Valvoline Inc. · NYSE:VVV
Valvoline — Q2 2025 Earnings Presentation
25 slides from Valvoline's earnings presentation, May 8, 2025
Slide 1: Second Quarter Fiscal 2025 Earnings
Second Quarter Fiscal 2025 Earnings Lori Flees, CEO & President Mary Meixelsperger, CFO Elizabeth Clevinger, Investor Relations 05.08.2025
Slide 2: Safe Harbor: Forward-Looking Statements
SAFE HARBOR Forward-Looking Statements Certain statements herein, other than statements of historical fact, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include, without limitation, statements about the
Slide 3: 2Q 2025 Key Highlights
2Q 2025 KEY HIGHLIGHTS1 $826M 5.8% System-wide Same System-wide Store Sales2 Store Sales2 Growth 11% $403M 33 Net Store Additions Net Sales 15 Franchise; 18 Company 11%3 $104M 2,078 Adjusted EBITDA4 System Locations2 6%3 8% $0.34 Kevin Willis Adjusted EPS4 Joins as CFO on 05/19 3%3 1. All comparison
Slide 4: Current Tariff Assessment
CURRENT TARIFF ASSESSMENT1 LUBRICANTS ANCILLARY PRODUCTS- OTHER FILTERS, WIPERS • Base oil: currently exempt from • Most sourcing already shifted out of • Minimal impact to construction tariffs China to lower tariff base countries materials and equipment • Additives: most expected to be • Continuing
Slide 5: Valvoline Well Positioned to Continue to Win in a Resilient Industry
VALVOLINE WELL POSITIONED TO CONTINUE TO WIN IN A RESILIENT INDUSTRY • Valvoline operates in an industry Miles Driven Vehicle Age Vehicle ICE / Hybrid Shift to Market Resilient with strong fundamentals and Cohort Complexity Vehicles in Operation Convenience Fragmentation Industry resilient long-term
Slide 6: Strategic Priorities
STRATEGIC PRIORITIES Long Runway For Delivering Shareholder Value DRIVE FULL POTENTIAL ACCELERATE NETWORK TARGET CUSTOMER & FOR OUR CORE BUSINESS GROWTH SERVICE EXPANSION Quick, Easy, Trusted 05.08.2025 || Second Quarter Fiscal 2025 Earnings 6
Slide 7: Accelerating Network Growth - Refranchising Impact
ACCELERATING NETWORK GROWTH - REFRANCHISING IMPACT Refresher on refranchising: Gross Store Additions1 • Refranchising transactions executed at a present value higher than current EBITDA trading multiple through sale 250 price as well as future franchise revenue from existing and committed new store
Slide 8: Q2 Financial Performance
Q2 FINANCIAL PERFORMANCE Quick, Easy, Trusted 05.08.2025 || Second Quarter Fiscal 2025 Earnings 8
Slide 9: 2Q 2025 Top-Line Performance
2Q 2025 TOP-LINE PERFORMANCE1 Net Sales Growth ($, Millions) +11.0% 389 403 363 150 net new system-wide stores YoY 2Q 2Q 2Q 2024 2024 2025 Premiumization, net pricing, and NOCR RECAST 2 service penetration all contributed to System-wide SSS Growth ticket growth +14.0% 2-year Stack 8.2% Continued tra
Slide 10: 2Q 2025 Financial Drivers
2Q 2025 FINANCIAL DRIVERS1 Gross Margin SG&A Expense Adjusted EBITDA as a % of Net sales as a % of Net sales as a % of Net sales 30 bps decrease YoY 150 bps increase YoY 110 bps decrease YoY 37.6% 37.3% 36.9% 19.6% 19.3% 27.0% 17.8% 25.9% 24.8% 2Q 1Q 2Q 2Q 1Q 2Q 2Q 1Q 2Q 2024 2025 2025 2024 2025 202
Slide 11: 2Q 2025 Profitability
2Q 2025 PROFITABILITY1,2 Adjusted EBITDA Adjusted Net Income Adjusted EPS ($, Millions) ($, Millions) 6% increase 3% increase 3% increase 105 99 104 43 44 $0.34 $0.33 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2024 2024 2025 2024 2025 2024 2025 RECAST RECAST RECAST 1. For a reconciliation of adjusted amounts to amounts r
Slide 12: 2Q 2025 Reporting Highlights
2Q 2025 REPORTING HIGHLIGHTS Balance Sheet Highlights • Debt increased $44M during the quarter (Millions) 2Q25 Cash & Cash Equivalents $61.9 • Target leverage ratio of 2.5 – 3.5x on a rating agency Total Debt $1,075.7 adjusted basis; at ~3.4x as of end of the quarter Cash Flow Highlights (Millions)
Slide 13: Quick, Easy, Trusted
Resilient business model built to 1 deliver growth even amid uncertain macro environment 2 Expect minimal impact from uncertain tariff environment in FY25 3 Reaffirming guidance for FY2025 Quick, Easy, Trusted 05.08.2025 || Second Quarter Fiscal 2025 Earnings 13
Slide 14: Quick, Easy, Trusted
Quick, Easy, Trusted 05.08.2025 || Second Quarter Fiscal 2025 Earnings 14
Slide 15: Fiscal Year 2025 Guidance
FISCAL YEAR 2025 GUIDANCE FY25 Outlook Same Store Sales1 Growth % 5% — 7% System-Wide Store Additions1 160 — 185 Net Revenues $1.67B — $1.73B Adjusted3 EBITDA $450M — $470M Adjusted3 EPS $1.57 — $1.67 Capital Expenditures $230M — $250M Share Repurchases2 $40M — $70M 1. For a discussion of management
Slide 16: Retail Services – Q2 System Results
RETAIL SERVICES – Q2 SYSTEM RESULTS (Preliminary and unaudited) Three months ended Six months ended March 31 March 31 2025 2024 2025 2024 Sales information System-wide store sales - in millions (a) $ 825.5 $ 746.1 $ 1,645.8 $ 1,469.0 Year-over-year growth (a) 10.6 % 13.1 % 12.0 % 12.7 % Same-store s
Slide 17: Retail Services – Store Information
RETAIL SERVICES – STORE INFORMATION (Preliminary and unaudited) Company-operated Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter 2025 2025 2024 2024 2024 Beginning of period 932 950 937 919 895 Opened 12 15 26 12 14 Acquired 6 6 10 6 10 Net conversions between company-operat
Slide 18: Reconciliation of Non-GAAP Data – Income from Continuing Operations & Diluted EPS
RECONCILIATION OF NON-GAAP DATA – INCOME FROM CONTINUING OPERATIONS & DILUTED EARNINGS PER SHARE (Preliminary and unaudited) Three months ended Six months ended March 31 March 31 (in millions, except per share amounts) 2025 2024 2025 2024 Reported income from continuing operations $ 38.3 $ 43.3 $ 13
Slide 19: Reconciliation of Non-GAAP Data – Q2 Adjusted EBITDA
RECONCILIATION OF NON-GAAP DATA – Q2 ADJUSTED EBITDA (Preliminary and unaudited) Three months ended Six months ended March 31 March 31 (in millions) 2025 2024 2025 2024 Reported net revenues (a) $ 403.2 $ 388.7 $ 817.5 $ 762.1 Adjusted EBITDA - Continuing operations Income from continuing operations
Slide 20: Reconciliation of Non-GAAP Data – Adjusted SG&A & Operating Income
RECONCILIATION OF NON-GAAP DATA – ADJUSTED SG&A & OPERATING INCOME Three months ended March 31 Selling, general and administrative expenses Operating income In millions - preliminary and unaudited 2025 2024 2025 2024 As reported $ 86.3 $ 72.3 $ 66.9 $ 76.4 Key items: Net legacy and separation-relate
Slide 21: Reconciliation of Non-GAAP Data – Free Cash Flows
RECONCILIATION OF NON-GAAP DATA – FREE CASH FLOWS (Preliminary and unaudited) Six months ended (In millions) March 31 Free cash flow (a) 2025 2024 Operating cash flows from continuing operations $ 93.2 $ 92.1 Adjustments: Additions to property, plant and equipment from continuing operations (105.4)
Slide 22: Consolidated GAAP Income Statement
CONSOLIDATED GAAP INCOME STATEMENT (Preliminary and unaudited) Three months ended Six months ended March 31 March 31 (In millions, except per share amounts) 2025 2024 2025 2024 Net revenues $ 403.2 $ 388.7 $ 817.5 $ 762.1 Cost of sales 252.7 242.5 514.1 481.1 Gross profit 150.5 146.2 303.4 281.0 Sel
Slide 23: Use of Non-GAAP Measures
USE OF NON-GAAP MEASURES This presentation includes the following non-GAAP measures: Adjusted operating income; adjusted operating margin; adjusted selling, general, and administrative expenses; adjusted selling, general, and administrative margin; EBITDA, adjusted EBITDA, and adjusted EBITDA margin
Slide 24: Use of Non-GAAP Measures, Continued
USE OF NON-GAAP MEASURES, CONTINUED Refer to the below for descriptions of the key items that comprise the adjustments which depart from the computations in accordance with U.S. GAAP: Net pension and other postretirement plan (income) expenses: Includes several elements impacted by changes in plan a
Slide 25: Key Business Measures
KEY BUSINESS MEASURES Valvoline tracks its operating performance and manages its business using certain key measures, including system-wide, company-operated and franchised store counts and system-wide SSS and store sales. Management believes these measures are useful to evaluating and understanding