Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Darling International — Investor Presentation (April 2008)
30 slides from Darling Ingredients's investor presentation, Apr 9, 2008
Slide 1: Investor Presentation April 2008
Exhibit 99.1 INVESTOR PRESENTATION APRIL 2008
Slide 2: Company Information
Company Information 2 Over a century old, Darling International Inc. is America’s leading provider of rendering, recycling and recovery solutions to the nation’s food industry.
Slide 3: Forward-Looking Statements
Forward-Looking Statements 3 This presentation contains forward-looking statements regarding the business operations of Darling and the industry in which it operates. These statements are identified by words such as “may,” “will,” “expect,” “believe,” “intend,” “anticipate,” “should,” “estimate,” “c
Slide 4: Darling at a Glance
Darling at a Glance 4 •• Founded Founded in in 1882; 1882; public public since since 1994 1994 •• 125 125 years years old old •• Corporate Corporate headquarters headquarters in in Irving, Irving, Texas Texas •• 77 77 locations locations across across the the US US •• 1,880 1,880 employees employees
Slide 5: Industry Overview
Industry Overview 5 •• Animal Animal and and food food by-product by-product recycling recycling industry industry is is “mission “mission critical” critical” in in the the food food supply supply chain chain and and is is the the most most efficient efficient and and environmentally environmentally
Slide 6: Industry Overview
Industry Overview 6 RAW MATERIAL Tallow Meat & Bone Grease Hides Finished Soap Bio- Pet Animal Hog Poultry Pet Animal Bio- Leather Fuels Food Feed Food Feed Food Feed Fuels Products Shoes Component Linoleic Oleic Glycerine Stearic Fertilizer Garments By-Products Acid Acid Acid Upholstery Component E
Slide 7: Industry Leader
Industry Leader 7 Creating value by leveraging our core competencies in collection, processing and marketing • Largest and only publicly traded US provider of rendering, recycling and recovery solutions • Only rendering company with a national footprint - Network of 39 processing facilities from coa
Slide 8: Darling's Value Proposition
Darling’s Value Proposition 8 Well positioned for opportunistic growth and delivering value to our stockholders • Unmatched capabilities and breadth of service offerings • Diversified business model • Diversified raw material stream • Uniquely positioned to capitalize on favorable market and regulat
Slide 9: Darling's Value Proposition: Healthy Capital Structure
Darling’s Value Proposition 9 Healthy Capital Structure • Sizeable unused revolving credit available • Proven ability to monetize stock • Favorable Debt/EBITDA ratio (0.4:1)
Slide 10: Business Segments
Business Segments 10 Rendering Rendering is the process of recycling animal and food waste products into useful commercial goods, including tallow, protein meals (meat and bone meal), yellow grease, and hides. Restaurant Services Darling is the only US provider of collection, storage, transport, and
Slide 11: Rendering Overview
Rendering Overview 11 Purchase & Darling operates a fleet of approx 1,000 trucks to collect raw materials from approx 115,000 food service establishments, butcher shops, grocery stores, and Collection independent meat and poultry processors nationwide. “Formula” basis: Applied to approx 55% of Darli
Slide 12: Qual-Pet
Qual-Pet 12 • A consistent and high quality branded product that has been recognized by the industry in excess of 30 years
Slide 13: Macro Factors Impacting Performance
Macro Factors Impacting Performance 13 • Raw material supply - Fluctuations in demand for proteins - Trade constraints • Finished product prices •• Energy costs
Slide 14: Processing Facilities & Serviced Areas
Processing Facilities & Serviced Areas 14
Slide 15: Smooth & Successful Integration of National By-Products (NBP)
Smooth & Successful Integration of 15 National By-Products (NBP) ü Implemented operational best practices practices ü Completed route optimization ü Redirected raw material ü Closed non-essential facilities ü Administrative improvements substantially complete
Slide 16: Restaurant Services Overview
Restaurant Services Overview 16 • Premium service offered in conjunction with COR - Self-contained used cooking oil storage system inside or outside customer’s premises • Grease trap maintenance and cleaning service - Operates in 20 markets - Customers represent FSEs, malls and industrial food proce
Slide 17: CleanStar
CleanStar 17 • Environmentally safe and efficient - Used cooking oil is pumped directly into sealed, insulated CleanStar storage tank with press of a button • Customer choice - Option of inside or outside storage systems to fit customer needs
Slide 18: Torvac (Trap)
Torvac (Trap) 18 • Ongoing maintenance - Provides manpower, equipment and expertise to find and fix grease trap problems • Compliance - Removed material is tracked and handled in a legal and environmentally sound manner
Slide 19: Cooking Oil Removal
Cooking Oil Removal 19 • Bundled services - Complete, individualized used cooking oil collection and recycling services nationwide through local providers • Environmental compliance - Efficient, reliable pickup and disposal of non-recyclable waste
Slide 20: National Service Center
National Service Center 20 Darling’s National Service Center (NSC) offers complete service management for all cooking oil removal, grease trap and rendering services. • Manages grease and rendering related service needs. • Ensures compliance for trap regulations and ordinances. • 24 hr/day, 7 day/we
Slide 21: Total Revenues
Total Revenues 21 (in (in millions) millions)
Slide 22: Operating Cash Flows
Operating Cash Flows 22 (in (in millions) millions)
Slide 23: Renewable Fuels
Renewable Fuels 23 • Fuels produced from bio-mass or non-petroleum sources • Only work with mandates/subsidies or high oil prices • Dependent on Washington D.C. - Direct subsidies - Mandates (Congress recently set significant targets which now includes bio-fuels as well as ethanol.)
Slide 24: Competitive Advantages
Competitive Advantages 24 • Darling is uniquely positioned to capitalize on emerging bio-fuel opportunities. - Concentrated regions which source large, stable supplies of raw materials - Top producer of rendered fats and greases - Historically, animal fats and greases have traded at a discount to ve
Slide 25: Opportunities Exist Today: Alternative Fuel Mixture Tax Credit
4 Opportunities Exist Today 25 1: Alternative Fuel Mixture Tax Credit • Pays Darling 50 cents per gallon to burn fats/greases in our boilers • Opportunistic calculation versus natural gas • Limited to no capital involved • Current subsidy is through 2009 • Proposed legislation extends through 2012
Slide 26: Opportunities: Bio Diesel
4 Opportunities: Bio Diesel 26 2: Bio Diesel Production of a Fatty Acid Methyl Ester from a triglyceride feedstock • Process is well known and fully commercialized • Issues exist with handling FFA, metals, phosphorus and other contaminants • Finished product has cold flow issues but are diminished w
Slide 27: Opportunities: Green Diesel
4 Opportunities: Green Diesel 27 3: Green Diesel Green or renewable diesel is the process of converting a triglyceride to a hydrocarbon. • Utilizes known petroleum-focused processes • Finished product is more fungible than bio-diesel - Higher Cetane - Better cold flow properties - Zero sulfur for up
Slide 28: Opportunities: Co-Processing
4 Opportunities: Co-Processing 28 4: Co-Processing The introduction of vegetable oils, fats and greases as a blend feedstock with petroleum. • Introduced at 2-5% with distillate stream prior to hydro treating • Allows petroleum companies to participate in renewable fuels, however, it displaces curre
Slide 29: Renewable Fuels: What's Next?
Renewable Fuels: What’s Next? 29 •• Waiting Waiting for for Washington Washington to to clarify clarify final final subsidies subsidies •• Technology Technology is is rapidly rapidly evolving evolving •• Potentially Potentially green green diesel diesel is is aa better better solution solution •• Ul
Slide 30: Investor Presentation
INVESTOR PRESENTATION For more information, visit www.darlingii.com
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