Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Q2 2024 Earnings Presentation
21 slides from Darling Ingredients's earnings presentation, Jul 25, 2024
Slide 1: Financial Results Q2 2024
Financial Results Q2 2024 July 25, 2024
Slide 2: Forward-looking statements
This presentation includes “forward-looking” statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements. Statements that are not statements of historical facts are forward-looking statements and are ma
Slide 3: Q2 2024 Business Highlights (unaudited)
Q2 2024 Business Highlights (unaudited) Financial Performance Q2 2024 Net Sales $1,455.3 million Net Income $78.9 million EPS Diluted $0.49 Combined Adjusted EBITDA $273.6 million Feed Ingredients EBITDA $122.1 million Food Ingredients EBITDA $73.2 million Fuel Ingredients EBITDA $96.8 million Share
Slide 4: Q2 2024 Earnings (unaudited)
Q2 2024 Earnings (unaudited) In millions, % YTD YTD % Q2-2024 Q2-2023 except per share variance 2024 2023 variance Net Sales $1,455.3 $1,757.6 (17.2%) $2,875.6 $3,548.8 (19.0%) Gross Margin $326.9 $397.9 (17.8%) $630.5 $822.1 (23.3%) Balance Sheet Gross Margin % 22.5% 22.6% (0.4%) 21.9% 23.2% (5.6%)
Slide 5: EBITDA (unaudited)
EBITDA (unaudited) Q2 2024 % of Total EBITDA by Segment Combined Adjusted EBITDA 600 $508.3 500 $413.0 $418.4 $402.6 $394.7 400 33.1% $330.6 $334.0 $350.9 $280.1 41.8% 300 $273.6 200 25.1% 100 0 Q122 Q222 Q323 Q422 Q123 Q223 Q323 Q423 Q124 Q224 Feed Food Fuel Global Ingredients DGD 5
Slide 6: Feed Segment
Feed Segment US $ (in millions, unaudited) Q2 2024 Q2 2023 YTD 2024 YTD 2023 Net Sales $ 934,147 $ 1,141,661 $ 1,823,995 $ 2,379,155 • Global raw material volumes remain strong. Cost of sales & operating expenses 737,871 876,413 1,443,640 1,826,485 Gross margin $ 196,276 $ 265,248 $ 380,355 $ 552,67
Slide 7: Food Segment
Food Segment US $ (in millions, unaudited) Q2 2024 Q2 2023 YTD 2024 YTD 2023 • Lower revenue a function of sales price Net Sales $ 378,841 $ 476,093 $ 770,123 $ 872,485 declines, but offset by consistent margins. Cost of sales & operating 276,760 371,095 574,905 661,210 expenses Gross margin $ 102,0
Slide 8: Continued growth driven by collagen peptides
Continued growth driven by collagen peptides Food Segment EBITDA (millions) $350 $321.2 $300 $256.7 $250 $194.9 $200 $167.1 $157.1 $150 $129.7 $100 2018 2019 2020 2021 2022 2023 8
Slide 9: Fuel Segment
Fuel Segment US $ (in millions, unaudited) Q2 2024 Q2 2023 YTD 2024 YTD 2023 • Received $77.1 million dividend on July 18, 2024. Net Sales $ 142,304 $ 139,867 $ 281,473 $ 297,153 Cost of sales & operating expenses 113,790 112,194 226,542 238,980 • Significant drop in RINS, LCFS and $8 million Gross
Slide 10: Fuel Segment: Diamond Green Diesel
Fuel Segment Quarterly Avg. Prices Diamond Green Diesel (unaudited) D4 RINs (1.7 Multiple) & Yellow Grease - IL US $ and gallons (in Q2 2024 Q2 2023 YTD 2024 YTD 2023 $0.70 $3.50 millions) $0.60 $3.00 Pro forma Adjusted $76.6 $247.4 $191.7 $376.7 $0.50 $2.50 EBITDA (Darling’s share) $0.40 $2.00 Tota
Slide 11: A Look Ahead
A Look Ahead • Fat prices are rebounding • No planned turnarounds at DGD • SAF scheduled for start-up in the fourth quarter – Contracts nicely progressing • Laser focus on operational excellence and margin management 11
Slide 12: Appendix
Appendix bee
Slide 13: California LCFS and RIN Value History
13 $50 $250 $100 $0 $150 $200 3/1/2020 6/1/2020 9/1/2020 12/1/2020 3/1/2021 6/1/2021 9/1/2021 12/1/2021 3/1/2022 (USD/MT) 6/1/2022 9/1/2022 12/1/2022 3/1/2023 6/1/2023 Monthly Average LCFS Carbon Credit Price 9/1/2023 12/1/2023 3/1/2024 6/1/2024 California LCFS and RIN Value History
Slide 14: Feed Segment – Historical (unaudited)
Feed Segment – Historical (unaudited) US$ (in millions) Q1-2023 Q2-2023 Q3-2023 Q4-2023 Total 2023 Q1-2024 Q2-2024 Net Sales $ 1,237.5 $ 1,141.7 $ 1,047.8 $ 1,045.6 $ 4,472.6 $ 889.8 $ 934.1 Gross Margin 287.4 265.2 243.5 290.6 1,086.7 184.1 196.3 Gross Margin % 23.2% 23.2% 23.2% 27.8% 24.3% 20.7% 2
Slide 15: Feed Segment Sales
Feed Segment Sales Rendering Sales Fats Proteins Other Total Rendering Used Cooking Oils Bakery Other Total Net sales three months ended July 1, 2023 $ 404.0 $ 434.0 $ 73.4 $ 911.4 $ 146.3 $ 67.3 $ 16.6 $ 1,141.6 Decrease in sales volumes (14.6) 7.1 — (7.5) (20.3) (4.9) — (32.7) Decrease in finished
Slide 16: Food Segment – Historical (unaudited)
Food Segment – Historical (unaudited) US$ (in millions) Q1-2023 Q2-2023 Q3-2023 Q4-2023 Total 2023 Q1-2024 Q2-2024 Net Sales $ 396.4 $ 476.1 $ 455.7 $ 423.8 $ 1,752.1 $ 391.3 $ 378.8 Gross Margin 106.3 105.0 117.5 112.7 441.5 93.1 102.1 Gross Margin % 26.8% 22.1% 25.8% 26.6% 25.2% 23.8% 26.9% Loss (
Slide 17: Fuel Segment – Historical (unaudited)
Fuel Segment – Historical (unaudited) US$ (in millions) Q1-2023 Q2-2023 Q3-2023 Q4-2023 Total 2023 Q1-2024 Q2-2024 Net Sales $ 157.3 $ 139.9 $ 121.7 $ 144.6 $ 563.4 $ 139.2 $ 142.3 Gross Margin 30.5 27.7 25.5 33.2 116.8 26.4 28.5 Gross Margin % 19.4% 19.8% 20.9% 23.0% 20.7% 19.0% 20.0% Loss (gain) o
Slide 18: Historical Pricing
Historical Pricing 2024 Finished Product Pricing 2024 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 - Chicago Renderer / cwt $43.43 $42.04 $44.26 $43.25 $
Slide 19: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income (Non-GAAP) Adjusted EBITDA and (Non-GAAP) Pro-Forma Adjusted EBITDA to Foreign Currency For the Three and Six Months Ended June 29, 2024 and July 1, 2023 (in thousands, unaudited) Three Months Ended Six Months Ended Adjusted EBITDA June 29, July 1, June 29, July 1, (U.S.
Slide 20: 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. It is presented here not as an alternative to net
Slide 21: Financial Results Q2 2024
Financial Results Q2 2024 July 25, 2024