February 25, 2014 Exhibit 99.1 Creating sustainable food, feed and fuel ingredients for a growing population J.P. Morgan Global High Yield & Leverage Finance Conference 1 |
1. Company Profile 4 2. New Business Segments 12 3. Growth Strategy 23 4. Financial Review 32 2 Table of Contents |
Creating sustainable food, feed and fuel ingredients for a growing population 3 Safe Harbor Statement This presentation contains forward-looking statements regarding the business operations and prospects of Darling International and industry factors affecting it. These statements are identified by words such as “may,” “will,” “begin,” “look forward,” “expect,” “believe,” “intend,” “anticipate,” “should,” “potential,” “estimate,” “continue,” “momentum” and other words referring to events that may occur in the future. These statements reflect Darling International's current view of future events and are based on its assessment of, and are subject to, a variety of risks and uncertainties beyond its control, including the Company’s ability to successfully integrate and operate Rothsay and Darling Ingredients International, disturbances in world financial, credit, commodities, stock markets and climatic conditions; unanticipated changes in national and international regulations affecting the Company’s products; a decline in consumer confidence and discretionary spending; the general performance of the U.S. and global economies; global demands for bio-fuels and grain and oilseed commodities, which have exhibited volatility, and can impact the cost of feed for cattle, hogs and poultry, thus affecting available rendering feedstock and selling prices for the Company’s products; risks associated with the renewable diesel plant in Norco, Louisiana owned and operated by a joint venture between Darling International and Valero Energy Corporation, including possible unanticipated operating disruptions and marketing challenges; risks relating to possible third party claims of intellectual property infringement; economic disruptions resulting from the European debt crisis; continued or escalated conflict in the Middle East; and the Company’s relatively high level of indebtedness, each of which could cause actual results to differ materially from those indicated in the forward-looking statements. Other risks and uncertainties regarding Darling International, its business and the industry in which it operates are referenced from time to time in the Company’s filings with the Securities and Exchange Commission. Darling International is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward- looking statements whether as a result of new information, future events or otherwise. |
4 Company Profile From Then to Now Company Profile Business Segments Growth Strategy Financial Review |
From... The oldest, largest and most innovative recycling solutions company serving the nation’s food industry... • 120 operating facilities across U.S. • Approx. 4,000 employees • Over $1.7 billion in revenues Company Profile Business Segments Growth Strategy Financial Review January 2013 5 |
6 To... A global growth platform for the development and production of sustainable natural ingredients from edible and inedible bio-nutrients, creating a wide range of products and customized specialty solutions Food Feed Fuel Company Profile Business Segments Growth Strategy Financial Review • Over 200 operation facilities on 5 continents • Approx. 10,000 employees • Over $4 billion in revenues January 2014 |
• Strong, market leading position to add value to animal by-products worldwide • Global platform in the key growth areas for expansion into other activities • Broadest product portfolio with unique focus on R&D/product development • Significant cash generation • INTELLECTUAL AND FINANCIAL PROWESS TO CREATE EXPANDING POSITION SUPPORTING THE ANIMAL BY-PRODUCT/BAKERY/RESTAURANT INDUSTRIES Our Our Strengths Strengths Today: Today: TRS TRS 7 RAW MATERIAL SOURCING EXPANSION- Wastewater value add; Access to DAF/SPN from food processing plants diversifies commodity exposure COMMODITY BUSINESS Mixed meat renderer with good used cooking oil business (particularly east/west coasts) Pre 2004 Pre 2004 VALUE ADD & REDUCTION OF COMMODITY EXPOSURE (countercyclical) Higher value use for fats produced by Darling, should be countercyclical to fat prices DGD DGD GEOGRAPHIC EXPANSION OF U.S. FOOTPRINT INTO CANADA Increase of both rendering and biodiesel Rothsay Rothsay GREW EXISTING BUSINESS ADDING PRODUCT DIVERSIFICATION; INITIAL MOVE TO VALUE ADD AND REDUCTION OF COMMODITY EXPOSURE Intro to frozen parts; diversified into poultry offal; incorporated value add concept for proteins; added significant bakery by-product business; developing hexane extraction NBP & Griffin NBP & Griffin 2006 2010 2006 2010 GLOBAL PRESENCE/PRODUCT LINE EXPANSION INTO FOOD INGREDIENTS Provides access to raw material sourcing in Europe/Australia/Brazil/China (Brazil and China areas where animal slaughter will increase); Product segment diversification: Blood/Gelatin/Casings/Specialty Products; High added value proposition VION VION Ingredients Ingredients 2014 2014 Company Profile Business Segments Growth Strategy Financial Review The Evolution of Darling International |
Creating sustainable food, feed and fuel ingredients for a growing population • Gelatin • Casings • Functional Proteins • Food Grade Fats • Heparin • Proteins • Fats • Bone China Bodies • Bakery Feeds • Glue • Organic Fertilizers • Plasmas • Hides • Biofuels • Green Gas • Green Electricity Global footprint: 5 continents Production facilities: Over 200 Founded: 1882 Listed: 1994 Publicly traded: NYSE: DAR Principal segments: Three Products: 400+ Industries served: Food, pet food, restaurant, feed, pharmaceutical, fuel, fertilizer LTM Sept.’13 pro forma revenue: Over $4.0 billion Employees: Approx. 10,000 Headquarters: Irving, Texas, USA 8 Food Feed Fuel A World Leader in Bio-Nutrient Transformation Improvement by Nature |
Over 200 operations on 5 continents Over 400 products sold worldwide 9 Company Profile Business Segments Growth Strategy Financial Review A World Leader in Bio-Nutrient Transformation Improvement by Nature |
Pro forma LTM Sept. 2013 Revenue LTM Sept. 2013 Revenue USA Feed 63% Fuel 8% Bakery 17% Rendering 83% Europe 41% USA 42% Canada 6% So. Amer. 4% China 6% Other Asia 2% 10 Food 29% Shown with new acquisitions by our new business segments Does not include pro forma DGD revenue Year of Tremendous Growth Uniquely Diversified Company Profile Business Segments Growth Strategy Financial Review 1 Includes Terra Renewal Services (“TRS”) results from August 26, 2013 through September 28, 2013. Does not include Darling’s share of Adjusted EBITDA of (or any potential cash distributions from) DGD 2 Q4 2012 Revenue and Adjusted EBITDA translated at period average exchange rate of 1.2837. Q1-Q3 2013 Revenue and Adjusted EBITDA translated at period average exchange rate of 1.315. As shown by country |
Continues to explore growth and value creation opportunities • Entrepreneurship • Transparency • Integrity 11 Creating sustainable food, feed and fuel ingredients for a growing population Highly Experienced and International Executive Team Colin T. Stevenson EVP – Global Finance & Admin. Darling International John F. Sterling EVP – General Counsel Darling International Dirk Kloosterboer Chief Operating Officer Darling International Marty W. Griffin EVP – Chief Oper- ating Officer, N.A. Darling International John Bullock EVP – Chief Strategy Officer Darling International Randall C. Stuewe Chairman & CEO Darling International Company Profile Business Segments Growth Strategy Financial Review |
12 Our New Business Segments Company Profile Business Segments Growth Strategy Financial Review Food, Feed & Fuel |
Creating sustainable food, feed and fuel ingredients for a growing population Renewable Butane Renewable Propane Renewable Diesel Green Electricity and Gas Biodiesel 13 Food Grade Fats Heparin Peptan® Gelatin (Pharma) Natural Casings Gelatin (Food) Bone China Plasma Leather Organic Fertilizer Proteins Fats Cookie Meal® Pet Food MucoPro® Naphtha General products Specialty products Fuel Food Food Pharma Fuel products Generated thru DGD production Company Profile Business Segments Growth Strategy Financial Review Provides broad stabilized market exposure worldwide Unique Diversified Portfolio Feed |
Creating sustainable food, feed and fuel ingredients for a growing population 14 Research and development are at our Company’s strategic core to achieve product leadership by creating the highest value-add for its raw material and end products strong relationships with our customers by co-development of specific products for their end markets Efforts focus on product development as well as continuous improvement of existing products • BP-95 is developed by Darling Ingredients International’s R&D team and combines expertise from Sonac and Rousselot activities • BP-95 is an innovative collagen protein which adds functionality (binding water/ fat) in meat products like hot dogs, salami, cooked hams and luncheon meat • Main growth areas are the emerging markets • Strengthens our portfolio of functional proteins for the consumer protein industry BP-95 Innovative high functional collagen protein developed for the consumer protein industry • DAF/SPN are solid residuals with nutritional value that are left in the wastewater stream of animal processing and industrial facilities • Process creates value add products from these recovered fats and protein • Water is restored at water treatment plants Hexane Extraction Fat: ~10-15% Protein: ~10-15% Recovering protein and fat residuals from solids in wastewater for feed and fuel use Research and Development Water ~75% |
Ingredients for living. Darling’s food ingredients are sold to a worldwide market that includes the pharmaceutical, food and cosmetic industries. Rousselot is the world’s leading supplier of gelatin and collagen peptides to the food and pharmaceutical industries. Peptan® collagen peptides have proven their health benefits in nutraceutical and nutricosmetic applications worldwide. CTH is a turnkey supplier of natural sausage casings on a global scale. Hepac delivers heparin to a global pharmaceutical market serving a growing population. SONAC Fats holds a leading position in Europe in the production of food grade fats and proteins. 15 Global Market For Food Ingredients Gelatin Food Grade Fats Casings Heparin Our Food Ingredients Creating sustainable food, feed and fuel ingredients for a growing population |
• Food grade fats • Schmalz • Natural casings (hanks) • Specialty meats • Heparin Products Activities Raw Material Source • Fat • Bowel packages • Runners • Mucosa Creating sustainable food, feed and fuel ingredients for a growing population 16 • Pig skin • Fish skin • Bovine hides/bones • Porcine bone • Gelatin • Hydrolysates • Collagen peptides Company Profile Business Segments Growth Strategy Financial Review Adding Value in the Food Segment |
Nutrients for growth. Our feed ingredients compose the largest segment of our business, with sales to feed and pet food manufacturers worldwide or used to produce our own fertilizers. The Company’s DAR PRO Solutions, Rothsay and Sonac brands collect and transform meat and animal by-products into protein meals, fats, minerals and tallows that are value-added nutritional ingredients for the animal feed and pet food industries as well as bone and blood specialty products. Bakery Feeds collects residuals from commercial bakery and snack producers, repurposing these materials into Cookie Meal®, a premium, high-energy animal feed ingredient. Nature Safe manufactures a premium organic fertilizer made from our protein meals; Terra Renewal reclaims the nutritional elements from industrial wastewaters and sludge for agricultural land application. Key Markets for Feed Ingredients 17 Creating sustainable food, feed and fuel ingredients for a growing population Our Food Ingredients |
• Wastewater • Sludge material • Used cooking oil • Meat processing or butchery by-products • Expired grocery meats Products Activities Raw Material Source • Bones • Fat • Blood • Hair • Mucosa • Hides • Soft byproducts • Deadstock • Residuals from production of cereals, breads, crackers, cookies, etc. • Packaging materials • Used cooking oil • Yellow Grease • Fats and tallow • Protein meals • Pet food • Fats, protein meals, tallow • Fertilizer • Prepared hides • Bone ash, glue, chips • Pet food • Plasma • Land applied organic fertilizer • Residuals for our extraction facility • Cookie Meal®, a high-energy ingredient for animal feed 18 Company Profile Business Segments Growth Strategy Financial Review Adding Value in the Feed Segment |
Energy for today’s world. For the past two decades, Darling has led the way in biofuel innovation and development. Diamond Green Diesel 1 , a partnership with Valero Energy Corp., is the Company’s most innovative and largest-scale effort to meet the growing demand for renewable energy. Located in Norco, LA, the facility recycles animal fats and used cooking oils into 137 million gallons per year (or 9,300 barrels per day) of renewable diesel. Our Bio-G 3000, Rothsay Biodiesel and Ecoson brands also produce biofuels, green electricity and gas, biophosphate and other green energy from organic residuals, manure, animal by-products, fats and cooking oils. Europe Ecoson Current Markets for Fuel Ingredients North America Diamond Green Diesel Bio G-3000 Rothsay Biodiesel 19 Creating sustainable food, feed and fuel ingredients for a growing population 1 DGD is not included in the Fuel segment for SEC reporting Our Fuel Ingredients |
Creating sustainable food, feed and fuel ingredients for a growing population • Fallen stock • By-product residuals • Organic Sludges • C1 Fat • Drain fat • Manure • Catering remains • Used cooking oil • Greases and fats • Animal fats • Refined fats • Green gas • Green electricity • Biophosphate • Animal fats • Fats & meals for industrial energy production • Biodiesel • Renewable diesel Products Activities Raw Material Source • Biodiesel • Renewable diesel • Animal fats • Specialty methyl-esters • Solvents, glycerides Creating sustainable food, feed and fuel ingredients for a growing population 20 Company Profile Business Segments Growth Strategy Financial Review Adding Value in the Fuel Segment |
Creating sustainable food, feed and fuel ingredients for a growing population Leader in Biofuel Innovation Pioneering in 1998 Began the first continuous- running bio-diesel plant in the U.S. utilizing used cooking oils and animal fats, located in Butler, KY Innovating in 2013 – Startup of the nation’s largest animal fat-to- renewable diesel facility; Diamond Green Diesel is designed to produce 9,300 barrels of renewable diesel per day First in Canada- 2001 The first commercial facility in Canada, located near Montreal, Quebec, producing premium biodiesel from used cooking oils and animal fats Note: Our Ecoson and Rendac brands also provide biofuel and green energy to segments of the European market 21 Company Profile Business Segments Growth Strategy Financial Review |
$445 million joint venture between Valero Energy Corporation and Darling International to fulfill nearly 15% of the national biomass-based diesel mandate (under RFS2) Most economical feedstock available – 1.135 billion lbs annually A low cost producer of biomass-based diesel to the U.S. market Annual production of 137 million gallons (or 9,300 barrels/day) Advantage of multiple synergies due to location next to Valero’s St. Charles refinery – Valero markets the renewable diesel, distributing via pipeline using its distribution network Renewable butane, renewable propane and NAPTHA are valuable co-products of DGD process 22 Company Profile Business Segments Growth Strategy Financial Review What is Diamond Green Diesel? Located in Norco, LA, U.S.A. next to Valero’s St. Charles Refinery Creating sustainable food, feed and fuel ingredients for a growing population |
23 How We Will Grow and Sustain Our Business Growth Strategy Company Profile Business Segments Growth Strategy Financial Review |
24 Strong growth in world population... ...and more wealth created in key growth areas (Asia and Latin America)... ...exponentially increases the demand for food, feed and fuel... thus increasing the need for our innovative ingredients and customized services which provide a sustainable means of meeting the world’s consumption needs Our growth is a response to our growing world |
Darling targets employing capital at a 15% or higher rate while maintaining a conservative balance sheet Strengthen Current Position Capture Growth Opportunities • Operational excellence: - Optimizing integration of global supply chains - Consolidation and realignment across brands of current raw materials, products and services - Use advanced and sustainable technology • Product innovation: Continue to research and evaluate new ideas and uses for our raw materials and develop new products & applications (R&D) • Customer intimacy: Build strong customer loyalty with increased products and services • Greenfield: Expand our operation facilities in new growing markets through our global platforms • Acquisitions: Strategically grow our business through acquisitions in growing and fragmented areas • Expansions: Expansions of our existing operating facilities 25 Company Profile Business Segments Growth Strategy Financial Review Darling’s growth strategy is centered on… …while holding to our core values: Entrepreneurship, Transparency and Integrity |
Success is consistently providing maximum value to the supply chain Creating sustainable food, feed and fuel ingredients for a growing population 26 Company Profile Business Segments Growth Strategy Financial Review How we accomplish our growth goals… |
• Expansion of blood plants in US/Canada • Grow hemoglobin/plasma business Diamond Green Diesel – Norco, LA • Renewable diesel expansion 27 • Grow the used cooking oil/ restaurant services and Terra Renewal Services • Optimize finished product margins • Potential investment in new bone facilities • Continued USA expansion of gelatin business North America Capture Growth Opportunities Rothsay – Canada Sonac – Upper Midwest Rousselot |
28 Current Terra Renewal operations Capture Growth Opportunities North America Company Profile Business Segments Growth Strategy Financial Review Combine Synergies: • Solid and semi-solid residuals from Terra’s processing will be further refined through our Hexane extraction process Hexane Extraction Currently operating one plant in Hampton, FL What is it? • Protein and fat recovery process from industrial residuals • Discovering additional value and products • Restoring water stream to water treatment plants Growth Opportunities • Explore new extraction plant construction Terra Renewal Permitted and active for land application in blue states What is it? • Repurposing nutrient-rich industrial residuals into eco-friendly fertilizer • Professional service and equipment • 250,000 acres permitted • Environmentally sound Growth Opportunities • Grow wastewater solids recovery • Expand across USA & Canada • Bundle services with key customers |
Rousselot - Brazil • Continue to expand gelatin • Grow the Peptan® brand 29 Sonac • Explore animal by-product processing opportunities Capture Growth Opportunities South America |
30 Capture Growth Opportunities Europe Sonac • Capture animal by-product processing opportunities in South and East Europe Ecoson - Son, Netherlands • Expand biophosphate production |
Sonac - China • Blood expansion • Explore animal by-product processing opportunities Rousselot - China • Gelatin expansion 31 Growth Opportunities China |
32 Financials Company Profile Business Segments Growth Strategy Financial Review |
Note: The LTM Sep-13 period includes TRS results from August 26, 2013 through September 28, 2013; for a reconciliation to LTM figures, please see page 39 Net Sales ($ millions) Adjusted EBITDA ($ millions) Capital Expenditures ($ millions) Adjusted EBITDA – Capital Expenditures ($ millions) 33 $1,797 $1,701 $1,720 2011 2012 LTM Sep-13 $393 $317 $290 2011 2012 LTM Sep-13 $60 $115 $117 2011 2012 LTM Sep-13 $333 $202 $173 2011 2012 LTM Sep-13 Creating sustainable food, feed and fuel ingredients for a growing population Historical Darling Operating Performance |
Rothsay ($ in millions) VION ($ in millions) 34 Net Revenue Operating Income plus D&A $227 $236 2012 LTM Sep-13 $2,088 $2,185 2012 LTM Sep-13 $87 $85 2012 LTM Sep-13 $251 $265 2012 LTM Sep-13 Creating sustainable food, feed and fuel ingredients for a growing population Historical Rothsay and VION Operating Performance Company Profile Business Segments Growth Strategy Financial Review |
Net Sales ($ in millions) Pro Forma Adjusted EBITDA ($ in millions) $653 $647 $4,141 2012 LTM Sep. 13 35 Darling VION Rothsay 1701 1720 2088 2185 227 236 0 500 1000 1500 2000 2500 3000 3500 4000 4500 2012 LTM Sept. 13 Company Profile Business Segments Growth Strategy Financial Review $4,017 Note: The 2012 and LTM Sep-13 periods do not include financial impact of Diamond Green Diesel or TRS (other than in the LTM Sep-13 period which includes TRS results from August 26, 2013 through September 28, 2013; for a reconciliation to LTM figures, please see page 39). Numbers may not add to total due to rounding. Pro Forma Operating Performance Creating sustainable food, feed and fuel ingredients for a growing population |
36 Appendix Company Profile Business Segments Growth Strategy Financial Review |
(mm in USD) Annual Nine Months Ended September LTM 2011 2012 2012 2013 Sep-2013 Net Sales $ 1,797 $ 1,701 $ 1,277 $ 1,295 $ 1,720 Adjusted EBITDA $ 393 $ 317 $ 245 $ 218 $ 290 Capital Expenditures $ 60 $ 115 $ 84 $ 86 $ 117 (mm in USD) Annual Nine Months Ended September LTM 2012 2012 2013 Sep-2013 Operating Income $ 167 $ 126 $ 142 $ 183 Plus: Depreciation and Amortization $ 84 $ 58 $ 55 $ 82 Operating Income plus Depreciation and Amortization $ 251 $ 183 $ 197 $ 265 (mm in USD) Annual Nine Months Ended September LTM 2011 2012 2012 2013 Sep-2013 Net Revenues $ 223 $ 227 $ 172 $ 181 $ 236 Net Revenues less Direct Costs and Operating Expenses $ 87 $ 73 $ 58 $ 57 $ 72 Plus: Depreciation $ 12 $ 14 $ 10 $ 10 $ 13 Operating Income plus Depreciation $ 99 $ 87 $ 68 $ 66 $ 85 Reconciliation of Non-GAAP Items Rothsay Darling VION Creating sustainable food, feed and fuel ingredients for a growing population 37 Company Profile Business Segments Growth Strategy Financial Review |
Darling FYE 2005 Darling FYE 2006 Darling FYE 2007 Darling FYE 2008 Darling FYE 2009 Darling FYE 2010 Darling FYE 2011 Darling FYE 2012 Pro Forma Combined FYE 2012 Pro Forma Combined LTM Sep-13 Net Income $8 $5 $46 $55 $42 $44 $169 $131 $183 $182 Depreciation 15 21 23 24 25 32 79 85 243 245 Goodwill impairment 0 0 0 16 0 0 0 0 0 0 Acquisition costs 0 0 0 0 0 0 0 0 0 1 Interest expense 6 7 5 3 3 9 37 24 125 125 Income tax expense 3 2 29 35 25 26 103 76 99 99 Other, net (0) 5 1 (0) 1 3 3 (2) (10) (8) Equity in net (income)/loss of unconsolidated subsidiary Non-controlling interest 0 0 0 0 0 0 0 0 9 10 Adjusted EBITDA - Pro Forma $32 $40 $104 $133 $96 $114 $393 $317 $653 $647 (8) 0 0 0 0 0 0 2 3 3 Adjusted EBITDA Reconciliation Pro Forma Adjusted EBITDA Reconciliation 1 ($ millions) Historical Adjusted EBITDA Reconciliation ($ millions) Creating sustainable food, feed and fuel ingredients for a growing population 38 Company Profile Business Segments Growth Strategy Financial Review Source: Management 1 Amounts for Rothsay and VION represent their historical results after giving effect to the pro forma adjustments to such amounts reflected in the unaudited pro forma condensed consolidated financial information of Darling International Inc. |
Creating sustainable food, feed and fuel ingredients for a growing population 39 |