Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Q3 2019 Earnings Presentation
18 slides from Darling Ingredients's earnings presentation, Nov 6, 2019
Slide 1: Darling Ingredients Q3 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
Consolidated Earnings 3 Q3 Q4 Total Q1 Q2 Q3 US$ (millions) except per share price Q3 2019 Overview 2018 2018 2018 2019 2019 2019 Revenue $ 812.6 $ 853.1 $ 3,387.7 $ 835.1 $ 827.3 $ 842.0 Gross Margin 164.7 185.4 741.3 184.1 182.6 189.1 • Combined adjusted EBITDA of $147.8 million Gross Margin % 20.
Slide 4: Third Quarter 2019 Financial Summary
Third Quarter 2019 Financial Summary 4 Q3 2019 Overview $ in millions Gross Profit and Margin % • Net sales - $842.0 million • Net income - $25.7 million • EPS at $0.15 per diluted share • Combined adjusted EBITDA* - $147.8 million • Potential additional Blenders Tax Credit (BTC) earnings if passed
Slide 5: Feed Segment
Feed Segment 5 US$ and metric tons Q3 Q4 Total Q1 Q2 Q3 (millions) 2018 2018 2018 2019 2019 2019 Adj. EBITDA Bridge Q3-2018 to Q3-2019 Revenue $482.7 $485.3 $1,952.6 $495.8 $487.4 $497.0 (millions) Gross Margin 99.0 110.4 454.6 109.0 110.5 117.2 100 Gross Margin % 20.5% 22.7% 23.2% 22.0% 22.7% 23.6%
Slide 6: Food Segment
Food Segment 6 US$ and metric tons Q3 Q4 Total Q1 Q2 Q3 Adj. EBITDA Bridge Q3-2018 to Q3-2019 (millions) 2018 2018 2018 2019 2019 2019 (millions) Revenue $265.2 $291.7 $1,139.1 $279.2 $274.8 $276.5 100 $48.0 ($24.1) Gross Margin 54.5 58.6 221.0 65.1 60.4 61.8 80 Gross Margin % 20.6% 20.1% 19.4% 23.3
Slide 7: Fuel Segment
7 Fuel Segment (Includes Diamond Green Diesel JV consolidated EBITDA) US$ and metric tons Q3 Q4 Total Q1 Q2 Q3 (millions) 2018 2018 2018 2019 2019 2019 Revenue $64.6 $76.2 $296.0 $60.1 $65.0 $68.6 Gross Margin 11.2 16.6 65.8 10.0 11.7 10.1 Gross Margin % 17.3% 21.8% 22.2% 16.7% 18.0% 14.7% Loss/(gai
Slide 8: Balance Sheet Highlights and Debt Summary
Balance Sheet Highlights and Debt Summary 8 Reaffirmed (US$,Balance in thousands) Sheet HighlightsJune 30, 2018 Debt Summary S&P Ratings 3/27/2019 Cash (includes restricted cash of $142) (US$, in thousands) September 28, 2019 (US$, in thousands) September 28, 2019 Term Loan B - BBB- $104,262 Amended
Slide 9: Appendix – Additional Information
9 Appendix – Additional Information
Slide 10: History of the Blenders Tax Credit
10 History of the Blenders Tax Credit California LCFS Carbon Credit Values (USD/MT) Year Credit In place Passed 2004 10/22/2004 2005 all year 08/08/2005 2006 all year 2007 all year 2008 all year 10/03/2008 2009 all year 2010 Retroactive 12/17/2010 2011 all year 2012 Retroactive 01/02/2013 2013 all y
Slide 11: Feed Segment - Historical
11 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 (millions) 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 2019 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 $497.0 Gross Margin 119.8 126.7 125.9 122.1
Slide 12: Feed Ingredients Segment – Net Sales
Feed Ingredients Segment – Net Sales 12 Change in Net Sales – Year over Year Three Months Ended September 29, 2018 over September 28, 2019 Rendering Sales Change in Net Sales - 3Q18 to 3Q19 Used Total Cooking Three Months Ended Fats Proteins Other (1) Rendering Oil Bakery Other (2) Total Net Sales T
Slide 13: Historical Finished Product Pricing 2019
Jacobsen, Wall Street Journal and Thomson Reuters 13 Historical Pricing 2019 Finished Product Pricing 2019 Average Jacobsen Prices (USD) Feed Segment Ingredients January February March Q1 Avg. April May June Q2 Avg. July August Sept. Q3 Avg. Oct. QTR. Over QTR. Year Over Year Bleachable Fancy Tallow
Slide 14: Food Segment - Historical
Food Segment - Historical 14 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 (millions) 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 2019 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) $276.5
Slide 15: Fuel Segment - Historical
Fuel Segment - Historical 15 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 (millions) 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 2019 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 $68.6 Gross Margin 13.7 12.7 7.4 21.5 55.3 24.3
Slide 16: Adjusted EBITDA definition
16 Adjusted EBITDA is not a recognized accounting measurement under GAAP; it should not be considered as an alternative to net income, as a measure of operating results, or as an alternative to cash flow as a measure of liquidity, and is not intended to be a presentation in accordance with GAAP. Adj
Slide 17: Adjusted EBITDA and Pro Forma Adjusted EBITDA
Adjusted EBITDA 17 Adjusted EBITDA and Pro Forma Adjusted EBITDA Three Months Ended - Year over Year Nine Months Ended - Year over Year (US$ in thousands) September 28 September 29 September 28 September 29 2019 2018 2019 2018 Net income/(loss) attributable to Darling $ 25,721 $ (6,037) $ 69,991 $ 6
Slide 18: Darling Ingredients - Creating Sustainable Food, Feed and Fuel
Le CREATING SUSTAINABLE|FOOD) FEED ANDIFUEL 2 st FOR A pai POP. ee = °2 @ . oF DARLING INGREDIENTS