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Overview and Core Business
Darling Ingredients Inc. (NYSE: DAR) is a globally recognized company specializing in the conversion of edible and inedible animal by-products and food waste into a wide array of sustainable ingredients and specialty products. With over 130 years of operational history, the company has established a robust and diverse portfolio that spans multiple industries including pharmaceutical, food, pet food, feed, technical, fuel, bioenergy, and fertilizer. By leveraging advanced processing technologies and sustainable practices, Darling Ingredients transforms fats, proteins, and other by-product streams into high-quality collagen, gelatin, pet food ingredients, and feed components. The incorporation of industry-specific processes such as the recovery and conversion of used cooking oil and bakery remnants further exemplifies their role in reducing waste and supporting renewable energy initiatives.
In its global operations, Darling Ingredients has built an expansive network of facilities across five continents, reinforcing its position as a pioneer in circular economy practices. The company’s operations are structured into three primary business segments: feed ingredients, food ingredients, and fuel ingredients. Notably, the feed segment is a significant revenue contributor due to its comprehensive approach in processing materials into animal feeds. The food ingredients segment meets the growing market demands for natural, high-quality excipients and additives, while the fuel ingredients segment underscores the company’s leadership in renewable energy by producing biogases and sustainable aviation fuel from waste-based feedstocks.
Business Model and Operational Excellence
Darling Ingredients generates revenue through multiple channels, including direct sales of processed ingredients, industrial services such as grease trap maintenance, and equipment that supports the collection and delivery of used cooking oil. The company’s integrated approach ensures that every facet of the conversion process is optimized—turning raw waste materials into valuable resources. This holistic model not only minimizes waste but also supports the development of sustainable solutions that serve a growing global population. The firm’s extensive operational network and proven expertise in handling diverse by-product streams allow it to maintain superior quality control and efficiency standards, making it a resilient player in a highly competitive market.
Sustainability and Circular Economy Leadership
At the heart of Darling Ingredients’ mission is the pursuit of sustainability through the principles of the circular economy. The company’s commitment to repurposing waste material into useful and often essential components for various industries is reflective of an environmentally responsible business ethos. Their innovative techniques, which include state-of-the-art processing and recovery methods, enable the efficient transformation of animal fats, used cooking oil, and other residual materials into products that not only nourish people and feed animals but also fuel renewable energy projects. Through these efforts, Darling Ingredients demonstrates that industrial success and environmental stewardship can go hand in hand.
Industry Impact and Market Position
Darling Ingredients occupies a unique niche in the global marketplace by bridging the gap between waste management and value-added production. Its strategic positioning is enhanced by a comprehensive global footprint, advanced technological capabilities, and a diversified product portfolio that is tailored to meet the needs of multiple high-demand industries. The company’s expertise allows it to respond effectively to market fluctuations and commodity price volatility while upholding sustainable practices. With its significant role in supplying renewable energy components, particularly in the production of sustainable aviation fuel through its joint ventures, Darling Ingredients continues to set benchmarks in both operational excellence and environmental responsibility.
Commitment to Research and Innovation
Driven by a legacy of innovation, Darling Ingredients invests significantly in research and development to enhance product quality and expand its suite of sustainable offerings. Its initiatives in developing novel collagen peptide compositions exemplify its commitment to scientific excellence, with applications that extend into health and nutritional benefits. By continuously exploring new avenues in product development, the company strengthens its competitive position and reinforces its reputation as a thought leader within the specialty ingredients space. This dedication is reflected in the rigorous research processes that underpin the development of ground-breaking products and technologies that optimize the conversion of raw materials into high-value outputs.
Conclusion
In summary, Darling Ingredients Inc. stands out as a fundamental player in the sustainable ingredients market by harnessing the potential of animal by-products and food waste. Its integrated business model, underpinned by a global network, advanced processing technologies, and a steadfast commitment to the circular economy, positions the company as an industry exemplar in both innovation and operational efficiency. With extensive expertise in converting waste to wealth, Darling Ingredients not only fulfills the immediate needs of diverse industrial sectors but also contributes meaningfully to global sustainability efforts.
Darling Ingredients (NYSE: DAR) has unveiled DarLinQ, an innovative technology using sonar and Bluetooth for real-time monitoring of used cooking oil (UCO) storage containers. The system enhances operational efficiency and security through continuous oil-level monitoring and automated equipment.
This patented technology addresses the significant challenge of UCO theft, which costs up to $75 million annually in the United States according to the National Renderers Association. DarLinQ provides real-time theft alerts and prevention features, already proven successful through pilot programs. The company is rolling out this technology across its network of over 200,000 restaurant and kitchen facilities in the U.S. through its DAR PRO Solutions brand.
Darling Ingredients (NYSE: DAR) has announced its participation in the upcoming Jefferies Renewables & Clean Energy Conference on December 4, 2024. The company, which specializes in converting food waste into sustainable products and renewable energy, will engage in investor meetings during the event. Chairman and CEO Randall C. Stuewe will participate in a fireside chat scheduled for 9:30 a.m. ET. Interested parties can access webcast details and registration information through the company's website at darlingii.com/events.
Darling Ingredients (NYSE: DAR) reported Q3 2024 net income of $16.9 million, or $0.11 per diluted share, down from $125.0 million ($0.77 per share) in Q3 2023. Total net sales decreased to $1.4 billion from $1.6 billion year-over-year. The decline was primarily attributed to sharp decreases in fat prices and lower Diamond Green Diesel earnings.
Combined adjusted EBITDA was $236.7 million, compared to $334.3 million in Q3 2023. The company received $111.2 million in cash dividends from Diamond Green Diesel, which sold 316.6 million gallons of renewable diesel at $0.25 per gallon EBITDA. Darling reduced debt by approximately $192 million and expects full-year 2024 combined adjusted EBITDA between $1.15-1.175 billion.
Darling Ingredients (NYSE: DAR) has announced the publication of preclinical and clinical studies in the Wiley Journal of Food Science and Nutrition, focusing on the impact of a specific collagen peptide composition on post-meal blood glucose spikes. The studies involve Nextida GC™, the first product in Rousselot's Nextida library, which has shown significant potential in mitigating post-meal glucose spikes in healthy individuals.
In the clinical trial, participants who consumed 5- or 10-gram doses of Nextida GC 30 minutes before a meal experienced a 42% reduction in blood glucose spike on average after the meal. This research supports Darling Ingredients' commitment to developing new collagen-based products with health benefits beyond traditional ones, meeting the growing consumer demand for natural and effective health solutions.
Darling Ingredients Inc. (NYSE: DAR) has announced it will release its third quarter 2024 financial results on Thursday, October 24, 2024. The company will host a conference call at 9 a.m. Eastern Time (8 a.m. Central Time) on the same day to discuss the results and provide an update on company operations. A presentation with supplemental financial data will be available on the company's investor website.
To access the call, listeners can register for an audio-only webcast. Participants wishing to ask questions can register in advance for dial-in details or call specific numbers on the day. A replay of the call will be available online and via phone until October 31, 2024, using the reference passcode 1857635.
Darling Ingredients Inc. (NYSE: DAR) announced that its joint venture Diamond Green Diesel (DGD) will supply sustainable aviation fuel (SAF) to Chicago Midway International Airport. The two-year agreement involves Valero Marketing and Supply Company and Southwest Airlines Co. (NYSE: LUV). Southwest will purchase a minimum of 3.6 million gallons of neat SAF, with an option to buy up to 25 million gallons.
The SAF, produced from waste-based feedstocks, is expected to reduce lifecycle greenhouse gas emissions by up to 80% compared to conventional jet fuel. It will be certified by a CORSIA-approved Sustainability Certification Scheme. The DGD Port Arthur plant will be able to upgrade about 50% of its 470 million gallon annual production capacity to SAF by Q4 2024, potentially making DGD one of the world's largest SAF manufacturers.
Darling Ingredients Inc. (NYSE: DAR) has introduced Nextida™ GC, a new collagen peptide designed to reduce post-meal glucose spikes in healthy individuals. A clinical trial conducted by Darling's brand Rousselot showed that a 5-gram or 10-gram dose taken 30 minutes before a meal significantly lowered post-meal glucose spike by an average of 42%.
CEO Randall C. Stuewe stated that Darling Ingredients has discovered a way to use natural collagen for targeted health benefits through a proprietary process. Nextida GC is the first of many collagen-based solutions with targeted health benefits that the company is developing. The company continues to demonstrate how collagen can be effectively used to target common health and wellness benefits, with patents pending on their scientific work.
Darling Ingredients Inc. (NYSE: DAR) has announced that its joint venture, Diamond Green Diesel (DGD), will provide the first regular supply of sustainable aviation fuel (SAF) to Florida through an agreement between World Fuel and DHL Express. Over a two-year period, World Fuel Services will deliver approximately 60 million gallons of blended SAF, including 18 million gallons of neat SAF, produced by DGD from used cooking oil and food waste.
The SAF will have at least 80% lower lifecycle greenhouse gas emissions compared to conventional jet fuel and will be used for DHL Express's GoGreen Plus emission-reduced air transportation services. DGD's Port Arthur plant is expected to be capable of upgrading about 50% of its 470 million gallon annual production capacity to SAF by the fourth quarter of 2024, potentially making it one of the largest SAF manufacturers globally.
Darling Ingredients Inc. (NYSE: DAR) has elected Randy Hill to its board of directors as an independent director, effective immediately. Hill will serve on the board's sustainability and audit committees. With his extensive background in financial services and experience advising companies with global operations, Hill is expected to provide valuable insights into complex financial analysis and global reporting for Darling Ingredients' multifaceted business.
Hill is currently a partner at Opportune LLP, a business advisory firm. He previously held various roles at KPMG, including Audit Partner-in-Charge of the Dallas office. His expertise spans corporate governance, mergers and acquisitions, complex audit and accounting matters, IPOs, and capital market transactions.
Darling Ingredients (NYSE: DAR) has announced a target to reduce Scope 1 and 2 emissions by 42% by 2030, aligning with its commitment to the Science Based Targets initiative (SBTi). This goal is highlighted in the company's 2023 Sustainability Progress Report, which outlines key environmental, social, and governance achievements.
Notable accomplishments in 2023 include:
- Disclosure of Scope 3 emissions inventory from Forest, Land and Agriculture sources
- Construction of a new Sustainable Aviation Fuel unit at the Diamond Green Diesel joint venture
- Increased representation of women in senior management
- Continued partnership with FFA, donating over $270,000
- Proactive mapping of biodiversity risks across U.S. operations
Darling Ingredients plans to submit Scope 1, 2, and 3 targets to SBTi for validation by the end of 2024, as part of its aspiration to achieve net zero emissions by 2050.
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