Darling Ingredients Inc. ($DAR)

[Presentation] Good morning. Thank you for joining us at the 2026 Darling Ingredients Investor Day. I'm Suann Guthrie, I'm the Senior Vice President Investor Relations and Global Affairs. During this Investor Day, we will be making forward-looking statements, which are predictions, projections or statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results can materially differ because of the factors and cautionary statements discussed in this Investor Day and in the accompanying slide presentation and in the Risk Factors section of our Form 10-K, 10-Q and other reported filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statement. For historical non-GAAP financial measures referenced during this Investor Day, reconciliations to the most directly comparable GAAP financial measures are available on the slide presentation, which can be found on our website. Reconciliations and forward-looking non-GAAP measures are not provided for the reasons stated in the slide presentation. Again, thank you for joining us here at the New York Stock Exchange, and thank you for all of those who are on the webcast. We have a great couple of hours planned for you guys. Very excited to be here. Let me just give you an overview of what we're doing today. I'll give you a quick overview on Darling Ingredients, who we are, what we do, for those of you who don't know us, I'm going to turn over the floor to Randy. Randy is our Chairman and Chief Executive Officer. He's going to talk to you about the foundation we've built over the last couple of decades and how that foundation has built the strength for our business and what that does to unlock our future Randy is going to turn over the floor to Carlos Pause. Carlos is our Executive Vice President, Renewals, North American Specialties and Global Risk Management. Carlos is going to spend some time talking to you about Diamond Grid diesel, how that is a proven model, and it's a resilient model, no matter the commodity markets or public policy. He's then going to turn the floor over to David Van Dorfler. David is our Executive Vice President in Sales and Marketing for Rousselot. That's our collagen and gelatin business. He's going to talk to you about the next era of collagen. What does that market look like and the growth we see there. And finally, we're going to wrap it up with Bob. He's going to talk to you about how we're going to put our strength and scale to work and a little bit about our capital allocation plans. At the end, we'll leave some time for Q&A for those of you in the room with us today and then we'll go from there. So with that, I'm going to turn the floor over no, I'm not talked about Darling first. Sorry, again, Darling Ingredients, who we are, what we do. For those of you who don't know what rendering is, about 50% of the animal that is eaten is not consumed. It goes to waste. So what rendering does is it takes about 99% of that animal and up cycles that into something else that reduces greenhouse gas emissions by about 90% compared to composting. Our process is quite simple. We collect -- we have one of the biggest trucking fleets in the U.S. And we collect that raw material from [indiscernible] and slaughter houses. That goes to 1 of our 260 factories across the world, and we processed that into fats and proteins. Proteins primarily go back into animal feed and pet food, fats go into primarily now renewable diesel and sustainable aviation fuel. And of course, we're creating value from all of those products that we have. Now I'm going to turn over the floor to Randy.

Thanks, Suann. Good morning, everybody, and thank you for taking time out of your day to come spend it with myself and my team. And today, I'm really excited to showcase my team that -- and kind of what we're looking at for Darling. As I walked in this morning, no different than you my head snapped when I saw they had a picture of me on the leaderboard. And I didn't know, but I do know for at least about another 2 hours, I'm bigger than Buffett. And I always have to start by telling people my 1 interaction with Warren Buffett in my life. Yes, I've been 3 tables over and tried to ease drop on a conversation. But Jamie Dimon invited me to an event he had at their old building and Warren was there and he said, "Randy, come on at a meet Warren. So Warren took me off to the corner. And I said, Warren, I'm Randy Stuewe. I run Darling Ingredients. He goes, "Oh, I know all about Darling. And Bob, we went on for no more than probably 2 or 3 minutes. He goes, I'm very proud of what you've built. And I said, well, does it fit in the Berkshire platform anywhere. And his answer to me that time was -- it's a really interesting business, but he says it takes too much capital. And that stayed with me, that's probably 10 years ago. And it's -- for me, it was a fascinating moment of it's a capital-intensive business. And then as I can always end all conversations to get the last leg, I said, well, don't you own a railroad? And so that's my opening line of -- you'll learn a lot today about how capital is deployed, how capital is used and ultimately, how we're going forward with it. And I think you're going to come away today with Carlos and Bob and especially Bob at the end. We're trying to bridge where we are to where we think we can be. So I'll talk to you a little bit about the foundation built and then I'm going to talk to you about what we've unlocked for the future. You're going to get a real deep look today at the collagen business and where that fits in our portfolio. And I think ultimately, we've got our marketing and sales team here, take some products home. It's a very -- it's a long trajectory to make critical scale in that business around the world. But we're the biggest, and we've got the most unique product portfolio of anybody out there in the collagen space. And in today's world of trying to find health and wellness. We have a solution that I think is really world class. So as we go forward, I always like to tell people, real quick, what built the business. And for many of you that know the company, you can say Bla, bla, blah, but for this team, I'm still transitioning my learnings along the way. And we operate under 3 primary principles entrepreneurship. We're decentralized. There's 260 P&Ls out there. The authority relies on that manager at that location. And yes, we provide capital planning and legal and treasury, but decisions are made at the lowest level to execute on the business plan. Transparency. We don't go to the balance sheet to make numbers. I've been in a company that's done that. I don't like it. And there's no surprises. We call it transparency. We call it no surprises. We share the good with the bad. And ultimately, we try to be accountable in a disciplined execution way. And then integrity, it's not the most glamorous business in the world. Maybe it gets a little bit of narrative of green and climate change and all of that. But at the end of the day, we're an essential service, the process is some stuff that doesn't really smell very good. And so it's hard to be a good citizen all the time. And so ultimately, the integrity piece for us is being part of a community, doing the right thing. Social media has made it so difficult to not beyond the defense. You're always being attacked constantly for something, whether it's an employee, whether it's an environmental or it's just an upset conditions. So integrity is key. I'm proud of the history of this team and of our company and especially from an accounting perspective, have not joined in the wall of shame of significant deficiencies and material weaknesses out there. And that's a very bold statement to say and it's for me because of the number of acquisitions that we've done, and we'll talk about that. So today, I get to talk to you about, we built a global foundation. You guys have ridden through the ups and downs of this business. It had some headwinds, policy. It had headwinds of global ingredient over production. We've spent the last couple of years transforming the business. fixing some assets that needed fix, disposing of some assets that needed to be let go. And we've invested to strengthen additional capabilities. What Bob is going to talk to you about is we are fundamentally poised for accelerated returns. We're going to show you how we think about that, how we calculate it, how do you communicate it, teach it and get and own the outcome, if you will, at the lowest level. Remember, 260 facilities and a decision-maker down in Brazil, in China, in Australia, how do they think of the business and make the right capital allocation, capital investment decisions. Now I think really, this is kind of a history lesson real quick for those that haven't seen it. We started in 2003, I took over the company with 600 employees, about 20 locations. We had a grand total EBITDA at that time of about $24 million. We had a CapEx budget of $24 million. We were using duct tape and Balan wire to hold the company together. As we went forward, we found someone else kind of in the same shape called National byproducts. National byproducts was part of the HollyFarms, which Tyson acquired and then Tyson decided to spin off national byproducts or HollyFarms did in order to get the Tyson deal done. And so we basically doubled our scale of plants. We took $225 million EBITDA numbers and synergistically through rerouting turned it to $100 million. And so that kind of became the foundation as we started. We then held off another 5 years, acquired the Griffin business and ultimately entered the species-specific or chicken multi processing business and doubled our scale. And ultimately, that started to transform the company. Now we both had beef, we had chicken, but we were still a North American processor. As we went forward, we were brought the Rousselot -- that was part of the Maple Leaf Foods. Maple Leaf had an activist in there that wanted to break up the company and spin Rousselot off focus on consumer products. So we were lucky enough to win that auction and picked up the #1 position in Canada. At the same time, we were making that initial investment of $423 million into Diamond Green Diesel on a technology never proven, never done. A career bet for us. And ultimately, we all know the history there. As we go forward, then oops, we got Diamond Green Diesel under construction. We just bought Rousselot and here comes the only international rendering platform in the world called VEON. A lot of history, a lot of noise underneath that one, but it gave us a position in Europe, gave us the #1 position there, gave us a position in China, gave us a small position in Brazil. And so ultimately, that's the last time, if you will, for the first time that we put a massive amount of debt on the balance sheet. But we also did a follow-on offering to finance and take out some of the risk. The foundation build goes forward. And as we look here, we like Diamond Green Diesel. For those that don't know, we invested in Diamond Green Diesel, not to be in the energy business. We don't know anything about energy. We built it as a transformation unit for waste fats and oils not to put an age on me today, but when I entered this business, waste fats and oils had a trading range of $0.08 to $0.15 a pound. The April P&L shows that they're trading somewhere between $0.68 and $0.77, FOB plants now. We have transformed this business because we created a machine that can value add this equivalent with the other big food oils and fuel oils in the world. Then 2022, we came out of it one more time. The balance sheet looked good. My job has always been not only to be the steward of capital, but to also help a chance to create relationships. And it's the funnest part of my job is building this relationship. You don't know when the when the founder is going to decide to transition and they're all under different circumstances, but here came the #1 chicken render or poultry render in North America, Valley proteins, 18 plants, been close to the family, and we created a deal to do that. And oh, by the way, here came 16 plants in Brazil at the same time, much smaller. But still, we fundamentally I'll show you why we have invested in Brazil. And then we like green energy and green energy is not only renewable diesel, green energy is in the Benelux countries, we're the largest green energy provider from biomethane and that's food waste recycling. And if you see a picture out there, that's [indiscernible] Belgium, '22 goes by and then '23, we're bringing on Diamond Green Diesel 3. I originally said we weren't in the energy business. When we built Diamond Green Diesel 3, we entered the energy business. And what I mean by that is we now consume more fat than the Darling global system produced. And that was quite a learning curve for us as we went there. Now we had the biggest quarter in the history of the business in '23, we felt pretty smart. Here comes [indiscernible] succession plan. Patriarch 84-year-old father of the founder, developed dementia and the children did not anything to do with the business. #1 producer of bovine grass-fed collagen in the world out of Brazil great position, great factories really built in the last 10 years. And so we looked at each other and we said, "Boy, we got -- we still got quite a bit of debt out of there from Vale and Pfizer, you think we can do it and -- and we said, yes, we think we can do it, we'll do it with all debt. And ultimately, we did. That put us in a pretty tough position because what happened -- and not only did we buy that, we bought a small plant. It's a couple of plants in Mirapase. We'd invested $500 million in the SAF production. And the story there was we decided not to use any equity at the time because we had the confidence in the business and the strength of the balance sheet and the ability to risk manage through these scenarios in a deflationary time. What we didn't envision at the time was having a policy environment where as you'll hear the renewable fuel standard or renewable volume obligation just kind of vaporized for a year. And we went to overproduction in the green energy business. And that put us in a pretty challenged position. So today, as we move forward, you're going to learn about those headwinds are gone. They're blowing pretty strong from the south right now, feeling pretty good. And Carlos will teach you how long that will last and what we see in the future going there. And then I'm going to try to teach you with the help of Bob about what we're looking at for the future. So as San already covered this, basically 1 out of every 6, 7 animals in the world goes through one of our factories after the meat goes to the consumer. The gelatin collagen market, we won't spend a lot of time talking about our joint venture with Tessenderlo. It's still an antitrust review. We're making lots of progress there. We're confident it's going to close. We're hoping to close it here yet this summer. It allows us to grow our position significantly in areas where raw material is available and we're not. So we're at capacity today in our rendering business globally. We're at capacity today in our collagen business globally. We see the collagen business growing rapidly over the next 5 to 10 years. David is going to help you understand why. I'm always going to remind you that remember in the collagen business, 80% of that process is animal feed and animal fat. And so not only in these tailwind markets now, the deflation or of the commodity markets, the Rousselot business is getting a nice uplift from that. And then the fuel business, Carlos, as I said, we'll try to take you through. We're going to try to show you the S&D. We're going to use the Bloomberg ran S&D. We've got our own version of it, but we'll talk to you about what we think that can be. I mean everybody wants me to forward guide that business, very difficult to forward guide, but it's doing quite well, and we'll talk more about that, especially during Q&A. So you've seen that. We don't need to talk about that again. But I want to talk to you about why Global scale where it matters. And this is, I think, 1 of the more powerful maps that we can put out there in the world, more facilities than ADM you start to think about it. Maybe we're not handling grain and crushing millions of tons of soybeans and -- but ultimately, we're where the animals are. The U.S., as we look forward here, continues to grow. Poultry is growing very, very rapidly. Chain speeds are going up, demand for the other white meat chicken is really doing well, beef is in a down cycle. We've never seen a down cycle like this in beef for 75 years. Heard replacement, probably still a couple of years out, but that's okay. At the end of the day, we've got -- it gives us a little time to get ready for that, and we'll talk a little more about that. This is why we went to Brazil. The numbers are unbelievable down there, the amount of, as I always say, land, water and people, they have it all there and they can continue to produce beef, but they're moving rapidly into poultry and also pork. Europe, this is the impact of climate change. This is green initiatives. I mean, this is somebody went over with an aerial map and measured nitrogen levels from 20 years ago and said they've got too much manure. Well, what happens? Well, it doesn't mean they're not going to eat. It means that Poland, it means Spain or they're producing more animals, it means it's now moving east. We're moving east. We've got joint ventures already in the Czech Republic and other areas in the East, the numbers will move east there. China came back sharply after ASF. It's still growing. Huge importer of soybeans, huge importer of meat. Brazil beef to there, it's -- we don't see that slowing down. What we do see slowing down, ultimately, we'll talk about with China is their production. They're out of land. They're out of water. They can't buy more proteins and other things. So it's really, end of the day, it's a U.S. Brazil production system is what we're building. So today, before I turn it over to Carlos here, we're going to talk to you about a road map. We'll look at it at a 3- to 5-year road map. Yes, there can be lots of different things that happen in that 3-year window. You've got an RVO for the next 2 years, it's very solid. What happens after that? Hard to say, but it's hard to believe that we'll go backwards from where we are. You're going to see that the road map that Bob lays out that's already out in that presentation took Q1 of 2026 and then kind of multiplied times 4. That doesn't mean that's what we believe. That just means that's the point in time we chose. What we're seeing when we did our earnings call a week or so ago was this is the first time that we've done an earnings call before we'd seen the first period of the next quarter. The first -- April, as we call it, or period 4 now, is starting to come in, and it's materially stronger than what we told you. And I think that -- so that will be the 1 headline on Bloomberg Samaria, it is materially stronger. That's driven by higher prices, strong volumes, fuel demand, fuel margins, it's really, really hitting on all cylinders. And then we're going to get to show you some scenarios in the balance sheet. And I haven't forgot that I was probably giving this presentation 3 or 4 years ago when I thought I'd be debt free by right now. I thought I'd be paying Jeff Gates a dividend. I'll never forgive me for that one. But I get 1 more shot at it. And I think you'll get to see how we're thinking about it and ultimately, the flexibility, as I refer to it there. From an M&A front, we're not done growing, but we're not M&A-focused. We own the big items that are out there, and we have built the foundation. But over the next 3 to 5 years, there's no less than probably 20, maybe up to 30 new factories that are going to have to be built around the world to meet the growing demand of me. And so we'll show you all of that, and then we'll let David kind of wow you with the collagen product line, and you kind of start to ask a lot of questions about that, what it can be -- and we've always said, if we're half as successful in our next Tita wellness program over the next 5, 7 years, we'll double the earnings in the Food segment. So half as successful as our prior collagen, which most would know at the time was vital proteins underneath this company. But -- so we're excited about these products. He'll tell you what's in the pipeline. So not only do we have a strong balance sheet to give us financial flexibility. We've got new plants and products and new opportunities around the world. So with that, Carlos, I will turn it over to you.

Thank you very much, Randy and good morning, everyone, and thank you for being here. Really appreciate you coming and listening to us. My name is Carlos Pass, and I will be talking about our Diamond Green Diesel business. But first of all, I want to talk to you about what a greatest story Darling is. And as Randy alluded to it. But I think to me, the brilliance of Darling and Diamond Green Diesel as an early adopter was our ability to transforming waste fats into a global opportunity okay? The waste end markets were driven by feed dynamics in the past. Margins were constrained and the business was very cyclical. As Randy alluded to, in those times, early 2000s. We have a chart here over the last 25 years of the value of fats and corn. In the early 2000s, the value of fat was somewhere between $0.07 and $0.10, and Luquethas transpired sans -- the value of fats in 2022 get all the way to above $0.80 a pound. So that is the transformational game that Darling has brought to the market. And as the largest animal producer in the world and has the largest used cooking oil collector in North America, Darling captures this massive upside in the market. Now I'm going to talk about our used cooking oil collection business. This is a great map that shows our facilities in the U.S., our rendering facilities and our used cooking all facilities in the U.S. and Canada. We run a very much an integrated business. We leverage our rendering facilities to maximize the value of our used cooking oil processing and collection facilities. We leverage this by creating synergies between the 2 businesses. And how do we create the synergies? We maximize economies of scale. And we take full advantage of the logistical advantages that provides by running these businesses as an integrated business rather than a separate business. A used cooking oil business is a fantastic business. We own over 90 facilities in the Continental U.S. and Canada. We serve the population centers of 90% in the U.S. and Canada. Something that I'm very proud of. We collect from over 160,000 restaurants in this geography. How do we do that? By using over 2,100 fleet units to be able to accomplish this job. And we serve over 8 industries in this space between restaurants, groceries, et cetera. And where does all this global fat and the used cooking oil business that we aggregate around the world and North America goes? The great majority goes to our Diamond Green Diesel business. We are truly a global industry leader in this space. We're a profitable entity. As Randy showed, we started in July of 2013, and we've had positive cash flow since year 1. We've invested over $6 billion in this entity and what is impressive that is having self-funded, and Bob will expand on that. It's a strategically positioned where we have world-leading size, scale and location. It's one of the largest renewable fuel producers in the world. We produce roughly 1.2 billion gallons of renewable diesel. Including in that is 235 million gallons of sustainable aviation fuel or SAF. We're very proud that we're very nimble, and we have an agile supply chain. What does that mean? We have extremely versatile inbound and outbound logistics. We can buy feedstocks from anywhere in the world. We can buy it by water, either by vessel or barges. We can buy it by pipe. We can buy it by rail, we can buy it with truck. In the same token, we can execute ourselves in the same mode of transportation to make sure we're maximizing the margins of the entity. We have massive pretreatment unit and this allows us to handle all types of feedstocks from virgin bases to the more complex fat that we can buy around the world. These pains are pretty good picture how well positioned is Diamond Green decent in the world in the international markets of supply and demand. We are located in the Gulf of Mexico or Gulf of America, whichever you prefer. And we buy feedstocks from the centers of production. As Randy alluded, our rendering plants over animals are and DGD buys its feedstock where those get produced, mainly from the United States and Canada, South America were from Brazil, Argentina, Uruguay, even Colombia. We buy from all over Europe, and we also regione from Southeast Asia. Everything goes to our 2 facilities, 1 in Norco, Louisiana and the other 1 in Port Arthur, Texas, and it gives us efficient access to the demand centers. This year, especially in the U.S. mainly the West Coast, Canada. And obviously, when the market determines itself, we go to Europe as well. Talking about demand, it's something that has been in everyone's mind is the RVO. The renewable volume obligation, which became essentially lower in April 1, 2026. The much anticipated RVO did not disappoint. It was quite robust. The 2026 and 2027 annual demand is 5.4 billion gallons compared to the 3.35 billion gallons of a year ago. So the delta is over 2 billion gallons of increased demand. It favors definitely domestic feedstocks, which is extremely supportive to Darling's core business. The global demand right now for renewables is solid. As you've seen, Indonesia, Brazil and Europe are increasing the potential demand for renewables. And in crude all times, because of what's going on in Iran today is making renewables very attractive, very economic. When we're paying $6.50 for a gallon of gas and in Chicago or $12 in Europe, renewables become a very economic and attractive option. I can tell you today, DGD is operating at a high-capacity utilization because the margin after the is a very attractive environment and as Randy alluded to, how do we view this picture of the current RVO and then had to be especially with my trading background, the easiest way to do it is to put in a supply and demand. I want to thank Sabrina and the Bloomberg team for providing this to us. But I think, obviously, in the top -- you all probably have seen this, but the top side of the table essentially looks at the demand side of the equation. The middle part looks at supply side of the equation, how are we going to be able to meet that demand. But the most important part is the lower line, which shows the balances. As Randy mentioned, the RVO from last year wasn't a robust one. So what it implies that we have an oversupply of RINs in 2025, and the balance is almost 2.8 billion RINs, where jobs are going to be used and consumed in 2026, given the increased demand that we have from the current RVO. And we agree with a scenario that Bomer paints here which essentially balances the S&D in 2026. There's an increased supply. The margins are there. We're going to meet the higher demand, and we're going to more than likely balance is S&D. RIN value should continue to support margins as they are the great equalizer. But Bloomberg shows some potential deficits as the demand increased in 2027. We believe those deficits can be addressed, mainly by higher production. Engineers and plants when there's sustained higher margins, good returns, find ways to produce more internally. This tend to happens in every industry. That's the beauty of capitalism. Also with this increased demand, imports of biofuels to the U.S. should increase. The U.S. should become the high-price islands for renewables in the world, which means imports need to come to the U.S., the best margins in the world should happen to the U.S. And what gets exported out of the U.S. should be very small. And this is how we believe there's the potential to balance the deficit that is growing in 2027. When you put all of this together, is extremely supportive for DGD margins. With that, I will pass it on to David who's going to talk about our great Collagen business.

Thank you, Carlos. I appreciate it. Good morning. My name is Dave Bandora Saler. I lead sales and marketing for Rousselot, and I'm honored to be here today and represent our global Rousselot team and share a little bit about how we are going to help our customers lead in the next era of wellness through collagen. And so for the next few minutes, I'm going to cover 3 things. I'm going to talk about the current trends that are happening in the collagen space how Rousselot is poised to be able to help support and lead over the next few years, several years as we go forward and capture those trends. And then we've got something special with Nextida as a platform. I'm excited to share that with you as we go throughout the presentation here. So let's jump into it. If we had had this conversation 10 years ago, we would be talking about collagen as a niche-type product, right? The hair, skin and nails. You can see back in 2016, there's about 600 products around the world that had some collagen end of functional food and beverages and supplements that were brought to market. And today, we're at over 1,800 products globally around the world that have collagen in them. And that is a 50% increase in just the last 3 years. So as I walk a little bit more into the trends coming up, I'll walk through what's happening there. What started to happen in 2022 and into 2023. But some of you may have already seen what's happening because we've got some good samples in the back with John and Louise in the back and I see some of you have already got your collegen and drinks and different applications. So you can see that the application trends are also changing, right? From the powder to mixed ingredients with hydration with electrolytes and collagen as well as sports nutrition and overall wellness. So let's jump into it and keep moving -- let's start -- take a step back just for a second and talk about what collagen is. And collagen is the most abundant protein in human thinks of it as the glue for our body and our scan and our joints and our structure. And as we get older, we lose just a little bit every year. And that is where the ability to have supplements like glycollagen that are bioactive, bioavailable allow us to be able to consume those supplements and support reinvigorating the collagen in our system. There are 28 types of collagen that are in the -- that are developed. There are 3 that are the most common, that's type 1, type 2 and type 3 collagen. And collagen has been used for ages, right? So collagen has been around for several hundred years. If you think about our other businesses that we have, we have a gelatin business and the collagen business is how we go to market in us. The gelatin manufacturing process, you can create gelatin or you can create collagen by adding hydrolysis and spray drying. And that's how we create collagen in our manufacturing facilities. So jump in and start moving into the trends, consumer trends, they're all in on wellness, and that is driving the college and boom. There are 3 things that we see, and you can see that with the variety of the applications that we have on the screen. There is an aging population that wants preventative health and nutrition. There is the rise of food as medicine, so we want to consume more natural ingredients, right, to be able to help us in our overall health journey. And then there's an increased demand in protein. So that's where you start to see in that 2022, 2023 time frame, the protein craze and the GLP on drugs that are out there, people need the protein to be able to support their diet, and collagen is an opportunity there. So this is one ingredient that is positioned for growth across multiple industries. I'll talk a bit about applications. And I think this is an area where Rousselot can really help and stand out in the market. You can see a wide range of applications here from cookies to beauty products, coffees, traditional powders and gummies that are out there for our consumers. But our application labs that we have, that is pretty unique. We have 3 global application labs around the world. And this is where customers can bring their applications to us, their ideas, and we partner with them to help solve some of the complexities that come up as you introduce new applications in the market. And that gives us that deep partnership and long history that we have with our customers to be able to support them as they bring new ideas to market. Yes, we work with large global multinational companies. We also work with innovative start-ups and founder-led companies that have an idea that they want to bring to market. And that's where Rousselot can help our customers and we have several examples here on this slide and also in the back. So if you haven't had time to try some of the collagen samples that we have, please feel free just after the session. So as I start to talk -- move from the second point around collagen and how Russia can help and start to transition into our next title platform, there's a few things I'd like to highlight here. You need the expertise of collagen, the history that we have. We have the scientific expertise with our science and innovation team that can help lay the foundation for us to build next -- we've got the process control. I'll talk a little bit more about why that matters in a second. We have the global scale that we need. We collagen is a trend that is happening around the world. I was just in Spain last week. We're talking with our European customers. This is a global initiative right now with collagen that is growing around the world. And we bring that deep industry knowledge. And I was going to talk a little bit about something Randy, you talked about, about entrepreneurship and our team. We have something really special at Rousselot and it's our people. and they're the people that are working on Nextida because they want to help people live better. And Nextida is a platform. It is not a product. And this team and this company is really passionate about that, and we're provided with the resources we need to be able to develop these entrepreneurial ideas like Nextida. And so we're really excited about what Nextida can bring in the market. We start with the industry knowledge, right, the history that we have with collagen Collagen is a long chain protein. It's got a broad peptide mix. So we take that collagen and we unlock the code, unlock the code of collagen with Nextida. So that's where we control the process, we can define the outcomes. And that gives us the targeted functionality that we need and that our customers are looking for to differentiate products in the market. And Nextida GC is just the first product under the Nextida platform. This one is focused on glucose control. So it reduces your post-meal blood sugar spike. It also naturally increases the body GLP-1, and it leads us to feeling fuller longer. And this is just the first example that we brought to market. We're very proud of Nextida GC and this is just the beginning. So with Nextida, it brings us the opportunity to have accelerated revenue growth with margin expansion potential. There's higher pricing power when you have products like Nextida GC, that give differentiated experiences and outcomes in the market that gives us improved margins and premium segment expansion. I would also say when customers are formulating with us in the application labs and they're introducing -- Nextida into their products, it really creates stickiness with that customer. for a long time. And you mirror that with our co-branding from a marketing standpoint, where we work with customers, we actually are co-branded with them with the Nextida platform on the products that they bring to market. It really helps us to accelerate the brand recognition around the world. So invest in the collegen and transformation with us. These are clinically validated products that we're bringing to market with Nextida GC. As I mentioned, this is just the first one. Our next focus will be in the cognitive space. And so we are well positioned to be able to excel in this new era. And again, this is a platform. We have a long library of peptide chains that we're studying around the world that we believe that will be -- keep us quite busy for years to come. And before I wrap up here, I would like to just add one of the things that we need to help us accelerate that growth and to make sure that we can compete long term in the broader health and wellness sector is the announcement that we made with the joint venture opportunity between Darling Ingredients and to [indiscernible] Group. This is where Darling is contributing Rousselot to a new joint venture company and to [indiscernible] will bring in PB Liner. As Randy mentioned, we entered into a definitive agreement in December, and that's going through the process. But we're excited about what this opportunity can bring for us. I think for me, the diversified global portfolio and attractive regions will help us as well as the gelatin solutions that are really important for the pharmaceutical industry. So thank you very much for the opportunity to be here. I'll now turn it over to Bob, I'll give you an update on the financials.

Thank you, David. Good morning, everyone, and thank you for the opportunity today. I speak to a lot of you frequently and -- but I'm excited about the opportunity today to talk about the business from a slightly different perspective. I'm going to really summarize our value proposition. I'll talk a little bit about our balance sheet, our debt position, the cash picture, how we see the outlook of the business from a number of different perspectives. And as Randy said, talk a little bit about how we see the future and what those plans are. Before I do that though, I want to just come back to talking about Darling and explaining Darling, we hear consistently that Darling is a complicated company. And for some people, it's hard to understand. And so we're going to try to demystify that as we go forward. From our perspective, it's really quite simple. We are -- our raw materials that make up 98% of Darling's adjusted EBITDA come from animal byproducts and used cooking oil. There are over 100 million metric tons of supply of these products. 90% of it is animal byproducts. That's a lot of supply in the world. And animal numbers our animal production continues to increase. So I think when a lot of people think about Darling, they kind of think, well, how long is it going to last? What's your supply picture. We're in a very stable position as it relates to supply. And when it comes to the processes that we have to run our business, there are 2 primary processes. We have collagen extraction that we're extracting from animal skins and bones. And then we have animal and rendering and used cooking oil processing. And as Carlos pointed out, we do those things as an integrated business. Pretty straightforward what we're doing. We're taking animal byproducts, used cooking oil. We are processing those things. and we're adding value to those products. And that's where it gets complex. And so I think it's complex in the right way from our perspective. The reason why that is attractive to us and to the market is because -- we're doing things as a P&L center that other companies are doing as a cost center, which means that these are businesses that are core to us. We're reinvesting in these. We're investing in innovation. We're investing in efficient operations. And so we can be a leader in the industry at creating all kinds of value-added products from these core processes. And then as we -- as Carlos explained and Randy explained, the fuel segment is essentially an extension of the Feed segment. It makes sense for us to be invested in that segment because at the end of the day, we can be in that space and we can compete in that space and we can control the outcome better if we are in that space. So that's just another way to look at Darling and hopefully simplify that picture a little bit. The value proposition. So Randy said this when he started, we are an essential service. We're an essential service for 2 reasons. 100 million metric tons of product -- that's a lot of biomethane emissions that the world would experience if we didn't do something with it, it's essential that we do and that's the role that we play. We also have a really important role in the broader meat and food industry. The value of what we do gets passed back to the producers of human meat production, and that ultimately leads to the -- a decrease in the cost of meat for people around the world. So our -- what we do is essential, and that's an important part. We've got a scaled global footprint. We talked about it, and I'll talk a little bit about kind of the history over the last several years and how we've been able to complete that global footprint, but that global footprint gives us certain advantages and stability that we didn't have before. We consistently generate cash, and that's a result of making good acquisitions being in the right place, running a good business, but also because of the competitive dynamics in our industry that we believe are more attractive than what you might see in some other commodity-based businesses. And then operational best practices and product innovation. This is who we are and this is what we do. We'll talk about all those things. I'm going to fast forward to this one first, and we'll come back to the others. A short history. Randy gave you the long history, but just kind of an update on the short history. The acquisitions of '22 and '23 were really important acquisitions for us. We bought Valley proteins. We bought Fasa in Brazil, and we bought [indiscernible] in Brazil. We also bought [indiscernible] and [indiscernible] and there's been some others. But those 3 were really critical at rounding out our global Feed segment and our Global Food segment, which essentially is our global rendering business and our global collagen business. Those acquisitions put us in the right places for the right reasons, and we'll talk a little bit more about that. we funded those acquisitions with cash flow and debt. The expectation was that we would pay that debt down relatively quickly. And as Randy talked about, we experienced somewhat of a down cycle in our markets at a time when we were integrating businesses and integrating businesses and companies is hard, and it takes a little while. And so we went through that process -- despite that, in '24 and '25 and despite being in a down cycle, we generated positive cash. And if you look at the run rate from the first quarter of 2026, and you extrapolate that out through the year, we are poised to generate over $800 million in cash in 2026. And as Randy started with, really, our environment is looking better than what we saw in the first quarter. We come back to our debt and our leverage ratio. So consistent with the picture that you saw on the last graph as we took on debt to make these acquisitions, our leverage ratio increased, our debt was high, relatively high. But if we look at the first quarter and extrapolating that out for the year, this -- the bar chart assumes $700 million of debt paid down we get our debt down pretty close to $3 billion by the end of the year, and our leverage ratio is below 2. So we're feeling pretty good about where we are today as far as this goes. As I said, it might have taken a little bit longer than expected, but I think now it's accelerating at a rate that may end up surpassing expectations. When we look at our overall debt and our obligations there and where we sit, we're really comfortable with that picture. If we end up -- if we are -- if we do get our debt paid down to near $3 billion by the end of the year, that implies that almost all or all of the $2 billion term a revolver line that we have would be paid down. And when we get to April of 2027, that's the expiration of a $500 million bond. I think we've been really clear on calls and one-on-one discussions that our Plan A is to pay that bond down, and we can either do it with cash on the balance sheet or taking money from the revolver to pay that down. We've got quite a lot of flexibility as to how we handle that, and that would -- is what we think would make sense to do at that point in time. In addition, once that's done, we've got quite a lot of flexibility in time. We don't have anything that comes due until 2030. We have a lot of flexibility and headroom with the $2 billion line that we've got. And so we really like our position once we get to that point where we've got our debt paid down to around $3 billion. So I want to shift a little bit to giving some insights on some of the operating metrics that we use to run our business. And and really emphasize the focus that we have on performance of the 260-plus assets around the world and the priority in our company to generate cash, positive cash in all those locations. We talk a lot about adjusted EBITDA. Adjusted EBITDA is an easy number to understand. It's an easy number to use to compare different companies -- but at the end of the day, what really matters to us is, are we generating cash? Are we generating cash in all these different locations that we can use to reinvest in the business. That is -- we use a very simple metric to come up with what we define as implied net cash. So every -- whether it's an asset or whether it's a business, we can use it for different purposes, but we start with the adjusted EBITDA we deduct a cost of debt. That's a combination of a term debt allocation based on the book value of the asset in question and total term debt that we have and then there's a maintenance cap or working capital debt charge based on actual use of working capital. And then we also deduct maintenance capital. The Warren Buffett story that Randy told and and the significant amount of capital that's required to run this company, it's true. I think we've forecasted that we'll spend around $400 million in maintenance capital this year. That's cash that we don't have access to at the end of the day. And so we want to see what our assets and business performances look like after paying for that maintenance capital. I will say later, I'll talk a little bit about how that high cost of investment is actually an advantage for us and not a disadvantage. But I wish Warren was here. And then we take that implied net cash number. It's a great number for us to use to have our P&L managers focused on. But we also then will divide that by different things so that we can compare that performance on a relative basis. We do look at invested capital as a way to do that. But what I really wanted to emphasize today was how we use that number as it relates to replacement value of our assets. And this is especially important for the rendering and used cooking oil business. But the calculation is also very simple. We take that implied net cash. We divide it by the replacement value of the assets or the business that we're talking about, and that gives us an implied return on replacement value. So why is that important? First, let me just point out, 95% of adjusted EBITDA in the Feed segment is rendering and used cooking oil. So when we talk about feed we're essentially talking about that. The reason why one of the reasons why implied return on replacement value is so important for that business is because of the inflation period that we went through over the COVID era. The cost of industrial construction from 2019 to '26, it increased 65%, 70%. We've got a lot of fixed assets. We put a lot of money into our fixed assets. And therefore, we need to increase the fees that we charge for the use of those fixed assets to keep up with what replacement cost is. that ensures good discipline. If we're able to do this, and the reason why this is important as well is because of the competitive dynamics in our industry. We have the luxury of having a lot of raw material -- a lot of moisture in the raw materials that we source. So what that means is if we're bringing in product from someone and we are at a certain distance away -- and if our supplier wants to go somewhere else, that added water in the freight is going to cost money. And so what it does is it prevents some of the irrational behavior from competitors that you see in other industries. The example I go back to is I lived in China for a while, and I worked in the oilseed crush industry. And this is back in 2010, 2011, when state-owned companies in China were coming into the industry and building out capacity, and everyone was competing for market share. And we were generating a negative $40 a metric ton loss before variable costs. That was completely irrational behavior. We don't see that in our business because, again, if someone wants to try to do that, they're going to have to decrease the fees they charge or even pay someone to take the product just to try to get market share that probably isn't sustainable on a long-term basis because they're not close enough to where they are. So -- this is a reality of our business. It provides stability in terms of the margins that we earn and the cash we can generate. And so it's really important then with the inflationary period that we went through that our teams are disciplined about the way we're pricing our contracts, we're getting paid a fair value. This methodology of implied return on replacement value. It ensures discipline on 1 hand -- but on the other hand, it also ensures fairness for the supplier. If you're generating a return on replacement value that's too high, well, then you're just incentivizing a competitor to come in and compete with you. And so what we really use this for is to help our teams really focus on the market, what's the right thing to do. What we're -- one of the things we're really excited about is with the acquisitions that we've made with Valley proteins and [indiscernible] we have made changes to our contracts. We have made improvements in the operations. We have increased the implied return on replacement value in those businesses. But we still see opportunities for improvement. And we believe that over the next 2 to 3 years, we can increase the implied return on replacement value by 2% to 3%, and that implies an additional $150 million to $300 million of EBITDA from the Feed segment. So we're very excited about that. The way we do that is operational efficiency. One of the things that Carlos and his team is focused on is now that with this Valley Protein acquisition, we have entered the poultry rendering industry on a large scale. We are working with those proteins that we make in identifying the best destination markets for that product, and we're getting more from it. That's an example of that. The commercial optimization Price risk management is another one. I think with our global footprint that we now have, we've got a line of sight into what's happening with world oils and fats that other companies don't see. That helps us understand and determine when a supply and demand analysis is loose or tight and how we should manage our commercial plans as a result of that and be much more strategic and precise about how we do that. The contract management, that happens over time. In some regions of the world, contracts are renewed once every 3 to 5 years. In some regions of the world, they're renewed every 3 months. in the cases where there's a long time line for the contracts, it's tough to adjust the prices all at 1 time. But over time, we're able to get that fair value and ultimately generate what we consider to be a modest return on the replacement value of assets. Market conditions is the 1 thing there that's outside of our control. And certainly, when we're in an environment like we are today, those are tailwinds that are back. But I think the message here is that -- there's a lot that we can control that is outside of any influence from the market because we're an essential business because of the competitive dynamics we see much more consistency in financial results and cash as we go forward.. Shifting to the Food segment, which, again, over 80% of the EBITDA -- adjusted EBITDA in the Food segment is collagen and the collagen business. We have a similar opportunity in terms of getting more value out of our existing footprint and infrastructure, but for very different reasons. And I mean, David really highlighted these things, and it's -- and we're very excited about it. The track record here is that over the last 5 years, we've increased the mix of college and gelatin from 280 to 30-70. If you look at the -- on the left -- bottom left part of the screen, if gelatin margins are a factor of one, hydrolyzed collagen margins are 2.5 to 3x that. And the targeted ingredients or the is 7 to 11x that. So Randy made the comment that if our -- next data business or our target ingredients business could sell half as much volume as our normal hydrolyzed collagen business, then we would double the EBITDA in the entire collagen business Gelatin included. That's the opportunity. And so what we're focused on is developing the next [indiscernible] portfolio of products. If they can represent 3% of our volume, that would represent 15% of our EBITDA. The beauty of this is we can make those products through our existing infrastructure. The only difference is we use different enzymes to cut the amino acids and create peptide profiles that that have those targeted health benefits. That's really the only difference. And that's, again, one of the reasons why we're so excited about the potential opportunity with forming a joint venture with Rousselot and that's because this is technology that we have that no one else has. We innovate in collagen more than anyone else does in the world. If we can bring that innovation to their asset footprint, then we believe we can get significantly more value from that footprint than what they're getting today. And there's some underutilized capacity there that will allow us to continue to grow. As Randy said earlier, we are at capacity today in our collagen business. So when we kind of look at trying to imagine a post-2026 picture, and we're sort of thinking about, well, what would -- what do we consider to be down cycle, mid-cycle up cycle. This isn't worst case, best case. I want to be clear about that. But it does sort of paint a picture around how we see ranges, and I want to give a little context to this. First of all, the down cycle. So what would cause a down cycle? -- right here, it says DGD, $0.33 a gallon average margins. We don't -- certainly don't expect that through 2027. We have an RVO in place that's very robust, as Carlos showed, we just don't -- we don't see that. But beyond that, I mean, who knows? I would say we think it's unlikely that it looks like this but we want to be respectful of what's possible. And so we always do that when we think about our balance sheet, we think about what opportunities we have and what commitments we want to make in terms of capital investment. We have to go through that process and look at what a down cycle looks like. I will say that we went through a down cycle in '24 and the beginning -- and despite making the acquisitions that we did in 2022 and 2023, our balance sheet withstood that just fine. And so that down cycle analysis was done then. We continue to do that today. And this is what it looks like for us. So at $0.33 a gallon would imply a pretty disappointing RVO 28 and beyond. And we're not really expecting that. One of the reason why is because, hey, the policy has worked. This policy was announced on April 1, one of the real intentions of that was to improve soybean prices at the farm, soybean futures are above $12 a bushel and climbing. And so I think this policy has achieved and is achieving the objectives of this administration. So we don't expect in 2028 and RVO to be completely disappointing, but if it was, this is what that picture looks like. Global oilseed crops, vegoil protein, I mean, let's just say, less than $0.50 a pound for fat and lower protein prices would mean that there's a problem with demand in the world and an abundance of supply. And then the tariff environment. The tariff environment has not been particularly negative to Darling. But there's a lot of different forms that, that can take. And if it were somewhat negative, then that's kind of what describes the downside scenario. The nice thing about that is if we assume, again, $3 billion in debt, and that's sort of what's assumed in the debt cost number here, reasonable CapEx and reasonable taxes, we would still be generating $400 million in cash even in a down cycle as we go forward. And that's in part because of this global infrastructure that we have and the reliability of that infrastructure. When we look at a mid-cycle or an up cycle, I mean we can go through all these different versions we could come up with 10 different versions. The bottom line is the external environment is going to shape what some of these things look like. We've given some examples. I mean in the mid-cycle, that really takes -- that would suggest that our first quarter run rate is kind of a mid-cycle type of an environment. that's $875 million of potential cash generation. So still very healthy in a mid-cycle environment. And in an up-cycle environment, it starts to get pretty exciting. So positioned for significant cash generation as we go forward. And I do want to make a distinction here. Carlos shared some information about Diamond Green Diesel and this is where things are a little bit different for us than they have been in the past. So Diamond Green Diesel officially founded in 2013. Obviously, the idea started a bit before that. $423 million invested by Valero and Darling together. In total, that's -- there has been about $6.5 billion of cash, either invested in the business or provided to the business for working capital over the history of the Diamond Green Diesel business, there's been almost as much money taken out as dividends as there has been contributed. So when investments have been required, each parent company contributes capital and when they generate surplus cash, they get dividends back roughly $1.3 billion have been put in, taken out and then the rest has been self-funded. So if you look back at the history of this investment, it's really been an incredible story. $400 million invested up front, $6.5 billion have been invested in total. And outside of the initial $200 million investment from each company, it hasn't cost either company anything to do that. And so a start-up that really has generated cash. Now what's different is as Diamond Green Diesel generates cash, we're not really planning to put the cash back into Diamond Green Diesel. We've got the footprint that we want. We may someday add more sustainable aviation fuel capacity to make some more of the renewable diesel capacity agile and flexible, so it can switch between the two. But we need some market commitments to do that. But now as we joke a little bit, this is like being able to go to the Pink Pony Club. I mean we are free clear we can take this money and we can use it to reinvest in any way that we see fit for what's in the best interest of Darling and Darling shareholders. And so this outlook shows what that picture looks like given those 2 different -- those 3 different cycles. The down cycle, we're assuming it doesn't exist in 2027, just because of the RVO that's in place and what we're seeing right now. If it happens '28 and beyond, then we're still generating over $2 billion in cash over the next 5 years. In the mid-cycle and the up cycle starts to generate a pretty exciting amount of cash, $4 billion to $6 billion. And what would we do with that? Randy talked about the organic growth that needs to happen in the company. We've built these and bought and put together this global footprint. And so we now have the luxury of not having to say, yes, to something new that's on the market that's for sale. We are in all the places that we want to be. Sure, we'd like to maybe have it look a little bit differently here and there. When we think about what our opportunities are, there's opportunities to organically invest and I'll talk about that more in just a second. Certainly, additional debt paydown is possible, share buybacks and dividends is a possibility. And I think what this demonstrates is that those are all things that now we can consider that we really just -- we considered a little bit in the past, but then when you thought about strategically what was the right thing to do long term for Darling shareholders, it made sense to add pieces that we didn't have. Because we've got these things in place now, we can consider some things that, quite frankly, we just really weren't in a position to do in the past. And so those are things that we just wanted to give insight around. We're going to be looking at that as we get this balance sheet to where our debt is down to $3 billion or below. And then we'll see what the outlook is for cash at that time and decide what to do. Growth, and this is just, again, some of the things sometimes Suwanne and I will be talking to some of you all and others and people will say, "Well, gosh, you guys -- are there any other big things out there? Are you going to be done growing? Like what's -- what more is there to do. There's still a lot more to do. When you think about the different segments and what we have and some of the things that we have going on, I mean, I won't read this list. But the bottom line is there's still plenty of runway for Darling -- we are ahead of the pack when it comes to our industries, whether it's rendering used cooking oil or collagen. And there are things that we can do to continue to stay out in front and we intend to do that. And so in summary, if I could leave you with this from a financial perspective, we are committed to solidifying our position financially that means reducing our debt down to below $3 billion, below a 2.5x leverage ratio even in a down cycle type of an environment. We are committed to optimizing this portfolio. And we are positioned to generate $4 billion to $6 billion of cash over the next 5 years, and we're going to do everything we can to make that happen and then delivering long-term shareholder value. This balance sheet is in a really solid place. We're excited about what it's going to look like when we get to the end of this year and what that may allow us to do in terms of funding shareholder value initiatives and continuing to methodically grow to maintain the strategic advantage we have. So with that, I don't know, Randy, if you have any last words or we open it up to questions.

Let's go ahead and open it up to questions, and then I'll have some closing statements when we're done.

Tom Palmer, JPMorgan. Thanks for the presentation, very, very efficient, too. wanted to maybe follow up on a comment you made, Randy, about April coming in stronger than you had expected. Maybe just an update on what areas of the business kind of drove that upside versus when we were speaking a couple of weeks ago what you thought it might look like? And then I guess any additional commentary you might want to provide on kind of how you see the rest of the year evolving at this point?

Yes. So like I said, traditionally, historically, we've always kind of seen period 1 of the next quarter. Given that we wanted to mirror Valero in their announcement on the 29th or 30th we did not have those numbers ready to go. The good news of having 260 facilities, you have 260. The bad news is consolidating that is a task. And I said, you obviously want to stay off the wall of shame. So we're very the team to get there. I just got to give them time. I can't push them. In the sense, I want to make sure the numbers we turn out are real. So all we did was basically divide March by 5 and took a time -- and I looked at bottom and said, let's that a little bit. And let me talk about what a little bit means. We've seen commodity cycles in the past that have caused fat prices to move up typically driven either by a hemispheric drought or policy change in the moment. We've never seen fat prices move up like they move. So to be -- the orders started to come in. So -- like the number I'm going to give you $1 to $2 a gallon. We're running strong there. Carlos said, we're running very, very strong right now. Feedstock prices are moving up rapidly. RINs are doing a lot of the work I mean, clearly, the run rate in Bob's up cycle there is probably much closer to where we're at at this point in time. Q2 looks absolutely fabulous as I look going forward, Q3. summertime rendering, a little bit of downturn there as always. But right now, the prices, if you look at what DGD's bids are out there. They're in the mid-80s, delivered, take $0.05 off to go FOB North America. We've never seen this before. And so ultimately, as we're originating cooking oil as we've got price sharing contracts as we've got all this stuff going on, how it flows through, what I think I would be -- Bob can echo on is, I think I'm pretty sure April is really darn good even though it's not final. I'm going to tell you, May is going to be better. And then it should probably level off after that unless we go higher. Margins at Diamond Green are -- as we expected, and then really just think about it, the RVO didn't kick in until April 1. So than what we saw to weeks ago. Very informative. Maybe just seems like what's the kind of PathP90-type spreads that you're seeing across the operations today and just on the commercial and with the Valley acquisition, we jumped really heavy into the poultry rendering business. And Darling has always is known poultry rendering, but I would say not to we can take from a supplier. And ultimately, the proteins that we make the qualities are different. They're different by plant. And it's just due to the nature of that raw material supply that's coming in. Our understanding today of what that quality is, our operational uptime, our ability to mix and blend if it if it may make sense, is something that we're doing much better today with that, and we see opportunities to continue to improve and get more value from as we go forward. So I think that's one of the areas. By being able to do those things, we're able to reach certain export destination markets that pay significant premiums for certain qualities of proteins and also some high-value pet markets in the United States that we just weren't able to hit when we first made the acquisition. So that's an example. Another 1 is with contract management. So I talked about that when you're talking to a supplier and you want to increase the processing fee by 75% versus the last contract that was negotiated 5 years ago, that's a tough discussion. They're not always prepared for that. We can't always get all of that, just out of -- in order to preserve and manage the relationship with the supplier. And so I think as time goes on and we continue to renegotiate contracts on the basis of replacement value of assets and getting what we consider to be a fair return on that basis, there's still some opportunity there. And then the -- outside the United States, with FAS as an example, that's a very, very different set of dynamics. In Randy's slide, he showed the growth rate of animal production in Brazil, keeping up with that growth is critical in order to maintaining good quality of our products and our processes. And we've learned some things in the couple of years that we've owned that business that I think going forward is going to allow us to extract a higher average margin from it. So those are some examples. I hope that answers your question.

Yes. I think Derek, and then I'll have Carlos. I mean some of the if we look back, I take the ownership on the outcome of purchasing the Valley assets. We have them fixed now. And I do declare victory. Now we're in that optimization phase of, as Bob was alluding to, if you're processing 2-day-old poultry, you're making byproduct a meal. If you can get it through your plant the same day, you're making chicken meal. So very different market condition profile. It has nothing to do with commodity swings, ups and downs. It just mean which market are you serving. The Trump tariffs were a punch in the nose because 1 day China is open, 1 day, China is closed, 1 day Vietnam's open close. And so we've got all the plants now REIT permitted, if you will, to ship into China. That -- those numbers alone, just off the Eastern Shore plants is $100 million. That's the differential in making good product and being able to export it or making lower-grade product and having to consume it domestically.

What else at grows?

I would say when you integrate companies, you've seen the growth that we experienced, you integrate it physically, but you got to integrate commercially. And I think that's a big part of my job. How do we run these businesses like global product lines. not like isolated business, we want to leverage the bigger darling to make sure we're executing to the right markets around the globe. We're shipping the right qualities. We're originating the right qualities. There's a lot of margin to have the qualities that you produce and how aligned we are as a global business. So that's a key part of what I do about managing risk. It's not just buying low, selling high, but how do we maximize margins with a global product line that we have.

And that's really speaking to the earlier comments of entrepreneurship and a number of facilities, getting 260 facility managers to agree on what's best for other Darling or the mothership is a challenge. Carlos is pulling that together. Examples of Bob talked to Brazil for you here that we're capacity down there. doesn't mean they stop killing animals. It's coming at you. We're having to run Saturday and then you're making lower grade quality fat because of the aging raw material and then here comes a Trump tariff. And so once again, the first like Carlos showed you is if you have to go back to animal feed, it's worth so much less than [indiscernible] and so that feed fuel arbitrage and trying to pull it together as a team is really what Carlos is doing around the world for us. Where do you want to go?

Matthew Blair from TPH. I have a few questions on the next data product line. First, I think you mentioned that clinical trials are now complete. Could you talk about the next steps here? What is the timing on new products look like? And how many partners are you working with -- and then second, for future Nextida products, I think you said that they would go into the cognitive space. Maybe you could talk a little bit about the opportunities there. And then finally, I'm not sure what slide it is, but there is a slide that shows 15% of EBITDA in 2030 coming from targeted ingredients. Is that -- is that the Nextida line? Or is that something else? You want to take that ship?

Yes. I mean I can answer your last question first. That is the implication. So when we talk about target ingredients, we are talking specifically about the Nextida portfolio of products. And then again, that's that if the gelatin margin is a factor of 1, the margin with those products is 7 to 11x. So if we can get 3% of our volume from those that it extrapolates out to 15% of EBITDA.

And for Nextida, we have completed an additional clinical study on that. So that is something that we are taking to our customers today. We're sharing that with them. That information it has validated the first study. So if you talked about the things that I mentioned in my presentation around the post-meal blood sugar spikes, the increase in the GLP-1 and then making you feel fuller for longer. That's been -- that work has been done. And so now we're sharing that with our customers. And we plan to have a new Nextida, I would say, every 18 to 24 months is the current road map in the cognitive space. is the next item.

Talk a little bit about the trajectory. I mean initial customers of Nextida GC repeat orders and what the pipeline looks like, maybe not quantity or whatever, but...

Yes. So I think one of the key KPIs that I'm looking at for the success of our sales business in this space is the number of repeat orders that we're getting. So the goal is we try to get this out into the customers and get as many seeds planted as we can, right, to have them launch products into the Nextida platform. And then we look to see where those reorders are coming, which means those SKUs are starting to be sold in the market. And we're starting to see that take place now this year. So that's really been positive for us that the success of GC, the glucose control product is picking up. And now I think that's just about us continuing to find those new customers and oftentimes, they're not the same customers that we've always been working with. So I mentioned earlier that we work with a lot of entrepreneurs, a lot of startups that are starting with us, and that's where our application labs come into play and help them solve those problems.

This is Dushyant from Jefferies. Just going back to that Slide I know that you guys have talked about the different levers in terms of contract management, price risk management. Could you maybe talk a little bit about what the time line is to get -- to start realizing that $150 million to $300 million? When can you start seeing that?

So Slide 50. We've been on that time line. I think if you were -- and again, if we were to go through a down cycle environment like we talked about. We don't -- we think our results would be better than what they look like the last time we went through that type of environment. So we're on that trajectory today. I think to get this additional $150 million to $300 million of EBITDA, assuming all other things equal, in terms of market environment, we think over the next 2 to 3 years that that's achievable.

It's $1 million a plant, when you put it into scale, it's very achievable.

Jason Gabelman from TD Cowen. It looks like a lot of your growth is focused on margin expansion. Obviously, this slide in the collagen and target ingredients opportunity as well. But you also talk about the volume growth you're seeing in Brazil and East Asia as well. So how much do you think about upside from additional capacity expansions or other volume opportunities? Where does that factor into the plan? And maybe kind of tied to that. You went through some of the large acquisitions you've made in the past once again, you're seeing a lot of volume growth in some of your core markets. Are there large packages out there still of things you would like to own as you look into the future and the balance sheet kind of improves over the next couple of years?

No, it's a good question. And I told Bob, I said, "I'm going to have a group of people that are out here that might know that every time I get a little extra cash in the cookie jar, I go buy something. I don't I know the world pretty well out there. We know the world pretty well. What we've identified as a management team, a global management team is 25 to 30 really targeted specific opportunities to grow. It's pretty simple on the next tie product line to see that. It's pretty simple to see the Decendrelo growth, what that will help with and give us a platform there. I just approved expansion in Paraguay. I've approved an expansion into winze, China that's in David's business, and that's because we're out of capacity. We're seeing the same thing in Brazil. There's no less than a half a dozen plants in the U.S. right now that have to expand over the next 3 to 5 years. Why do we say 3 to 5, why not the month? Permitting is 1 year, construction is about 1.5 years and then half a year of commissioning. So that's what we're looking at. It doesn't -- but we're also limited in resources. And what I mean by that, there's anybody out here that does this. And when I say this, this is construction. So we build our own equipment. We do our sites permitting for wastewater and air is just -- it's a process. And so ultimately, we've got some onesie-twosies. We call them tuck-in acquisitions out there. We've still got some aging families that are facing the same environmental hurdles we do that they've got to decide whether they want to stay in or not. I think that's true in the U.S.A. That's true in North America. It's true in Eastern Europe. I didn't think I'd be talking about moving east into Europe, but we are. South America, there's 1 or 2 that tuck-ins that could be bought that have 2 or 3 plants, but there's no 18 or 20 plant systems left out there. So I don't see anything. The SAF decision -- it's engineered for out there if that market continues to grow, we'll see. So the portfolio is there, but I just want to articulate to what Bob and we've got the team focused over the last couple of years disciplined capital allocation, fancy word for saying spending money where we needed to spend money, we know very much from history that if we don't reinvest, you have real problems in this business. That happened in a couple of places. They decided to capital, not we leave those decisions down there. I can't tell you if you need to replace an air condenser in [indiscernible] Texas or the wastewater is at limits. Those are things that that we kind of work through when they happen. But -- so we're playing a little defense there, we'll clean that up. But ultimately, we know what it takes to maintain the business. The flexibility is -- do we feel a little bit of that off and keep reinvesting? We have to for our customers today. I mean we woke up here a month or 2 ago, something that we've known for years, but the chain speed of the chicken plant. That's how quick the birds hung and goes by to be deboned, if you will, or cut up. They just gave us another 25%, 30% speed, [indiscernible] give us any more rendering capacity. Now now it takes -- that doesn't happen tomorrow. You got to build that feed mill, you got to build the hatchery. -- and then you got to have the labor and all of that in place. So -- but that's what we're talking about. And we just see -- and Bob, you want to clean up my mess that I just started.

That's pretty good. I mean maybe Sean, if you go to -- I think it's Slide 5, maybe 8 or so, -- and I just kind of highlight some of these -- the 1 right before that. Yes, some of the growth opportunities. And like Randy said earlier, we are focused on organic growth -- we've got massive growth in the poultry sector in the United States. We're going to need more capacity. The cheapest way to add per metric ton of vintage capacity is to expand a plant when you've got wastewater treatment capacity available. Beyond that, we may have to build a plant. And so greenfielding a few things here and there is probably in order. Similarly, in Brazil, we may need to greenfield or consolidate. We've got with the Fasa acquisition, not all rendering plants in that acquisition were made equal. And the bigger ones are more efficient. And so we have an opportunity to increase scale and consolidate, collagen is a similar story. So I think that's really the focus and then the tuck-in acquisitions.

We are in a very different world than we were at the start of this year. Your partner is actually making high cetane diesel and sending it all across to Europe to make most profits. What I'm trying to get to is that -- is there an inherent demand pull on renewable diesel in the U.S. market to offset the amount of ultra low sulfur diesel we are exporting. And then globally, 6 million barrels of refining capacity is off-line. So you're not even making that macular deals allowed there. So can U.S. actually fulfill some of its transportation needs by making more renewable diesel, just because there's not much ultra-low-sulfur diesel out the spare?

I could start. But look, I'm glad you brought that up, Manav. I mean, the value proposition for renewable diesel and quite frankly, ethanol as well has never been stronger, I don't think, than what we're experiencing today. Imagine a world where we took out 6% of the diesel supply in the United States and 10.5% of the gas supply. Prices would be a lot higher than where they are today. So ultimately, the cost of production and competitiveness and all that it matters a lot less when you really understand what the impact of the lack of that supply would have. Specifically, I want to talk just a little bit about the conflict and what that's done for the business because I think a lot of people jump to the conclusion that, oh, the margins are great because oil prices are so high. And if that changed, it wouldn't be that great. Well, we always expected the margins that we're seeing today that we would see those margins because of the renewable volume obligation that we got. What we didn't necessarily expect is that it would happen so quickly because we expect that it would happen when there's ultimately compliance dates that require the buying of RINs so that we have convergence between actual demand and supply. What this conflict has done is it's somewhat bridge that gap, and it's gotten us there and it sort of highlighted the value proposition of those fuels. I think the answer to your question is yes. We can do a lot for this economy and fill in a lot of gaps, and we're seeing that all around the world. Carlos, I don't know if you.

I think you cover very well and is what I tried to allude right now, renewables are very attractive, not only in the U.S. and the rest of the world because of what's going on. They're an attractive option of inclusion.

I mean that's -- I think Carlos set it up there and maybe renewable diesel made at Diamond diesel today is cheaper than fossil diesel in Denmark and the continent. I mean who would have thought that? And so that's what that's doing is dislocating capacity, keeping at home versus here and trying to pull from here now.

Okay. Ben? Just maybe adding on to Manav's question. How has the response been just on the supply side to is everything running full out now? And just how does that impact the next short term, I guess, until more capacity comes back online?

I would say it's been gradual, but as Bob alluded to, we expect kind of a gradual increase in margins. But what's going on in the Middle East and Iran has accelerated that. So I think, obviously, -- there's some biodiesel plants that were not operating. Eventually, our margins stay up here. They're going to have to come online. There's too much incentive to be idle. And that's what we said by 2027, there's probably more capacity that does come online and the plans that are operating, we're probably operate as much as they can for as long as they can. -- as people get used to running plants, they get better as well. And those marginal increases when you aggregate everything creates higher supply.

But I don't think, Ben, I don't think it's going to restart investment in the Houston Ship Channel and the $9 billion of plants that were planned down there. So clearly, the [indiscernible] plant coming on in Rotterdam is '27 sometime, Shell is trying to sell their Rotterdam, whatever is there and BP abandoned RD business.

Jeff Gates from Gates Capital Management. We appreciate your commitment to finally deleverage the company in an up cycle. I think the market appreciates that as well. But I'm wondering on the operational side, are there businesses that you might consider exiting that aren't integrated that would reduce the commodity volatility in the next down cycle.

I want to take that. Yes. I mean, look, it's not by accident that we focus today's presentation very much on rendering used cooking oil and collagen. I think Darling has been a very successful company. Certainly, the investment in Diamond Green Diesel, like I talked about, has generated a lot of cash. It's given a lot of opportunities and options -- there was some experimentation kind of getting into ancillary businesses and doing some things. And what we look back and see is that when we stick to our core, we're really successful. And we've got some other businesses that have been successful, but maybe they aren't as strategic. In our last K, we made it clear that we've got some assets that are held for sale in the queue that went out last friday, we announced that we sold the majority of our trap business for $90 million. And so that's a good example of of a business that we didn't -- we were good at and generated some decent EBITDA. But quite frankly, that becomes a financial transaction, if it makes sense relative to expected returns. And so -- we've got some more of those kinds of opportunities that we think could generate some cash. When you look at the expected cash generation for the next 5 years, it's not necessarily extremely material. It's nice. But it's more of the focus and the lack of distraction. And I think that we've got a couple more of those types of things.

Just wanted to clarify again on the operational improvements in the feed business that you articulated. Is that embedded in those assumptions? Or does it change kind of the fat prices that you would need? -- to get there? And then my other question is just on the priority uses of cash. I guess, where does M&A actually kind of like stack up? I know you said you'll evaluate that as you get there, but you'll have a lot of cash is -- it was listed first. Is it the #1 priority? I guess how do you kind of tick off the cash use priorities.

So first question first, those assumptions are not really built into the mid-cycle. We're kind of -- that was more of a bit of an as is take where we are today pay down debt to $3 billion, what does it look like kind of a mid-cycle. If we get continued improvement from the Feed segment then that should change the outlook of that. As far as cash priorities, Again, I think what we want to be really clear about is that we want to get our debt down to $3 billion or below. And that has been our focus. Randy has referred to it as an M&A holiday. You can see it with the history of where we managed our capital -- once we get to that point, it's going to depend upon the outlook. I would say this, though. We want to continue to maintain a strong balance sheet with a great leverage ratio. That's always important in a business that is subject to commodity market forces. So that's critical. Second, we recognize that our peers are doing things with -- related to shareholder value initiatives that -- now where we are as a company, we need to consider. And so we're going to evaluate that, and that's a priority to take a serious look at that. That's a discussion with our Board, and we'll evaluate that. And then I think the next priority is really on some of these organic investments that we have. In order for 1 plus 1 to equal 3, it's really to round out this infrastructure that we've built and make it more and more efficient. We can either do that by investing in image capacity per metric ton at a lower cost because we're expanding something or there's just a lower cost way to do it with the existing infrastructure or there are commercial synergies because of the location that we have, the contracts we already have in place, the commercial destinations we can serve. And so we want to really take advantage of the low-hanging fruit that's been created by buying and building out the global network that we have.

Yes, Andrew, Bob says it so eloquently. And the reality is we are the buyer of last resort in the M&A world. We started the presentation with the foundation is built value to be unlocked. And clearly, organic investment now as we optimize our global footprint is a far better return -- the challenge with it is you got to -- you got to start now, and it's got to be continuous because the capacity gets added, not rendering or rose low capacity in the meat production business just doesn't ever stop right now.

One of the most defined uses of cash that you outlined is the transition from Gelatin to collagen within the food ingredients business. And to help demonstrate that, could you give us an idea of per ton or per facility CapEx and research and development intensity for that growth and expansion.

You want to take that, Bob.

Okay. So per ton, it's probably lower than you might expect. And so look, I will -- before I answer the question, I will say this, that we continually ask ourselves if there's an opportunity to invest more capital to accelerate the rate of development of these products and the innovation of these products. the cost per metric ton annually that we put back to the business is -- I mean I want to -- it's -- I don't want to be 1 digit off. So I'm just going to run the math quickly it's roughly $100 a ton.

I wanted to follow up on the market scenarios that you outlined, maybe a 2-parter there. Can you talk a little bit about some of the macro assumptions that are running into your adjusted EBITDA per gallon? And then also notably, -- as we think about the capital spend in each of those scenarios right now looks pretty constant. But can you talk about how you would think of adjusting that in those different environments?

That's a fair -- it's a fair question. I think certainly, in an up cycle type of an environment, we might be a little more aggressive about CapEx. But I think what we wanted to show with this slide is -- what's that maintenance CapEx obligation that we feel in order to keep our assets running in top shape, what is it that we need to do? And honestly, when it comes to this kind of CapEx, maintenance CapEx, we're committed to keeping our assets at a darling level condition irrespective of the cycle that we're in. So there isn't a lot of fluctuation there. I would say maybe there's more investment in some newer innovation things or some -- we might try some things, more additional things that we may not do in an environment where we're trying to be lean, but there isn't a big difference as far as that goes. As far as the Diamond Green Diesel environment that kind of gets us to $0.92 versus $1.50, at the end of the day, it's very hard to predict. I mean I can't sit here today and tell you where our margin is going in the renewable diesel industry in the next 1.5 years, even though we've got an RVO that's clear because there's just so many uncertainties still around what's the industry's ability to make product and how much are they going to make and what are imports going to be like and what are other markets outside of the United States is going to be. There's a lot of questions there. But this just assumes a a reasonable RVO with reasonable production obligations in the United States from both the renewable diesel sector and the biodiesel sector. And our understanding of where Diamond Green Diesel's margins are when a reasonable amount of biodiesel production needs to exist in the United States, and we kind of back into this sort of a scenario.

Yes. I think it's another little macro point that's out there. I think the world learned here in the last 30 days in the Iranian conflict, how fragile the S&D still is in global fossil. And so the -- while the narrative on climate change and green may have moderated, I think a little bit of a wake-up call here that where green fuels need to play a role in the portfolio going forward. That is reassuring to me because the longer you listen to our President, the more you thought all these programs were going to be dead even though we knew that the RVO is farm policy. So the 28 cycle is the one. If you think of what could happen in the EPA right now, where is Lee Zeldin going to be as he taking Bonnie's job where his 2 lieutenants that did the program are going back to the private sector. So now we start over then with legacy staff. But I don't think they ever go -- they've proven they never go backwards to to what they've done for the farmer here. And clearly, the whole world woke up when you realize you're not exporting soybeans to China. So it looks pretty solid. But once again, just to Bob's comment on on the down cycle. I mean as we talked in the boardroom, and we could roll the movie back 3 years and show you charts that said Darling stock was never going below 600 again and Diamond Green Diesel would never have margins below $0.80 a gallon, Boy, were we wrong. And at the end of the day, we hit a couple of cycles there. So the down cycle here is actually what the business ran pretty much last year. And that was with no RVO out there, and that was with some plant problems around the world that have all been fixed. So that's why we -- Bob said it's not worst case, it isn't, but it feels pretty solid. And then we should get uplift from there with the new products and then clearly, an improved biofuel environment globally.

Pooran Sharma from Stephens. It sounds like you qualitatively took up your guidance on the business. April sounds really good. Does that mean we've started to see imports roll in now? Or do we need some more margin to see that?

You guys want to take that?

And you're talking about renewable fuels renewable fuels. Sorry. Do you want to talk about that? I'm happy to join.

[indiscernible] ports for sure, are coming in. And to an extent, renewable fuel should come in. It's it's a margin environment that will drive that. So I think is -- and obviously, the data that we have today is as of March, right? So there's -- it was right when the RVO was getting implemented. So the the actual import data is not out there. So -- but imports, especially for feedstocks are taking place.

Yes. I would just say, I think if you take a look at -- so bring in the Bloomberg team's numbers imports for the S&D we need to accelerate that relative to where we are today. And it would suggest either margins need to get better here for that to happen or they need to get worse somewhere else where that product is otherwise going. And so we do think there's continued uplift opportunity there.

If we can go back for the fifth time to Slide 57, where you show the different scenarios? So this shows, even in a down cycle, you're generating very healthy cash flow. Well something that you've demonstrated over the last 2 years. So we appreciate and understand the commitment to deleveraging before considering your alternative uses of cash. But once we're through that, what would prevent you from initiating a dividend resuming larger share repurchases because this math would say even in very difficult industry conditions, you can afford to pay $1 to $2 a share dividend. And then my second question -- on the $150 million to $300 million of upside in fee earnings as you reprice your contracts over time. Should investors think about that as a onetime reset? Or should longer-term investors think about this as a business that can compound earnings over time as you offset inflation?

I'll take the first part of that, Bob, and then I'll give you the second part of that. It comes down to 1 word, Jackson, confidence. And our ability as a management team to stand in front of our Board and have the same discussion we're having with you today and to get them comfortable. And I'm telling you, from my standpoint, the last -- the meeting just wrapped up last week, the confidence level is much greater. It was kind of -- I think the verbiage was, we're from Missouri, show me, -- and so it gives us a whole different narrative. What we wanted to show you was, that's possible now exactly what you said and articulated. Bob's I'm a less than $3 billion guy, and there's nothing magical about that. But and you look at the mid-cycle and up cycle this year, you're going to blow past that is kind of what's underneath it. So it gives the Board the chance. And then we kind of kind of wait the way the -- what do we have in the pipeline? Do we have to invest 3 new plants can we do it all? And I think the answer is the flexibility to do it all is way different than it's been in the past.

We go back to the return on replacement value slide, and I appreciate the question, Jack. So I think there's some of this that's sort of a onetime improvement. I mean that's certainly when it comes to the operational efficiency, the commercial optimization. As we sort of figure out what the best destination markets are for our products, and we're hitting all those and we're mixing and blending and optimizing and all that. I mean, you get to a point when you've maximized what you can do, and that's sort of what that $150 million to $300 million speaks to -- but you bring up a point that I didn't emphasize probably enough and that is even more important, and that is because of the competitive dynamics that I explained earlier, talking about the high moisture and raw materials and comparing it to oilseed crush in China in 2011 to '12. This business, essentially, if it's run well and we're disciplined about the way we operate it, it acts as an inflation hedge against the cost of construction. And the nice thing about that and maybe the power of that doesn't jump out on the slide because we don't have actual numbers on there. But as EBITDA increases dollar-for-dollar cash increases. So that's exciting. That means the numerator in the calculation on returns is increasing. And when we compare that on an invested capital basis against book value of assets, the denominator is decreasing. And so while we want to get to an appropriate return on replacement value and stay there and stay there even as we live through a more and more inflation in the future, the implication there is that on assets that we've acquired in the past -- we are going to be significantly accelerating return on invested capital. That's -- that doesn't come out in this slide, but you gave me an opportunity to say that. So I appreciate it. But I don't think that a lot of agriculture-based, commodity-based businesses are able to say that about their business.

I guess I'll close it up. And as we started the foundation built, the futures unlocked. I showed you values, core values, there were 2 that I left off, and I'll leave you with a smile here. It's called Family and fun. Bob and I are both honored to have our children in the back of the room today. Bob was also given a challenge today by his daughter that if he could sneak in a line, I would pay him $100. And I believe you heard something about the Pink Pony club. That was a bet. So the values carry forward, and there's nothing more honoring than to have you guys and our children in the audience today, and thank you for your trust and support in Darling Ingredients.

For those of you here with us in New York, we do have lunch available for you. Feel free to grab some and come back in here.