Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Roth Investor Conference 2015
36 slides from Darling Ingredients's conference presentation, Mar 9, 2015
Slide 1: Roth Investor Conference March 10, 2015
Roth Investor Conference March 10, 2015 Creating sustainable food, feed and fuel ingredients for a growing population Randall C. Stuewe, Chairman and CEO John O. Muse, EVP Chief Financial Officer Exhibit 99.1
Slide 2: Safe Harbor Statement
Creating sustainable food, feed and fuel ingredients for a growing population Safe Harbor Statement This presentation contains “forward-looking” statements regarding the business operations and prospects of Darling Ingredients Inc. and industry factors affecting it. These statements are identified b
Slide 3: A Global Leader in Sustainable Ingredient Creation
Creating sustainable food, feed and fuel ingredients for a growing population Global footprint: 5 continents, 200+ locations Founded: 1882 Listed: 1994 Publicly traded: NYSE: DAR 2014 revenue: ~$4.0 billion • Gelatin • Casings • Functional Proteins • Food Grade Fats • Heparin • Bone China • Proteins
Slide 4: Locations by Continent and Process
Creating sustainable food, feed and fuel ingredients for a growing population Process USA Canada Europe China S. America Australia Total: Rendering - (C3 By-products & UCO) 93 5 18 116 Bakery 11 11 Used Cooking Oil processing only 8 1 9 Disposal Rendering - (C1 & C2) 6 6 Food Grade Fat Processing 5
Slide 5: Population Growth Creates Margin Opportunity
Creating sustainable food, feed and fuel ingredients for a growing population Creates Margin Opportunity DAR is operated as a spread business Operating Costs Transportation Costs Energy Costs Global Drivers to Business Raw Material Availability Competing Ingredient Supply Some sources estimate stron
Slide 6: Darling Ingredients Recipe
Creating sustainable food, feed and fuel ingredients for a growing population Darling Ingredients Recipe Diverse Raw Material Supply Establish Spread/Margin Transform and Value Add Key Suppliers Procure Raw Mat Identify Margin Opportunity Process to highest value Manage Margin Our model today has ev
Slide 7: Our Business Segments
Food, Feed & Fuel Our Business Segments Creating sustainable food, feed and fuel ingredients for a growing population
Slide 8: Three primary segments: Food, Feed, Fuel
Creating sustainable food, feed and fuel ingredients for a growing population The ingredients we produce are used in three primary segments: - Food (pharmaceutical, gelatin, natural casings, food fats) - Feed (fats & proteins, pet food, nutritional feed supplements, fertilizers) - Fuel (renewable an
Slide 9: Food Ingredients Segment
Creating sustainable food, feed and fuel ingredients for a growing population Food Ingredients Segment Ingredients for living: Darling transforms nutrient streams into high value food ingredients The odds are high that one of our ingredients was part of your life today! . 9
Slide 10: Food – A Closer Look: Rousselot
Creating sustainable food, feed and fuel ingredients for a growing population Food – A Closer Look: • Rousselot is the world’s leading supplier of gelatin and collagen peptides* • Headquartered in Son, Netherlands, 4 continent network • Rousselot has 13 production facilities selling to 75 countries
Slide 11: Food – A Closer Look: Sonac
Creating sustainable food, feed and fuel ingredients for a growing population • Sonac fat processes, refines and packages high-quality food-grade animal fats for baking, frying and technical applications • Sonac fat has 6 processing facilities in Germany and the Netherlands • Sonac bone provides foo
Slide 12: Food – A Closer Look: Casings
Creating sustainable food, feed and fuel ingredients for a growing population • A top supplier of natural sausage casings • 50 years experience sourcing, processing and selling the highest quality product through an extensive distribution network • CTH has sorting facilities in Europe and China MARK
Slide 13: Feed Ingredients Segment
Creating sustainable food, feed and fuel ingredients for a growing population Feed Ingredients Segment Nutrients for growth. Our feed ingredients compose the largest segment of our platform with facilities located on 4 continents. We provide nutrient solutions to livestock, poultry, aquaculture and
Slide 14: Feed Ingredients – North America
Creating sustainable food, feed and fuel ingredients for a growing population Feed Ingredients – North America North American Feed Ingredients • DAR PRO Ingredients • DAR PRO Solutions • Bakery Feeds • Rothsay • Terra Renewal • Nature Safe Operated as Margin Management Business Feed is our largest s
Slide 15: Feed Segment – North America: DAR PRO Solutions
Creating sustainable food, feed and fuel ingredients for a growing population • DAR PRO Solutions is North America’s leading collector of used cooking oil • Focused on providing services to the restaurant and food industry • Collects, transforms, and markets used cooking oil • Leading provider of gr
Slide 16: Feed Segment – North America: Bakery Feeds
Creating sustainable food, feed and fuel ingredients for a growing population Feed Segment – North America: • Cookie Meal®, a Bakery Feeds product, is a premium, high- energy, animal feed ingredient • Earnings move in relation to corn MARKET DRIVERS: • Corn price • Raw material volume • Calorie subs
Slide 17: Feed Ingredients – International
Creating sustainable food, feed and fuel ingredients for a growing population • Sonac is Europe’s leading supplier of consistent and high-quality proteins, fats and minerals from food grade animal by-products that are used in pet foods, animal feed and fertilizers. Sonac products are marketed as: Fe
Slide 18: Fuel Ingredients Segment
Creating sustainable food, feed and fuel ingredients for a growing population Fuel Ingredients Segment Energy for today’s world. Bio-fuels are a key part of our portfolio. Not only are they key to the environment, they are critical for the global demand of our fats and oils. 18
Slide 19: Fuel Ingredients – DGD
Creating sustainable food, feed and fuel ingredients for a growing population Fuel Ingredients– DGD: • July 2013, DGD commissioned as North America’s largest facility to convert animal fats, used cooking oils and distillers corn oil into renewable diesel • 50/50 Joint Venture with Valero • Unconsoli
Slide 20: 2014 – DGD Look Back
Creating sustainable food, feed and fuel ingredients for a growing population 2014– DGD Look Back • Approximately 126 million gallons of renewable diesel produced • Darling EBITDA share is $81.6 million • $126 million tax credit due Apr-2015 • Total facility debt $212.7 million • Mandatory repayment
Slide 21: Fuel – A Closer Look: Rendac
Creating sustainable food, feed and fuel ingredients for a growing population • Europe’s has strict laws enacted post-BSE, Rendac collects, pasteurizes, and sterilizes mortalities and slaughter by-products that are designated unfit for animal feeds or human consumption (Category C1 & C2) • Rendac pl
Slide 22: Fuel – A Closer Look: Ecoson
Creating sustainable food, feed and fuel ingredients for a growing population Fuel – A Closer Look: o A leading provider of renewable energy in the Netherlands o Our Ecoson Green Energy Park is located in Son o Organic residuals from food industry are converted to biogas for renewable electricity o
Slide 23: Growth Strategy
Growth Strategy How we will grow and sustain our business Creating sustainable food, feed and fuel ingredients for a growing population
Slide 24: Darling Ingredients is focused on global growth
Creating sustainable food, feed and fuel ingredients for a growing population Darling Ingredients is focused on global growth How we plan to do it... • Expansions of Rousselot platform • Casings business growth • Branded fats Food • 6 new plants under construction • 2 more on drawing board • USA and
Slide 25: Growth happening in 2015 and 2016
Creating sustainable food, feed and fuel ingredients for a growing population Growth happening in 2015 and 2016….. Food • Dubuque Expansion • Europe modernizations and debottlenecking • Specialty product developments • China debottlenecking • Packaged fat • Expansion of sorting plant in China Feed •
Slide 26: Financials
Financials Creating sustainable food, feed and fuel ingredients for a growing population
Slide 27: Adjusted EBITDA definition
Creating sustainable food, feed and fuel ingredients for a growing population Adjusted EBITDA is presented here not as an alternative to net income, but rather as a measure of the Company’s operating performance and is not intended to be a presentation in accordance with GAAP. Since EBITDA (generall
Slide 28: Earnings Summary
Creating sustainable food, feed and fuel ingredients for a growing population Earnings Summary January 3, December 28, January 3, December 28, $ Change 2015 2013 2015 2013 Favorable (Unfavorable) Revenues 1,000,203$ 447,939$ 3,956,443$ 1,802,268$ 2,154,175$ Gross profit 205,905 110,345 833,272 462,4
Slide 29: Adjusted (Non-GAAP) Diluted EPS
Creating sustainable food, feed and fuel ingredients for a growing population Adjusted (Non-GAAP) Diluted EPS Note: Adjustments to diluted earnings per share of acquisition related items are net of tax. Calculations of all adjustment tax amounts were at the applicable effective tax rate for the peri
Slide 30: Adjusted EBITDA and Pro Forma Adjusted EBITDA
Creating sustainable food, feed and fuel ingredients for a growing population Adjusted EBITDA (1) January 7, 2014 closed on VION Ingredients, thus the 13th week would be revenue adjusted for January 1, 2014 through January 7, 2014 (2) Darling's pro forma adjusted EBITDA (Non-GAAP)in the above table
Slide 31: Balance Sheet Highlights and Debt Summary
Creating sustainable food, feed and fuel ingredients for a growing population Balance Sheet Highlights and Debt Summary (US$, in thousands) January 3, 2015 Cash 108,784$ Accounts receivable 409,779 Total inventories 401,613 Net working capital 569,570 Net property, plant and equipment 1,574,116 Tota
Slide 32: Food Segment Operational Highlights
Creating sustainable food, feed and fuel ingredients for a growing population Operational Highlights • Gelatin business performed nicely; China normalizing and South American margins adjusting to supply and currency • European edible fats business volumes remained strong • CTH showed improved margin
Slide 33: Feed Segment Operational Highlights
Creating sustainable food, feed and fuel ingredients for a growing population Feed Segment Operational Highlights • Lower finished product pricing in 4th quarter, primarily in fats • Protein prices eased, but demand remained strong • Strong raw material volumes • Raw material procurement formulas be
Slide 34: Fuel Segment Operational Highlights
Creating sustainable food, feed and fuel ingredients for a growing population Operational Highlights • Diamond Green Diesel, as well as our biodiesel operations in Canada and US, received the Tax Credit Benefit for 2014 • DGD running in excess of 11,000 barrels per day of input feedstock • New Ecoso
Slide 35: Shareholder Value: Our Recipe for Success
Creating Shareholder Value Success is consistently providing maximum value to the supply chain Our Recipe for Success... Creating sustainable food, feed and fuel ingredients for a growing population 35 Protein Production Maximize the valuation of our raw materials by focusing on their highest and be
Slide 36: Q&A
Q&A 36 Creating sustainable food, feed and fuel ingredients for a growing population