Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Q4 2023 Earnings Presentation
22 slides from Darling Ingredients's earnings presentation, Feb 28, 2024
Slide 1: Earnings Report Q4 FY 2023
Earnings Report Q4 FY 2023 | February 27, 2024
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation includes “forward-looking” statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements. Statements that are not statements of historical facts are forward-looking
Slide 3: 2023 Significant Business Highlights
2023 Significant Business Highlights Strengthening our position in global ingredients market • 6th consecutive year of record combined adjusted EBITDA • Continued to deliver on successful integration of newly acquired businesses • Acquired Gelnex, a leading global producer of collagen products – bri
Slide 4: Q4, FY 2023 Business Highlights
Q4, FY 2023 Business Highlights Financial Performance Q4 2023 FY 2023 Net Sales $1,614.1 million $6,788.1 million Net Income $84.5 million $647.7 million EPS Diluted $0.52 $3.99 Combined Adjusted EBITDA $350.9 million $1,611.9 million Global Ingredients EBITDA $312.1 million $1,109.9 million Feed In
Slide 5: Q4, FY 2023 Earnings
Q4, FY 2023 Earnings In millions, except % FY FY % Balance Sheet Q4-2023 Q4-2022 per share variance 2023 2022 variance As of As of Net Sales In millions, except ratio data $1,614.1 $1,768.1 (8.7%) $6,788.1 $6,532.2 3.9% 12/30/2023 12/31/2022 Gross Margin $436.4 $388.8 12.2% $1,645.0 $1,529.6 7.5% Ca
Slide 6: EBITDA
EBITDA Combined Adjusted EBITDA Q4 2023 % of Total EBITDA by (In millions) $508.3 Segment $500 $450 $413.0 $418.4 $402.6 $394.7 $400 $247 $91 $350.9 $350 $334.3 Fuel 18% $129 $330.7 $120 $146 $39 $300 $87 $86 Feed $250 58% Food $200 24% $150 $312 $312 $274 $289 $267 $261 $248 $244 $100 $50 $0 Q1 202
Slide 7: Feed Segment
Feed Segment Key Drivers US $ (in millions) Q4 2023 Q4 2022 FY 2023 FY 2022 Net Sales $ 1,045,642 $ 1,216,073 $ 4,472,592 $ 4,539,000 • Effective global margin Cost of sales & operating expenses 755,062 950,778 3,385,859 3,473,506 Gross Margin management and higher volumes $ 290,580 $ 265,295 $ 1,08
Slide 8: Feed Segment
Feed Segment US $ (in millions, unaudited) Fats Proteins Other Total Rendering Used Cooking Oil Bakery Other Total Net Sales Year Ended Dec. 31, 2022 $ 1,951.2 $ 1,476.6 $ 200.9 $ 3,628.7 $ 519.1 $ 333.4 $ 57.8 $ 4,539.0 Increase/(Decrease) in sales volumes 93.3 128.8 - 222.1 56.4 (37.1) - 241.4 Inc
Slide 9: Food Segment
Food Segment US $ (in millions) Q4 2023 Q4 2022 FY 2023 FY 2022 Key Drivers Net Sales $ 423,836 $ 387,733 $ 1,752,065 $ 1,459,630 Cost of sales & operating expenses 311,163 294,417 1,310,581 1,102,250 Gross Margin $ 112,673 $ 93,316 $ 441,484 $ 357,380 • Global collagen business remains strong with
Slide 10: Food Segment
Food Segment FY 2023 % of Sales Breakdown Food Segment Trailing 4Q adjusted EBITDA $350 $300 $250 84% 10% $200 $150 6% $100 Collagen Edible fats Other products Trailing 4 Q's Fourth Quarter & FY 2023 Financial Results (unaudited) 10
Slide 11: Fuel Segment
Fuel Segment US $ (in millions) Q4 2023 Q4 2022 FY 2023 FY 2022 Net Sales $ 144,605 $ 164,277 $ 563,423 $ 533,574 Key Drivers Cost of sales & operating expenses 111,427 134,093 446,620 426,853 • European renewable energy segment Gross Margin $ 33,178 $ 30,184 $ 116,803 $ 106,721 continues to deliver
Slide 12: Fuel Segment
Fuel Segment Diamond Green Diesel Quarterly Avg. Prices US $ and gallons (in millions) Q4 2023 Q4 2022 FY 2023 FY 2022 D4 RINs (1.7 Multiple) & Yellow Grease - IL $0.70 $3.50 Pro forma Adjusted EBITDA $38.8 $146.0 $502.0 $443.5 (Darling’s share) $0.60 $3.00 Total gallons produced 352.0 224.6 1,267.2
Slide 13: Appendix
Appendix Additional Information
Slide 14: Feed Segment – Historical
Feed Segment – Historical US$ (in millions) Q1-2022 Q2-2022 Q3-2022 Q4-2022 Total 2022 Q1-2023 Q2-2023 Q3-2023 Q4-2023 Total 2023 Net Sales $ 879.4 $ 1,170.3 $ 1,273.1 $ 1,216.1 $ 4,539.0 $ 1,237.5 $ 1,141.7 $ 1,047.8 $ 1,045.6 $ 4,472.6 Gross Margin 233.9 306.0 260.2 265.3 1,065.5 287.4 265.2 243.5
Slide 15: Food Segment – Historical
Food Segment – Historical US$ (in millions) Q1 -2022 Q2-2022 Q3-2022 Q4-2022 Total 2022 Q1-2023 Q2-2023 Q3-2023 Q4-2023 Total 2023 Net Sales $ 354.8 $ 369.2 $ 347.9 $ 387.7 $ 1,459.6 $ 396.4 $ 476.1 $ 455.7 $ 423.8 $ 1,752.1 Gross Margin 84.5 88.2 91.3 93.3 357.4 106.3 105.0 117.5 112.7 441.5 Gross
Slide 16: Fuel Segment – Historical
Fuel Segment – Historical US$ (in millions) Q1-2022 Q2-2022 Q3-2022 Q4-2022 Total 2022 Q1-2023 Q2-2023 Q3-2023 Q4-2023 Total 2023 Net Sales $ 132.0 $ 110.7 $ 126.6 $ 164.3 $ 533.6 $ 157.3 $ 139.9 $ 121.7 $ 144.6 $ 563.4 Gross Margin 27.3 24.4 24.8 30.2 106.7 30.5 27.7 25.5 33.2 116.8 Gross Margin %
Slide 17: California LCFS and RIN Value History
$250 $150 $0 $50 $200 $100 1/1/2018 4/1/2018 7/1/2018 10/1/2018 1/1/2019 4/1/2019 7/1/2019 10/1/2019 1/1/2020 4/1/2020 7/1/2020 10/1/2020 1/1/2021 (USD/MT) 4/1/2021 7/1/2021 10/1/2021 Fourth Quarter & FY 2023 Financial Results (unaudited) 1/1/2022 4/1/2022 7/1/2022 10/1/2022 Monthly Average LCFS Car
Slide 18: Historical Pricing
Historical Pricing 2023 Finished Product Pricing 2023 Average Jacobsen Prices (USD) Feed Segment Ingredi ents January February March Q1 Avg. April May June Q2 Avg. July August Sept. Q3 Avg. Oct. Nov. Dec. Q4 Avg. Year Avg. Bleachable Fancy Tallow - Chicago Renderer / cwt $68.00 $60.92 $55.80 $61.39
Slide 19: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to (Non-GAAP) Adjusted EBITDA and (Non-GAAP) Pro-Forma Adjusted EBITDA to Foreign Currency For the Three and Twelve Months Ended December 30, 2023 and December 31, 2022 (in thousands) Three Months Ended Twelve Months Ended Adjusted EBITDA December 30, December 31, Decemb
Slide 20: Event Calendar
Event Calendar Scotia Bank Howard Weil Energy Conference • Miami • Feb. 29 Raymond James • Orlando • March 5 Piper Sandler Energy Conference • Las Vegas • March 19 Fourth Quarter & FY 2023 Financial Results (unaudited) 20
Slide 21: 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. It is presented here not as an alternative to net
Slide 22: Earnings Report
EARNINGS REPORT Q4 FY 2023 | February 27, 2024