Darling Ingredients NYSE: DAR used its 2026 Investor Day at the New York Stock Exchange to outline a stronger operating outlook, renewed confidence in its renewable diesel joint venture and a capital allocation plan focused first on debt reduction and then on broader shareholder-return options.
Chairman and CEO Randy Stuewe said the company has spent the past several years building a global platform through acquisitions and investments in rendering, collagen and renewable fuels. He said Darling has also been working through policy and commodity headwinds, integrating recently acquired assets and improving operations across its more than 260 facilities.
Stuewe said the company is now seeing a materially stronger start to the second quarter than it had expected when it last reported results. In response to a question from JPMorgan analyst Tom Palmer, Stuewe said April was “materially stronger” than prior expectations, driven by higher prices, strong volumes, fuel demand and margins. He said May should be better than April, while noting that some seasonal moderation typically occurs in the third quarter.
Renewable diesel outlook improves after RVO
Carlos Paz, executive vice president of renewables, North American specialties and global risk management, said Darling’s Diamond Green Diesel joint venture remains a central part of the company’s value proposition. He said Darling’s early investment in Diamond Green Diesel helped transform waste fats from a market historically driven by feed demand into a higher-value global renewable fuel feedstock.
Paz said Diamond Green Diesel has produced positive cash flow since its first year of operation and now produces roughly 1.2 billion gallons of renewable diesel, including 235 million gallons of sustainable aviation fuel. He said the business benefits from flexible logistics, large-scale pretreatment capabilities and access to global feedstock markets.
Management highlighted the Renewable Volume Obligation, or RVO, as a major policy tailwind. Paz said the 2026 and 2027 annual demand requirement is 5.4 billion gallons, compared with 3.35 billion gallons a year earlier. He said the new RVO “favors definitely domestic feedstocks,” which supports Darling’s core rendering and used cooking oil businesses.
Paz said Diamond Green Diesel is operating at high capacity utilization in what he described as an attractive margin environment. He added that the U.S. should become a “high price island” for renewables, meaning imports should come to the U.S. and exports should remain limited. In the question-and-answer session, Paz said supply-side response to the RVO has been gradual, but sustained margins should encourage idle biodiesel capacity to return.
Collagen business targets wellness growth
David Van Doorslaer, executive vice president of sales and marketing for Rousselot, said collagen has shifted from a niche category focused on hair, skin and nails into a broader wellness ingredient. He said global product launches containing collagen have risen from about 600 in 2016 to more than 1,800 today, with 50% growth over the past three years.
Van Doorslaer said Rousselot is positioned to benefit from wellness trends including preventive health, “food as medicine” and demand for protein. He highlighted the company’s application labs, which work with large multinational customers as well as startups developing new collagen applications.
Management also focused on Nextida, which Van Doorslaer described as a platform rather than a single product. The first product, Nextida GC, is focused on glucose control. Van Doorslaer said it is designed to reduce post-meal blood sugar spikes, naturally increase the body’s GLP-1 response and help consumers feel fuller longer. He said an additional clinical study has been completed and validated the first study, and the company is sharing that data with customers.
Bob Day, executive vice president and chief financial officer, said targeted ingredients such as Nextida have significantly higher margins than traditional gelatin. He said if Nextida products represent 3% of collagen volume, they could represent 15% of EBITDA in the collagen business. Van Doorslaer said the company’s current roadmap calls for a new Nextida product every 18 to 24 months, with the next focus in the cognitive health space.
Darling also discussed its planned joint venture with Tessenderlo Group, under which Darling would contribute Rousselot and Tessenderlo would contribute PB Leiner. Stuewe said the transaction remains under antitrust review and that the company hopes to close it this summer.
Debt reduction remains near-term priority
Day said Darling’s raw materials that generate 98% of adjusted EBITDA come from animal byproducts and used cooking oil. He described the company as an essential service that processes more than 100 million metric tons of supply globally while creating value-added products for feed, food and fuel markets.
Day said the company funded acquisitions including Valley Proteins, FASA and Gelnex with cash flow and debt, expecting to reduce debt quickly. However, a down cycle in 2024 and early 2025 slowed that process. Even so, he said Darling generated positive cash in those years, and based on the first-quarter 2026 run rate, it is poised to generate more than $800 million in cash in 2026.
Day said a scenario that assumes $700 million of debt paydown would bring total debt close to $3 billion by year-end and leverage below two times. He said Darling’s plan is to pay down a $500 million bond maturing in April 2027, either with cash or revolver capacity, after which the company would have no maturities until 2030.
Management said the company is committed to reducing debt below $3 billion and maintaining leverage below 2.5 times even in a down-cycle environment. After that, Day said Darling could evaluate additional debt reduction, share repurchases, dividends and organic growth investments.
Feed segment improvements and capital allocation
Day said Darling sees opportunities to improve implied return on replacement value across its rendering and used cooking oil assets, particularly following the Valley Proteins and FASA acquisitions. He said operational efficiency, commercial optimization, contract management and market conditions could support an additional $150 million to $300 million of EBITDA from the Feed segment over the next two to three years.
Stuewe said the company is not focused on large-scale M&A and described the current period as an “M&A holiday.” He said Darling has identified 25 to 30 targeted organic growth opportunities, including expansions in Paraguay, Wenzhou, China, Brazil and the U.S. poultry network. He said permitting, construction and commissioning mean many capacity projects take roughly three years to complete.
Asked what could prevent the company from initiating a dividend or larger share repurchases after deleveraging, Stuewe said the issue is “confidence” in the outlook and in the company’s ability to present that outlook to the board. Day said Darling now has more flexibility than in the past because major strategic pieces of the platform are in place.
Day said Darling is positioned to generate $4 billion to $6 billion in cash over the next five years in mid-cycle to up-cycle scenarios. In a down-cycle scenario, he said the company would still generate more than $2 billion over that period.
About Darling Ingredients NYSE: DAR
Darling Ingredients Inc NYSE: DAR is a global leader in converting edible and inedible bio-nutrient streams into sustainable food, feed ingredients, renewable fuels and specialty products. Founded in 1882 and headquartered in Irving, Texas, the company builds on more than a century of experience in animal rendering and by-product recycling. Over time, Darling has expanded its capabilities beyond traditional rendering to include advanced processing technologies that support a circular economy and reduce waste from food and agricultural industries.
The company's core operations revolve around four primary segments: Feed Ingredients & Services, Food & Nutrition, Fuel Ingredients & Services, and Specialty Ingredients.
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