Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Q3 2020 Earnings Presentation
18 slides from Darling Ingredients's earnings presentation, Nov 3, 2020
Slide 1: Third Quarter 2020 Conference Call
Exhibit 99.2 Third Quarter 2020 Conference Call
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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 st
Slide 3: Summary Highlights: Third Quarter 2020 Business Update
Summary Highlights Third Quarter 2020 Business Update • Best combined adjusted EBITDA quarter YTD for 2020 • Gross margin percentage growth of 2.4 points year over year and 2.7 points YTD 2020 versus YTD 2019 • Reduced term loan B balance by $145 million to $350 million outstanding • Amended and ext
Slide 4: Financial Highlights
Financial Highlights Financials YTD YTD Balance Sheet As of As of (in millions) Q3-2020 Q3-2019 Q3-2020 Q3-2019 (in millions, except ratio data) 9/26/2020 12/28/2019 Segment EBITDA Cash (including restricted) $66.0 $73.0 Feed $72.3 $72.3 $227.6 $201.4 Revolver availability $934.3 $911.9 Food 41.7 39
Slide 5: Feed Segment
Feed Segment US$ (in millions) Q3-2019 Q4-2019 Q1-2020 Q2-2020 Q3-2020 Net Sales $ 497.0 $ 490.4 $ 512.6 $ 503.7 $ 483.0 Gross Margin 117.2 114.3 124.2 135.8 121.4 Adj. EBITDA Bridge Q3-2019 to Q3-2020 Gross Margin % 23.6% 23.3% 24.2% 27.0% 25.1% (millions) Loss/(gain) on sale of assets (2.4) (0.4)
Slide 6: Food Segment
Food Segment US$ (in millions) TotalQ4-2018Q1-2019 2018 Q3-2019 Q4-2019 Q1-2020 Q2-2020 Q3-2020 Net Sales $ 276.5 $ 288.6 $ 270.3 $ 278.9 $ 291.8 Gross Margin 61.8 67.2 64.9 58.8 65.1 Gross Margin % 22.4% 23.3% 24.0% 21.1% 22.3% Adj. EBITDA Bridge Q3-2019 to Q3-2020 (millions) Loss/(gain) on sale of
Slide 7: Fuel Segment
Fuel Segment (Includes Diamond Green Diesel JV consolidated EBITDA) US$ (in millions) Q3-2019 Q4-2019 Q1-2020 Q2-2020 Q3-2020 Net Sales $ 68.6 $ 80.6 $ 69.9 $ 66.0 $ 75.7 Key Drivers: Gross Margin 10.1 37.6 16.9 21.8 25.7 • Combined adjusted EBITDA of $117.1 million, with DGD Gross Margin % 14.7% 46
Slide 8: October 2020 400-million-gallon expansion
October 2020 400-million-gallon expansion Existing 275-million-gallon plant Page 8 | Third Quarter 2020 Results | 11.04.2020
Slide 9: Appendix: Additional Information
Appendix Additional Information
Slide 10: California LCFS & RIN value history
$250 $200 $150 $100 $50 $- Page Source: https://ww3.arb.ca.gov/fuels/lcfs/credit/lrtweeklycreditreports.htm Source: Apr-16 10 Jun-16 | Third| Quarter 2020Results | 11.04.2020 Aug-16 Oct-16 California LCFS &RIN value history Dec-16 Feb-17 Apr-17 Average LCFS Carbon Credit Price Jun-17 Weighted Ave Pr
Slide 11: Feed Segment - Historical
Feed Segment - Historical US$ (in millions) Q3-2018 Q4-2018 Total 2018 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Total 2019 Q1-2020 Q2-2020 Q3-2020 Net Sales $ 482.7 (1) $ 485.3 $ 1,952.6 $ 495.8 $ 487.4 $ 497.0 $ 490.4 $ 1,970.6 $ 512.6 $ 503.7 $ 483.0 Gross Margin 99.0 110.4 454.6 109.0 110.5 117.2 114.3 45
Slide 12: Historical Pricing
Historical Pricing Jacobson, Wall Street Journal and Thomson Reuters 2020 Finished Product Pricing 2020 Average Jacobsen Prices (USD) Feed Segment Ingredients January February March Q1 Avg. April May June Q2 Avg. July August Sept. Q3 Avg. Bleachable Fancy Tallow - Chicago Renderer / cwt $31.26 $35.2
Slide 13: Food Segment - Historical
Food Segment - Historical US$ (in millions) Q3-2018 Q4-2018 Total 2018 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Total 2019 Q1-2020 Q2-2020 Q3-2020 Net Sales (1) (1) (1) (1) (1) $ 265.2 $ 291.7 $1,139.1 $ 279.2 $ 274.8 $ 276.5 $ 288.6 $1,119.1 $ 270.3 $ 278.9 $ 291.8 Gross Margin 54.5 58.6 221.0 65.1 60.4 61.
Slide 14: Fuel Segment - Historical
Fuel Segment - Historical US$ (in millions) Q3-2018 Q4-2018 Total 2018 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Total 2019 Q1-2020 Q2-2020 Q3-2020 Net Sales $ 64.6 $ 76.2 $ 296.0 $ 60.1 $ 65.0 $ 68.6 $ 80.6 $ 274.3 $ 69.9 $ 66.0 $ 75.7 Gross Margin 11.2 16.6 65.8 10.0 11.7 10.1 37.6 69.4 16.9 21.8 25.7 Gross
Slide 15: Non-U.S. GAAP Measures
Non-U.S. GAAP Measures 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 accor
Slide 16: Adjusted EBITDA
Adjusted EBITDA Three Months Ended Nine Months Ended Adjusted EBITDA September 26, September 28, September 26, September 28, (U.S. dollars in thousands) 2020 2019 2020 2019 Net income attributable to Darling $ 101,125 $ 25,721 $ 252,074 $ 69,991 Depreciation and amortization 85,730 80,407 253,711 23
Slide 17: Upcoming IR Events
Upcoming IR Events • Baird Industrial Conference – 11.11.20 • Berenberg CEO Conference – 11-12-20 • Stephens Consumer Staples Conference – 11.18.20 • BMO Growth & ESG Conference – 12.08.20 or 12.09.20 Page 17 | Third Quarter 2020 Results | 11.04.2020
Slide 18: We create solutions that sustain life
WE CREATE SOLUTIONS THAT SUSTAIN LIFE 4 WEARE.DARLINGILCOM HEALTH « NUTRIENTS 4 BIOENERGY » SERVICES DARLI NG INGREDIENTS