Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Darling International — BMO Capital Markets 2010 Agriculture, Protein & Fertilizer Conference
35 slides from Darling Ingredients's conference presentation, May 19, 2010
Slide 1: Investor Presentation – BMO Capital Markets Conference
NYSE: DAR Investor Presentation BMO Capital Markets 2010 Agriculture, Protein & Fertilizer Conference May 2010
Slide 2: Forward-Looking Statements
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,” “con
Slide 3: Rendering = ReCYCLING
Rendering = ReCYCLING Mission Critical, Necessary, Essential and Sustainable
Slide 4: Sustaining, Innovating, Renewing
Sustaining Innovating Renewing “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 5: The Original Recycler
The Original Recycler Founded in 1882 Headquartered in Dallas, TX 1870 employees Public since 1994 NYSE listed (DAR) Reports under two segments: – Rendering – Restaurant services Green when green was just a color!
Slide 6: With a National Platform…
With a National Platform… 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 7: Producing sustainable green ingredients for feed and fuel
Producing sustainable green ingredients for feed and fuel Rendering of Fat and Bone Tallow Meat & Bone Meal Pet Food Poultry Feed Hog Food Animal Feed Pet Food Renewable Fuels Soap Linoleic Acid Oleic Acid Glycerine Stearic Acid Fertilizer Lubricants Textiles Plastics Shampoo Emulsifiers Cleaners Cr
Slide 8: Producing sustainable green ingredients for feed and fuel
Chemical uses Industrial uses Energy Producing sustainable green ingredients for feed and fuel Animal Feed Lubricants Textiles Plastics Cleaners Rubber Plastics Tires Lubricants Component By- Products Applications Boiler fuel Biodiesel Green diesel Finished Products Renewable Fuels
Slide 9: A Proven Industry Leader…
A Proven Industry Leader… 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 30 million tons of inedible by-products generated annually from meat packers
Slide 10: Reporting Segments
Reporting Segments: Rendering Restaurant Services Darling is the only US provider of collection, storage, transport, and recycling of old grease on a national scale.
Slide 11: The Business Model
The Business Model 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 and delivers the material back to one of its 45 processing plants. “Formu
Slide 12: Rendering - Turning this …
Rendering - Turning this … Meat scrap Bones and fat Blood Dead animals Feathers … into This
Slide 13: Restaurant Services Overview
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 – Operates in 20 markets – Customers represent FSEs, malls and industrial food processors CleanStar® Use
Slide 14: One-stop National Approach to your food waste recycling needs
One-stop National Approach to your food waste recycling needs
Slide 15: Darling International is:
Darling International is: America’s leading independent renderer and recycler A diversified national platform with scale A time proven business Solid balance sheet Experienced management team A track record of growth
Slide 16: Core Business Growth through Acquisition
Core Business Growth through Acquisition March Dec May July Dec Feb Aug Oct Enviro Vac, Inc. FL, GA KC metro NYC metro GA GA Socal TX Burrows Industries, Inc. dba Minuteman Pumping Ace Grease Service J&R Rendering, Inc. Southeastern Maintenance & Construction Inc. National By-Products, LLC API Recyc
Slide 17: Uniquely positioned to grow again
Uniquely positioned to grow again RFS 2…mandates apply! “Similar to owning the oil field” Not a food oil Source: National Biodiesel Board.
Slide 18: Like owning an oil field!
Like owning an oil field! 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 Los Angeles Las Vegas Fresno Turlock San Francisco Boise Tacoma Cleveland Kendallville Newark F
Slide 19: Darling's fats and oils have limited uses
Darling’s fats and oils have limited uses Feed Fat calories supplement corn calories…..
Slide 20: Worth more as a fuel…
Worth more as a fuel…. 2001 .11 .10 (.01) .14 . 13 2002 .10 .12 (.02) .14 .12 2003 .12 .17 (.05) .14 .09 2004 .16 .17 (.01) .14 .13 2005 .24 .17 .07 .14 .21 2006 .27 .16 .11 .14 .25 2007 .30 .26 .04 .14 .18 2008 .41 .32 .09 .14 .23 2009 .20 .22 (.02) .14 .12 AVERAGE .21 .19 .02 .14 .16 Per # price D
Slide 21: Feed or Fuel: Own the arbitrage
Feed or Fuel: Own the arbitrage Bio-fuels represent a significant margin opportunity Waste fats and greases are the cheapest feedstock RFS2 mandates will drive margin Identified as most efficient technology for conversion of DAR fats and greases Customer driven solution…. Oil company friendly or
Slide 22: A proposed 50/50 Joint Venture Company between Darling and Valero
A proposed 50/50 Joint Venture Company between Darling and Valero
Slide 23: Green Diesel vs Petro-Diesel and Biodiesel
Green Diesel Petro-Diesel Biodiesel (FAME) Green Diesel NOx Emission Baseline + 10 -10 to 0 Cetane 40-55 50-65 75-90 Cold flow properties Baseline Poor Excellent Oxidative stability Baseline Poor Excellent Energy content Baseline Lower Similar Pipeline ready Yes NO Yes Animal fat based bio-diesel (T
Slide 24: Overview of St. Charles Refinery/Green Diesel Location
OVERVIEW OF ST. CHARLES REFINERY/GREEN DIESEL LOCATION
Slide 25: A 50/50 Joint Venture
A 50/50 Joint Venture UOP Technology selected Desmet Ballestra designed pre-treat Darling to supply the feedstock Valero to market the fuel Integrated and operated within the Valero infrastructure
Slide 26: Department of Energy Loan Process
Department of Energy Loan Process Applied for Dept. of Energy Loan Guarantee Program In Phase III of due diligence — Technology review — Marketing review — Environmental assessment — Financial modeling Detailed engineering proceeding Air permit has been received
Slide 27: Our Financials
Our Financials March 2010 NYSE: DAR Our Financials
Slide 28: Rendering and Restaurant Services Revenues
$900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $308,867 ee : 2005 $406,990 2006 $807,492 $645,313 $627,588 $597,206 sor'vor s0L'sss els‘esp goc‘ler 2007 = 2008 )=_ 2009 LT™. Rendering Revenues = Restaurant Services Revenues DARLING
Slide 29: Operating Cash Flows
Operating Cash Flows (in $ millions)
Slide 30: Working Capital, Net Worth, Debt, Total Assets
5 $80 $60 $40 $20 $0 $300 $200 $100 so Year Working Capital 2005 2006 2007 2008 2009 5 Year Net Worth 2005 2006 2007 2008 2009 $100 $80 $60 $40 $20 $0 $500 $400 $300 $200 $100 $0 5 Year Debt 2005 2006 2007 2008 2009 5 Year Total Assets 2005 2006 2007 2008 2009 DARLING
Slide 31: Capital Expenditures
Capital Expenditures $ millions
Slide 32: Balance Sheet
Balance Sheet April 3, 2010 April 4, 2009 CASH $ 77,106 $ 38,608 ACCOUNTS RECEIVABLE 47,927 41,337 INVENTORIES 20,698 18,142 INCOME TAXES REFUNDABLE 168 11,098 OTHER CURRENT ASSETS 13,787 13,356 TOTAL CURRENT ASSETS 159,686 122,541 PROPERTY, PLANT & EQUIP 150,612 147,692 GOODWILL 79,085 66,958 OTHER
Slide 33: Climate Change and Carbon Impact
Climate Change and Carbon Impact
Slide 34: Darling Captures and Recycles Carbon
Material Darling recycles in a year: Carbon Darling captures, lb/year 1.23 billion CO 2 Darling avoids, metric ton/year 2.1 million CO 2 emitted per metric ton avoided 0.14 metric ton GHG avoided ,metric ton/year* 4 million Darling Captures and Recycles Carbon (Emissions per 1000 lb raw material) Re
Slide 35: The Original Recycling Company… The Carbon Friendly Fuel Company of Tomorrow
The Original Sustaining Innovating Renewing RECYCLING COMPANY…. The CARBON FRIENDLY FUEL COMPANY of TOMORROW
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