Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Q1 2018 Earnings Presentation
18 slides from Darling Ingredients's earnings presentation, May 9, 2018
Slide 1: Darling Ingredients Q1 2018 Earnings
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., including its Diamond Green Diesel joint venture, and industry factors affecting it. These statements are identified by words such as “believe,” “anticipate,” “expec
Slide 3: Consolidated Earnings
Consolidated Earnings 3 Total Q1 Q2 Q3 Q4 Total Q1 Q1 2018 Overview US$ (millions) except per share price 2016 2017 2017 2017 2017 2017 2018 Revenue $ 3,391.9 $ 878.5 $ 894.9 $ 936.3 $ 952.6 $ 3,662.3 $ 875.4 • Harsh winter weather in N. America impacted performance Gross Margin 756.6 190.5 195.7 19
Slide 4: First Quarter 2018 Financial Summary
First Quarter 2018 Financial Summary 4 Q1 2018 Overview Gross Profit and Margin • Net sales - $875.4 million – includes $12.6 million of 2017 BTC in the $ in millions Fuel Segment $220 $210 21.7% 21.9% 22.5% $200 21.7% 20.7% • Net income - $97.3 million $190 $180 • EPS at $0.58 per diluted share $17
Slide 5: Feed Segment
Feed Segment 5 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 (millions) 2017 2017 2017 2017 2017 2018 Adj. EBITDA Bridge Q1-2017 to Q1-2018 (millions) Revenue $552.6 $549.1 $575.5 $562.3 $2,239.5 $485.8 $75.2 ($66.7) Gross Margin 120.0 126.9 126.0 122.0 494.9 116.7 80 $66.5 $2.0 $68.5 Gross Margin % 21.7
Slide 6: Food Segment
Food Segment 6 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 (millions) 2017 2017 2017 2017 2017 2018 Adj. EBITDA Bridge Q1-2017 to Q1-2018 (millions) Revenue (1) $266.2 $278.4 $298.9 $313.5 $1,157.0 $305.5 40 $8.9 $31.9 ($5.9) $4.3 $32.4 Gross Margin 56.8 56.0 60.2 63.6 236.6 56.3 30 $28.1 Gross Margin
Slide 7: Fuel Segment
7 Fuel Segment (Does not include Diamond Green Diesel JV) US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 (millions) 2017 2017 2017 2017 2017 2018 Adj. EBITDA Bridge Q1-2017 to Q1-2018 (millions) Revenue $59.7 $67.4 $61.9 $76.8 $265.8 $84.1 Gross Margin 13.7 12.7 7.6 21.4 55.4 24.2 80 $25.6 Gross Margin %
Slide 8: Diamond Green Diesel (50% Joint Venture)
8 DGD - ENTITY LEVEL ➢ DGD JV Long term debt of $53.7M has been paid off, total cash of exploring phase $41.0M at March 31, 2018 plus $160.4M of blenders tax credit (BTC) receivable expected Q2 2018 three expansion to 600 million ➢ Entity EBITDA of $1.19 per gallon on 33.4M gallons of gallons sales.
Slide 9: Balance Sheet Highlights and Debt Summary
Balance Sheet Highlights and Debt Summary 9 Balance Sheet Highlights Debt Summary (US$, in thousands) March 31, 2018 (US$, in thousands) March 31, 2018 Amended Credit Agreement Cash (includes restricted cash of $142) $ 123,011 Accounts receivable 413,659 Revolving Credit Facility $ 55,374 Total Inve
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 (millions) 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 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 Gross Margin 103.5 126.8 117.8 116.2 464.3 120.0 126.9 126.0 122.0 494.9 116.7 Gros
Slide 12: Feed Ingredients Segment – Net Sales
Feed Ingredients Segment – Net Sales 12 Change in Net Sales – Year over Year Three Months Ended April 1, 2017 over March 31, 2018 Rendering Sales Change in Net Sales - 1Q17 to 1Q18 Total Used Fats Proteins Other (1) Rendering Cooking Oil Bakery Other (2) Total Net Sales Three Months Ended April 1, 2
Slide 13: Historical Finished Product Pricing
Jacobsen, Wall Street Journal and Thomson Reuters 13 Historical Pricing 2018 Finished Product Pricing 2018 Average Jacobsen Prices (USD) Feed Segment Ingredients January February March Q1 Avg. April QTR. Over QTR. Year Over Year Bleachable Fancy Tallow - Chicago Renderer / cwt $26.60 $25.57 $26.20 $
Slide 14: Food Segment - Historical
Food Segment - Historical 14 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 (millions) 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 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 $305.5 Gross Margin 62.4 57.9 50.7 56.6 227.6 56.8 56.0 60.2
Slide 15: Fuel Segment - Historical
Fuel Segment - Historical 15 US$ and metric tons Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 (millions) 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2018 Revenue $55.6 $62.3 $60.4 $68.8 $247.1 $59.7 $67.4 $61.9 $76.8 $265.8 $84.1 Gross Margin 14.9 15.6 14.2 19.9 64.6 13.7 12.7 7.6 21.4 55.4 24.2 Gro
Slide 16: Adjusted EBITDA definition
16 Adjusted EBITDA is not a recognized accounting measurement under GAAP; it should not be considered as an alternative to net income, as a measure of operating results, or as an alternative to cash flow as a measure of liquidity, and is not intended to be a presentation in accordance with GAAP. Adj
Slide 17: Adjusted EBITDA and Pro Forma Adjusted EBITDA
Adjusted EBITDA 17 Adjusted EBITDA and Pro Forma Adjusted EBITDA Three Months Ended - Year over Year (US$ in thousands) March 31, April 1, 2018 2017 Net income attributable to Darling $ 97,305 $ 5,829 Depreciation and amortization 78,619 71,114 Interest expense 23,124 21,680 Income tax expense 3,712
Slide 18: Upcoming Investor Conferences
18 BMO Farm to Market Conference May 16, 2018 Grand Hyatt – New York City Oppenheimer Consumer Conference June 19, 2018 Four Seasons – Boston, MA