Darling Ingredients (DAR) Raymond James & Associates’ 46th Annual Institutional Investors Conference 2025 summary

Company evolution and business model

• Expanded from a small regional renderer to the world's largest animal byproduct processor, operating 280 factories in 24+ countries with 16,000 employees.

• Processes 17 million tons of waste annually into products for food, feed, and energy, including collagen, edible fats, and renewable fuels.

• Launched a collagen peptide product line, with Nextida GC targeting glucose control, and plans for additional health-focused peptides within a year.

• Collagen business grew from $90 million to $300 million annually since 2014, with potential to double in 2–4 years if peptide launches succeed.

• Largest global collector of used cooking oil, converting it into renewable diesel and sustainable aviation fuel (SAF).

Renewable fuels and regulatory environment

• Leading producer of renewable diesel and SAF, with 1.3 billion gallons processed annually and significant investment in hydrocarbon technology.

• SAF production ramped up, with current capacity representing a major share of global output; European mandates and voluntary US market drive demand.

• Regulatory framework is favorable, with 45Z guidance and increased RVO mandate for 2025 supporting domestic biofuel and animal fat prices.

• Import restrictions on biofuels and used cooking oil benefit domestic producers; surplus RINs and delayed compliance affect current pricing.

• Policy outlook remains positive regardless of administration, with energy security and ag policy expected to support renewable mandates.

Market dynamics and financial performance

• Industry shifted from high margins and rapid growth to oversupply, prompting questions about Big Oil's long-term commitment and potential supply cutbacks.

• SAF margins currently attractive due to limited global supply; demand outpaces production, with major airlines and consumer brands driving adoption.

• 2024 guidance is conservative due to macro uncertainty and commodity price volatility; 2023 was the fourth best year historically despite headwinds.

• Fat prices significantly impact earnings; each penny per pound change equals $12 million.

• Focus on reducing leverage and maintaining disciplined CapEx, with $400 million debt paid down in 2023 and similar targets for 2024.