Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Investor Day (September 2016)
95 slides from Darling Ingredients's investor day presentation, Sep 14, 2016
Slide 1: Focus on Food Fall 2016
Exhibit 99.1 Focus on Food Fall 2016
Slide 2: Reaching Further Together
REACHING FURTHER TOGETHER Jos Vervoort Managing Director, Rousselot
Slide 3: Rousselot, the Global Leader in Gelatin and Collagen Peptides
ROUSSELOT, THE GLOBAL LEADER IN GELATIN AND COLLAGEN PEPTIDES Jos Vervoort Managing Director, Rousselot
Slide 4: Table of content
Table of content Global Landscape Our Unique Position Reaching Further
Slide 5: Production by application
4 Production by application 6% Food & beverages 5% Estimated (ition Nutr 28% + pharm) aceuticals Nutraceuticals Global Market 14% Foods/drinks with extra health benefits Pharmaceuticals 390,000MT Photography in 2014 21% Cosmetics 26% Other applications Source: Grandview Market Research – The Global
Slide 6: Production by area
5 Production by area Regional breakdown 16% 24% North America remains stable up to 2020 Europe 20% Asia Pacific (Grandview Market Research) South America 40% Source: Grandview Market Research – The Global Gelatin Market 2014 – 2020
Slide 7: Production by input
6 Production by input Largest production regions: Pig Skin Europe, North America, China 1% 30% Largest production regions: Bovine Bone Europe, North America, China 41% Largest production regions: Bovine Hide South America, China 28% Others Source: Grandview Market Research – The Global Gelatin Marke
Slide 8: Competitive environment
7 Competitive environment Rousselot (US) 29% 26% Gelita (Germany) PB Gelatins (Belgium) Sterling (India) 5% Weishardt (France) 6% 22% 13% Others Source: Grandview Market Research – The Global Gelatin Market 2014 – 2020
Slide 9: Our Unique Position
Global Landscape Our Unique Position Reaching Further
Slide 10: Continuously building our global presence
9 Unrivaled knowledge & expertise Continuously building our global presence 2003 Darling Ingredients acquires VION Ghent Girona Wenzhou Ingredients BELGIUM SPAIN CHINA including Rousselot 2008 Amparo & Presidente Epitacio Angoulême Dubuque Kaiping Peptan brand & business FRANCE IA, USA CHINA 1891 20
Slide 11: Global locations: plants, labs and sales offices
10 Ghent, Belgium Peabody, MA, USA Paris, France Son, The Netherlands Angoulême, France Isle s/Sorgue, France Da’an, China Dubuque, IA, USA Mukwonago, IA, USA Girona, Spain Shanghai, China Tokyo, Japan Wenzhou, China Mexico City, Mexico Zhejiang, China Kaiping, China 13 Plants and Quality Kuala Lump
Slide 12: Product range: gelatin and Peptan collagen
11 Acid Pig Skin Gelatin Hide Gelatin Bovine Bone Gelatin Peptan Collagen
Slide 13: One stop shop for slaughterhouses
12 We have become a “one stop shop” for slaughterhouses Meat By-products FOOD FEED FUEL ROUSSELOT SONAC RENDAC | ECOSON Skins & bones DAR PRO INGREDIENTS DIAMOND GREEN DIESEL SONAC All Feed/Pet -grade DAR PRO BIOENERGY all Food-grade by-products by-products By-products to renewable energy
Slide 14: Reaching Further
Global Landscape Our Unique Position Reaching Further
Slide 15: Vision and Mission
14 Vision Advanced food solutions to inspire Rousselot is the global leader new product of gelatin and collagen peptides development by working with our customers to achieve their goals Mission Innovative Nutritional pharmaceutical solutions to meet We collaborate with customers solutions for today’
Slide 16: Operational Excellence, Product Leadership, Customer Intimacy
15 Operational Product Customer Excellence Leadership Intimacy Lean production Highest Best at low cost quality solution
Slide 17: Operational Excellence
16 Operational Excellence LEAN PRODUCTION AT LOW COST Plant & Logistics Optimization Technology Innovation Quality Performance Capital intensive state Sustainability Highly automated plants Highly qualified laboratories of the art technology
Slide 18: Product Leadership
17 Product Leadership HIGHEST QUALITY Highest Standards Innovation & Development Product safety Widest range Innovative concepts World class R&D & Highest quality
Slide 19: Customer Intimacy
18 Customer Intimacy BEST SOLUTION Joint Value Creation Commercial Excellence Innovation days Co-branding
Slide 20: Our ambitions in a growing market
19 Our ambitions in a growing market Worldwide Highest Full expertise standards responsibility R&D & Applications Operational excellence Sustainable plants & Pilot plant Increased capacity for sales with renewable energy Working on the future with growth from Darling Ingredients innovative products
Slide 21: Conclusion
Conclusion eS Rousselot Pharma coe Roussetot
Slide 22: Reaching Further Together
21 rousselot. com REACHING FURTHER TOGETHER
Slide 23: Reaching Further Together
REACHING FURTHER TOGETHER Sandor Noordermeer Global Marketing & Sales, Rousselot
Slide 24: Gelatin, a trend setting ingredient
23 Gelatin, a trend setting ingredient Unique in pharma Unique in food Fulfilling the needs of our customers Innovations
Slide 25: Rousselot world class gelatin every day
24 Rousselot world class Gelath every day
Slide 26: Designed by nature
25 Designed by nature Strong heritage • 100% natural protein • Traditional usage in • Clean label and safe pharma, food & nutrition • Totally digestible • It is known from earlier times: Napoleon gave • Fully compatible bouillon to his people Environmentally friendly Multifunctional • Biodegradable
Slide 27: Pharma
26 Pharma • Oral dosage forms? over 3,000,000,000,000 • Hard capsules 600,000,000,000 • Soft capsules • Hard andsoft capsules ? appr. and growing • Search for new and improved dosageforms
Slide 28: Leading companies in the global pharma market
Leading companies in the global pharma market apne pet @@Qualicaps a=e= CATALENT
Slide 29: Advantages of gelatin in pharma
28 Advantages • Film forming for optimal performance • Optimal gelling and drying • Melting property: fast release of API • Protection of the API from oxidation • Prevents brittleness of capsules Alternative • HPMC, starch, carrageenan
Slide 30: Be healthy
29 Be healthy • Growing markets – pharma markets are outgrowing food • Plasma volume replacer • New technologies • Vaccines – drug delivery challenges for poorly soluble drugs • Microencapsulation Purified gelatin • Medical sponges • • Regenerative medicine – reduced levels of endotoxins required fo
Slide 31: The global specialty pharma market
e global specialty pharma market Bis Regenerative B|BRAUN B|BRAUN og Medicine L ee ies eer) FRESENIUS “") SS SANOFI wi SS Rousselot
Slide 32: Advantages
31 Advantages • High acceptance by the human body • Fully metabolized • Foaming properties • Dedicated pharmaceutical grade Alternative • Human albumin, starches
Slide 33: Food
32 Food • Confectionery • Differentiation? Coca Cola flavored MMs (Acidogel™) – Gummy bears – Marshmallows • Heat-resistant gummy bears (Resistagel™) • Dairy • Desserts • Reduced fat applications in desserts
Slide 34: Leading companies in the global food market
Leading companies in the global food market GS.) Guatemalan Candies, $.A. HARIBO oa Ba MONDELEZ ale | 7 Ge |
Slide 35: Advantages in food
34 Advantages • Unique foaming and stabilizing functionality • Very specific setting characteristics • Best flavor release and unique mouthfeel • Unrivalled transparent end product Alternative • Pectin, starch, carrageenan
Slide 36: The objectives of our customer
35 The objectives of our customer • Profitable, sustainable business • Grow their business through: REACHING – NPD or line extensions FURTHER – Acquisition local and global TOGETHER Their needs • High quality • Continuity in supply • Expertise? technical, legislation, science, application, marketing
Slide 37: Years of experience and collaboration with leading customers
36 • 125 years of experience • Collaboration with leading customers globally and regionally • World class products—worldwide expertise on 4 continents • State of the art operations & supply chain • Unshakable commitment to quality, safety and sustainability
Slide 38: An innovative dosage form
37 An innovativedosage form • 100 mg chewable Ibuprofen as alternative to liquids and chewable tablets • Core is a gel matrix with flavors and active • Shell is gelatin, using softgelencapsulation technology • Technology developed in partnership with Patheon
Slide 39: A co-development with Fortified and DSM
38 A co-development Rousselot, Fortified and DSM True innovation A breakthrough technology and drug delivery system Large potential Getting nutraceuticals into daily life food Makes a difference PATENTED Opening doors to the food industry
Slide 40: The world's leading collagen peptides brand
39 ® The world’s leading collagen peptides brand Backed by clinical studies, Peptan is a natural, bioactive protein with proven health benefits. It is the ingredient of choice for manufacturers looking to create exciting functional foods, drinks and supplements Bone & joint Healthy aging Skin beauty
Slide 41: Reaching Further Together
rousselot.com REACHING FURTHE TOGETHER
Slide 42: Collagen Peptides for a Healthy Lifestyle
COLLAGEN PEPTIDES FOR A HEALTHY LIFESTYLE
Slide 43: Peptan: Global Leader in Collagen Peptides
PEPTAN GLOBAL LEADER IN COLLAGEN PEPTIDES mai Nygaard I Global Director Peptan September 2016 Peptan
Slide 44: Peptan agenda topics
43 Global market—Nutraceuticals Collagen market drivers Product applications Peptan® health benefits Peptan® value offering What’s next?
Slide 45: Collagen distribution in human body
44 COLLAGEN DISTRIBUTION IN HUMAN BODY (by weight ration of dry mass) 75% Skin Tendons 85% Tendinous 90% 6% Bones muscles (organic bone mass) 70% 70% Ligaments Joint cartilage (c) Collagen molecules (triple helices) Collagen is a triple (b) helix of chains Collagen fibrils of amino acids which (d) b
Slide 46: Peptan is the world's leading collagen peptides brand
45 Peptan® is the world’s leading collagen peptides brand BONE & JOINT HEALTHY AGING HEALTH Backed by clinical studies, Peptan® is a natural, bioactive protein with proven health benefits. It’s the ingredient of choice for manufacturers looking to create exciting functional foods, drinks and supplem
Slide 47: Peptan taps into growing health and wellness markets
46 CONSUMER HEALTH VITAMINS WEIGHT ® AND DIETARY SPORTS NUTRITION Peptan taps into the growing MANAGEMENT SUPPLEMENTS Health & Wellness markets SPORTS globally SUPPLEMENT MEAL DIETARY NUTRITION NUTRITION REPLACEMENT SUPPLEMENTS PROTEIN DRINKS SLIMMING PRODUCTS NON-HERBAL/ SPORTS Keymarket drivers TR
Slide 48: Savvy, health-conscious consumers
47 Savvy, health-conscious consumers Interest in natural and ‘getting back to basics’ Ageing global population Demand for convenience, Self-care trend portability and optimum nutrition Interest in Sub-trends in nutrition “age prevention” drivingcollagen demand further up: Health • Protein enrichment
Slide 49: Brodo: bone broth takeaway
48 Brodo: bone broth takeaway Bone broth contains collagen and is currently in New York. Price popular among consumers for several anti-aging ranges from $4.5 and health benefits to $9 a cup • Skin • Joints • Bones • Gut health A healthy alternative to e.g. coffee Peptan® taken Driven by strong pale
Slide 50: The market for collagen peptides
49 The market for collagen Collagen peptides is projected Peptides Market Size to grow at a CAGR of 7.1% Trend, to exceed $820 million by 2019 2012-2019 ($Million) (acc. to MarketandMarkets, 2015) North America is estimated Collagen as the biggest market today Peptides Market Share (Value), Growth d
Slide 51: Tracking of collagen product launches
50 # of product 640 Tracking of collagen market launches 603 product launches globally 507 over time 340 Collagen is still increasing in popularity 236 199 112 Product Positioning –the main health benefit of collagen promoted differs geographically 2009 2010 2011 2012 2013 2014 2015 Source: InnovaAn
Slide 52: Collagen peptides used across several segments
51 Functional Dietary food/beverage supplements Health Clinical wellness nutrition Collagen peptides are used as the key bioactive ingredient across several segments
Slide 53: Bioactive peptides, Type 1 Collagen
52 Bioactive peptides, Type 1 Collagen • A pure protein with unique amino acid composition • Proven health benefits for joint, bone and skin health, clinical studies • Easy to formulate • Digestible and bioavailable 100% in-house production in state-of-art plants (in France and Brazil) Collagen type
Slide 54: Enzymatic hydrolysis technology
53 Rousselot® technology based on a specific enzymatic hydrolysis process Peptan® is a bioactive ingredient characterized by a unique amino acid composition and high bioavailability Collagen type 1 peptides high in the AA’s Glycine, Hydroxyproline, Proline and Glutamic acid • 2,000 / 5,000 Da • High
Slide 55: Peptan is a holistic health ingredient
54 Peptan® is a ‘holistic health’ ingredient offering multiple health benefits to consumers. The Peptan® brand delivers added value solutions to our customers. Multiple Peptan® solutions Our global leadership in the production and supply of collagen peptides, combined with our worldwide presence and
Slide 56: Peptan suitable for all applications
55 Peptan® is suitable for all applications, incl. high concentration collagen & protein formulations • Neutral • Highly soluble Peptan® • pH stable is available • Heat stable (UHT, baking, etc.) in different grades, raw material, molecular Beverages Powder blends Nutritional bars weight Confectione
Slide 57: Science behind the ingredient
56 Science behind an ingredient is increasingly important, regulators & consumers expect health claims to be backed by science Mechanisms of action In vitro studies Peptan® offers • Cell culture • Target cell type / molecule proven efficacy Proof of principle In vivo studies • Animal studies (mice,
Slide 58: Healthy Aging and Mobility
Healthy Aging and Mobility Peptan®
Slide 59: Less collagen produced from age 30
58 From the age of 30. less collagen is produced by the body • As we age, less collagen is produced naturally by our body. Loss of collagen affects all the connective tissues, such as skin, joints and bones. Skin collagen (µg collagen/mg protein) and bone mineral density (g hydroxyapatite/cm²) relat
Slide 60: Peptan benefits for mobility
59 Peptan® is shown in scientific studies to address 3 key benefits for Mobility BONES Promote healthy Bones Fortification of bone collagen Promote healthy and flexible MOBILITY joints Fortification of joint collagen MUSCLES JOINTS Maintain lean muscle mass
Slide 61: Collagen is the main protein in bone
60 Collagen is the main protein in bone Collagen works together representing ~ 90% of organic bone mass, with calcium & vitamins (D, K) providing structural framework for Calcium to promote strong, healthy bones and other minerals Peptan® provides key bone health benefits VITAMIN D • Helps maintain
Slide 62: Joint health and WOMAC score
61 • As we age, we experience wear Collagen makes up 70-95% and tear on our joints of joint cartilage matrix. • High impact activity also affects Peptan® provides unique building joint health with time blocks to regenerate cartilage • Symptoms may include joint discomfort, tenderness, stiffness 17 1
Slide 63: Sports and Fitness Nutrition
Sports and Fitness Nutrition
Slide 64: Peptan supporting performance and recovery
63 z Peptan®, a bioactive protein supporting performance and recovery • Easily digestible protein Build muscle Provides energy • Excellent bioavailability • Neutral sensory Muscle regeneration Protein energy source Protect joints Weight Management • Ideal in protein blends • Multiple nutritional ben
Slide 65: Beauty from within
Beauty from within
Slide 66: Collagen and elastin create skin's structure
65 Collagen and elastin create skin’s structure, collagen provides infrastructure, while elastin allows skin to stretch Collagen also traps moisture, hyaluronic acid Decreased Collagen During aging, decreased fibroblast (skin cells) activity slows collagen+elastinsynthesis, Line leading to loss of c
Slide 67: Beauty starts with Peptan from the inside
66 Beauty starts with Peptan® from the inside… Peptan® has been shown in clinical studies to: • Improve skin moisture level • Improve skin smoothness • Prevent the formation of wrinkles • Improve skin suppleness Peptan® works from the inside by decreasing collagen fragmentation & increasing collagen
Slide 68: Conclusion: What's next?
Conclusion What’s next?
Slide 69: Active ingredient destined for further growth
68 Active ingredient destinedforfurthergrowth Mobility-Musculoskeletal health • Demographics & lifestyle of aging populations more opportunity for the future! • Trusted and recognized ingredient by consumers Quality of life • Clean label, natural, GRAS 100% OPTIMIZATION OF QUALITY OF LIFE 50% Move f
Slide 70: Science, quality, brand, innovation, formulation
Science – Clinically and scientifically documented with placebo-controlled studies In-house R&D in Gent, Belgium • Partnerships with leading Quality – 100% in-house production, highest quality universities around the world standards, full traceability • Placebo-controlled clinical tests at leading i
Slide 71: Look for us on YouTube
70 Look for us on YouTube (Peptan® collagen peptides) to view our videos and webinars Day (Gent) (Geneva) Live (London) (Sao Paulo)
Slide 72: peptan.com
peptan.com PeptanbyRousselot @Peptan_Global Collagen Peptides Collagenpeptidesfora healthylifestyle
Slide 73: Darling Ingredients brands
DARLING INGREDIENTS ? ? ? PRO ‘9aakery Feeds Jl{/J_ture ecoson Roussei!· Peptan’ besthides •OTH.UI’ ??mu.,,., ?R PRO hepac l?.m!J cth ·?Rendac W./ sonac ? PRO ., lrrolt.“l!EO!UHS ? e’ 1”” . • SOI.UflONS o:‘n.? “ lillOENERG’I
Slide 74: Activities: food grade fats
73 Activities o Food grade fats Production lines o Lard and tallow packing lines
Slide 75: Geographical overview food grade fats activities
74 Geographical overview food grade fats activities
Slide 76: Lard, tallow, poultry oil
75 • Lard • Tallow • Poultry oil • Fit for human consumption
Slide 77: B2B, wrapped packs, specialties
76 B2B Wrapped packs Specialties
Slide 78: Regional food fat uses: Germany, Belgium, UK
77 Germany/Austria: Belgium: United Kingdom: Schmalz French fries Fish & chips/Pork pie
Slide 79: West Europe Laru and Vada (packed fats)
78 West Europe Laru and Vada (packed fats)
Slide 80: Changing attitudes toward saturated fats
79 • Change in attitude towards saturated fats • Resistance against palm oil due to sustainability • Back to traditional kitchen • Taste -related fats, for example Knorr beef stock (Unilever)
Slide 81: Germany strong position and Laru expectations
80 • Germany has a strong position in home market • German dripping is an asset ? Quality image • Export ? make use of Darling network • Strong expectations for packed fats from LARU
Slide 82: Sonac Functional Products
Sonac Functional Products Gert Mulderij DARLING INGREDIENTS
Slide 83: Global production of animal-based protein for meat markets
82 Essentia Global production of Other animal-based protein 12 (25%) 15 market share for meat (30%) markets/food (kMtand %) Royal Protein 3 (5%) 4 (9%) Veos 5 10 (10%) (21%) Darling Scanflavour * Darling estimate (internal analysis)
Slide 84: Two ways of selling proteins
83 Two ways of selling proteins Following soy protein/commodity Selling functionality –pricing protein value customer perceived value
Slide 85: Production sites
84 Sonac Eindhoven Sonac Vuren Sonac Loenen Sonac Versmold Rousselot Ghent Rousselot Angouleme ousselot ISS ousselot Da’an Rousselot Amparo
Slide 86: Functional benefits of proteins
85 o Emulsifying capacity o Protein enrichment o Texture improvement o Natural coloring o Low fat / low carb o Sodium reduction o Quality improvement o Improved processing o Water retention / juiciness
Slide 87: Main Market: processed meat
Main Market . P Processed meat market
Slide 88: Consumers prefer no artificial ingredients in meat
87 • Meat & Poultry are top food category where consumers prefer no artificial ingredients (Kalsec, 2015) • Ingredient market prefers: o Beef to Beef o Porcine to Porcine o Chicken to Chicken
Slide 89: Processed meat growth in MEA, LA and Asia
88 MEA, LA and Asia highest growth rate in processed meat; Sonac will capture its share of this growth Source: Euromonitor
Slide 90: Growth in emerging markets and protein blends
89 o Growth is mainly in emerging markets where proteins are mainly supplied to meat processors o Meat processors ask for fit-for-purpose proteins/solutions o Protein blends add more value and expand sales of ‘basic’ proteins o Sonac Functional Products has the broadest portfolio to offer to the mea
Slide 91: Other opportunities: pet food and nutraceuticals
90 In addition to the meat market, we see possibilities in: Pet food snacks & treats Nutraceutical (humani
Slide 92: Positioned on a mountain of opportunities
91 Positioned on a mountain of opportunities
Slide 93: Darling Ingredients brands
DARLING INGREDIENTS ? ? ? PRO ‘9aakery Feeds Jl{/J_ture ecoson Roussei!· Peptan’ besthides •OTH.UI’ ??mu.,,., ?R PRO hepac l?.m!J cth ·?Rendac W./ sonac ? PRO ., lrrolt.“l!EO!UHS ? e’ 1”” . • SOI.UflONS o:‘n.? “ lillOENERG’I
Slide 94: Forward-looking statements
1 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 by words such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “could,” “may,” “will,” “
Slide 95: Darling Ingredients
DARLING INGREDIENTS DAES “ahery Fonds NBME ecoson newman Peptan’ besthides aOrmmar "Frets OARORO hepac (OUD cth eenendac ( sonac AERO