HQ Sustainable Maritime Industries Inc
HQ Sustainable Maritime Industries — Investor Presentation (September 2010)
31 slides from HQ Sustainable Maritime Industries's investor presentation, Sep 14, 2010
Slide 1: Listed on the NYSE Amex: HQS
Listed on the NYSE Amex: HQS Exhibit 99.1
Slide 2: Forward-looking statements
This presentation contains forward-looking statements within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward –looking statements includes, but not limited to, statements regarding our management's expectations, hopes, beliefs, intention
Slide 3: Overview
Overview Completely integrated global operations Five wholly owned subsidiaries HQ Sustainable Maritime Industries Inc. 2010 Jiahua Health products store, Haikou China
Slide 4: Current Operations
Current Operations Tilapia Biomass Market Growth Plans Financial Review HQ Sustainable Maritime Industries Inc. 2010 Jiahua new Beauty and beauty within cosmeceutical products
Slide 5: HQS Tilapia Biomass Production Methods
HQS Tilapia Biomass Production Methods
Slide 6: HQS Operations
HQ Seafood HQ Health Products HQ Feed Products HQ Marketing HQ Fry Genetics HQS Operations
Slide 7: Food Safety, Environment, Fair Trade
FOOD SAFETY ENVIRONMENT FAIR TRADE HQ Sustainable Maritime Industries Inc. 2010
Slide 8: Current Operations
Corporate Presentation November 2008 Current Operations Tilapia Biomass Market Growth Plans Financial Review HQ Sustainable Maritime Industries Inc. 2010 HQ Sustainable Seafood Processing plant, Wenchang China
Slide 9: Tilapia Demand Trends
2000 2008 CAGAR US Per Capita Annual Consumption (lbs) Tilapia Demand Trends Fastest growing quality protein Completely sustainable protein Relatively low per capita penetration in USA Low cost protein solution Adapts well to value added products Similar demand trends in Europe Protein powders from
Slide 10: ‘sauuo] UNO,
ae 3.8 ‘sauuo] UNO, N | Fan 94 m™ ‘Tapia a a 4 3 3 & 5 é 3 a = z é 3 z a] ¥ é ees
Slide 11: Feed Conversion Ratio
Feed Conversion Ratio Beef a otk See
Slide 12: Tilapia "Green Food"
Tilapia “Green Food” Tilapia is the alternative sustainable source to wild caught white fish Ocean caught whitefish supply has declined by 50% Almost 50% of today’s seafood is from aquaculture (all incremental growth) Tilapia’s Green Production Attributes Grows Rapidly in low oxygen levels Fresh wat
Slide 13: New Directions in Biomass Consumption
New Directions in Biomass Consumption in the United States By 2020, according to the USDA fish proteins consumed will increase by over 20% All of this growth will come from aquaculture Organic proteins are growing by 20% per year Only farmed animals can be organic Similar demand trends in Europe (Fr
Slide 14: Current Operations
Current Operations Tilapia Biomass Market Growth Plans Financial Review HQ Sustainable Maritime Industries Inc. 2010 HQ Feed Mill, Wenchang China
Slide 15: Sales Volume Growth and Branding Margin
Omojo 10 th anniversary Health Products HQ Fry Genetics Sales HQ Fry Genetics HQ Feed Products HQ Seafood HQ Health Products Lillian’s Healthy Gourmet products HQ Feed Sales Sales Volume Growth Margin & Sales Growth from Branding
Slide 16: Growth Plans: New Re-Processing Plant
Growth Plans New Re-Processing Plant Value added production for China market to export standards Dates • Expected Completion Date Q1 2011 Capacity • 10 million lbs of Meals and Value Added Products • 6,500 m2 total construction area • Run-Rate Capacity at 80% Margin • Gross Margin Expected to be +/-
Slide 17: Growth Plans: New Fry Breeding and Genetics Facility
HQ Sustainable Maritime Industries Inc. 2010 Growth Plans New Fry Breeding and Genetics Facility Genetics development of Tilapia and other farmed fish, develop breeding pairs, fry breeding Dates • Expected Completion Date Q3 2010 Capacity • Estimated Annual Fry 200 mm • Run-Rate Capacity at 80% Marg
Slide 18: Proceeds from pre-IPO
Proceeds from pre-IPO: •Accelerate growth •Flagship Sanya store •10 stores in Tier one Cities
Slide 19: Jiahua mission
J I A H U A To use sustainable marine sourced raw materials to produce high quality health and wellness products To bring these products and the understanding of their use to our customers
Slide 20: The Opportunity: Unprecedented aging population
18 Population Pyramids, China: 2000 and 2050 2000 2050 Source: World Population Prospects: The 2004 Revision (2005). (New York: United Nations, 2005) and WHO. The Opportunity: Unprecedented aging population By 24% of the population will be over with double digit annual growth in disposable incomes H
Slide 21: China Retail: Fragmented but growing
China Sales Pie 2012 By 2050, 300 million Chinese over 65 With double digit revenue growth as a group spending 50 times more than today on health products or 35 billion USD China Retail: Fragmented but growing
Slide 22: Current Operations
Corporate Presentation November 2008 Current Operations Tilapia Biomass Market Growth Plans Financial Review HQ Sustainable Maritime Industries Inc. 2010 Fillet processing at HQ Seafood processing plant, Wenchang, China
Slide 23: Nutraceutical Segment
Nutraceutical Segment YTD 2009 YTD 2010 Revenues $9.8 $15.3 $18.7 $22.3 $25.5 $9.0 $9.4 Gross Profit $8.7 $13.1 $15.6 $16.7 $19.1 $6.9 $6.6 Gross Margin 85% 86% 83% 75% 75% 77% 70% $9.8 $15.3 $18.7 $22.3 $25.5 $9.0 $9.4 $8.7 $13.1 $15.6 $16.7 $19.1 $6.9 $6.6 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0
Slide 24: Aquaculture Segment
Aquaculture Segment YTD 2009 YTD 2010 Revenue $17.8 $23.8 $36.2 $45.4 $45.5 $17.8 $18.3 Gross Profit $2.9 $4.0 $10.0 $12.3 $10.7 $4.2 $3.5 Gross Margin 16% 17% 28% 27% 23% 24% 19% $17.8 $23.8 $36.2 $45.4 $45.5 $17.8 $18.3 $2.9 $4.0 $10.0 $12.3 $10.7 $4.2 $3.5 $- $10.0 $20.0 $30.0 $40.0 $50.0
Slide 25: Feed Mill Segment
q4 q1 2010 q2 2010 Revenue $1.3 $3.0 $4.3 Gross Profit $0.6 $0.4 $0.4 Gross Margin 46% 13% 9% $1.3 $3.0 $4.3 $0.6 $0.4 $0.4 $- $1.0 $2.0 $3.0 $4.0 $5.0 Feed Mill Segment
Slide 26: Summary Income Statement
Summary Income Statement ($ in millions) YTD 2009 YTD 2010 Revenues $27.6 $39.1 $55.0 $67.7 $72.3 $26.9 $35.0 Gross Profits $11.6 $17.2 $25.5 $28.2 $30.2 $11.0 $10.9 Operating Income $4.6 $7.0 $12.9 $15.0 $11.1 $3.8 $4.0 Net Income to Shareholders $3.2 $0.9 $4.5 $10.0 $8.1 $2.2 $2.8 EBITDA $5.2 $8.1
Slide 27: Balance Sheet
Balance Sheet ($ in millions) 12/31/2005 12/31/200 12/31/2007 12/31/2008 12/31/2009 6/30/2010 Cash and Equivalents $5.1 $11.4 $47.0 $54.9 $37.0 $43.9 Total Current Assets $15.0 $30.4 $73.4 $84.1 $98.5 $100.2 Total Assets $24.4 $41.9 $84.3 $100.2 $119.8 $121.7 Total Current Liabilities $6.5 $8.4 $11.
Slide 28: Summary
• Tilapia Biomass provides products for the future…here today • We are participating in the growing global personal healthcare industry • We are a “Green Food” winner by meeting the growing global demand for environmentally-sensitive products • We qualify as a “Natural Food” and attract the ‘health-
Slide 29: EBITDA reconciliation
EBITDA Fiscal Year Ended 2006 2007 2008 2009 Net Income to Shareholders $ 873,964 $4,486,562 $10,040,688 $8,100,131 Income Taxes $ 967,968 $2,548,812 $ 2,913,340 $2,212,861 Fair Value Change in Derivatives Instruments $(678,378) Financing Costs $5,183,567 $5,857,117 $ 2,662,734 $1,097,410 Other expe
Slide 30: Management team
Norbert Sporns, Harry Wang Hua, Lillian Wang Li – CEO, COO, Chairman Co-founders of HQS more than 10 years ago (own 25% of HQS) Jean-Pierre Dallaire – Financial Controller and CFO Masters degree in Administration Tony Fish - Senior Vice President, Sales & Brian Gent VP new Product Development Extens
Slide 31: Contacts
HQ Sustainable Maritime Industries, Inc. Suite 788, Melbourne Towers 1511 Third Avenue, Suite 788 Seattle, Washington 98101 USA Tel 206 621-9888 Fax 206 621-0318 http://www.hqfish.com/ [email protected] Auditors: Schwartz, Levitsky & Feldman, LLP Toronto, Canada Counsel: Troutman Sanders LLP New Yor
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