Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Q1 2019 Earnings Presentation
20 slides from Darling Ingredients's earnings presentation, May 8, 2019
Slide 1: Darling Ingredients Q1 2019 Earnings Presenters
EXHIBIT – 99.2 Randall C. Stuewe, Chairman and CEO Brad Phillips, EVP Chief Financial Officer Melissa A. Gaither, VP IR and Global Communications
Slide 2: Forward-looking statements
2 This presentation contains “forward-looking” statements that are subject to risks and uncertainties that could cause the actual results of Darling Ingredients Inc. (the “Company”) to differ materially from those expressed or implied in the statements. Statements that are not statements of historic
Slide 3: Consolidated Earnings
Consolidated Earnings 3 Q1 Q2 Q3 Q4 Total Q1 Q1 2019 Overview US$ (millions) except per share price 2018 2018 2018 2018 2018 2019 Revenue $ 875.4 $ 846.6 $812.6 $853.1 $3,387.7 $ 835.1 • Global volumes up 2.7% year over year Gross Margin 197.3 193.6 164.5 185.2 740.6 188.4 • Tough winter and N. Amer
Slide 4: First Quarter 2019 Financial Summary
First Quarter 2019 Financial Summary 4 $ in millions Gross Profit and Margin % Q1 2019 Overview • Net sales - $835.1 million • Net income - $18.0 million • EPS at $0.11 per diluted share • Adjusted EBITDA - $ 103.4 million • Diamond Green Diesel JV EBITDA - $ 59.7 million (Entity without BTC) $ 29.8
Slide 5: Feed Segment
Feed Segment 5 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 (millions) 2018 2018 2018 2018 2018 2019 Adj. EBITDA Bridge Q1-2018 to Q1-2019 (millions) Revenue $485.8 $498.8 $482.7 $485.3 $1,952.6 $495.8 100 Gross Margin 116.7 128.0 98.9 110.2 453.8 113.4 $14.5 80 $5.2 $68.5 Gross Margin % 24.0% 25.7% 20.
Slide 6: Food Segment
Food Segment 6 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 Adj. EBITDA Bridge Q1-2018 to Q1-2019 (millions) 2018 2018 2018 2018 2018 2019 (millions) 50 $46.7 ($3.5) Revenue $305.5 $276.7 $265.2 $291.7 $1,139.1 $279.2 $43.2 $0.2 40 $3.4 ($6.8) Gross Margin 56.3 51.9 54.5 58.6 221.3 65.0 $32.4 30 Gross M
Slide 7: Fuel Segment (Does not include Diamond Green Diesel JV)
7 Fuel Segment (Does not include Diamond Green Diesel JV) US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 (millions) 2018 2018 2018 2018 2018 2019 Adj. EBITDA Bridge Q1-2018 to Q1-2019 Revenue $84.1 $71.1 $64.6 $76.2 $296.0 $60.1 (millions) Gross Margin 24.2 13.7 11.1 16.5 65.5 10.0 30 Gross Margin % 28.8%
Slide 8: DGD – Entity Level
8 DGD – ENTITY LEVEL ➢ Construction underway for Super Diamond expansion for parallel 400 million gallon plant increasing our annual capacity to 675 million gallons of renewable diesel plus additional 50–60 million gallons of renewable naphtha gallons for the green gasoline markets ➢ Super Diamond e
Slide 9: Balance Sheet Highlights and Debt Summary
Balance Sheet Highlights and Debt Summary 9 Reaffirmed (US$,Balance in thousands) Sheet HighlightsJune 30, 2018 Debt Summary S&P Ratings 3/27/2019 Cash(US$, in(includes thousands) restricted cash Marchof $142) 30, 2019 (US$, in thousands) March 30, 2019 $104,262 Term Loan B - BBB- Cash (includes res
Slide 10: Appendix – Additional Information
10 Appendix – Additional Information
Slide 11: History of the Biodiesel Tax Credit
11 History of the Biodiesel Tax Credit Year Credit In place Passed 2004 10/22/2004 2005 all year 08/08/2005 2006 all year 2007 all year 2008 all year 10/03/2008 2009 all year 2010 Retroactive 12/17/2010 2011 all year 2012 Retroactive 01/02/2013 2013 all year 2014 Retroactive 12/19/2014 2015 Retroact
Slide 12: Feed Segment - Historical
12 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 (millions) 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 2019 Revenue $552.6 $549.1 $575.5 $562.3 $2,239.5 $485.8 (1) $498.8 (1) $482.7 (1) $485.3 (1) $1,952.6 $495.8 Gross Margin 120.0 126.9 126.0 122.0 494.9 116.7 128.0 98.9 110.2 4
Slide 13: Feed Ingredients Segment – Net Sales Change
Feed Ingredients Segment – Net Sales 13 Change in Net Sales – Year over Year Three Months Ended March 31, 2018 over March 30, 2019 Rendering Sales Used Change in Net Sales - 1Q18 to 1Q19 Total Cooking Fats Proteins Other (1) Rendering Oil Bakery Other (2) Total Net Sales Three Months Ended March 31,
Slide 14: Historical Finished Product Pricing
Jacobsen, Wall Street Journal and Thomson Reuters 14 Historical Pricing QTR. Over QTR. Year Over Year 2019 Finished Product Pricing 2019 Average Jacobsen Prices (USD) Comparison Q4-2018 Q1-2019 % Q1-2018 Q1-2019 % Feed Segment Ingredients January February March Q1 Avg. April Bleachable Fancy Tallow
Slide 15: Food Segment - Historical
Food Segment - Historical 15 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 (millions) 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 2019 Revenue (1) $266.2 $278.4 $298.9 $313.5 $1,157.0 $305.5 (2) $276.7 (2) $265.2 (2) $291.7 (2) $1,139.1 $279.2 (2) Gross Margin 56.8 56.0 60.2 63.6
Slide 16: Fuel Segment - Historical
Fuel Segment - Historical 16 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 (millions) 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 2019 Revenue $59.7 $67.4 $61.9 $76.8 $265.8 $84.1 $71.1 $64.6 $76.2 $296.0 $60.1 Gross Margin 13.7 12.7 7.6 21.4 55.4 24.2 13.7 11.1 16.5 65.5 10.0 Gro
Slide 17: Adjusted EBITDA definition
17 Adjusted EBITDA is not a recognized accounting measurement under GAAP; it should not be considered as an alternative to net income, as a measure of operating results, or as an alternative to cash flow as a measure of liquidity, and is not intended to be a presentation in accordance with GAAP. Adj
Slide 18: Adjusted EBITDA and Pro Forma Adjusted EBITDA
Adjusted EBITDA 18 Adjusted EBITDA and Pro Forma Adjusted EBITDA Three Months Ended - Year over Year (US$ in thousands) March 30, March 31, 2019 2018 Net income/(loss) attributable to Darling $ 18,012 $ 97,305 Depreciation and amortization 79,164 78,619 Interest expense 19,876 23,124 Income tax expe
Slide 19: Upcoming investor conferences
19 Citi 2019 Global Energy and Utilities Conference May 14, 2019 Intercontinental Hotel – Boston, MA BMO Farm to Market Conference May 15, 2019 Grand Hyatt – New York, NY Roth International Conference June 18, 2019 Dorchester Hotel – London, UK
Slide 20: Creating Sustainable Food, Feed and Fuel
Le CREATING SUSTAINABLE|FOOD) FEED ANDIFUEL 2 st FOR A pai POP. ee = °2 @ . oF DARLING INGREDIENTS