Darling Ingredients (DAR) Barclays 40th Annual Energy-Power Conference summary

Margin outlook and regulatory environment

• Supportive renewable diesel margins expected through 2027, underpinned by strong RVO mandates and constructive RIN S&D balance.

• Reallocation of small refinery exemptions likely to be addressed by year-end, with rulemaking and comment periods extending into 2028 discussions.

• Limited renewable diesel imports due to loss of PTC eligibility and tariffs, with no significant import changes anticipated through 2027.

• Policy-driven regional dislocations and tariffs are supporting North American fat prices and margins.

• Industry capacity and ag productivity are expected to keep pace with incremental RVO growth through 2029.

Strategic initiatives and business segments

• Expansion into health and wellness markets via the Nextida line, leveraging clinical trials and science-backed claims for higher-margin growth.

• Collagen and peptide products are gaining rapid consumer and institutional adoption, with strong momentum in sales and brand recognition.

• Strategy focuses on ingredient sales to CPG companies, supported by peer-reviewed studies and clinical validation.

• Margin expansion in the food segment is expected as volumes and scientific backing increase, with potential for multiple expansion.

• Global gelatin and collagen capacity expansion and new rendering and biogas plants are planned to support continued growth.

Financial outlook and capital allocation

• Net debt targeted below $3 billion and leverage below 2x by end of 2026, with strong cash generation expected.

• Capital allocation priorities include debt reduction, potential share buybacks, and consideration of a dividend program.

• Free cash flow of $4–6 billion projected through 2030, with core business now able to sustain maintenance and growth capital.

• Large M&A is paused, but organic growth and selective investments in capacity and innovation will continue.

• SAF business expansion is on hold pending clearer consumer demand, but remains a strategic option.