Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Darling International — Investor Presentation (April 2009)
39 slides from Darling Ingredients's investor presentation, Apr 14, 2009
Slide 1: Investor Presentation April 2009
Investor Presentation April, 2009 NYSE: DAR Exhibit 99.1 Investor Presentation
Slide 2: Forward-Looking Statements
2 Forward-Looking Statements This presentation contains forward-looking statements regarding the business operations of Darling and the industry in which it operates. These statements are identified by words such as “may,” “will,” “expect,” “believe,” “intend,” “anticipate,” “should,” “estimate,” “c
Slide 3: Over a century old, Darling International Inc.
3 Over a century old, Darling International Inc. is America’s leading provider of rendering, recycling and recovery solutions to the nation’s food industry.
Slide 4: Who we are
4 Founded in 1882 Headquartered in Dallas, TX 1900 employees Public since 1994 NYSE Listed (DAR) Largest independent rendering company with 81 locations, 43 processing plants nationwide Reports under two segments: – Rendering – Restaurant services Who we are:
Slide 5: Essential Gate Keeper for People & Planet
5 Essential “Gate Keeper” for People & Planet Composting - Volume would fill 10,000 new Dallas Cowboy stadiums per year Landfill – Volume would reduce existing US landfill space by 25% per year and increase GHG emissions Incineration – Cost prohibitive and has air quality issues Digesting – Operatio
Slide 6: Rendering… invisible industry with massive scale
6 Rendering… invisible industry with massive scale Animal and food by-product recycling industry is “mission critical” in the food supply chain and is the most efficient and environmentally sound disposal alternative for a sustainable society. Over 59 billion pounds of inedible by-products generated
Slide 7: The Rendering Industry (U.S. and Canada)
7 The Rendering Industry (U.S. and Canada) 273 facilities in the U.S. and 29 in Canada $3.5 billion annual revenue 59 billion pounds raw material each year 250 million pounds raw material each day
Slide 8: U.S. Animal Agriculture Annual Production
8 million cattle (49% of live wt. not used for human food) 100 million hogs (44% not used for human food) 8 billion chickens (37% not used for human food) 280 million turkeys (36% not used for human food) U.S. Animal Agriculture Annual Production
Slide 9: Slide 9
Slide 10: Industry Leader
10 Industry Leader Only recycling/rendering company with a national footprint operating in 42 states – Network of 43 processing facilities from coast to coast – Supported by 38 accumulation centers. A national footprint with scale ……
Slide 11: Reporting Segments
11 Reporting Segments Rendering Rendering is the process of recycling animal and food waste products into useful commercial goods, including tallow, protein meals (meat and bone meal), yellow grease, and hides. Restaurant Services Darling is the only US provider of collection, storage, transport, an
Slide 12: Rendering Process
Grinding Cooking Defatting 12 Rendering Process Meal Fat
Slide 13: INTERNATIONAL INC.
INTERNATIONAL INC. DARLIN YI G
Slide 14: Raw Materials – turning this…
13 Raw Materials – turning this … Offal Bones and fat Blood Animals dead on arrival, in transit or on farms Feathers
Slide 15: …into this
14 … into this
Slide 16: Rendering Overview
15 Rendering Overview Darling operates a fleet of approx 960 trucks to collect raw materials from approx 116,000 food service establishments, butcher shops, grocery stores, and independent meat and poultry processors nationwide. “Formula” basis: Applied to approx 58% of Darling’s annual raw material
Slide 17: Restaurant Services Overview
16 Restaurant Services Overview Basic cooking oil removal (COR) service – Collection of used cooking oil from inside systems or outside corrals Premium service offered in conjunction with COR – Self contained used cooking oil storage system inside or outside customer’s premises Grease trap maintenan
Slide 18: Cooking Oil Removal
17 Cooking Oil Removal Bundled services – Complete, individualized used cooking oil collection and recycling services nationwide through local providers Environmental compliance – Efficient, reliable pickup and disposal of non-recyclable waste
Slide 19: CleanStar
18 CleanStar Environmentally safe and efficient – Used cooking oil is pumped directly into sealed, insulated CleanStar storage tank with press of a button Customer choice – Option of inside or outside storage systems to fit customer needs
Slide 20: Torvac (Trap)
19 Torvac (Trap) Ongoing maintenance – Provides manpower, equipment and expertise to find and fix grease trap problems Compliance – Removed material is tracked and handled in a legal and environmentally sound manner
Slide 21: National Service Center
20 National Service Center Darling’s National Service Center (NSC) offers complete service management for all cooking oil removal, grease trap and rendering services. Manages grease and rendering related service needs. Ensures compliance for trap regulations and ordinances. 24 hr/day, 7 day/week hig
Slide 22: Rendering and Restaurant Services Revenues
$900,000 - 807,492 $800,000 $700,000 645,313 $600,000 $500,000 «Rendering coon 406,990 Revenues ; i 320,229 308,867 = Restaurant $300,000 —- = i Services eae Revenues $100,000 $0 | T r ee 2004 2005 + + 2006 += 2007-~S 2008 a DAR LING
Slide 23: Operating Cash Flows
22 Operating Cash Flows 57.5 49.9 103.9 133.4 68.3 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 $130 $140 $150 $160 $170 2003 2004 2005 2006 2007 2008 Darling & National By-Products Combined (Proforma) Darling International Inc. (Post - Acquisition) (in millions)
Slide 24: Slide 24
Slide 25: Debt, Working Capital, Net Worth, Total Assets
. . 5 Year Debt 5 Year Working Capital $100 O $80 $60 | $60 - $40" $40 $20 - $20 - Re $0 | “om2004 2005 2006 2007 2008 (mer) 2904 2005 2006 2007 2008 $300 --5 Year Net Worth __ 5 Year Total Assets $500 $200 | $400 - $300 - $100 | $200 | $0 $100 - “m'en2004 2005 2006 2007 2008 pa 2004 2005 2006 2007
Slide 26: Darling International Inc. – Triangle of Value
26 Darling International Inc. – Triangle of Value
Slide 27: Rendering's Cycle of Sustainability
27 SUSTAINABILITY Rendering’s Cycle of Sustainability Darling and the rendering industry have been the gatekeepers of food safety and the environment for decades, offering a sanitary and eco-friendly way to dispose of the massive amount of meat and food by-products produced every year. Municipal Inf
Slide 28: Green Impact in a Carbon World
Item Average Plant Industry Greenhouse gas reduction strategy Average plant Industry 28 Green Impact in a Carbon World Industry Carbon Footprint • Recycling fat and protein significantly reduces the amount of greenhouse gases, such as CO 2 , that is released into the environment as compared to alter
Slide 29: Oren AUGIS...
Oren AUGIS...
Slide 30: Darling is uniquely positioned
30 Darling is uniquely positioned Top producer of animal fats and greases “Similar to owning the oil field” Capable of making 150-200 million gallons Limited food impact (Food vs. Fuel) RFS will encourage incorporation Source: National Biodiesel Board.
Slide 31: Bio Diesel vs. Green Diesel
31 Bio Diesel vs. Green Diesel Green Diesel has many advantages for the petroleum industry Petro-Diesel Biodiesel (FAME) Green Diesel NOx Emission Baseline + 10 -10 to 0 Cetane 40-55 50-65 75-90 Cold flow properties Baseline Poor Excellent Oxidative stability Baseline Poor Excellent Energy content B
Slide 32: What are the benefits of Green Diesel fuel?
32 What are the benefits of Green Diesel fuel? Green diesel is a biofuel indistinguishable from petroleum diesel; it can be blended to any proportion Green diesel can be used in any proportion within today’s infrastructure, from pipelines and storage to gas pumps and automobiles Green diesel has exc
Slide 33: Why This is a Game Changer
33 Traditional discount of animal fat/used grease to vegetable oil is based on most animal fats/used grease being used as a feed product which prices vs. corn As fat/used grease is diverted from feed to fuel, the traditional pricing discount for animal fats/used grease may begin to narrow. How much
Slide 34: Always a discount to vegetable oil
34 Always a discount to vegetable oil
Slide 35: DARLING
DARLING BR errrrionac ine
Slide 36: Earnings Snapshot: Renewable Diesel Plant
35 MMs Annual $ Revenue renewable diesel Revenue tax credits Total revenue Input cost Plant operating cost Total expenses EBITDA Depreciation EBIT Taxes Entity PAT Darling equity investment Darling return on equity 86% Renewable Diesel in 2008 10,000 barrel/day plant costing $200MM Earnings Snapshot
Slide 37: Green Diesel and the Carbon World
U.S. ANIMAL FAT & USED GREASE SUPPLY Gallons green diesel 1.250,000,000 X #’s/gallon carbon reduction 18 = Total #’s of carbon reduction 22,500,000,000 or Metric tonnes carbon credit 10,205,933 X Assumed per tonne credit $35 = Available income carbon credits $357.207,655 36 Green Diesel and the Carb
Slide 38: Our Concept to enter Green Diesel
37 Our Concept to enter “Green Diesel” Business: Joint venture to construct a 6,800 – 10,000 barrel/ day “ Green Diesel Refinery ” Facility to have pre-treatment capability for multi-feedstock flexibility, but tallow and used cooking oil are primary Cost to construct – $150-$200 million Site locatio
Slide 39: The Recycling Company of Yesterday… The Fuel Company of Tomorrow
The RECYCLING COMPANY of YESTERDAY… The FUEL COMPANY of TOMORROW CARBON FRIENDLY CARBON FRIENDLY
Darling International — Investor Presentation (April 2009) on 6ix