Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Darling International — Stephens Inc. Investment Conference 2010
35 slides from Darling Ingredients's conference presentation, Mar 17, 2010
Slide 1: Stephens Inc. Investment Conference March 17, 2010
Stephens Inc. Investment Conference March 17, 2010 NYSE: DAR Exhibit 99.1
Slide 2: Forward-Looking Statements
2 Forward-Looking Statements 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 3: Over a century old, Darling International Inc.
3 Over a century old, Darling International Inc. is America’s leading provider of rendering, recycling and recovery solutions to the nation’s food industry, converting valuable waste streams into sustainable feed and fuel products.” .
Slide 4: Who we are
4 Founded in 1882 Headquartered in Dallas, TX 1870 employees Public since 1994 NYSE Listed (DAR) Largest independent rendering company with locations nationwide, including processing plants Reports under two segments: – Rendering – Restaurant services Renewable fuel initiative Who we are:
Slide 5: A national footprint with scale
5 A national footprint with scale . . . The only recycling/rendering company with a national footprint operating in 42 states – Network of 45 processing facilities from coast to coast – Supported by 36 accumulation centers.
Slide 6: The products we produce
RAW MATERIAL Tallow Meat & Bone Grease Hides Lubricants Textiles Plastics Shampoo Emulsifiers Cleaners Creams Esters Paints Plastics Lubricants Inks Glues Solvents Antifreeze Explosives Rubber Plastics Tires Lubricants 6 The products we produce: Leather Shoes Garments Upholstery Bio- Fuels Animal Fe
Slide 7: The industry we operate within
7 The industry we operate within: Animal and food by-product recycling industry is “mission critical” in the food supply chain and is the most efficient and environmentally sound disposal alternative for a sustainable society. Over 59 billion pounds of inedible by-products generated annually from me
Slide 8: How we report
8 How we report: 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 rec
Slide 9: How the business operates
9 How the business operates: Darling operates a fleet of approx 1,000 trucks to collect raw materials from approx 110,000 food service establishments, butcher shops, grocery stores, and independent meat and poultry processors nationwide. “Formula” basis: Applied to approx 53% of Darling’s annual raw
Slide 10: Darling International Inc.
INTERNATIONAL ING. DARLIN YM! G
Slide 11: Rendering…..turning this …
10 Rendering…..turning this … Offal Bones and fat Blood Animals dead on arrival, in transit or on farms Feathers
Slide 12: into this
11 … into this
Slide 13: Restaurant Services Overview
12 Restaurant Services Overview Basic Cooking Oil Removal (COR) Service – Complete, individualized used cooking oil collection services offered nationwide – recycling 100% of the used oil we collect Grease Trap Maintenance and Cleaning Service – Operates in 20 markets – Customers represent FSEs, mal
Slide 14: One Stop National Approach
13 A “ One Stop ” National Approach: 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 da
Slide 15: A proposed 50/50 Joint Venture between Darling and Valero
14 A proposed 50/50 Joint Venture Company between Darling and Valero
Slide 16: Valero and Darling have chosen Green Diesel
15 Valero and Darling have chosen Green Diesel! Animal fat based bio-diesel (TME) has not been embraced because of cold flow properties… hard to handle in the distribution system and variable quality . Petro-Diesel Biodiesel (FAME) Green Diesel NOx Emission Baseline + 10 -10 to 0 Cetane 40-55 50-65
Slide 17: What Motivates Darling to do this?
16 What Motivates Darling to do this?
Slide 18: Darling is uniquely positioned
17 Darling is uniquely positioned RFS 2…mandates apply! “Similar to owning the oil field” Not a food oil (Feed vs. Fuel) Own the arbitrage! Source: National Biodiesel Board.
Slide 19: Darling owns an "Oil Field"
18 Darling owns an “Oil Field”… MIDWESTERN FEEDSTOCK Coldwater Indianapolis Mason City Chicago Berlin Blue Earth Sioux City Denver Omaha (3) Bellevue Des Moines Clinton St. Louis Kansas City Wichita Tulsa Little Rock Dallas Houston WESTERN FEEDSTOCK EASTERN FEEDSTOCK Los Angeles Las Vegas Fresno Tur
Slide 20: Darling's fats and oils have one use: Feed
19 Darling‘s fats and oils have one use: Feed Fat calories supplement corn calories…..
Slide 21: How is the value of fat determined?
20 How is the value of fat determined? = Price per Bushel / 56 multiplied by 3.0 = The value of fats and greases
Slide 22: Corn…..understanding its impact
21 Corn…..understanding it‘s impact -----------Billions of annual bushels--------- CORN NON-ETHANOL SURPLUS SUPPLY DEMAND NO ETHANOL 9.4 9.0 .4 9.9 9.2 .7 9.5 9.1 .4 9.0 8.5 .5 10.1 9.0 1.1 11.8 9.3 2.5 11.1 9.6 1.5 10.5 9.1 1.4 12.5 9.0 3.5 12.0 8.5 3.5 Increasing due to higher yields Non-ethanol d
Slide 23: A changing value proposition
CRUDE OIL Animal Fat & Used Cooking Oil 22 A changing value proposition GASOLINE/DIESEL FUEL CORN Determines * the * price Heavily * influences * the * price Has * been * and * will * become * even * more * in * the * future * key * influence Primary * determinant * for * price ETHANOL
Slide 24: Fat is more valuable as a fuel than as a feed
23 Fat is more valuable as a fuel than as a feed Per # price Diesel fuel Per # price Tallow/YG Per # premium Fuel to feed Per # value Tax credit Per # premium Fuel after tax credit 2002 2003 2004 2005 2006 2007 2008 2009 AVERAGE .10 .12 (.02) .12 .14 .12 .17 (.05) .09 .14 .16 .17 (.01) .13 .14 .24 .
Slide 25: Overview of St. Charles Refinery/Green Diesel Location
OVERVIEW OF ST. CHARLES REFINERY/GREEN DIESEL LOCATION ______________________________________________________________
Slide 26: Our Financials March 2010
Our Financials March 2010 NYSE: DAR Our Financials
Slide 27: Revenue is commodity price influenced
26 Revenue is commodity price influenced… $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000 2005 2006 2007 2008 2009 Rendering Revenues Restaurant Services Revenues $308,867 $406,990 $645,313 $807,492 $597,806
Slide 28: Operating Cash Flows
27 Operating Cash Flows (in millions) $49.9 $103.9 $133.0 $57.5 $96.2 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 $130 $140 $150 $160 $170 2005 2006 2007 2008 2009 Darling & National By-Products Combined (Proforma) Darling International Inc. (Post - Acquisition)
Slide 29: Core Business Growth through Acquisition
28 28 Core Business Growth through Acquisition March Dec May July Dec Feb Aug Oct 2003 2004 2005 2006 2007 2008 2009 Enviro Vac, Inc. FL, GA KC metro NYC metro GA GA So CA TX Burrows Industries, Inc. dba Minuteman Pumping Ace Grease Service J&R Rendering, Inc. Southeastern Maintenance & Construction
Slide 30: Debt and Total Assets
5 Year Debt 2005 2006 2007 2008 2009 § Year Total Assets 2005 2006 2007 2008 2009 DARLIN y! G INTERNATIONAL ING.
Slide 31: Capital Expenditures
30 Capital Expenditures Millions
Slide 32: Balance Sheet
31 Balance Sheet January 2, 2010 January 3, 2009 CASH $ 68,579 $ 51,263 ACCOUNTS RECEIVABLE 45,572 40,424 INVENTORIES 19,057 22,182 INCOME TAXES REFUNDABLE 11,248 OTHER CURRENT ASSETS 12,564 13,352 TOTAL CURRENT ASSETS 146,377 138,469 PROPERTY, PLANT & EQUIP 151,982 143,291 GOODWILL 79,085 61,133 OT
Slide 33: Darling International Inc. is America's leading provider of rendering
* * 32 “Darling * International * Inc. * is America’s * leading * p rovider * of * rendering, recycling * and * recovery * solutions * to the nation’s * food * industry * … converting valuable * waste * streams * into * sustainable feed * and * fuel * products.”
Slide 34: Material Darling recycles in a year
Material Darling recycles in a year: 33 Darling Captures and Recycles Carbon (Emissions per 1000 lb raw material) Rendering Facility kg CO eq avoided by recycling 64 kg CO Industrial uses and biofuels Feed Carbon Darling captures, lb/year 1.23 billion CO 2 Darling avoids, metric ton/year 2.1 million
Slide 35: The Recycling Company of Yesterday… The Carbon Friendly Fuel Company of Tomorrow
The RECYCLING COMPANY of YESTERDAY… The of TOMORROW CARBON CARBON FRIENDLY FRIENDLY FUEL COMPANY
Darling International — Stephens Inc. Investment Conference 2010 on 6ix