Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Investor Day (September 2014)
33 slides from Darling Ingredients's investor day presentation, Sep 4, 2014
Slide 1: Investor/Analyst Forum September 2014
Investor/Analyst Forum September 2014 Creating sustainable food, feed and fuel ingredients for a growing population EXHIBIT 99.1
Slide 2: Safe Harbor Statement
Creating sustainable food, feed and fuel ingredients for a growing population Safe Harbor Statement This media release contains “forward-looking” statements regarding the business operations and prospects of Darling Ingredients Inc. and industry factors affecting it. These statements are identified
Slide 3: Our Historical Timeline
Creating sustainable food, feed and fuel ingredients for a growing population Our Historical Timeline 3 TRS: Additional value add services; New raw material supply DAR: Rendering; Used cooking oil (UCO); Trap DGD: Value add fats; Hedge core business Rothsay: Leading position in Canada NBP & Griffin
Slide 4: A World Leader in Bio-Nutrient Transformation
Creating sustainable food, feed and fuel ingredients for a growing population A World Leader in Bio-Nutrient Transformation Global footprint: 5 continents Locations: Over 200 Founded: 1882 Listed: 1994 Publicly traded: NYSE: DAR Principal segments: Three Industries served: Pharmaceutical, food, pet
Slide 5: Locations by Continent and Process
Creating sustainable food, feed and fuel ingredients for a growing population Process USA Canada Europe China S. America Australia Total: Rendering - (C3 By-products & UCO) 35 5 10 50 Transfer Stations 54 8 62 Protein Blending 4 4 Bakery 11 11 Used Cooking Oil processing only 8 1 9 Disposal Renderin
Slide 6: Growing Population Creates Margin Opportunity
Creating sustainable food, feed and fuel ingredients for a growing population Creates Margin Opportunity DAR is operated as a spread business Operating Costs Transportation Costs Energy Costs 6 Global Drivers to Business Raw Material Availability Competing Ingredient Supply Some sources estimate str
Slide 7: Genesis of Business Model
Creating sustainable food, feed and fuel ingredients for a growing population Genesis of Business Model 7 Diverse Raw Material Supply Establish Spread/Margin Transform and Value Add Shift Risk Solid Business Market Growth New Market Spread Management Our model today has evolved to one that shifts th
Slide 8: How Do We Measure Success?
Creating sustainable food, feed and fuel ingredients for a growing population 8 Return on Gross Investment (ROGI): Earnings before interest, taxes, depreciation and amortization adjusted for certain non- operational costs divided by the sum of Total Assets plus Accumulated Depreciation and Amortizat
Slide 9: Our Business Segments
Food, Feed & Fuel Our Business Segments Creating sustainable food, feed and fuel ingredients for a growing population
Slide 10: Our Brands by Reporting Segments
Creating sustainable food, feed and fuel ingredients for a growing population The ingredients we produce are used in three primary segments: - Food (pharmaceutical, gelatin, natural casings, edible fats) - Feed (fats & proteins, pet food, nutritional feed supplements, fertilizers) - Fuel (renewable
Slide 11: Our Food Ingredients – A Closer Look
Creating sustainable food, feed and fuel ingredients for a growing population Ingredients for living. Darling’s food ingredients are sold to a worldwide market that includes the pharmaceutical, food, nutraceuticals and cosmetic industries. 11 Our Food Ingredients – A Closer Look
Slide 12: Food – A Closer Look: Gelatin (Rousselot)
Creating sustainable food, feed and fuel ingredients for a growing population • Rousselot is the world’s leading supplier of gelatin and collagen peptides to a global market* • Europe held the highest market share of gelatin revenue and volume in 2013, followed by North America and Asia/Pacific, the
Slide 13: Food – A Closer Look: Casings
Creating sustainable food, feed and fuel ingredients for a growing population • Turnkey supplier of natural sausage casings and meat by-products to the food and meat processing industry • Traceability and food safety are critical to CTH operations • 50 years experience sourcing, processing and selli
Slide 14: Food – A Closer Look: Edible Fat
Creating sustainable food, feed and fuel ingredients for a growing population 14 Food – A Closer Look: Edible Fat • Sonac fat processes, refines and packages high-quality food-grade animal fats for baking, frying fats and spreads (schmaltz, lard) • Some Sonac fat products are used as a natural bindi
Slide 15: Our Feed Ingredients – A Closer Look
Creating sustainable food, feed and fuel ingredients for a growing population 15 Our Feed Ingredients – A Closer Look Nutrients for growth. Our feed ingredients compose the largest segment of our business, with sales to animal feed, aquaculture and pet food manufacturers worldwide.
Slide 16: Feed – A Closer Look: Geographic Production
Creating sustainable food, feed and fuel ingredients for a growing population 16 North American Feed Ingredients • DAR PRO Ingredients • DAR PRO Solutions • Bakery Feeds • Rothsay • Terra Renewal • Nature Safe Feed – A Closer Look: Geographic Production European Feed Ingredients • Sonac Operated as
Slide 17: North America - Bakery Feeds
Creating sustainable food, feed and fuel ingredients for a growing population $5.14 $3.78 $4.27 $6.89 $7.21 $6.22 $198 $139 $195 $296 $295 $266 $0 $50 $100 $150 $200 $250 $300 $350 2008 2009 2010 2011 2012 2013 Bakery Revenue ($ in millions) Corn Price ($/bushel) 17 North America - Bakery Feeds Sour
Slide 18: European Feed Ingredients: Sonac
Creating sustainable food, feed and fuel ingredients for a growing population • Sonac is Europe’s leading supplier of consistent and high-quality proteins, fats and minerals from food grade animal by-products that are used in pet foods, animal feed and fertilizers. Sonac products are marketed as: 18
Slide 19: Our Fuel Ingredients – A Closer Look
Creating sustainable food, feed and fuel ingredients for a growing population 19 Our Fuel Ingredients – A Closer Look Energy for today’s world. For the past two decades, Darling has led the way in biofuel innovation and development.
Slide 20: Fuel – A DGD Update
Creating sustainable food, feed and fuel ingredients for a growing population 20 • In operation for over a year, DGD continues as North America’s largest facility to convert animal fats, used cooking oils and distillers corn oil into renewable diesel • DGD’s nameplate capacity is 137 million gallons
Slide 21: Year 1 – DGD Lookback
Creating sustainable food, feed and fuel ingredients for a growing population • Approximately 120 million gallons of renewable diesel produced • Darling EBITDA approximately $35.2 million • Darling invested capital of approximately $115 million • Plant performance excellent up until fire incident on
Slide 22: Fuel – A Closer Look: Rendac
Creating sustainable food, feed and fuel ingredients for a growing population 22 Fuel – A Closer Look: • In answer to Europe’s stringent laws enacted post-BSE, Rendac collects and safely processes mortalities and slaughter by-products that are designated unfit for animal feeds or human consumption (
Slide 23: Fuel – A Closer Look: Ecoson Green Energy Park
Creating sustainable food, feed and fuel ingredients for a growing population 23 • One of the largest producers of green energy from a digesting process in the Netherlands, our Ecoson Green Energy Park is located in Son o Organic residuals from food industry are converted to biogas for green electri
Slide 24: Growth Strategy
Growth Strategy How we will grow and sustain our business Creating sustainable food, feed and fuel ingredients for a growing population
Slide 25: Projected EBITDA Growth thru 2017 and Beyond
Creating sustainable food, feed and fuel ingredients for a growing population Note: Management’s current views on future performance (see page 2). Baseline EBITDA does not include Diamond Green Diesel. Projected EBITDA Growth thru 2017 and Beyond And how we plan to do it... Stable and positioned to
Slide 26: Projected EBITDA Growth: How we plan to pay for it
Creating sustainable food, feed and fuel ingredients for a growing population (in US $millions) $ 600 EBITDA (250) CAPEX (100) Interest (100) Taxes $ 150 Free Cash For growth projects and debt reduction 70% maintenance/compliance 30% organic growth Financing Projected EBITDA Growth How we plan to pa
Slide 27: Financials
Financials Creating sustainable food, feed and fuel ingredients for a growing population
Slide 28: Pro Forma Operating Performance
Creating sustainable food, feed and fuel ingredients for a growing population $0 $100 $200 $300 $400 $500 $600 $700 2012 2013 LTM June '14 2Q 13 2Q 14 $655 $0 $1,000 $2,000 $3,000 $4,000 $5,000 2012 2013 LTM June '14 2Q 13 2Q 14 28 Food Feed Fuel Pro Forma Operating Performance Net Sales (US $ in mi
Slide 29: Pro Forma Adjusted EBITDA
Creating sustainable food, feed and fuel ingredients for a growing population Pro Forma Adjusted EBITDA 29 See Cautionary Statement at end of this presentation. FYE 2012 FYE 2013 LTM Q2 2014 Q2 2013 Q2 2014 Net Income 302,642$ 241,426$ 69,407$ 71,927$ 32,757$ Depreciation and Amortization 173,217 18
Slide 30: Operating Performance, Free Cash Flow and Debt Summary
Creating sustainable food, feed and fuel ingredients for a growing population 0 100 200 300 400 500 600 700 Mar. 29, 2014 June 28, 2014 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 FYE 2012 FYE 2013 LTM Q2 2014 Note: Net working capital is defined as current assets less current liabilities. O
Slide 31: Shareholder Value: Our Recipe for Success
Shareholder Value Success is consistently providing maximum value to the supply chain Our Recipe for Success... Creating sustainable food, feed and fuel ingredients for a growing population 31 Protein Production 31 Maximize the valuation of our raw materials by focusing on their highest and best pos
Slide 32: Q&A
Q&A 32 Creating sustainable food, feed and fuel ingredients for a growing population
Slide 33: Unaudited Pro Forma Financial Information
Creating sustainable food, feed and fuel ingredients for a growing population 33 The unaudited pro forma financial information (“Unaudited Pro Forma Financial Information”) presented in the Financial Section pages of this presentation was prepared by Darling management and is based upon (i) Darling