High Liner Foods reported its fourth consecutive year of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) growth after it ended the year with a strong Q4 performance.
For the full year, High Liner posted an adjusted EBITDA of USD 103.9 million (EUR 98.1 million). That total is an increase of 14.9 percent, or USD 13.5 million (EUR 12.7 million) from the USD 90.4 million (EUR 85.3 million) the company posted for FY 2021.
The company’s sales and gross profit also both increased in 2022. Sales jumped 22.2 percent for the full year to USD 1.06 billion (EUR 1 billion), up USD 194.3 million (EUR 183.6 million) from the USD 875.4 million (EUR 827.3 million) High Liner earned in 2021. Gross profit increased 15.8 percent, or USD 31.4 million (EUR 29.6 million), to USD 229.9 million (EUR 293.4 million) – up from a gross profit of USD 198.5 million (EUR 187.5 million) in 2021.
For Q4 2022, the company posted an adjusted EBITDA of USD 25.4 million (EUR 23.9 million), a 23.3 percent, or USD 4.8 million (EUR 4.5 million), increase from the USD 20.5 million (EUR 19.3 million) it earned in Q4 2021. Sales and gross profit also increased for the quarter. The company posted a sales total of USD 250.3 million (EUR 236.5 million), up 9.8 percent, or USD 22.4 million (EUR 21.1 million) from the USD 227.9 million (EUR 215.3 million) it posted in Q4 2021.
Gross profit increased by USD 6.2 million (EUR 5.8 million), or 12.8 percent, to USD 54.8 million (EUR 51.7 million), up from USD 48.6 million (EUR 45.9 million) in Q4 2021.
"We ended the year with another solid quarter of earnings, including higher sales, gross profit and Adjusted EBITDA, supporting our delivery of the fourth consecutive year of Adjusted EBITDA growth," High Liner Foods President and Chief Executive Officer Rod Hepponstall said. "This is a tremendous result that stands out in our corporate history and reflects the significant transformation of our business and the talent and hard work of our team."
The solid quarter, and year, is the culmination of the five-point plan to shift back to profitability the company announced soon after Hepponstall was hired in April 2018.
“The work behind these numbers began in earnest four years ago when I joined the company and we initiated a series of five critical initiatives to reposition High Liner foods for profitable organic growth over the long term,” Hepponstall said.
At the time, High Liner was facing a tough situation, with declining sales volumes and values. As part of the realignment plan Hepponstall introduced, the company laid off 14 percent of its salaried work force and began to identify and implement efficiency initiatives at its operations in the U.S. and Canada.
“We integrated our business across the border, enhance the efficiency of our global supply chain and optimize our product portfolio to deliver value to our customers,” Hepponstall said. “A spirit of continuous improvement and high performance held true quarter after quarter and year after year. It brought us to the point last year where we gain market share and outperform the category on both sides of the border and in both our foodservice and retail businesses and successfully expanded the reach of our most successful product offerings into new channels and markets.”
The company has seen some impacts of inflation on its product sales, according to High Liner Chief Commercial Officer Anthony Rasetta. The company expanded its sales in foodservice, but saw customer shifts in retail.
“As headlines continue to remind us daily, inflation is leading to price sensitivity across the entire grocery sector,” Rasetta said. “While frozen seafood has not been impacted by price increases to the same extent as other proteins and grocery items we experienced a redistribution of volume from premium branded value added product.”
Rasetta added that the diversification of High Liner’s seafood product portfolio has helped it deal with the inflationary pressure.
“Against this backdrop we're pleased to have still grown market share in U.S. retail through the breadth of our portfolio with our premium sea cuisine line in our value offerings in Fisher Boy, Fisher boy remains very well positioned to be a popular choice for consumers looking for quality protein at an affordable price point,” he said.
Foodservice, in contrast to retail, seemed to shrug off any inflationary pressures. According to Rasetta, the company’s value-added portfolio has helped entice restauranteurs to new products.
“Operators continue to seek out reliability of supply, coupled with the ability to innovate and simplify their menus and operational efficiencies in a challenging labor market,” he said. “Our value added portfolio continues to deliver these solutions and drive increased sales and share gains. We also drove sales growth across our core, non-commercial segments and continue to inspire innovation and adoption of seafood in our priority growth areas of quick service restaurants and casual dining.”
Rasetta revealed the company had a win by securing new business with a leading family and casual dining restaurant chain in the U.S., which will feature the company’s value added salmon “prominently” on its menu.
Looking forward, Hepponstall said the company plans to continue delivering new products to continue the year-over-year growth streak.
“We also plan to develop and launch innovative and delicious new products anticipate rolling out between 10 and 12 new products across foodservice and retail in 2023. Our product innovations will be tailored to growth species and categories and be designed to expand our reach through targeted distribution,” Hepponstall said.
Some of those launches will be coming soon – the company is working on a series of shrimp products for foodservice.
“We are already in the process of launching seven new value added shrimp SKUs in foodservice, and we believe that this will be a very compelling solution for operators who will be able to offer a popular healthy versatile protein on the menu while reducing preparation time in the kitchen,” Hepponstall said. “I look forward to updating you on the seven new products launched in the next quarter.”
Photo courtesy of High Liner Foods
