Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Q3 2018 Earnings Presentation
18 slides from Darling Ingredients's earnings presentation, Nov 6, 2018
Slide 1: Darling Ingredients Q3 2018 Earnings Presentation
Exhibit – 99.2 Randall C. Stuewe, Chairman and CEO Brad Phillips, EVP Chief Financial Officer Melissa A. Gaither, VP IR and Global Communications
Slide 2: Forward-looking statements
2 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 3: Consolidated Earnings
Consolidated Earnings 3 Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q3 2018 Overview US$ (millions) except per share price 2017 2017 2017 2017 2017 2018 2018 2018 Revenue $ 878.5 $ 894.9 $ 936.3 $ 952.6 $ 3,662.3 $ 875.4 $ 846.6 $ 812.6 • Total global volumes up 5.0% year over year Gross Margin 190.5 195.7 193.8 206
Slide 4: Third Quarter 2018 Financial Summary
Third Quarter 2018 Financial Summary 4 Q3 2018 Overview $ in millions Gross Profit and Margin • Net sales - $812.6 million • Net income - $(6.0) million • EPS at $(0.04) per diluted share • Adjusted EBITDA - $97.0 million • DGD joint venture Adjusted EBITDA - $0.5 million (Darling’s share) $ in mill
Slide 5: Feed Segment
Feed Segment 5 US$ and metric tons Q3 Q4 Total Q1 Q2 Q3 (millions) 2017 2017 2017 2018 2018 2018 Adj. EBITDA Bridge Q3-2017 to Q3-2018 (millions) Revenue $575.5 $562.3 $2,239.5 $485.8 (1) $498.8 (1) $482.7 (1) 100 Gross Margin 126.0 122.0 494.9 116.7 128.0 98.9 $81.1 ($89.7) 80 Gross Margin % 21.9%
Slide 6: Food Segment
Food Segment 6 US$ and metric tons Q3 Q4 Total Q1 Q2 Q3 (millions) 2017 2017 2017 2018 2018 2018 Adj. EBITDA Bridge Q3-2017 to Q3-2018 (millions) Revenue (1) $298.9 $313.5 $1,157.0 $305.5 (2) $276.7 (2) $265.2 (2) 40 $34.6 ($26.2) $33.0 ($0.3) $32.7 Gross Margin 60.2 63.6 236.6 56.3 51.9 54.5 30 $20
Slide 7: Fuel Segment
7 Fuel Segment (Does not include Diamond Green Diesel JV) US$ and metric tons Q3 Q4 Total Q1 Q2 Q3 Adj. EBITDA Bridge Q3-2017 to Q3-2018 (millions) 2017 2017 2017 2018 2018 2018 (millions) Revenue $61.9 $76.8 $265.8 $84.1 (1) $71.1 (1) $64.6 (1) Gross Margin 7.6 21.4 55.4 24.2 13.7 11.1 $14.0 $13.9
Slide 8: DGD – Entity Level
8 DGD – ENTITY LEVEL Super Diamond phase three expansion ➢ Super Diamond expansion project approved to 675 approved million total annual gallons of renewable diesel plus parallel independent plant additional renewable Naphtha gallons for the green to bring total annual gasoline markets production to
Slide 9: Balance Sheet Highlights and Debt Summary
Balance Sheet Highlights and Debt Summary 9 (US$,Balance in thousands) Sheet HighlightsJune 30, 2018 Debt Summary Cash(US$, in thousands)(includes restricted cashSeptember of $142) 29, 2018 (US$, in thousands) September 29, 2018 $104,262 Cash (includes restricted cash of $103) $ 81,573 Amended Credi
Slide 10: Appendix – Additional Information
10 Appendix – Additional Information
Slide 11: Feed Segment - Historical
11 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 (millions) 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2018 2018 2018 Revenue $476.2 $543.0 $531.4 $538.5 $2,089.1 $552.6 $549.1 $575.5 $562.3 $2,239.5 $485.8 (1) $498.8 (1) $482.7 (1) Gross Margin 103.5 126.8 117.8 116.2 464.
Slide 12: Feed Ingredients Segment – Net Sales
Feed Ingredients Segment – Net Sales 12 Change in Net Sales – Year over Year Three Months Ended September 30, 2017 over September 29, 2018 Rendering Sales Change in Net Sales - 3Q17 to 3Q18 Total Used Fats Proteins Other (1) Rendering Cooking Oil Bakery Other (2) Total Net Sales Three Months Ended S
Slide 13: Historical Finished Product Pricing 2018
Jacobsen, Wall Street Journal and Thomson Reuters 13 Historical Pricing 2018 Finished Product Pricing 2018 Average Jacobsen Prices (USD) QTR. Over QTR. Year Over Year Feed Segment Ingredients January February March Q1 Avg. April May June Q2 Avg. July August Sept. Q3 Avg. Comparison Q2-2018 Q3-2018 %
Slide 14: Food Segment - Historical
Food Segment - Historical 14 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 (millions) 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2018 2018 2018 Revenue (1) $246.6 $270.5 $260.2 $278.4 $1,055.7 $266.2 $278.4 $298.9 $313.5 $1,157.0 $305.5 (2) $276.7 (2) $265.2 (2) Gross Margi
Slide 15: Fuel Segment - Historical
Fuel Segment - Historical 15 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 (millions) 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2018 2018 2018 Revenue $55.6 $62.3 $60.4 $68.8 $247.1 $59.7 $67.4 $61.9 $76.8 $265.8 $84.1 (1) $71.1 (1) $64.6 (1) Gross Margin 14.9 15.6 14.2 19
Slide 16: Adjusted EBITDA definition
16 Adjusted EBITDA is not a recognized accounting measurement under GAAP; it should not be considered as an alternative to net income, as a measure of operating results, or as an alternative to cash flow as a measure of liquidity, and is not intended to be a presentation in accordance with GAAP. Adj
Slide 17: Adjusted EBITDA and Pro Forma Adjusted EBITDA
Adjusted EBITDA 17 Adjusted EBITDA and Pro Forma Adjusted EBITDA Three Months Ended - Year over Year Nine Months Ended - Year over Year (US$ in thousands) September 29, September 30, September 29, September 30, 2018 2017 2018 2017 Net income/(loss) attributable to Darling $ (6,037) $ 7,761 $ 60,848
Slide 18: Upcoming investor conferences
18 Bank of America Merrill Lynch – 2018 Leveraged Finance Conference December 4, 2018 Boca Raton Resort and Club – Boca Raton, FL BNP Paribas 15th Annual High Yield and Leveraged Finance Conference January 19, 2019 Landmark Hotel - London, UK BMO Farm to Market Conference May 15-16, 2019 Grand Hyatt