Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Q2 2021 Earnings Presentation
20 slides from Darling Ingredients's earnings presentation, Aug 10, 2021
Slide 1: Second Quarter 2021 Conference Call
Second Quarter 2021 Conference Call Exhibit 99.2
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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 st
Slide 3: Summary Highlights: Second Quarter 2021 Business Update
Summary Highlights Second Quarter 2021 Business Update • Record second quarter global ingredients EBITDA of $221.7 million • Q2 2021 combined adjusted EBITDA totaled a record $353.7 million • Significant growth in net income increasing to $196.6 million, or $1.17 per diluted share for Q2 2021 • DGD
Slide 4: Financial Highlights
Financial Highlights Financials (in millions, except per share) Q2-2021 Q2-2020 % Variance YTD 2021 YTD 2020 % Variance Net sales $1,198.7 $848.7 41.2% $2,245.4 $1,701.5 32.0% Gross margin 320.6 216.3 48.2% 594.5 422.3 40.8% Gross margin % 26.7% 25.5% 4.7% 26.5% 24.8% 6.8% Net income $196.6 $65.4 30
Slide 5: Financial Highlights: Segment EBITDA and 2021 Guidance
Financial Highlights Financials (in millions) Q2-2021 Q2-2020 % Variance YTD 2021 YTD 2020 % Variance Segment EBITDA Feed $160.7 $85.2 88.6% $285.0 $155.4 83.4% Food 53.0 36.3 46.0% 99.4 75.6 31.5% Fuel 154.2 86.9 77.4% 282.9 205.8 37.5% Corporate (14.1) (13.2) 6.8% (28.9) (28.3) 2.0% Total Combined
Slide 6: Feed Segment
Feed Segment Key Drivers: • Higher protein and animal fat prices drove the overall feed segment sales up 53.3% quarter over quarter on slightly higher raw materials processed. Gross margin increased $79.7 million or 58.7% quarter over quarter led by higher commodity prices across all products sold.
Slide 7: Food Segment
Food Segment • Net sales for the food segment grew $38.1 million or 13.7% in Q2 2021 compared to the prior year, driven by higher collagen volume sales and higher edible fat prices. • Segment income improved $20.9 million or was 128.1% higher driven primarily by higher revenue. Higher S,G&A expense
Slide 8: Fuel Segment (Includes Diamond Green Diesel JV consolidated EBITDA)
Fuel Segment (Includes Diamond Green Diesel JV consolidated EBITDA) Key Drivers: • Q2-2021 Combined adjusted EBITDA of $154.2 million, with DGD earning $3.14 per gallon on 84.0 million gallons sold • DGD – Norco, LA expansion remains on track and is scheduled to be at full production in the middle o
Slide 9: Norco 400-million-gallon expansion
July 2021 400-million-gallon expansion Existing 290-million-gallon plant Page 9 | Second Quarter 2021 Financial Results | 08.11.2021
Slide 10: Port Arthur, TX 470-million-gallon facility
July 2021 Port Arthur, TX 470-million-gallon facility Page 10 | Second Quarter 2021 Financial Results | 08.11.2021
Slide 11: Appendix: Additional Information
Appendix Additional Information
Slide 12: California LCFS & RIN value history
California LCFS & RIN value history Source: The Jacobson and StoneX Page 12 | Second Quarter 2021 Financial Results | 08.11.2021 $0 $50 $100 $150 $200 $250 1 / 1 /2 0 1 6 4 / 1 /2 0 1 6 7 / 1 /2 0 1 6 1 0 / 1 / 2 0 1 6 1 / 1 /2 0 1 7 4 / 1 /2 0 1 7 7 / 1 /2 0 1 7 1 0 / 1 / 2 0 1 7 1 / 1 /2 0 1 8 4 /
Slide 13: Feed Segment - Historical
Feed Segment - Historical (1) Does not include Unconsolidated Subsidiaries EBITDAPage 13 | Second Quarter 2021 Financial Results | 08.11.2021 US$ (in millions) Q1-2020 Q2-2020 Q3-2020 Q4-2020 Total 2020 Q1-2021 Q2-2021 Net Sales 512.6$ 503.7$ 483.0$ 572.8$ 2,072.1$ 651.4$ 771.9$ Gross Margin 124.2 1
Slide 14: Historical Pricing
Historical Pricing Jacobson, Wall Street Journal and Thomson Reuters Page 14 | Second Quarter 2021 Financial Results | 08.11.2021 2021 Avg. Jacobsen Prices January February March Q1Avg. April May June Q2 Avg. July August September Q3 Avg. October November December Q4 Avg. BFT - Chicago Renderer / cw
Slide 15: Food Segment - Historical
Food Segment - Historical (1) Adjusted for the $13.1 million gain on the asset sale in China for Q2-19 and FY-19 Page 15 | Second Quarter 2021 Financial Results | 08.11.2021 US$ (in millions) Q1-2020 Q2-2020 Q3-2020 Q4-2020 Total 2020 Q1-2021 Q2-2021 Net Sales 270.3$ 278.9$ 291.8$ 344.6$ 1,185.7$ 29
Slide 16: Fuel Segment - Historical
Fuel Segment - Historical (1) Includes Fuel Segment EBITDA and Darling's share of DGD EBITDA. * Excludes feed stock (raw material) processed at the DGD joint venture. Page 16 | Second Quarter 2021 Financial Results | 08.11.2021 Diamond Green Diesel (50% Joint Venture) US$ and gallons (in millions) Q
Slide 17: 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 and is not intended to be a presentation in accord
Slide 18: Adjusted EBITDA
Adjusted EBITDA Page 18 | Second Quarter 2021 Financial Results | 08.11.2021 (1) The average rate assumption used in this calculation was the actual fiscal average rate for the three months ended July 3, 2021 of €1.00:USD$1.21 and CAD$1.00:USD$0.81, as compared to the average rate for the three mont
Slide 19: Upcoming IR Events
Upcoming IR Events • Energy Transition Conference Simmons – 08-17/19-21 • Stephens Investment Conference – 12-02-21 • BMO ESG Virtual Conference – 12-07-21 Page 19 | Second Quarter 2021 Financial Results | 08.11.2021
Slide 20: We Create Solutions That Sustain Life
WE CREATE SOLUTIONS THAT SUSTAIN LIFE 4 WEARE.DARLINGIICOM HEALTH « NUTRIENTS 4 BIOENERGY « SERVICES DARLING INGREDIENTS