Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Darling International — Investor Presentation (November 2009)
37 slides from Darling Ingredients's investor presentation, Nov 2, 2009
Slide 1: Investor Presentation November 2009
Investor Presentation November 2009 NYSE: DAR 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: America's leading provider of rendering, recycling and recovery solutions
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 80 locations, 44 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: U.S. Animal Agriculture Annual Production
7 35 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 8: How it All Fits Together
RAW MATERIAL Tallow Meat & Bone Grease Hides Lubricants Textiles Plastics Shampoo Emulsifiers Cleaners Creams Esters Paints Plastics Lubricants Inks Glues Solvents Antifreeze Explosives Rubber Plastics Tires Lubricants 8 How it All Fits Together Leather Shoes Garments Upholstery Bio- Fuels Animal Fe
Slide 9: Industry Leader
9 Industry Leader Only recycling/rendering company with a national footprint operating in 42 states - Network of 44 processing facilities from coast to coast - Supported by 36 accumulation centers. A national footprint with scale ……
Slide 10: Reporting Segments
10 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 11: Rendering Process
Grinding Cooking Defatting 11 Rendering Process Meal Fat
Slide 12: Raw Materials - turning this …
12 Raw Materials - turning this … Offal Bones and fat Blood Animals dead on arrival, in transit or on farms Feathers
Slide 13: …into this
13 … into this
Slide 14: Rendering Overview
14 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 15: Restaurant Services Overview
15 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 16: Cooking Oil Removal
16 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 17: CleanStar
17 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 18: Torvac (Trap)
18 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 19: National Service Center
19 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 20: Rendering and Restaurant Services Revenues 2004-2008
$900,000 807,492 $800,000 $700,000 645,313 $600,000 $500,000 © Rendering 406,990 Revenues $400,000 308,867 @ Restaurant $300,000 Services 00068 Revenues $100,000 $0 + T T T 2004 2005 2006 2007 2008 t™ DARLIN YM! G
Slide 21: Operating Cash Flows
21 Operating Cash Flows (in millions)
Slide 22: 5 Year Working Capital, Debt, Net Worth and Total Assets
5 Year Working Capital si00 «Year Debt $80 $80 ——__ $60 - $60 $40 $40 $20 | | | s2 | ral of T | (amilins>QQ4 2005 2006 2007 2008 tno 2004 5008 2006 2007 2008 $300 _ 5 Year Net Worth goo 5 Year Total Assets $200 | $400 | $300 | #100) it $200 - i o $100 | | . om004 2005 2006 2007 2008 ee ; 2004 2005 2
Slide 23: Capital Expenditures
23 Capital Expenditures Millions $13.3
Slide 24: Balance Sheet
24 July 4, 2009 June 28, 2008 CASH $ 57,786 $ 44,596 ACCOUNTS RECEIVABLE 46,404 65,078 INVENTORIES 20,073 30,300 INCOME TAXES REFUNDABLE 5,170 - OTHER CURRENT ASSETS 15,539 12,018 TOTAL CURRENT ASSETS 144,972 151,992 PROPERTY, PLANT & EQUIP 146,477 132,698 GOODWILL 66,958 71,856 OTHER 47,604 32,716
Slide 25: Core Business Growth through Acquisition
25 Core Business Growth through Acquisition March Dec May July Dec Feb Aug Oct Enviro Vac, Inc. FL, GA KC metro NYC metro GA GA So CA TX Burrows Industries, Inc. dba Minuteman Pumping Ace Grease Service J&R Rendering, Inc. Southeastern Maintenance & Construction Inc. National By-Products, LLC API Re
Slide 26: Darling International Inc. - Triangle of Value
26 Darling International Inc. - Triangle of Value
Slide 27: Darling Captures and Recycles Carbon
Material Darling recycles in a year: Carbon Darling captures, lb/year 1.23 billion CO 2 Darling avoids, metric ton/year 2.1 million CO 2 emitted per metric ton avoided 0.14 metric ton GHG avoided ,metric ton/year* 4 million 27 Darling Captures and Recycles Carbon (Emissions per 1000 lb raw material)
Slide 28: Fuels
Veen FUGIS...
Slide 29: Darling is uniquely positioned
29 Darling is uniquely positioned A top producer of animal fats and greases “Similar to owning the oil field” Not a food oil (Food vs. Fuel) Mandates, subsidies, and carbon credits Source: National Biodiesel Board.
Slide 30: Bio-diesel has not been the solution so far for animal fats
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 Baseline Lower Similar 30 Bio-diesel has not been the solution so far for animal fats Animal
Slide 31: Green diesel may be a better solution?
31 Green diesel may be a better solution? Green diesel is a bio fuel 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 excelle
Slide 32: Animal fat price is determined by its value relative to corn
2006 2007 2008 3-Yr Average Per # price of diesel fuel .27 .30 .45 .34 Per # price of animal fat/used grease .16 .26 .31 .24 Price premium as fuel before tax credit .11 .04 .14 .10 Per # value of tax credit .14 .14 .14 .14 Price premium as fuel after tax credit .25 .18 .28 .24 Billions of Annual Lbs
Slide 33: Animal fat price versus soy oil
itionally been a discountto vegetabl Soy oll —BO Futures —BFT Ppunog Jed sjuap c (
Slide 34: What did Green Diesel economics in 2008 look like?
MMs Annual Revenue renewable diesel $526 Other products 30 Total revenue 556 Input cost 375 Plant operating cost 39 Total expenses 414 EBITDA $142** 34 What did Green Diesel economics in 2008 look like? 10,000 barrel/day plant Earnings Snapshot **Assumes 2008 average market prices for the respective
Slide 35: 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 8 = 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 35 Green Diesel and the Carbon
Slide 36: DAR & VLO have applied for DOE Loan Guarantee
36 DAR & VLO have applied for DOE Loan Guarantee Joint venture to construct 10,000 barrel/ day “ Green Diesel Refinery ” Facility to have pre-treatment capability for multi-feedstock flexibility, but animal fats and used cooking oil are primary St. Charles Site Provides: – Located on major waterway
Slide 37: The Recycling Company of Yesterday… The Fuel Company of Tomorrow
The RECYCLING COMPANY of YESTERDAY… The FUEL COMPANY of TOMMORROW CARBON FRIENDLY
Darling International — Investor Presentation (November 2009) on 6ix