Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Q3 2024 Earnings Presentation
21 slides from Darling Ingredients's earnings presentation, Oct 24, 2024
Slide 1: Financial Results Q3 2024
Financial Results Q3 2024 October 24, 2024
Slide 2: Forward-looking statements
This presentation includes “forward-looking” statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements. Statements that are not statements of historical facts are forward-looking statements and are ma
Slide 3: Q3 2024 Business Highlights (unaudited)
Q3 2024 Business Highlights (unaudited) Financial Performance Q3 2024 Total Net Sales $1,421.9 million Net Income $16.9 million EPS Diluted $0.11 Combined Adjusted EBITDA $236.7 million Feed Ingredients EBITDA $132.2 million Food Ingredients EBITDA $57.0 million Fuel Ingredients EBITDA $59.7 million
Slide 4: Q3 2024 Earnings (unaudited)
Q3 2024 Earnings (unaudited) In millions, % YTD YTD % Q3-2024 Q3-2023 except per share variance 2024 2023 variance Total Net Sales $1,421.9 $1,625.2 (12.5%) $4,297.5 $5,174.0 (16.9%) Gross Margin $313.6 $386.5 (18.9%) $944.1 $1,208.6 (21.9%) Balance Sheet Gross Margin % 22.1% 23.8% (7.1%) 22.0% 23.4
Slide 5: EBITDA (unaudited)
EBITDA (unaudited) Q3 2024 % of Total EBITDA by Segment Combined Adjusted EBITDA 600 $508.3 500 $402.6 $413.0 $418.4 24.0% 400 $394.7 $350.9 $334.0 $280.1 300 $273.6 $236.7 53.1% 200 22.9% 100 0 Q222 Q323 Q422 Q123 Q223 Q323 Q423 Q124 Q224 Q324 Feed Food Fuel Global Ingredients DGD 5
Slide 6: Feed Segment
Feed Segment US $ (in millions, unaudited) Q3 2024 Q3 2023 YTD 2024 YTD 2023 Total net sales $ 927,457 $ 1,047,796 $ 2,751,452 $ 3,426,950 • Raw material volumes remain steady, animal Cost of sales & operating expenses 727,642 804,312 2,171,282 2,630,797 numbers shifting in favor of Brazil for beef
Slide 7: Food Segment
Food Segment US $ (in millions, unaudited) Q3 2024 Q3 2023 YTD 2024 YTD 2023 • Global gelatin and collagen business Total net sales $ 357,292 $ 455,744 $ 1,127,415 $ 1,328,229 continuing to feel global capacity Cost of sales & operating 271,861 338,208 846,766 999,418 increases and customer destocki
Slide 8: Continued growth driven by collagen peptides
Continued growth driven by collagen peptides Food Segment EBITDA (millions) $350 $321.2 $300 $256.7 $250 $194.9 $200 $167.1 $157.1 $150 $129.7 $100 2018 2019 2020 2021 2022 2023 8
Slide 9: Fuel Segment
Fuel Segment US $ (in millions, unaudited) Q3 2024 Q3 2023 YTD 2024 YTD 2023 • Received $111.2 million in dividends from DGD. Total net sales $ 137,142 $ 121,664 $ 418,615 $ 418,818 Cost of sales & operating expenses 108,816 96,213 335,358 335,193 • Sustainable aviation fuel unit successfully Gross
Slide 10: Fuel Segment: Diamond Green Diesel
Fuel Segment Quarterly Avg. Prices D4 RINs (1.7 Multiple) & Yellow Grease - IL Diamond Green Diesel (unaudited) $0.70 $3.50 $0.60 $3.00 US $ and gallons (in millions) Q3 2024 Q3 2023 $0.50 $2.50 Pro forma Adjusted EBITDA (Darling’s $0.40 $2.00 $39.1 $86.5 share) $0.30 $1.50 $0.20 $1.00 Total gallons
Slide 11: Appendix
Appendix bee
Slide 12: California LCFS and RIN Value History
California LCFS and RIN Value History Monthly Average LCFS Carbon Credit Price (USD/MT) $250 $200 $150 $100 $50 $0 12
Slide 13: Feed Segment – Historical (unaudited)
Feed Segment – Historical (unaudited) US$ (in millions) Q1-2023 Q2-2023 Q3-2023 Q4-2023 Total 2023 Q1-2024 Q2-2024 Q3-2024 Total Net Sales $ 1,237.5 $ 1,141.7 $ 1,047.8 $ 1,045.6 $ 4,472.6 $ 889.8 $ 934.1 $ 927.5 Gross Margin 287.4 265.2 243.5 290.6 1,086.7 184.1 196.3 199.8 Gross Margin % 23.2% 23.
Slide 14: Feed Segment Sales
Feed Segment Sales Rendering Sales Used Cooking Fats Proteins Other Total Rendering Oils Bakery Other Total Total net sales three months ended September 30, 2023 $ 417.9 $ 405.4 $ 42.6 $ 865.9 $ 103.1 $ 63.2 $ 15.6 $ 1,047.8 Increase/(decrease) in sales volumes 2.7 11.3 — 14.0 (25.0) (2.3) — (13.3)
Slide 15: Food Segment – Historical (unaudited)
Food Segment – Historical (unaudited) US$ (in millions) Q1-2023 Q2-2023 Q3-2023 Q4-2023 Total 2023 Q1-2024 Q2-2024 Q3-2024 Total Net Sales $ 396.4 $ 476.1 $ 455.7 $ 423.8 $ 1,752.1 $ 391.3 $ 378.8 $ 357.3 Gross Margin 106.3 105.0 117.5 112.7 441.5 93.1 102.1 85.4 Gross Margin % 26.8% 22.1% 25.8% 26.
Slide 16: Fuel Segment – Historical (unaudited)
Fuel Segment – Historical (unaudited) US$ (in millions) Q1-2023 Q2-2023 Q3-2023 Q4-2023 Total 2023 Q1-2024 Q2-2024 Q3-2024 Total Net Sales $ 157.3 $ 139.9 $ 121.7 $ 144.6 $ 563.4 $ 139.2 $ 142.3 $ 137.1 Gross Margin 30.5 27.7 25.5 33.2 116.8 26.4 28.5 28.3 Gross Margin % 19.4% 19.8% 20.9% 23.0% 20.7
Slide 17: Historical Pricing
Historical Pricing 2024 Finished Product Pricing 2024 Average Jacobsen Prices (USD) Feed Segment Ingredi ents January February March Q1 Avg. April May June Q2 Avg. July August Sept. Q3 Avg. Oct. Nov. Dec. Q4 Avg. Year Avg. Yellow Grease - Illinois / cwt $31.60 $31.50 $32.05 $31.71 $34.27 $35.36 $38.
Slide 18: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income (Non-GAAP) Adjusted EBITDA and (Non-GAAP) Pro-Forma Adjusted EBITDA to Foreign Currency For the Three and Nine Months Ended September 28, 2024 and September 30, 2023 (in thousands, unaudited) 18
Slide 19: Non-U.S. GAAP Measures
Non-U.S. GAAP Measures Segment EBITDA is not a recognized accounting measurement under GAAP; it should not be considered as an alternative to segment income (loss), as a measure of operating results, or as an alternative to cash flow as a measure of liquidity. It is presented here not as an alternat
Slide 20: Non-U.S. GAAP Measures (cont.)
Non-U.S. GAAP Measures (cont.) DGD Joint Venture Adjusted EBITDA (Darling's share) is not reflected in the Adjusted EBITDA or the Pro forma Adjusted EBITDA to Foreign Currency. DGD Joint Venture Adjusted EBITDA (Darling’s share) is not a recognized accounting measure under GAAP; it should not be con
Slide 21: Financial Results Q3 2024
Financial Results Q3 2024 October 24, 2024