Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Non-Deal Roadshow (September 2015)
37 slides from Darling Ingredients's roadshow presentation, Sep 11, 2015
Slide 1: Canaccord Genuity Europe Non-Deal Road Show September 2015
CANACCORD Genuity Europe Non-Deal Road Show September 2015 Creating sustainable food, feed and fuel ingredients for a growing population Randall C. Stuewe, Chairman and CEO John O. Muse, EVP Chief Financial Officer Exhibit 99.1
Slide 2: Safe Harbor Statement
Creating sustainable food, feed and fuel ingredients for a growing population Safe Harbor Statement 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
Slide 3: Seeking to be the global leader in food, feed, fuel ingredients
3 Seeking to be the global leader in FOOD FEED FUEL INGREDIENTS for a growing population. We will build, acquire and develop businesses within geographies where we can achieve a sustainable Top 3 market position within 5 years. To be THE RECOGNIZED Global Leader in the production, development and va
Slide 4: Our Promises
OUR PROMISES FINANCIAL – FOR OUR SHAREHOLDERS 1. We seek investments and growth in businesses and geographies where sustainable and predictable margins can be achieved. 2. We will deliver superior financial results relative to our defined peer group. 3. We will maintain a capital structure that is c
Slide 5: We have created a new global platform
Creating sustainable food, feed and fuel ingredients for a growing population 5 We have created a new global platform
Slide 6: Global platform: food, feed and fuel ingredients
Creating sustainable food, feed and fuel ingredients for a growing population • Gelatin • Casings • Functional Proteins • Food Grade Fats • Heparin • Bone China • Proteins • Fats • Bakery Feeds • Organic Fertilizers • Plasmas • Hides • Renewable Fuels • Biofuels • Green Gas • Green Electricity FUE L
Slide 7: A growing population creates margin opportunity
Creating sustainable food, feed and fuel ingredients for a growing population 7 Creates Margin Opportunity DAR is operated as a spread business Operating Costs Transportation Costs Energy Costs Raw Material Availability Competing Ingredient Supply Some sources estimate strong growth in world populat
Slide 8: We value add and manage our spread
Creating sustainable food, feed and fuel ingredients for a growing population We value add and manage our spread…. 8 Diverse Raw Material Supply Establish Spread/Margin Transform and Value Add Key Suppliers Procure Raw Mat Identify Margin Opportunity Process to highest value Manage Margin Our model
Slide 9: Our Business Segments
Food, Feed & Fuel Our Business Segments Creating sustainable food, feed and fuel ingredients for a growing population
Slide 10: Three primary segments: Food, Feed, Fuel
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: Food Segment - Ingredients for living
Creating sustainable food, feed and fuel ingredients for a growing population 11 Food Segment - Ingredients for living Business Overview o Collection and processing of animal by- products into gelatin and hydrolyzed collagen o Collection and processing of porcine/bovine intestines into natural casin
Slide 12: 2Q Operational Highlights Food Segment
Creating sustainable food, feed and fuel ingredients for a growing population 2Q Operational Highlights Food Segment 12 • Rousselot performance strong globally especially in China • Inventories and working capital improved • Adjustments made in Edible fat refining business • CTH struggled with borde
Slide 13: Feed Segment - Nutrients for growth
Creating sustainable food, feed and fuel ingredients for a growing population 13 Feed Segment - Nutrients for growth Business Overview o Rendering: Collection & processing of animal by-products into oils and protein meals / blood plasma powder and hemoglobin o Bakery: Collection & processing of resi
Slide 14: Feed Segment 2Q Operational Highlights
Creating sustainable food, feed and fuel ingredients for a growing population 11 12 13 14 15 Q3 2014 Q4 2014 Q1 2015 Q2 2015 LTM EBITDA Margin Feed Segment 2Q Operational Highlights 14 • Global rendering making necessary adjustments • Volumes seasonally declined • Europe and Canada both steady • USA
Slide 15: Fuel Segment - Energy for today's world
Creating sustainable food, feed and fuel ingredients for a growing population 15 Fuel Segment - Energy for today’s world Business Overview o Conversion of animal fats and recycled greases into biodiesel o Conversion of organic sludge and food waste into biogas o Processing of manure into natural bio
Slide 16: 2Q Operational Highlights Fuel Segment
Creating sustainable food, feed and fuel ingredients for a growing population 0 5 10 15 20 25 Q3 2014 Q4 2014 Q1 2015 Q2 2015 LTM EBITDA Margin 16 2Q Operational Highlights Fuel Segment • Canada biodiesel continues to struggle losing $1.6 mm EBITDA during the 2nd quarter of fiscal 2015 • Rendac and
Slide 17: Fuel Ingredients - DGD
Creating sustainable food, feed and fuel ingredients for a growing population Fuel Ingredients –DGD • 50/50 Joint Venture with Valero • Unconsolidated subsidiary for DAR; now capable of processing in excess of 12,000 barrels per day of input making it North America’s single largest demand point • Lo
Slide 18: DGD - 2014 / 2015
Creating sustainable food, feed and fuel ingredients for a growing population DGD – 2014 / 2015 • 126 million gallons produced in 2014, capacity has been increased to 160 million • 2014 EBITDA $162.3 million • $126 million tax credit received Apr-2015 • $25 million dividend issued in April • Facilit
Slide 19: Operating Environment & Strategy
Operating Environment & Strategy How we will grow and sustain our business Creating sustainable food, feed and fuel ingredients for a growing population
Slide 20: Drivers for 2015
Creating sustainable food, feed and fuel ingredients for a growing population • Bio Fuels • RFS Clarity • Trade constraints • Strong Dollar • Volatile petroleum • China • Protein expansion • Pet food demand • Global weather • No Acreage reductions Supply Demand Policy Currency & Petroleum Complex Dr
Slide 21: A balanced approach
Creating sustainable food, feed and fuel ingredients for a growing population A balanced approach….. 21 • Expansions of Rousselot platform • Casings business growth • Branded fats Food • 5 new plants under construction • 2 more on drawing board • USA and Global bolt on acquisition opportunities Feed
Slide 22: Growth happening in 2015 and 2016
Creating sustainable food, feed and fuel ingredients for a growing population Growth happening in 2015 and 2016….. Food • Dubuque Iowa Expansion • Europe modernizations and debottlenecking • Specialty product developments • China debottlenecking • Packaged fat • New casings plant in China Feed • Eur
Slide 23: Action Plan Showing Execution in Second Quarter
Creating sustainable food, feed and fuel ingredients for a growing population Action Plan Showing Execution in Second Quarter 23 • Announced a stock repurchase program for up to $100 million of common stock • EBITDA sequentially improved, adjustments taking hold, even with continued deflationary com
Slide 24: We are Darling Ingredients
24 We are DARLING INGREDIENTS
Slide 25: Financials
Financials Creating sustainable food, feed and fuel ingredients for a growing population
Slide 26: Earnings Summary
Creating sustainable food, feed and fuel ingredients for a growing population Earnings Summary 26 Note: (1) The three months ended July 4, 2015 includes approximately $10.6 million write-off of deferred loan costs related to the retirement of the Euro Term Loan B borrowings under the term B facility
Slide 27: Adjusted EBITDA
Creating sustainable food, feed and fuel ingredients for a growing population Adjusted EBITDA 27 (1) January 7, 2014 closed on VION Ingredients, thus the 13th week would be revenue adjusted for January 1, 2014 through January 7, 2014 (2) Foreign currency exchange rates held constant for comparable q
Slide 28: Balance Sheet Highlights and Debt Summary
Creating sustainable food, feed and fuel ingredients for a growing population Balance Sheet Highlights and Debt Summary 28 Debt SummaryBalance Sheet Highlights (US$, in thousands) July 4, 2015 Amended Credit Agreement Revolving Credit Facility 57,552$ Term Loan A 295,370 Term Loan B 592,500 5.375% S
Slide 29: Adjusted (Non-GAAP) Diluted EPS
Creating sustainable food, feed and fuel ingredients for a growing population Adjusted (Non-GAAP) Diluted EPS 29 Note: Adjustments to diluted earnings per share of acquisition related items are net of tax. Calculations of all adjustment tax amounts were at the applicable effective tax rate for the p
Slide 30: Feed Ingredients Segment Change in Net Sales
Creating sustainable food, feed and fuel ingredients for a growing population Feed Ingredients Segment Change in Net Sales -Three Months Ended 30 Change in Net Sales - 2Q14 to 2Q15 Fats Used Cooking Oil Proteins Bakery Other Total Net Sales Second Quarter 2014 165.9$ 58.3$ 251.9$ 59.4$ 86.6$ 622.1$
Slide 31: Feed Ingredients Segment Change in Net Sales - Three Months
Creating sustainable food, feed and fuel ingredients for a growing population 31 Changes in Net Sales Three Months Ended - 1Q15 to 2Q15 Fats Used Cooking Oil Proteins Bakery Other Total Net Sales Three Months Ended April 4, 2015 146.7$ 36.1$ 220.0$ 53.8$ 90.9$ 547.5$ Changes: Increase/(Decrease) in
Slide 32: Feed Ingredients Segment Change in Net Sales - Six Months
Creating sustainable food, feed and fuel ingredients for a growing population Feed Ingredients Segment Change in Net Sales –Six Months Ended 32 Change in YTD Net Sales - 2Q14 to 2Q15 Fats Used Cooking Oil Proteins Bakery Other Total Net Sales YTD Second Quarter 2014 322.9$ 103.1$ 485.1$ 113.6$ 183.5
Slide 33: Feed Segment Operational Highlights
Creating sustainable food, feed and fuel ingredients for a growing population (1) Has impact of inventory step-up in 1st and 2nd quarter. (2) Exclusive of non-cash inventory step-up and Darling Ingredients International 13th week. (3) Raw material process volumes have been adjusted to include additi
Slide 34: Food Segment
Creating sustainable food, feed and fuel ingredients for a growing population Food Segment 34 (1) Has impact of inventory step-up in 1st and 2nd quarter. (2) Exclusive of non-cash inventory step-up and Darling Ingredients International 13th week. (3) Raw material process volumes for the first quarte
Slide 35: Fuel Segment
Creating sustainable food, feed and fuel ingredients for a growing population 35 (1) Has impact of inventory step-up in 1st quarter. (2) Exclusive of non-cash inventory step-up and Darling Ingredients Int'l 13th week. (3) Raw material process volumes for the first quarter have been adjusted to be co
Slide 36: 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) 93 5 18 116 Bakery 10 10 Used Cooking Oil processing only 8 1 9 Disposal Rendering - (C1 & C2) 6 6 Food Grade Fat Processing 5
Slide 37: Adjusted EBITDA definition
Creating sustainable food, feed and fuel ingredients for a growing population Adjusted EBITDA is presented here not as an alternative to net income, but rather as a measure of the Company’s operating performance and is not intended to be a presentation in accordance with GAAP. Since EBITDA (generall
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