age group
Total Market*
% of total population % share of total seafood servings
Source: NPD Group CREST research, August 2007 * Total Canada
Our Outlook
Growth Strategy
Organic growth• Develop new products
Innovative value added productsHigh-quality, innovatively packaged raw products
• Introduce new species from aquaculture• Expand distribution of existing products
Drive continued growth by leveraging our core High Liner and FPI brands
Growth Strategy
Acquisitions • Seek acquisitions that will expand our product
portfolio & strengthen our market leadership
Strict acquisition criteria• Must be complementary to frozen seafood• Should be synergistic• Must leverage our existing:
Leading brandsStrong customer relationshipsMarketing & logistics expertiseProduct development expertise
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adding valueto seafoodINVESTOR PRESENTATION OCTOBER 2009