FOODS CIBC 2017 RETAIL AND CONSUMER SMALL CAP FORUM June 14, 2017 - - PowerPoint PPT Presentation

HIGH LINER FOODS

CIBC 2017 RETAIL AND CONSUMER SMALL CAP FORUM

June 14, 2017 Keith Decker, President & CEO

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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).

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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. Investors are reminded to take into consideration the USD/CAD exchange rate when calculating financial ratios, including dividend payout and share price-to- earnings ratios.

Non-IFRS Measures

This document includes certain non-IFRS financial measures which the Company uses as supplemental indicators of its operating performance and financial position, as well as for internal planning purposes. These non-IFRS measures do not have any standardized meaning as prescribed by IFRS, and therefore, may not be comparable to similarly titled measures presented by other publicly traded companies, nor should they be construed as an alternative to other financial measures determined in accordance with IFRS. Non- IFRS financial measures are defined and reconciled to the most directly comparable IFRS measures in the Company’s MD&A.

PRESENTATION NOTES

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HIGH LINER FOODS

Canadian public company since the 1960’s, TSX-listed in 1971

Ticker symbol Current price(1) CAD$19.54 Shares outstanding(1)(2) ~33.3 million Market capitalization(1) ~CAD$651 million 52-week range(1) CAD$17.01 - $27.62 Annual dividend(3) CAD$0.56 per share Current yield ~2.9%

(1) Source: TSX June 12, 2017 (2) Acquisition of Rubicon Resources for $107 million completed May 30, 2017, settled 30% in HLF common shares, increasing HLF’s outstanding shares by 2.4 million to 33.3 million (3) Effective December 15, 2016

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INVESTMENT THESIS

Why Seafood?

• Healthy protein – for humans and the planet
• North Americans, on average, consume substantially less seafood than suggested in

recommended dietary guidelines

• Long-term growth influenced by North America’s demographics – a growing and aging

population, with an increasing focus on eating healthier

• Industry focus has primarily been on supply of seafood and not on increasing

consumer demand

• Versatility – 100+ commercial species and multiple eating formats make for endless

possibilities when it comes to preparing and enjoying seafood

• Seafood industry in North America is highly-fragmented

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INVESTMENT THESIS

Why High Liner Foods?

• North American leader in value-added frozen seafood, with 115+ years of seafood

expertise

• Broad market reach and market-leading brands
• Customer-focused, innovative and responsible
• Global seafood procurement and frozen food logistics expertise
• Consolidated manufacturing footprint
• Strong free cash flow from operations support dividends and market consolidation
• Track record of growth through acquisitions and adaptability

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BUSINESS OVERVIEW

Focused on the frozen seafood market in North America

78% 22%

Geography

US (incl. Mexico) Canada 70% 30%

Branding

HLF Brands Other 50% 50%

Channel

Foodservice Retail

• The North American leader in value-added frozen seafood
• In Canada, #1 market position in retail and largest foodservice supplier
• In the US, estimated #2 in retail value-added (including private label) on a volume basis and the leading

supplier of value-added products in foodservice

58% 42%

Product Form

Value-added Other Based on 2016 sales (in USD) and shown on a proforma basis to include the impact of acquiring Rubicon

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SEAFOOD IS COMPLEX

We simplify the seafood category for our customers

• Global supply chain with 100+ commercial species
• People believe preparing seafood is difficult and

time consuming

• By leveraging the full extent of our seafood

expertise, from procurement through to preparation, our customers can be confident in serving quality, delicious seafood

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New Products

Products that don’t exist in our portfolio today or the marketplace

• Innovate
• Align with customer trends
• Expand and diversify our

portfolio, including through species diversification

Core Offerings

Types of products that already exist in our portfolio today

• Innovate
• Improve
• Change perceptions

Innovation Engineering

Methodology that allows us to speed up innovation efforts, while reducing risk

ORGANIC GROWTH STRATEGY

Customer-focused, innovative seafood solutions

• Product development efforts are focused on what today’s seafood consumer wants when selecting

seafood products and appealing to Millennials in a more meaningful way

• Innovation must be a core competency and an ingrained part of our culture
• Adopted Innovation Engineering in 2016 to help align innovation strategy across all departments

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• Procure 30+ species of seafood from 20+ different countries

ORGANIC GROWTH STRATEGY

Focused on species diversification to aquaculture species experiencing stronger growth rates in North America

Based on 2016 sales (in Lbs) and shown on a proforma basis to include the impact of acquiring Rubicon

24% 21% 17% 16% 8% 7% 7% Alaska Pollock Cod Shrimp Other Salmon Haddock Tilapia

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ORGANIC GROWTH STRATEGY

Commercial excellence also a key factor for organic sales growth

• Working more closely with customers to gain better insight into

how to leverage the full extent of our seafood expertise to help customers win in seafood

• Demonstrations by our highly trained chefs that focus on ease
• f preparation and other product benefits
• Making it easier to do business with us through an Enterprise

Resource Planning (ERP) system upgrade and streamlining work practices

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CONSOLIDATED OPERATIONS

Three value-added seafood manufacturing facilities in North America

• New Bedford facility closed in Q3 2016 marking

the last significant initiative planned as part of a multi-year supply chain optimization project which removed $20+ million in annual cost savings on a run rate basis

• Lower demand for traditional breaded and

battered products reduces plant efficiency

• Current manufacturing footprint: aggregate

production capacity of ~228 million lbs

• Ideal capacity ~ 85% to allow for seasonal

demand surge

Lunenburg, NS (Can) Capacity p.a.: 50M lbs Utilization: 73% Portsmouth, NH (US) Capacity p.a.: 84M lbs Utilization: 71% Newport News, VA (US) Capacity p.a.: 94M lbs Utilization: 71%

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CORPORATE SOCIAL RESPONSIBILITY

The Company’s first CSR report will be released in 2017

• Committed to sourcing all our seafood from “certified sustainable or responsible” fisheries and

aquaculture

• Recognized as a global leader in driving best practice improvements in wild fisheries and aquaculture

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ROLE OF ACQUISITIONS

Acquisition of Rubicon supports our organic growth strategy through expediting species diversification

• Acquisition of Rubicon Resources, LLC completed on May 30, 2017 for $107 million
• Primary business is the import and distribution of sustainably sourced frozen shrimp products in the

private-label US retail market

• 2016 sales of $234 million and pro forma EBITDA of $16 million
• Transaction settled 70% cash, 30% HLF common shares; cash settlement at closing financed with

Company’s asset-based revolving credit facility (“ABL”), with $70 million of these borrowings being termed

• ut via an add-on to the Company’s senior secured term loan on June 6th.

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DEBT LEVERAGE RATIO

Net Interest-Bearing Debt to Adjusted EBITDA Ratio

4.4x 3.2x 4.0x 4.4x

0.0x 1.0x 2.0x 3.0x 4.0x 5.0x

Dec 31/11 Pro forma Icelandic Acquisition Sep 28/13 Pre-American Pride Acquisition Sep 28/14 Pre-Atlantic Trading Acquisition Jan 3/15 End of Fiscal 2014 Jan 2/16 End of Fiscal 2015 Dec 31/16 End of Fiscal 2016 Apr 1/17 End of Q1 2017 Target

3.0x 3.7x 3.1x 4.0x

$61M Reduction in Net Interest-Bearing Debt in 2016

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DIVIDEND HISTORY

$0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 $0.45 $0.50 $0.55 $0.60 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* Annual Dividend Paid per Share ($CAD)

14-year CAGR: 25%

* Annual dividends to be paid in 2017 estimated at CAD$0.56 per share based on the current quarterly dividend rate of CAD$0.14 per share $0.520 $0.560 $0.465

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2017 OUTLOOK

• Trend of lower demand for traditional breaded and battered products is expected to

continue in 2017, but optimistic that sales from new and improved product offerings can

• ffset this decline by the end of 2017
• This improvement in sales trend and a return to typical plant production levels (following

the busy Lenten period) are expected to return the Company to year-over-year earnings growth in the second half of 2017

THANK YOU!

GREAT TASTING SEAFOOD FOR A BETTER LIFE