Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Q2 2019 Earnings Presentation
20 slides from Darling Ingredients's earnings presentation, Aug 7, 2019
Slide 1: Darling Ingredients Q2 2019 Earnings Presentation
EXHIBIT 99.2 Randall C. Stuewe, Chairman and CEO Brad Phillips, EVP Chief Financial Officer Melissa A. Gaither, VP IR and Global Communications
Slide 2: Forward-looking statements
2 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 statements of historic
Slide 3: Consolidated Earnings Q2 2019 Overview
Consolidated Earnings 3 Q2 Q3 Q4 Total Q1 Q2 Q2 2019 Overview US$ (millions) except per share price 2018 2018 2018 2018 2019 2019 Revenue $ 846.6 $812.6 $853.1 $3,387.7 $ 835.1 $ 827.3 • Combined proforma adjusted EBITDA of $159.4 million 194.4 164.7 185.4 741.3 184.1 182.6 Gross Margin - includes $
Slide 4: Second Quarter 2019 Financial Summary
Second Quarter 2019 Financial Summary 4 $ in millions Gross Profit and Margin % Q2 2019 Overview • Net sales - $827.3 million • Net income - $26.3 million • EPS at $0.16 per diluted share • Combined Proforma Adjusted EBITDA - $159.4 million (includes Darling’s share DGD JV) • Adjusted EBITDA - $115.
Slide 5: Feed Segment
Feed Segment 5 US$ and metric tons Q2 Q3 Q4 Total Q1 Q2 (millions) 2018 2018 2018 2018 2019 2019 Adj. EBITDA Bridge Q2-2018 to Q2-2019 (millions) Revenue $498.8 $482.7 $485.3 $1,952.6 $495.8 $487.4 Gross Margin 128.8 99.0 110.4 453.1 109.0 110.5 100 $84.1 ($18.5) $14.9 Gross Margin % 25.8% 20.5% 22.
Slide 6: Food Segment
Food Segment 6 US$ and metric tons Q2 Q3 Q4 Total Q1 Q2 Adj. EBITDA Bridge Q2-2018 to Q2-2019 (millions) 2018 2018 2018 2018 2019 2019 (millions) Revenue $276.7 $265.2 $291.7 $1,139.1 $279.2 $274.8 $29.9 ($12.6) $14.2 60 $53.8 ($3.5) Gross Margin 51.8 54.5 58.6 221.0 65.1 60.4 $50.3 50 ($4.5) ($2.9)
Slide 7: Fuel Segment
7 Fuel Segment (Does not include Diamond Green Diesel JV) US$ and metric tons Q2 Q3 Q4 Total Q1 Q2 (millions) 2018 2018 2018 2018 2019 2019 Adj. EBITDA Bridge Q2-2018 to Q2-2019 (millions) Revenue $71.1 $64.6 $76.2 $296.0 $60.1 $65.0 Gross Margin 13.7 11.2 16.6 65.8 10.0 11.7 15 $13.6 ($12.3) $12.1
Slide 8: DGD – Entity Level
8 DGD – ENTITY LEVEL ➢ Q2 2019 Entity EBITDA of $87.8 million or $1.25 per gallon on 70.0 million gallons of sales ➢ DGD has delivered $1.25 per gallon average EBITDA over the last 3 quarters in operation at the 275 million gallon annual run rate ➢ Full year outlook is for 275 million gallons at $1.
Slide 9: Balance Sheet Highlights and Debt Summary
Balance Sheet Highlights and Debt Summary 9 Reaffirmed (US$,Balance in thousands) Sheet HighlightsJune 30, 2018 Debt Summary S&P Ratings 3/27/2019 Cash (includes restricted cash of $142) (US$, in thousands) June 29, 2019 (US$, in thousands) June 29, 2019 Term Loan B - BBB- $104,262 Corporate Family
Slide 10: Appendix – Additional Information
10 Appendix – Additional Information
Slide 11: California LCFS Carbon Credit Values and Biodiesel Tax Credit History
11 California LCFS Carbon Credit Values (USDA/ton) History of the Biodiesel Tax Credit Year Credit In place Passed 2004 10/22/2004 2005 all year 08/08/2005 2006 all year 2007 all year 2008 all year 10/03/2008 2009 all year 2010 Retroactive 12/17/2010 2011 all year 2012 Retroactive 01/02/2013 2013 al
Slide 12: Feed Segment – Historical
12 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 (millions) 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 2019 2019 Revenue $552.6 $549.1 $575.5 $562.3 $2,239.5 $485.8 (1) $498.8 (1) $482.7 (1) $485.3 (1) $1,952.6 $495.8 $487.4 Gross Margin 119.8 126.7 125.9 122.1 494.5 116.3 128
Slide 13: Feed Ingredients Segment – Net Sales Change Year over Year
Feed Ingredients Segment – Net Sales 13 Change in Net Sales – Year over Year Three Months Ended June 30, 2018 over June 29, 2019 Rendering Sales Change in Net Sales - 2Q18 to 2Q19 Used Total Cooking Three Months Ended Fats Proteins Other (1) Rendering Oil Bakery Other (2) Total Net Sales Three Month
Slide 14: Historical Finished Product Pricing
Jacobsen, Wall Street Journal and Thomson Reuters 14 Historical Pricing QTR. Over QTR. Year Over Year 2019 Finished Product Pricing 2019 Average Jacobsen Prices (USD) Feed Segment Ingredients January February March Q1 Avg. April May June Q2 Avg. July Comparison Q1-2019 Q2-2019 % Q2-2018 Q2-2019 % Bl
Slide 15: Food Segment - Historical
Food Segment - Historical 15 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 (millions) 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 2019 2019 Revenue (1) $266.2 $278.4 $298.9 $313.5 $1,157.0 $305.5 (2) $276.7 (2) $265.2 (2) $291.7 (2) $1,139.1 $279.2 (2) $274.8 (2) Gross Margin 5
Slide 16: Fuel Segment - Historical
Fuel Segment - Historical 16 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 (millions) 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 2019 2019 Revenue $59.7 $67.4 $61.9 $76.8 $265.8 $84.1 $71.1 $64.6 $76.2 $296.0 $60.1 $65.0 Gross Margin 13.7 12.7 7.4 21.5 55.3 24.3 13.7 11.2 16.6
Slide 17: Adjusted EBITDA definition
17 Adjusted EBITDA is not a recognized accounting measurement under GAAP; it should not be considered as an alternative to net income, as a measure of operating results, or as an alternative to cash flow as a measure of liquidity, and is not intended to be a presentation in accordance with GAAP. Adj
Slide 18: Adjusted EBITDA and Pro Forma Adjusted EBITDA
Adjusted EBITDA 18 Adjusted EBITDA and Pro Forma Adjusted EBITDA Three Months Ended - Year over Year Six Months Ended - Year over Year (US$ in thousands) June 29, June 30, June 29, June 30, 2019 2018 2019 2018 Net income/(loss) attributable to Darling $ 26,258 $ (30,420) $ 44,270 $ 66,885 Depreciati
Slide 19: Upcoming Investor Conferences
19 Heather Jones Research Conference August 15, 2019 Le Meridien – Philadelphia, PA ROTH Technology & Clean Tech Conference November 12-13, 2019 New York, NY Morgan Stanley Clean Tech Conference December 4, 2019 New York, NY
Slide 20: Creating Sustainable Food, Feed and Fuel
Le CREATING SUSTAINABLE|FOOD) FEED ANDIFUEL 2 st FOR A pai POP. ee = °2 @ . oF DARLING INGREDIENTS