Darling Ingredients Inc. · NYSE:DAR
Darling Ingredients — Q3 2022 Earnings Presentation
22 slides from Darling Ingredients's earnings presentation, Nov 8, 2022
Slide 1: Earnings Report Q3 November 2022
1 21 EARNINGS REPORT Q 3 | N O V E M B E R 2 0 2 2 Exhibit 99.2
Slide 2: Safe Harbor Statement
2 21 SAFE HARBOR STATEMENT This presentation contains “forward-looking” statements that are subject to risks and uncertainties that could cause the actual results of Darling Ingredients Inc. (the “Company”) to differ materially from those expressed or implied in the statements. Statements that are n
Slide 3: Solid Financial Performance Summary Highlights
3 21 Solid Financial Performance SUMMARY HIGHLIGHTS Q3 - 22 EARNINGS Q3-2022 Combined Adjusted EBITDA $394.7 Global Ingredients EBITDA $274.4 Feed Ingredients EBITDA $198.6 Food Ingredients EBITDA - Record Quarter $68.2 Fuel Ingredients EBITDA $143.4 EPS Diluted $1.17 Net Sales – Record Quarter $1.7
Slide 4: Strong 3Q and YTD Earnings
4 21 Strong 3Q and YTD Earnings In millions, except per share Q3-2022 Q3-2021 % variance YTD 2022 YTD 2021 % variance Net Sales $1,747.6 $1,185.9 47.4% $4,764.1 $3,431.3 38.8% Gross Margin $376.4 $326.3 15.4% $1,140.8 $920.8 23.9% Gross Margin % 21.5%* 27.5%** (21.8%)** 23.9%* 26.8%** (10.8%)** Net
Slide 5: Combined Adjusted EBITDA Q3 2022
5 21 Food 17%Feed 48% Fuel 35% Food Feed Fuel Combined Adjusted EBITDA Q3 2022 % of Total EBITDA by Segment $222 $230 $224 $244 $312 $274 $132 $60 $83 $87 $91 $120 $0 $150 $300 $450 Global Ingredients DGD $353.7 $289.6 (In millions) $306.8 $330.7 $394.7 Q2 22Q1 22Q4 21Q3 21Q2 21 Q3 22 $402.6 (1) Inc
Slide 6: Feed Segment: Strong raw material volumes
6 21 Key Drivers • Raw materials volumes up 39.6% quarter over quarter, 21.8% year to date • Net sales growth up 65.4% quarter over quarter, driven by Valley Proteins and FASA acquisitions • Higher fat prices and increased raw materials volumes drove a 9.8% increase in operating income • Energy cost
Slide 7: Feed Segment: Strong export demand for North American proteins
7 21 Feed Segment Strong export demand for North American proteins US $ (in millions) Fats Proteins Other Total Rendering Used Cooking Oil Bakery Other Total Net Sales Nine Months Ended Oct. 2, 2021 $ 829.5 $ 771.9 $ 132.1 $ 1,733.5 $ 207.4 $ 222.9 $ 29.2 $ 2,193.0 Increase in sales volumes 182.4 16
Slide 8: Food Segment: Continued Record Growth
8 21 Key Drivers • Improving product mix shift at Rousselot • Strong sales prices in edible fat markets • Casings business affected by Russia • Oct. 18, entered into definitive agreement to purchase all shares of Gelnex, leading global producer of collagen products – increases capacity for grass-fed
Slide 9: Food Segment: Global Growth in Peptides
9 21 Food Segment Global Growth in Peptides 77% 14% 9% Q3 - 2022 % of Sales Breakdown Collagen Edible fats Other products $100 $120 $140 $160 $180 $200 $220 $240 $260 Food Segment Trailing 4Q adjusted EBITDA Trailing 4 Q's
Slide 10: Fuel Segment Key Drivers
10 21 Fuel Segment Key Drivers • Diamond Green Diesel sold 190 million gallons of renewable diesel, $1.26 EBITDA per gallon • Diamond Green Diesel III commissioning • Fat prices remained strong; LCFS prices softened, but RINs doing heavy lift • Green energy investments in Europe delivering as planne
Slide 11: Fuel Segment: Diamond Green Diesel
11 21 Fuel Segment High Feedstock Prices, Lower California LCFS, Volati le RINs Diamond Green Diesel US $ and gallons (in millions) Q3 2022 Q3 2021 YTD 2022 YTD 2021 EBITDA (Entity) – recorded w/no BTC $ 50.4 $ 58.4 $ 50.4 $377.0 EBITDA (Entity) – recorded including BTC $ 240.7 $ 120.1 $ 595.0 $600.
Slide 12: Poised for Sustainable Growth
12 21 Poised for Sustainable Growth Q3 - 22 EARNINGS Global Rendering Population growth and wealth creation will increase animal production, opportunistic bolt-on acquisitions Collagen Continued shift from gelatin to collagen peptides, as demand is forecasted to double in 5 years Green Energy Expans
Slide 13: Appendix: Additional Information
13 21 APPENDIX ADDITIONAL INFORMATION Q3-22 EARNINGS
Slide 14: California LCFS RIN Value History
14 21 Q3-22 EARNINGS Cal i fornia LCFS RIN Value History
Slide 15: Feed Segment – Historical
15 21 Q3-22 EARNINGS Feed Segment – Historical US$ (in millions) Q1-2021 Q2-2021 Q3-2021 Q4-2021Total 2021 Q1-2022 Q2-2022 Q3-2022 Net Sales $ 651.4 $ 771.9 $ 769.6 $ 846.5 $ 3,039.5 $ 879.4 $ 1,170.3 $ 1,273.1 Gross Margin 176.9 215.5 216.0 224.9 833.3 233.9 306.0 260.2 Gross Margin % 27.1% 27.9% 2
Slide 16: Food Segment – Historical
16 21 Q3-22 EARNINGS Food Segment – Historical US$ (in millions) Q1-2021 Q2-2021 Q3-2021 Q4-2021 Total 2021 Q1 -2022 Q2-2022 Q3-2022 Net Sales $ 298.1 $ 317.0 $ 311.9 $ 344.7 $ 1,271.6 $ 354.8 $ 369.2 $ 347.9 Gross Margin 71.7 78.5 70.5 71.7 292.4 84.5 88.2 91.3 Gross Margin % 24.0% 24.8% 22.6% 20.8
Slide 17: Fuel Segment – Historical
17 21 Q3-22 EARNINGS F u e l S e g m e n t – H i s t o r i c a l (1) Includes Fuel Segment base EBITDA and Darling's share of DGD EBITDA. (2) Excludes feed stock (raw material) processed at the DGD joint venture. US$ (in millions) Q1-2021 Q2-2021 Q3-2021 Q4-2021 Total 2021 Q1-2022 Q2-2022 Q3-2022 Ne
Slide 18: Historical Pricing: 2022 Finished Product Pricing
18 21 Historical Pricing 2022 Finished Product Pricing Feed Segment Ingredients January February March Q1 Avg. April May June Q2 Avg. July August Sept. Q3 Avg. Oct. Nov. Dec. Q4 Avg. Year Avg. Bleachable Fancy Tallow - Chicago Renderer / cwt $67.00 $72.03 $74.70 $71.39 $75.60 $81.00 $81.76 $79.51 $8
Slide 19: Adjusted EBITDA
19 21 Adjusted EBITDA (1) The average rate assumption used in this calculation was the actual fiscal average rate for the three months ended October 1, 2022 of €1.00:USD$1.01 and CAD$1.00:USD$0.77, as compared to the average rate for the three months ended October 2, 2021 of €1.00:USD$1.18 and CAD$1
Slide 20: Event Calendar
20 21 EVENT CALENDAR Q3 – 22 Earnings Stephens Investment Conference November 17 - Nashville Goldman Sachs Carbonomics Conference November 29 - London Goldman Sachs Global Energy and Clean Technology Conference January 5-6 – Miami BMO ESG Conference Dec. 5 – Virtual
Slide 21: Non-U.S. GAAP Measures
21 21 Non-U.S. GAAP Measures 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
Slide 22: Earnings Report Q3 November
22 21 Q 3 | N O V E M B E R 2 0 2 2 EARNINGS REPORT