Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Q2 2022 Earnings Presentation
21 slides from Darling Ingredients's earnings presentation, Aug 9, 2022
Slide 1: Earnings Report Q2 | August 2022
1 21 EARNINGS REPORT Q 2 | A U G U S T 2 0 2 2 Exhibit 99.2
Slide 2: Safe Harbor Statement
2 21 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 n
Slide 3: Solid Financial Performance: Summary Highlights
3 21 Solid Financial Performance SUMMARY HIGHLIGHTS Q2 - 22 EARNINGS Q2-2022 Combined Adjusted EBITDA – Record Quarter $402.6 million Global Ingredients EBITDA - Record Quarter $312 million Feed Ingredients EBITDA - Record Quarter $242.1 million Food Ingredients EBITDA - Record Quarter $65.4 million
Slide 4: Strong 2Q and YTD Earnings
4 21 Strong 2Q and YTD Earnings In millions, except per share Q2-2022 Q2-2021 % variance YTD 2022 YTD 2021 % variance Net Sales $1,650.2 $1,198.7 37.7% $3,016.5 $2,245.4 34.3% Gross Margin $418.7 $320.6 30.6% $764.4 $594.5 28.6% Gross Margin % 25.4% 26.7% (4.9)% 25.3% 26.5% (4.5)% Net Income $202.0
Slide 5: Combined Adjusted EBITDA Q2 2022
5 21 Food 16%Feed 58% Fuel 26% Food Feed Fuel Combined Adjusted EBITDA Q2 2022 % of Total EBITDA by Segment $177 $222 $230 $224 $244 $312 $108 $132 $60 $83 $87 $91 $0 $150 $300 $450 Global Ingredients DGD $284.8 $353.7 $289.6 (In millions) $306.8 $330.7 $402.6 Q1 21 Q2 22Q1 22Q4 21Q3 21Q2 21 (1) Inc
Slide 6: Feed Segment Record Growth, Advantaged Feedstocks
6 21 Key Drivers • Raw materials volumes up 23% quarter over quarter, 13% year to date • Net sales growth up 51.6% quarter over quarter, driven by Valley Proteins acquisition • Waste fat strength illustrates growing demand for decarbonization solutions • Used cooking oil growth attributed to Valley
Slide 7: Feed Segment Strong Sales Volumes
7 21 Feed Segment Strong Sales Volumes Fats Proteins Other Rendering Total Rendering Used Cooking Oil Bakery Other Total Net sales three months ended July 3, 2021 292.5$ 258.4$ 45.4$ $ 596.3 86.4$ 79.3$ 9.9$ $ 771.9 Increase in sales volumes 52.1 60.9 - 113.0 11.7 2.6 - 127.3 Increase in finished pr
Slide 8: Food Segment Continued Record Growth
8 21 Key Drivers • Continued uplift in food segment from movement from gelatin to higher-margin collagen peptides • Hydrolyzed collagen demand is escalating rapidly as demand for collagen peptides for joint, ligament, hair and skin health grows worldwide • North America accounts for 32.2% of the hyd
Slide 9: Food Segment High-Margin Collagen Peptides Drive Growth
9 21 Food Segment High-Margin Col lagen Peptides Drive Growth 76% 14% 10% Q2 - 2022 % of Sales Breakdown Collagen Edible fats Other products $100 $120 $140 $160 $180 $200 $220 Food Segment Trailing 4Q adjusted EBITDA Trailing 4 Q's
Slide 10: Fuel Segment Feedstock Outpaced Hedging
10 21 Fuel Segment Feedstock outpaced hedging US $ (in millions) Q2-2022 Q2-2021 YTD-2022 YTD-2021 Net Sales $ 110,660 $ 109,706 $ 242,742 $ 206,913 Cost of sales & operating expenses 86,237 83,110 190,979 154,900 Gross Margin 24,423 26,596 51,763 52,013 Gain on sale of assets (18) (58) (57) (38) Se
Slide 11: Fuel Segment: Diamond Green Diesel
11 21 Fuel Segment High Feedstock Prices, Lower California LCFS, Volati le RINs US$ and gallons (in millions) Q2 2022 Q2 2021 YTD 2022 YTD 2021 EBITDA (Entity) - recorded w/no BTC (17.2)$ 180.0$ 0.1$ 317.4$ EBITDA (Entity) - recorded including BTC 181.2$ 264.0$ 354.3$ 480.4$ Pro forma Adjusted EBITD
Slide 12: Appendix: Additional Information
12 21 APPENDIX ADDITIONAL INFORMATION Q2-22 EARNINGS
Slide 13: California LCFS RIN Value History
13 21 Q2-22 EARNINGS Cal i fornia LCFS RIN Value History $0 $50 $100 $150 $200 $250 1 /1 /2 0 1 6 4 /1 /2 0 1 6 7 /1 /2 0 1 6 1 0 /1 /2 0 1 6 1 /1 /2 0 1 7 4 /1 /2 0 1 7 7 /1 /2 0 1 7 1 0 /1 /2 0 1 7 1 /1 /2 0 1 8 4 /1 /2 0 1 8 7 /1 /2 0 1 8 1 0 /1 /2 0 1 8 1 /1 /2 0 1 9 4 /1 /2 0 1 9 7 /1 /2 0 1 9
Slide 14: Feed Segment – Historical
14 21 Q2-22 EARNINGS Feed Segment – Historical US$ (in millions) Q1-2021 Q2-2021 Q3-2021 Q4-2021 Total 2021 Q1-2022 Q2-2022 Net Sales $ 651.4 $ 771.9 $ 769.6 $ 846.5 $ 3,039.5 $ 879.4 1,170.3 Gross Margin 176.9 215.5 216.0 224.9 833.3 233.9 306.0 Gross Margin % 27.1% 27.9% 28.1% 26.6% 27.4% 26.6% 26
Slide 15: Food Segment – Historical
15 21 Q2-22 EARNINGS Food Segment – Historical US$ (in millions).1 Q1-2021 Q2-2021 Q3-2021 Q4-2021 Total 2021 Q1 -2022 Q2-2022 Net Sales $ 298.1 $ 317.0 $ 311.9 $ 344.7 $ 1,271.6 $ 354.8 $ 369.2 Gross Margin 71.7 78.5 70.5 71.7 292.4 84.5 88.2 Gross Margin % 24.0% 24.8% 22.6% 20.8% 23.0% 23.8% 23.9%
Slide 16: Fuel Segment – Historical
16 21 Q2-22 EARNINGS F u e l S e g m e n t – H i s t o r i c a l US$ (in millions) Q1-2021 Q2-2021 Q3-2021 Q4-2021 Total 2021 Q1-2022 Q2-2022 Net Sales $ 97.2 $ 109.7 $ 104.4 $ 118.9 $ 430.2 $ 132.0 $ 110.7 Gross Margin 25.4 26.6 39.8 24.5 116.3 27.3 24.4 Gross Margin % 26.1% 24.2% 38.1% 20.6% 27.0%
Slide 17: Historical Pricing: 2022 Finished Product Pricing
17 21 Historical Pricing 2022 Finished Product Pricing 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 - Chicago Renderer / cwt $67.00 $72.03 $74.70 $71.39 $75.60 $81.00 $81.76 $79.51 Ye
Slide 18: Adjusted EBITDA
18 21 Adjusted EBITDA Three Months Ended Six Months Ended Adjusted EBITDA July 2, July 3, July 2, July 3, (U.S. dollars in thousands) 2022 2021 2022 2021 Net income attributable to Darling $201,996 $196,582 # $390,049 $348,348 Depreciation and amortization 93,113 79,222 172,359 157,756 Interest expe
Slide 19: Event Calendar
19 21 EVENT CALENDAR Q2 – 22 Earnings Piper Sandler Energy Transition Leader’s Summit August 16-18 - Aspen AllianceBerstein, Columbia Threadneedle Buy-Side Small & Mid-Cap Investor Summit September 20 – New York Raymond James Sustainability Symposium | Low-Carbon Technology: Empowering Companies to
Slide 20: Non-U.S. GAAP Measures
20 21 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
Slide 21: Q2 | August Earnings Report
21 21 Q 2 | A U G U S T 2 0 2 2 EARNINGS REPORT