Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Q4 2018 Earnings Presentation
22 slides from Darling Ingredients's earnings presentation, Feb 27, 2019
Slide 1: Darling Ingredients Q4 2018 Earnings Presentation
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 regarding the business operations and prospects of Darling Ingredients Inc. and industry factors affecting it. These statements are identified by words such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “could,” “may,” “will,” “
Slide 3: Executing World of Growth Strategy
3 Executing World of Growth Strategy: Financial: • Refinanced 4.75% senior Euro-notes to 3.625% – lowering interest cost and Growth projects completed in 2018: extending terms through 2026 • Protein Conversion Facility – Los Angeles, California Q1 2018 • Protein Conversion Facility (beef) – Wahoo, N
Slide 4: Consolidated Earnings 2018 Overview
Consolidated Earnings 4 2018 Overview Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total US$ (millions) except per share price Q 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 4 • Global volumes up 3.3% over 2017 Revenue $ 878.5 $ 894.9 $ 936.3 $ 952.6 $ 3,662.3 $ 875.4 $ 846.6 $ 812.6 $ 853.1 $ 3,387.7 190.5 1
Slide 5: Fourth Quarter 2018 Financial Summary
Fourth Quarter 2018 Financial Summary 5 $ in millions Gross Profit and Margin % Q4 2018 Overview • Net sales - $853.1 million • Net income - $40.6 million • EPS at $0.24 per diluted share • Adjusted EBITDA - $108.9 million • Diamond Green Diesel JV EBITDA - $110.6 million (Entity without BTC) $55.3
Slide 6: Feed Segment
Feed Segment 6 US$ and metric tons Q4 Total Q1 Q2 Q3 Q4 Total (millions) 2017 2017 2018 2018 2018 2018 2018 Adj. EBITDA Bridge Q4-2017 to Q4-2018 (millions) Revenue $562.3 $2,239.5 $485.8 (1) $498.8 (1) $482.7 (1) $485.3 (1) $1,952.6 80 $76.1 ($50.9) Gross Margin 122.0 494.9 116.7 128.0 98.9 110.2 4
Slide 7: Food Segment
Food Segment 7 US$ and metric tons Q4 Total Q1 Q2 Q3 Q4 Total Adj. EBITDA Bridge Q4-2017 to Q4-2018 (millions) 2017 2017 2018 2018 2018 2018 2018 (millions) (1) (1) (1) (1) (1) 60 Revenue $313.5 $1,157.0 $305.5 $276.7 $265.2 $291.7 $1,139.1 $15.4 ($22.3) Gross Margin 63.6 236.6 56.3 51.9 54.5 58.6 2
Slide 8: Fuel Segment
8 Fuel Segment (Does not include Diamond Green Diesel JV) US$ and metric tons Q4 Total Q1 Q2 Q3 Q4 Total Adj. EBITDA Bridge Q4-2017 to Q4-2018 (millions) 2017 2017 2018 2018 2018 2018 2018 (millions) Revenue $76.8 $265.8 $84.1 (1) $71.1 (1) $64.6 (1) $76.2 (1) $296.0 (1) Gross Margin 21.4 55.4 24.2
Slide 9: DGD – Entity Level, Super Diamond phase three expansion
9 DGD – ENTITY LEVEL Super Diamond phase three expansion ➢ Expansion to 275 million gallons completed and running at approved capacity since early October parallel independent plant to bring total annual ➢ Super Diamond expansion project approved to 675 production to 675 million million total annual
Slide 10: Before and after clearing land for start of construction
10 Before and after clearing land for start of construction
Slide 11: Balance Sheet Highlights and Debt Summary
Balance Sheet Highlights and Debt Summary 11 (US$,Balance in thousands) Sheet HighlightsJune 30, 2018 Debt Summary Cash(US$, in thousands)(includes restricted cashDecember of $142) 29, 2018 (US$, in thousands) December 29, 2018 $104,262 Cash (includes restricted cash of $107) $ 107,369 Amended Credi
Slide 12: Appendix – Additional Information
12 Appendix – Additional Information
Slide 13: History of the Biodiesel Tax Credit
13 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 14: Feed Segment – Historical
14 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total (millions) 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 Revenue $476.2 $543.0 $531.4 $538.5 $2,089.1 $552.6 $549.1 $575.5 $562.3 $2,239.5 $485.8 (1) $498.8 (1) $482.7 (1) $485.3 (1) $1,952.6 Gr
Slide 15: Feed Ingredients Segment – Net Sales Change
Feed Ingredients Segment – Net Sales 15 Change in Net Sales – Year over Year Three Months Ended December 30, 2017 over December 29, 2018 Rendering Sales Change in Net Sales - 4Q17 to 4Q18 Total Used Fats Proteins Other (1) Rendering Cooking Oil Bakery Other (2) Total Net Sales Three Months Ended Dec
Slide 16: Historical Finished Product Pricing 2018
Jacobsen, Wall Street Journal and Thomson Reuters 16 Historical Pricing 2018 Finished Product Pricing 2018 Average Jacobsen Prices (USD) Feed Segment Ingredients January February March Q1 Avg. April May June Q2 Avg. July August Sept. Q3 Avg. Oct. Nov. Dec. Q4 Avg. Year Avg. Bleachable Fancy Tallow -
Slide 17: Food Segment – Historical
Food Segment - Historical 17 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total (millions) 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 Revenue (1) $246.6 $270.5 $260.2 $278.4 $1,055.7 $266.2 $278.4 $298.9 $313.5 $1,157.0 $305.5 (2) $276.7 (2) $26
Slide 18: Fuel Segment – Historical
Fuel Segment - Historical 18 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total (millions) 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 Revenue $55.6 $62.3 $60.4 $68.8 $247.1 $59.7 $67.4 $61.9 $76.8 $265.8 $84.1 (1) $71.1 (1) $64.6 (1) $76.2 (1) $
Slide 19: Adjusted EBITDA definition
19 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 20: Adjusted EBITDA and Pro Forma Adjusted EBITDA
Adjusted EBITDA 20 Adjusted EBITDA and Pro Forma Adjusted EBITDA Three Months Ended - Year over Year Twelve Months Ended - Year over Year (US$ in thousands) December 29, December 30, December 29, December 30, 2018 2017 2018 2017 Net income/(loss) attributable to Darling $ 40,648 $ 105,729 $ 101,496
Slide 21: Upcoming investor conferences
21 31st Annual ROTH Conference March 19, 2019 The Ritz Carlton - Dana Point, CA Gabelli 5th Annual Environmental Conference March 26, 2019 Lotte New York Palace Hotel - New York, NY BMO Farm to Market Conference May 15, 2019 Grand Hyatt – New York, NY Oppenheimer Consumer Conference June 18-19, 2019
Slide 22: Creating Sustainable Food, Feed and Fuel
|} CREATING SUSTAINABLE FOOD, FEED AND EDEL » ot FOR A GROWING POPUL AuJON t . ® @e, +”** DARLING INGREDIENTS