Fourth Quarter & FY 2020 Conference Call Exhibit 99.2
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 not statements of historical facts are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “estimate,” “project,” “planned,” “contemplate,” “potential,” “possible,” “proposed,” “intend,” “believe,” “anticipate,” “expect,” “may,” “will,” “would,” “should,” “could” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on the
Company’s current expectations and assumptions regarding its business, the economy and other future conditions. The Company cautions readers that any such forward-looking statements it makes are not guarantees of future performance and that actual results may differ materially from anticipated results or expectations expressed in its forward-looking statements as a result of a variety of factors, including many that are beyond the Company’s control. These factors include, among others, existing and unknown future limitations on the ability of the Company's direct and indirect subsidiaries to make their cash flow available to
the Company for payments on the Company's indebtedness or other purposes; 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; reductions in raw material volumes available to the Company due to weak margins in the meat production industry as a result of higher feed costs, reduced consumer demand or other factors, reduced volume from food service establishments, or otherwise; reduced demand for animal feed; reduced finished product prices,
including a decline in fat and used cooking oil finished product prices; changes to worldwide government policies relating to renewable fuels and greenhouse gas(“GHG”) emissions that adversely affect programs like the U.S. government’s renewable fuel standard, low carbon fuel standards (“LCFS”) and tax credits for biofuels both in the United States and abroad; possible product recall resulting from developments relating to the discovery of unauthorized adulterations to food or food additives; the occurrence of 2009 H1N1 flu (initially known as “Swine Flu”), Highly pathogenic strains of avian influenza (collectively known as “Bird Flu”), severe acute respiratory syndrome (“SARS”), bovine spongiform encephalopathy (or "BSE"), porcine epidemic diarrhea ("PED") or other diseases associated with animal origin in the United States or elsewhere, such as the outbreak of African Swine Fever (“ASF”) in China and elsewhere;
the occurrence of pandemics, epidemics or disease outbreaks, such as the current COVID-19 outbreak; unanticipated costs and/or reductions in raw material volumes related to the Company’s compliance with the existing or unforeseen new U.S. or foreign (including, without limitation, China) regulations (including new or modified animal feed, Bird Flu, SARS, PED, BSE, ASF or similar or unanticipated regulations) affecting the industries in which the Company operates or its value added products; risks associated with the DGD Joint Venture, including possible unanticipated operating disruptions and issues relating to the announced expansion project; risks and uncertainties relating to international sales and operations, including imposition of tariffs, quotas, trade barriers and other trade protections imposed
by foreign countries; difficulties or a significant disruption in our information systems or failure to implement new systems and software successfully, risks relating to possible third party claims of intellectual property infringement; increased contributions to the Company’s pension and benefit plans, including multiemployer and employer-sponsored defined benefit pension plans as required by legislation, regulation or other applicable U.S. or foreign law or resulting from a U.S. mass withdrawal event; bad debt write-offs; loss of or failure to obtain necessary permits and registrations; continued or escalated conflict in the Middle East, North Korea, Ukraine or elsewhere; uncertainty regarding the exit of the U.K. from the European Union; and/or unfavorable export or import markets. These factors, coupled with volatile prices for natural gas and diesel fuel, climate conditions, currency
exchange fluctuations, general performance of the U.S. and global economies, disturbances in world financial, credit, commodities and stock markets, and any decline in consumer confidence and discretionary spending, including the inability of consumers and companies to obtain credit due to lack of liquidity in the financial markets, among others, could cause actual results to vary materially from the forward looking statements included in this release or negatively impact the Company's results of operations. Among other things, future profitability may be affected by the Company’s ability to grow its business, which faces competition from companies that may have substantially greater resources than the Company. The
Company’s announced share repurchase program may be suspended or discontinued at any time and purchases of shares under the program are subject to market conditions and other factors, which are likely to change from time to time. Other risks and uncertainties regarding Darling Ingredients Inc., its business and the industries in which it operates are referenced from time to time in the Company’s filings with the Securities and Exchange Commission. Darling Ingredients Inc. 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. Page 2 | Fourth Quarter & FY 2020 Results | 03.03.2021
Summary Highlights Fourth Quarter & FY 2020 Business Update • Record fourth quarter global ingredients EBITDA of $146.3 million lead by a strong performance in our feed segment • 2020 combined adjusted EBITDA totaled a record $841.5 million • Q4-2020 adjusted net income of $75.3 million, adjusted EPS of $0.45 per diluted share; FY-2020 adjusted net income of $327.4 million, adjusted EPS of $1.96 per diluted share exclusive of the $30.6 million after-tax restructuring and asset impairment charge related to the shutdown of biodiesel plants located in Montreal, Quebec and Butler Kentucky • DGD sold a record 288 million gallons for 2020 at an average $2.34 EBITDA/gallon, generating $675 million total EBITDA • Reduced term loan B balance by $195 million to $300 million outstanding as of January 2, 2021 • 2020 ESG report issued with targets to reduce energy & water usage 5% on a per unit
bases by 2025 • Three new Peptan hydrolyzed collagen production facilities online in 2020 • Repurchased approximately 2.2 million shares of common stock in 2020 • Amended and extended $1.0 billion revolver until September 2025 • DGD Port Arthur FID approved in January 2021. Construction is underway with commissioning expected in the second half of 2023 Page 3 | Fourth Quarter & FY 2020 Results | 03.03.2021
Financial Highlights Balance Sheet (in millions, except ratio data) As of 01/02/2021 As of 12/28/2019 Cash (including restricted) $81.7 $73.0 Revolver availability $893.9 $911.9 Net working capital $257.5 $246.9 Total debt $1,508.1 $1,649.4 Leverage ratio (2) 1.90x 3.18x Capital expenditures $280.1 $359.5 Financials (in millions, except per share data) Q4-2020 Q4-2019 FY 2020 FY 2019 Net sales $1,019.8 $859.4 $3,571.9 $3,363.9 Gross margin 248.6 218.9 883.1 774.8 Gross margin % 24.4% 25.5% 24.7% 23.0% Net income(1) $44.7 $242.6 $296.8 $312.6 EPS diluted $0.27 $1.44 $1.78 $1.86 Adj. net income(1) $75.3 $50.1 $327.4 $226.0 Adj. EPS diluted(1) $0.45 $0.30 $1.96 $1.34 $110 $126 $122 $146 $504 $104 $69 $96 $68 $337 $0 $150 $300 $450 $600 $750 Q1 Q2 Q3 Q4 FY 2020 Global Ingredients DGD $213.3 $195.2 $218.5 $841.5 (In millions) 2020 Combined adjusted EBITDA $214.5 (1) Q4 2019 net income includes approximately $193 million of retroactive 2018
and the first none months of 2019 BTC. Q4 and FY 2020 results adjusted to exclude the $30.6 million after-tax restructuring and asset impairment charge related to the shutdown of 2 biodiesel plants. Q4-19 adjusted net income excludes 2018 and first nine months of 2019 retroactive BTC. FY 2019 adjusted net income excludes retroactive 2018 BTC. (2) Leverage ratio calculated per bank covenant Page 4 | Fourth Quarter & FY 2020 Results | 03.03.2021 $445 $456 $428 $428 $504 $350 $370 $390 $410 $430 $450 $470 $490 $510 $530 2016 2017 2018 2019 2020 $ in m ill io n s Global Ingredients Business Proforma Adjusted EBITDA 2017 & 2018 Darling BTC moved to the period earned
Financial Highlights Financials (in millions) Q4-2020 Q4-2019 FY-2020 FY-2019 Segment EBITDA Feed $90.2 $56.8 $317.8 $258.2 Food 49.8 37.5 167.1 157.1 Fuel (2) 89.0 118.7 411.9 $369.1 Corporate (14.5) (19.7) (55.3) (57.9) Total Combined adjusted EBITDA (2) $214.5 $193.3 $841.5 $739.7 (1) FY 2019 excludes the $13.1 million gain on an asset sale in China (2) Fuel segment and total combined adjusted EBITDA exclude retroactive 2018 BTC in Q4 2019 and first 9 months BTC. 4Q 2020 turnaround at DGD resulted in lower gallons sold vs 4Q 2019 (1) Page 5 | Fourth Quarter & FY 2020 Results | 03.03.2021 Feed 35% Food 19% Fuel 46% FY 2020 % of Total EBITDA by Segment (before corporate) 968 1,026 1,072 1,161 1,163 1,221 317 316 314 345 343 308 - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2015 2016 2017 2018 2019 2020 Darling Production Volumes (000's metic tons) Animal Fats Used Cooking Oil 2021 EBITDA Guidance Low High (in
millions) By Segment Feed $380 $400 Food 180 190 Fuel* 400 420 Corporate (60.0) (60.0) Total Combined adjusted EBITDA $900 $950 *(Estimating DGD @ 300-310 mmg @ $2.25/gallon for '21)
Feed Segment Key Drivers: Page 6 | Fourth Quarter & FY 2020 Results | 03.03.2021 • Solid growth in overall feed segment sales quarter over quarter and year over year. Lead by a 7.2% improvement in raw material processed for 4Q and 2.4% increase in raw material processed for 2020 over 2019 • UCO volumes continue to run approximately 10% below historical levels, UCO pricing did improve offsetting some of the lost volume due to the impact of COVID 19 on the restaurant industry • Fat prices (BFT & YG) were mixed for 2020 compared to a year ago. BFT average price finished 2020 12.1% higher than 2019 while YG was flat in 2020 compared to the prior year. Protein pricing (MBM) was also higher for 2020 by 13.2% compared to 2019 US$ (in millions) 4Q 2020 4Q2019 FY 2020 FY 2019 Net Sa les 572,764$ 490,317$ 2,072,104$ 1,970,561$ Cost of sa les and operating expenses 426,593 375,990 1,544,524 1,519,596 Gross Margin 146,171$ 114,327$ 527,580$ 450,965$ Loss/(ga
in) on sa le of assets (275) (377) 19 (7,720) Sel l ing, genera l and adminis trative expenses 56,289 57,872 209,748 200,487 Depreciation and amortization 61,218 55,185 221,187 203,456 Segment operating income 28,939$ 1,647$ 96,626$ 54,742$ Equity in net income of unconsol idated subs idiaries 726$ 1,515$ 3,193$ 428$ Segment Income 29,665$ 3,162$ 99,819$ 55,170$ Segment EBITDA 90,157$ 56,832$ 317,813$ 258,198$ Raw material processed (mmts) 2.37 2.21 8.95 8.74 Fats Proteins Other Rendering Total Rendering Used Cooking Oil Bakery Other Total Net Sales Twelve Months Ended December 28, 2019 584.3$ 791.3$ 167.9$ 1,543.5$ 185.7$ 191.6$ 49.8$ 1,970.6$ Changes: Increase/(Decrease) in sales volumes 66.6 20.2 - 86.8 (11.7) (0.6) - 74.5 Increase/(Decrease) in finished product prices 10.5 16.1 - 26.6 2.8 (7.2) - 22.2 Increase/(Decrease) due to currency exchange rates 0.3 2.6 0.1 3.0 (0.1) - - 2.9 Other change - - 10.6 10.6 - - (8.7) 1.9 Total
Change: 77.4 38.9 10.7 127.0 (9.0) (7.8) (8.7) 101.5 Net Sales Twelve Months Ended January 2, 2021 661.7$ 830.2$ 178.6$ 1,670.5$ 176.7$ 183.8$ 41.1$ 2,072.1$ Rendering Sales Change in Net Sales - 2019 to 2020 Twelve Months Ended
Food Segment Page 7 | Fourth Quarter & FY 2020 Results | 03.03.2021 • Second half of 2020 Peptan sales were 16% higher than the first half of 2020. Peptan sales continues to show growth into 2021. • Excluding the gain on the sale of assets in 2019, 2020 EBITDA improved 6.4% over the previous year and 4Q 2020 EBITDA was 32.7% better than 4Q 2019 Key Drivers: $130.5 $131.9 $129.7 $157.1 $167.1 $0 $50 $100 $150 $200 2016 2017 2018 2019 2020 Food Segment 5 Year EBITDA EBITDA 80% 12% 8% 2020 % of Sales Breakdown Collagen Edible fats Other products 1) FY 2019 excludes the $13.1 million gain on an asset sale in China US$ (in millions) 4Q 2020 4Q2019 FY 2020 FY 2019 Net Sales 344,631$ 288,619$ 1,185,701$ 1,119,085$ Cost of sales and operating expenses 268,348 221,527 920,682 864,618 Gross Margin 76,283$ 67,092$ 265,019$ 254,467$ Loss/(gain) on sale of assets 512 343 482 (13,175) Selling, general and administrative expenses
25,999 29,234 97,406 97,363 Depreciation and amortization 22,826 20,556 83,752 79,671 Segment operating income 26,946$ 16,959$ 83,379$ 90,608$ Equity in net income of unconsolidated subsidiaries -$ -$ -$ -$ Segment Income 26,946$ 16,959$ 83,379$ 90,608$ Segment EBITDA 49,772$ 37,515$ 167,131$ 157,104$ Raw material processed (mmts) 0.3 0.3 1.1 1.1 (1) (1)
Fuel Segment (Includes Diamond Green Diesel JV consolidated EBITDA) Key Drivers: • Q4-2020 Combined adjusted EBITDA of $89.1 million, with DGD earning $2.40 per gallon on 56.8 million gallons sold • DGD turnaround in October lowered the production gallons for the quarter, but DGD still sold record number 288 million gallons in 2020 • European green bioenergy 2020 results best in our history • Darling approved the shutdown of its two biodiesel plant operations in December 2020. There are no plans to reopen the Montreal, Quebec and Butler Kentucky due to unfavorable biodiesel economics • DGD II – Norco, LA expansion is on track to startup in Q4-2021, adding 400 million gallons. The current production run rate at Norco, LA has been raised to 290 million gallons of production capacity • DGD Port Arthur location FID made in Jan. 2021 and is expected to be operational in the second half of 2023 Page 8 | Fourth Quarter & FY 2020 Results | 03.03.2021 Diamond
Green Diesel US$ and gallons (in millions) 4Q 2020 4Q2019 FY 2020 FY 2019 EBITDA (Enti ty) - in quarter recorded w/no BTC 79.8$ 121.7$ 386.0$ 348.3$ EBITDA (Enti ty) - BTC adjusted to when earned 136.6$ 198.2$ 675.0$ 623.0$ Pro forma Adjusted EBITDA (Darl ing's share) 68.3$ 99.1$ 337.4$ 311.5$ Tota l ga l lons produced 60.5 77.9 289.3 274.6 Total ga l lons sold/shipped 56.8 77.1 288.0 276.9 EBITDA per gallon sold $2.40 $2.57 $2.34 $2.25 $1.09 $1.53 $2.18 $2.25 $2.34 2016 2017 2018 2019 2020 DGD Annual EBIDTA per Gallon (1) Includes Fuel Segment EBITDA and Darling's share of DGD EBITDA. • Excludes feed stock (raw material) processed at the DGD joint venture. (2) Q4-19 and fiscal 2019 EBITDA includes retroactive BTC for 2018 & 2019. BTC was recognized in Q4-19 US$ (in millions) 4Q 2020 4Q2019 FY 2020 FY 2019 Net Sa les 102,443$ 80,492$ 314,118$ 274,259$ Cost of sa les and operating expenses 76,250 43,016 223,609 204,871 Gross Margin 26,193$ 37,476$ 90,509$ 69,388$ Loss/(ga
in) on sa le of assets (22) 297 (75) 313 Sel l ing, genera l and adminis trative expenses 5,369 2,179 16,014 2,762 Restructuring and asset impairment charges 38,167 38,167 Depreciation and amortization 9,513 7,891 34,218 31,946 Equity in net income of Diamond Green Diesel 62,684 270,062 315,095 364,452 Segment operating income 35,850$ 297,171$ 317,280$ 398,819$ Equity in net income of unconsol idated subs idiaries -$ -$ -$ -$ Segment Income 35,850$ 297,171$ 317,280$ 398,819$ Segment EBITDA 20,846$ 35,000$ 74,570$ 66,313$ DGD adjusted EBITDA (Darl ing's Share) 68,171$ 276,146$ 337,348$ 389,416$ Segment EBITDA (1) (2) 89,017$ 311,146$ 411,918$ 455,729$ Raw material processed (mmts) * 0.4 0.3 1.3 1.3
January 2021 400-million-gallon expansion Existing 290-million-gallon plant Page 9 | Fourth Quarter & FY 2020 Results | 03.03.2021
Appendix Additional Information
California LCFS & RIN value history Source: https://ww3.arb.ca.gov/fuels/lcfs/credit/lrtweeklycreditreports.htm Page 11 | Fourth Quarter & FY 2020 Results | 03.03.2021 $- $50 $100 $150 $200 $250 A p r - 1 6 J u n - 1 6 A u g - 1 6 O c t - 1 6 D e c - 1 6 F e b -1 7 A p r - 1 7 J u n - 1 7 A u g - 1 7 O c t - 1 7 D e c - 1 7 F e b -1 8 A p r - 1 8 J u n - 1 8 A u g - 1 8 O c t - 1 8 D e c - 1 8 F e b -1 9 A p r - 1 9 J u n - 1 9 A u g - 1 9 O c t - 1 9 D e c - 1 9 F e b -2 0 A p r - 2 0 J u n - 2 0 A u g - 2 0 O c t - 2 0 D e c - 2 0 Average LCFS Carbon Credit Price Weighted Ave Price (USD/MT)
Feed Segment - Historical (1) Does not include Unconsolidated Subsidiaries EBITDA Page 12 | Fourth Quarter & FY 2020 Results | 03.03.2021 US$ (in millions) Q1-2019 Q2-2019 Q3-2019 Q4-2019 Total 2019 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Total 2020 Net Sales 495.8$ 487.4$ 497.0$ 490.4$ 1,970.6$ 512.6$ 503.7$ 483.0$ 572.8$ 2,072.1$ Gross Margin 109.0 110.5 117.2 114.3 451.0 124.2 135.8 121.4 146.2 527.6 Gross Margin % 22.0% 22.7% 23.6% 23.3% 22.9% 24.2% 27.0% 25.1% 25.5% 25.5% Loss/(gain) on sale of assets (4.4) (0.5) (2.4) (0.4) (7.7) 0.1 0.1 0.2 (0.3) - SG&A 48.8 46.5 47.3 57.9 200.5 53.9 50.5 49.0 56.3 209.7 SG&A Margin % 9.8% 9.5% 9.5% 11.8% 10.2% 10.5% 10.0% 10.2% 9.8% 10.1% Operating Income 15.2 15.8 22.1 1.6 54.7 16.7 32.5 18.5 28.9 96.6 Adj. EBITDA (1) 64.5$ 64.5$ 72.3$ 56.8$ 258.2$ 70.2$ 85.2$ 72.3$ 90.2$ 317.8$ Adj.
EBITDA Margin % 13.0% 13.2% 14.5% 11.5% 13.2% 13.7% 16.9% 15.0% 15.7% 15.3% Raw Material Processed (mmts) 2.18 2.16 2.19 2.21 8.74 2.24 2.15 2.18 2.37 8.95
Historical Pricing Jacobson, Wall Street Journal and Thomson Reuters Page 13 | Fourth Quarter & FY 2020 Results | 03.03.2021 Avg. Jacobsen Prices January February March Q1Avg. April May June Q2 Avg. July August September Q3 Avg. October November December Q4 Avg. Avg. BFT - Chicago Renderer / cwt $31.26 $35.21 $31.86 $32.70 $30.78 $33.98 $24.86 $29.94 $23.86 $30.60 $32.07 $29.04 $32.00 $33.00 $36.41 $34.24 $31.48 YG - IL / cwt $22.00 $24.22 $22.73 $22.92 $20.67 $21.78 $18.33 $20.18 $17.60 $18.70 $22.37 $19.48 $23.50 $24.72 $26.23 $25.22 $21.95 Choice White Grease - IL / cwt $25.81 $29.13 $26.36 $27.02 $26.53 $26.95 $22.77 $25.34 $21.00 $25.68 $28.08 $24.92 $29.02 $28.89 $36.41 $31.44 $31.48 Poultry Fat - Southeast / cwt $28.50 $28.50 $28.00 $28.32 $29.23 $30.00 $26.52 $28.54 $25.50 $27.41 $29.04 $27.32 $30.06 $33.24 $36.86 $33.39 $29.43 Poultry Grease - Mid South / cwt $25.71 $26.50 $25.60 $25.90 $24.57 $23.95 $22.18 $23.52 $22.07
$23.05 $24.23 $23.12 $25.97 $28.45 $35.66 $30.03 $29.88 Distiller's Corn Oil - IL / cwt $25.05 $28.04 $27.70 $26.91 $29.04 $26.98 $23.08 $26.29 $21.57 $24.50 $28.38 $24.82 $30.98 $33.07 $35.26 $33.10 $28.82 Corn - Decatur, IL / bushel $4.02 $3.96 $3.73 $3.90 $3.21 $3.22 $3.37 $3.26 $3.46 $3.06 $3.77 $3.55 $3.99 $4.36 $4.56 $4.29 $3.75 MBM - IL / ton $230.0 $231.6 $248.6 $237.1 $306.8 $326.6 $240.7 $290.4 $208.64 $208.57 $224.17 $212.91 $268.75 $317.11 $331.59 $305.29 $261.43 MBM - CA / ton $165.8 $190.3 $207.5 $188.1 $220.0 $218.5 $205.0 $214.5 $190.70 $190.00 $191.90 $190.87 $234.32 $247.37 $278.75 $253.48 $211.77 Pork Meal - IA IL / ton $195.0 $198.7 $229.9 $208.5 $369.3 $332.5 $214.1 $304.1 $205.00 $208.57 $223.81 $212.46 $298.60 $306.84 $315.00 $306.81 $257.79 Feed Grade PM - Carolina / ton $220.0 $220.0 $239.8 $227.0 $300.0 $304.0 $259.1 $287.5 $245.00 $245.00 $245.00 $245.00 $275.23 $314.74 $345.00 $311.66 $267.70 Feed Grade PM - Mid South / ton $215.0 $215.0 $245.7
$225.7 $269.3 $298.3 $241.4 $257.0 $225.00 $225.00 $229.29 $226.07 $252.73 $283.16 $315.00 $283.65 $251.13 Pet Food PM - SE / ton $447.0 $471.1 $583.0 $502.6 $653.6 $690.6 $625.0 $656.6 $585.23 $527.38 $548.21 $553.61 $626.70 $731.05 $797.16 $718.30 $607.65 Pet Food PM - Mid South / ton $471.0 $550.0 $598.9 $540.4 $660.7 $729.4 $647.7 $679.1 $610.80 $555.95 $578.57 $581.80 $667.05 $732.90 $799.43 $733.12 $633.61 Feather meal - AL GA / ton $270.0 $270.0 $277.3 $272.6 $280.0 $280.0 $248.6 $269.0 $240.00 $248.93 $275.71 $254.88 $307.73 $374.74 $405.45 $362.64 $289.51 Feather meal - Mid South / ton $279.1 $280.0 $288.0 $282.5 $303.2 $333.8 $268.4 $300.9 $252.10 $264.29 $289.29 $267.91 $338.41 $407.89 $470.45 $405.58 $314.20 Blood Meal - Ruminant MO River / ton $802.4 $912.5 $943.8 $886.3 $973.8 $965.1 $665.6 $863.2 $527.73 $540.12 $557.14 $541.66 $742.61 $811.84 $846.59 $800.35 $771.37 D4 RINs (B20) $0.40 $0.50 $0.50 $0.50 $0.52 $0.54 $0.57 $0.43 $0.60 $0.65 $0.76 $0.67
$0.80 $0.87 $0.97 $0.88 $0.64 Comparison Q3-2020 Q4-2020 % Q4-2019 Q4-2020 % FY 2019 FY 2020 % Q1Avg. Q2 Avg. Q3 Avg. Q4 Avg. Avg. Avg. Change Avg. Avg. Change Avg. Avg. Change BFT - Chicago Renderer / cwt $32.70 $29.94 $28.84 $34.24 $29.04 $34.24 17.91% $25.62 $34.24 33.65% $28.08 $31.48 12.09% YG - IL / cwt $22.92 $20.18 $19.56 $25.22 $19.48 $25.22 29.47% $20.39 $25.22 23.69% $22.01 $21.95 -0.27% Choice White Grease - IL / cwt $27.02 $25.34 $24.92 $31.44 $24.92 $31.44 26.17% $23.21 $31.44 35.46% $25.48 $31.48 23.53% Poultry Grease - SE / cwt $28.32 $28.54 $27.32 $33.39 $27.32 $33.39 22.23% $28.56 $33.39 16.90% $30.13 $29.43 -2.32% Poultry Grease - Mid South / cwt $25.90 $23.52 $23.12 $30.03 $23.12 $30.03 29.89% $24.09 $30.03 24.64% $25.61 $29.88 16.65% Distiller's Corn Oil - IL / cwt $26.91 $26.29 $24.82 $33.10 $24.82 $33.10 33.39% $22.73 $33.10 45.63% $24.26 $28.82 18.79% Corn - Decatur, IL / bushel $3.90 $3.26 $3.43 $4.29 $3.55 $4.29 20.85% $3.98 $4.29 7.79% $3.95
$3.75 -4.96% MBM - IL / ton $237.10 $290.42 $213.79 $305.29 $212.91 $305.29 43.39% $230.01 $305.29 32.73% $230.85 $261.43 13.25% MBM - CA / ton $188.11 $214.49 $190.87 $253.48 $190.87 $253.48 32.80% $164.60 $253.48 54.00% $174.53 $211.77 21.33% Pork Meal - IA IL / ton $208.51 $304.09 $212.46 $306.81 $212.46 $306.81 44.41% $193.54 $306.81 58.53% $208.21 $257.79 23.81% Feed Grade PM - Carolina / ton $227.02 $287.46 $245.00 $311.66 $245.00 $311.66 27.21% $231.01 $311.66 34.91% $251.08 $267.70 6.62% Feed Grade PM - Mid South / ton $225.73 $256.99 $226.43 $283.65 $226.07 $283.65 25.47% $223.46 $283.65 26.94% $241.37 $251.13 4.04% Pet Food PM - SE / ton $502.62 $656.58 $553.61 $718.30 $553.61 $718.30 29.75% $395.86 $718.30 81.45% $540.42 $607.65 12.44% Pet Food PM - Mid South / ton $540.44 $679.08 $581.77 $733.12 $581.80 $733.12 26.01% $408.75 $733.12 79.36% $522.39 $633.61 21.29% Feathermeal - AL GA / ton $272.60 $269.00 $254.88 $362.64 $254.88 $362.64 42.28% $276.71 $362.64
31.05% $339.80 $289.51 -14.80% Feathermeal - Mid South / ton $282.50 $300.90 $268.56 $405.58 $267.91 $405.58 51.39% $283.81 $405.58 42.91% $352.87 $314.20 -10.96% Blood Meal - Ruminant MO River / ton $886.30 $863.22 $541.66 $800.35 $541.66 $800.35 47.76% $634.06 $800.35 26.23% $647.98 $771.37 19.04% D4 Rins $0.50 $0.43 $0.67 $0.88 $0.67 $0.88 31.21% $0.56 $0.88 57.25% $0.47 $0.64 35.59% 2020
Food Segment - Historical (1) Adjusted for the $13.1 million gain on the asset sale in China for Q2-19 and FY-19 Page 14 | Fourth Quarter & FY 2020 Results | 03.03.2021 US$ (in millions) Q1-2019 Q2-2019 Q3-2019 Q4-2019 Total 2019 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Total 2020 Net Sales 279.2$ 274.8$ 276.5$ 288.6$ 1,119.1$ 270.3$ 278.9$ 291.8$ 344.6$ 1,185.7$ Gross Margin 65.1 60.4 61.8 67.2 254.5 64.9 58.8 65.1 76.3 265.0 Gross Margin % 23.3% 22.0% 22.4% 23.3% 22.7% 24.0% 21.1% 22.3% 22.1% 22.4% Loss/(gain) on sale of assets 0.1 (13.4) (0.2) 0.3 (13.2) - - 0.0 0.5 0.5 SG&A 21.9 23.4 22.8 29.3 97.4 25.5 22.6 23.4 26.0 97.4 SG&A Margin % 7.8% 8.5% 8.2% 10.2% 8.7% 9.4% 8.1% 8.0% 7.5% 8.2% Operating Income 23.6 30.5 19.5 17.0 90.6 19.1 16.3 21.1 26.9 83.4 Adj. EBITDA (1) 43.2$ 37.1$ 39.3$ 37.5$ 157.1$ 39.4$ 36.3$ 41.7$ 49.8$ 167.1$ Adj. EBITDA Margin % 15.5% 13.5% 14.2% 13.0%
14.0% 14.6% 13.0% 14.3% 14.4% 14.1% Raw Material Processed (mmts) 0.3 0.3 0.3 0.3 1.1 0.3 0.3 0.3 0.3 1.1
Fuel Segment - Historical (1) Includes Fuel Segment EBITDA and Darling's share of DGD EBITDA. * Excludes feed stock (raw material) processed at the DGD joint venture. Page 15 | Fourth Quarter & FY 2020 Results | 03.03.2021 Diamond Green Diesel (50% Joint Venture) US$ and gallons (in millions) Q1-2018 Q2-2018 Q3-2018 Q4-2018 Total 2018 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Total 2019 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Total 2020 EBITDA (Entity) - in quarter recorded w/no BTC 39.7$ 36.3$ 1.0$ 110.6$ 187.6$ 59.7$ 87.8$ 79.1$ 121.7$ 348.3$ 127.3$ 66.0$ 112.9$ 79.5$ 385.7$ EBITDA (Entity) - BTC adjusted to when earned 72.8$ 70.8$ 23.9$ 176.1$ 343.5$ 130.2$ 157.2$ 137.3$ 198.2$ 623.0$ 207.3$ 138.2$ 192.9$ 136.3$ 674.7$ Pro forma Adjusted EBITDA (Darling's share) 36.4$ 35.4$ 11.9$ 88.0$ 171.7$ 65.1$ 78.6$ 68.6$ 99.1$ 311.5$ 103.6$ 69.1$ 96.4$ 68.2$ 337.3$ Total gallons produced 37.1 33.2 17.2 72.8 160.3 67.6 73.2 55.9 77.9 274.6 77.0 74.5 77.3 60.5 289.3 Total
gallons sold/shipped 33.4 34.8 23.1 66.1 157.4 71.1 70.0 58.7 77.1 276.9 78.9 72.3 80.0 56.8 288.0 EBITDA per gallon sold/shipped 2.18$ 2.03$ 1.03$ 2.66$ 2.18$ 1.83$ 2.25$ 2.34$ 2.57$ 2.25$ 2.63$ 1.91$ 2.41$ 2.40$ 2.34$ US$ (in millions) Q1-2019 Q2-2019 Q3-2019 Q4-2019 Total 2019 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Total 2020 Net Sales 60.1$ 65.0$ 68.6$ 80.6$ 274.3$ 69.9$ 66.0$ 75.7$ 102.4$ 314.1$ Gross Margin 10.0 11.7 10.1 37.6 69.4 16.9 21.8 25.7 26.2 90.5 Gross Margin % 16.7% 18.0% 14.7% 46.7% 25.3% 24.2% 32.9% 33.9% 25.6% 28.8% Loss/(gain) on sale of assets - - - 0.3 0.3 - (0.0) (0.1) (0.0) (0.1) SG&A (0.8) 0.4 0.9 2.3 2.8 1.6 4.0 5.0 5.4 16.0 Depreciation and amortization 7.8 8.4 7.9 7.8 31.9 8.1 8.0 8.6 9.5 34.2 Equity in net income of DGD 24.3 38.1 32.0 270.1 364.5 97.8 63.5 91.1 62.7 315.1 Segment Income 27.3 41.1 33.3 297.2 398.8 105.0 73.3 103.1 35.9 317.3 Segment
EBITDA 10.8 11.4 9.2 35.0 66.3 15.3 17.8 20.7 20.8 74.6 DGD adjusted EBITDA (Darling's Share) 29.8 43.8 39.5 276.2 389.4 103.6 69.1 96.4 68.2 337.3 Combined Adj. EBITDA (1) 40.6$ 55.2$ 48.7$ 311.2$ 455.7$ 118.9$ 86.9$ 117.1$ 89.0$ 411.9$ Raw Material Processed*(mmts) 0.3 0.3 0.3 0.3 1.3 0.3 0.3 0.3 0.4 1.3
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 accordance with GAAP. Adjusted EBITDA is presented here not as an alternative to net income, but rather as a measure of the Company’s operating performance. Since EBITDA (generally, net income plus interest expenses, taxes, depreciation and amortization) is not calculated identically by all companies, this presentation may not be comparable to EBITDA or Adjusted EBITDA presentations disclosed by other companies. Adjusted EBITDA is calculated in this presentation and represents, for any relevant period, net income/(loss) plus depreciation and amortization, goodwill and
long-lived asset impairment, interest expense, (income)/loss from discontinued operations, net of tax, income tax provision, other income/(expense) and equity in net loss of unconsolidated subsidiary. Management believes that Adjusted EBITDA is useful in evaluating the Company’s operating performance compared to that of other companies in its industry because the calculation of Adjusted EBITDA generally eliminates the effects of financing, income taxes and certain non-cash and other items that may vary for different companies for reasons unrelated to overall operating performance. As a result, the Company’s management uses Adjusted EBITDA as a measure to evaluate performance and for other discretionary purposes. In addition to the foregoing, management also uses or will use Adjusted EBITDA to measure
compliance with certain financial covenants under the Company’s Senior Secured Credit Facilities and 5.25% Notes and 3.625% Notes that were outstanding at January 2, 2021. However, the amounts shown in this presentation for Adjusted EBITDA differ from the amounts calculated under similarly titled definitions in the Company’s Senior Secured Credit Facilities and 5.25% Notes and 3.625% Notes, as those definitions permit further adjustments to reflect certain other non-recurring costs, non-cash charges and cash dividends from the DGD Joint Venture. Additionally, the Company evaluates the impact of foreign exchange impact on operating cash flow, which is defined as segment
operating income (loss) plus depreciation and amortization. Page 16 | Fourth Quarter & FY 2020 Results | 03.03.2021
Adjusted EBITDA Page 17 | Fourth Quarter & FY 2020 Results | 03.03.2021 Adjusted EBITDA January 2, December 28, January 2, December 28, (U.S. dollars in thousands) 2021 2019 2021 2019 Net income attributable to Darling 44,745$ 242,609$ 296,819$ 312,600$ Depreciation and amortization 96,467 86,453 350,178 325,510 Interest expense 16,883 18,586 72,686 78,674 Income tax expense 10,231 35,567 53,289 59,467 Restructuring and asset impairment charges 38,167 - 38,167 - Foreign currency loss 1,581 657 2,290 1,311 Other (income) expense, net 256 (487) 5,534 6,671 Debt extinguishment costs - - - 12,126 Gain on disposal of subsidiaries - (2,967) - (2,967) Equity in net income of Diamond Green Diesel (62,684) (270,062) (315,095) (364,452) Equity in net income of unconsolidated subsidiaries
(726) (1,515) (3,193) (428) Net income attributable to noncontrolling interests 1,394 837 3,511 8,367 Adjusted EBITDA (Non-GAAP) 146,314$ 109,678$ 504,186$ 436,879$ Foreign currency exchange impact (6,826) (1) - (6,419) (2) - Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP) 139,488$ 109,678$ 497,767$ 436,879$ DGD Joint Venture Adjusted EBITDA (Darling's Share) 68,171$ 276,146$ 337,348$ 389,416$ Darling plus Darling's share of DGD Joint Venture Adjusted EBITDA 214,485$ 385,824$ 841,534$ 826,295$ Three Months Ended Twelve Months Ended (1) The average rate assumption used in this calculation was the actual fiscal average rate for the three months ended January 2, 2021 of €1.00:USD$1.19 and CAD$1.00:USD$0.77, as compared to the average rate for the three months ended December 28, 2019 of €1.00:USD$1.11 and CAD$1.00:USD$0.75, respectively.
(2) The average rate assumption used in this calculation was the actual fiscal average rate for the twelve months ended January 2, 2021 of €1.00:USD$1.14 and CAD$1.00:USD$0.75, as compared to the average rate for the twelve months ended December 28, 2019 of €1.00:USD$1.12 and CAD$1.00:USD$0.75, respectively. For the twelve months ended December 28, 2019, Adjusted EBITDA included a gain on the sale of assets of approximately $20.8 million.
Upcoming IR Events • Roth Capital Conference- 3.15.21 • BNP Exane Conference– 3.17.21 • Gabelli Conference – 3.18.21 Page 18 | Fourth Quarter & FY 2020 Results | 03.03.2021
Thank you
