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Dedicated to Sustainable Seafood Excellence
May 16, 2013, New York
Seafood Investment Forum
2
Dedicated to Sustainable Seafood Excellence
Forward Looking Statements
This presentation may contain forward-looking statements. Such statements
involve known and unknown risks, uncertainties, and other factors outside
management’s control including but not limited to total allowable catch levels,
selling prices, weather, exchange rates and fuel costs, that could cause actual
results to differ materially from those expressed in the forward-looking
statements.
Clearwater does not assume responsibility for the accuracy and completeness
of the forward-looking statements and does not undertake any obligation to
publicly revise these forward-looking statements to reflect subsequent events
or circumstances.
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Dedicated to Sustainable Seafood Excellence
Company Overview
North America’s largest vertically integrated harvester, processor, and distributor of premium shellfisho ~79 million pounds sold in 2012
o Key species include: lobster, scallops, clams, coldwater shrimp and crab
o Recognized for quality, eco-harvesting practices* and reliable delivery
Largest holder of shellfish quotas in Canadao Operations in offshore Canada and Argentina
At-sea processing o Company-owned state-of-the-art factory vessels
o Advanced onshore processing, storage and distribution capabilities
Global sales, marketing and distribution platformo Diverse customer base with local sales forces
* Widest selection of MSC-certified species of anyseafood harvester worldwide
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Dedicated to Sustainable Seafood Excellence
26%10%
38%
20%
23%
59%
7% 6%4% 4%2% 1%
2009 2030
North America EuropeAsia Pacific Central / South AmericaMiddle East / North Africa Sub-Sahara Africa
Powerful Industry Fundamentals
Asia-Pacific middle class sustainable growth provides a stable source of long-term demand (six-fold growth in consumer spending forecast through 2020)
Growing incomes have increased demand for high-capacity premium products
Increasing adaptation of premium priced western-inspired products
Robust Emerging Market Demand
Source: OECD, FAO Secretariates and PricewaterhouseCoopers.
Growing focus on health and wellness driving interest in “higher-quality” protein
Increasing consumer willingness to pay a premium for “sustainable” , traceable, safe food
Desire for “authentic” taste experiences (wild-caught vs. farm-raised) and scarcity premium (the seafood connaisseur)
Compelling Market
“Mega Trends” in Advanced
Economies
Supplier Pricing Power
Global demand outstripping finite wild-caught supply sources
Regulatory bodies managing wild-caught fisheries conservatively to protect long-term supply
Declining growth of both wild-caught and aquaculture production
Customers willing to pay a premium for high-quality sustainable supply
19%23%
30%
43%50%
Fish Oil Capture/Wild
Traded/Export
Fish Meal Aquaculture
Projected 2000-2020 Price Growth
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Dedicated to Sustainable Seafood Excellence
Licensing - An enterprise requires a license to harvest the species harvested by Clearwater in the Atlantic Canada and Argentine offshore fisheries. Regulatory Authorities in Canada and Argentina strictly control the number of licensed enterprises and granting new licenses is extremely rare
Significant Capital requirements to acquire and outfit vessels (estimated total value in excess of $500 million)
Ongoing investments in R&D - Significant investments in proprietary technology and operations that reduce cost and/or increase productivity require a knowledgeable management team.
Global reach - A global, direct sales force that is capable of interacting with and selling directly to customers worldwide is required in order to execute on pricing opportunities.
Automated Shucking
(C$ in millions)
Significant Barriers to Entry
Lobster Innovation
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Dedicated to Sustainable Seafood Excellence
Wild Capture$80 bn
Aquaculture$60 bn
PrimaryProcessing
$60 bn
SecondaryProcessing
$120 bn
Distribution,Procurement
& Trading$80 bn
Leading Global Provider of Wild-Caught Shellfish
Valuable License Ownership
Balanced Global Footprint
Strong Presence Across the Value-Chain
Clearwater’s Value Added Pipeline• Scallops• Lobster• Clams• Shrimp
Balanced Species Mix(1)
100% 100%
49%39%
25%
Artic SurfClams
OffshoreLobster
SeaScallops
ArgentineScallops
ColdwaterShrimp
China17%
Japan13%
Other Asia5%
Europe35%
UnitedStates15%
Canada14%
Other1%
Scallops31%
ColdwaterShrimp
22%
Clams21%
Lobster18%
Crab4%
Other4%
Clearwater is a primary license-holder in all of its
key fisheries
20% 2-yr Sales CAGR
1) Reflects percent of 2012 net sales.
($ in millions)
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Dedicated to Sustainable Seafood Excellence
FoodService
49%
Retail38%
Other13%
Balanced End-Market and Customer Exposure
Global Footprint
Worldwide distribution presence
Local sales and marketing teams
On-trend products in all markets
Channel Mix
Multiple touch points to global seafood consumers
Diverse Customer Base
No single customer represents more than 6% of revenue
Average top-ten customer relationship of nearly 10 years
2011 Revenues of $332.7 million
Broadest, highest-quality premium shellfish offering
Widest selection of MSC-certified species of any harvester/processor
Unique, “just-in-time” live lobster program
New product innovation, consumer/customer insight competency
Clearwater’s Value Proposition
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Dedicated to Sustainable Seafood Excellence
Deep and Experienced Leadership Team
Deep management team focused on developing the Clearwater brand globally while preserving the Company’s commitment to quality and sustainability
Recently, Clearwater has expanded the senior management team, bringing in ten new additions including three individuals at the leadership level in China
• Joined: May 17th, 2010• Experience: 23 years
Ian SmithChief Executive Officer
Robert WightVP Finance & Chief
Financial Officer
Eric RoeChief Operating Officer
David RathbunChief Talent Officer
Greg MorencyVice President & Chief
Commercial Officer
Leadership Team
• Joined: November 16th, 1987• Experience: 35 years
• Joined: September 4th, 1988• Experience: 27 years
• Joined: April 26th, 2011• Experience: 25 years
• Joined: July 1, 2010• Experience: 35 years
Mike PittmanVice President Fleet
Paul BroderickVice President International Sales
Christine PenneyVP of Sustainability and
Public Affairs
Tyrone CotieTreasurer
• Joined: October 1st, 1988
• Experience: 48 years
• Joined: September 18th, 1989• Experience: 29 years
• Joined: September 3rd, 2002• Experience: 23 years
• Joined: July 1st, 1995• Experience: 17 years
John Burwash Chief Information Officer
David KavanaghVP & General Counsel
• Joined: November 5th, 2012• Experience: 24 years
• Joined: June 23rd, 2003• Experience: 23 years
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Dedicated to Sustainable Seafood Excellence
Multiple Sources of Long-Term Cash Flow Stability
Unique, protected access to a scarce, highly-regulated resource Diminishing growth rates in global supply over next three
decades Growing focus on management of fisheries (i.e. licensing and
quota protection)
Robust global seafood fundamentals Growth in per capita consumption in developed and developing markets On-trend with consumers push toward higher quality, healthier proteins
Diverse product and species mix provides multiple customer touch points
Attractive value proposition for customers across all channels (retail, white table cloth, export, etc.)
Track record of successful innovation (packaging, branding, value-added)
Scarcity
Demand
Product Offering
Pricing Power
Consistent track record of pricing gains Focus on “high-value” premium species MSC Certification provides additional pricing halo
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Dedicated to Sustainable Seafood Excellence
Sales and earnings trends
2008 2009 2010 2011 2012
$301,204
$284,065
$315,539
$332,785
$350,447
Sales (000"s)
CAGR
5.3%
2008 2009 2010 2011 2012
$36.2
$44.2
$50.7
$61.2
$72.2
Adjusted EBITDA (millions)
CAGR
18.0%
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Dedicated to Sustainable Seafood Excellence
Most recent financial results – Q1 2013
Clearwater has committed to key financial targets, some of which are outlined below:
Return on assets is calculated as (EBIT / Total Assets).
Net leverage is calculated as (Total Debt - Cash) / EBITDA.
Rolling 4 quarters ended Q1 2013
Rolling 4 quarters ended Q1 2012
Peer company top quartile
(Target)
Sales Growth 4.0% 6.0% 5.0%
Sales in the first quarter of 2013 was constrained by lower available supply. Demand, particularly in China and throughout Asia remains strong for all our core species, as supply becomes available Management expects continued revenue growth in line with target.
Free cash flows (millions) $9.0 $0.0 NA
Growth in free cash flows has been driven by improvements in adjusted EBITDA, lower capital expenditures and working capital.
Return on Assets 10.7% 11.2% 12% or greaterReturn on assets shows a continuing trend of improvement and focused management of investments.
Net Leverage 3.2x 3.9x 3.0x or lower
Net leverage has improved due to stronger EBITDA levels and lower net debt balances. Seasonality will result in periodic increases in leverage and investments may also result in periodic increases in leverage from target leverage of 3.0x.
Dedicated to Sustainable Seafood Excellence
Seafood Investment Forum
THANK YOU