Valero Energy Corporation · NYSE:VLO
Valero Energy — Q1 2025 Earnings Presentation
61 slides from Valero Energy's earnings presentation, Apr 24, 2025
Slide 1: Leading Producer of Liquid Transportation Fuels
Leading Producer of Liquid Advancing the Future of Energy Transportation Fuels • With Capital Discipline, Innovation and Unmatched Execution C A P I TA L D I S C I P L I N E I N N O VAT I O N U N M AT C H E D E X E C U T I O N I N V E S T O R P R E S E N TAT I O N | M A R C H 2 0 2 5
Slide 2: Cautionary Statement
Cautionary Statement This presentation contains forward-looking statements made by Valero Energy Corporation (“VLO” or “Valero”) within the meaning of federal securities laws. These statements discuss future expectations, contain projections of results of operations or of financial condition or stat
Slide 3: Leading Profitable Producer of Low-Carbon Transportation Fuels
LEADING PROFITABLE PRODUCER OF LOW-CARBON TRANSPORTATION FUELS REFINING RENEWABLE DIESEL ETHANOL WORLD’S PREMIER INDEPENDENT DIVERSIFYING INTO HIGHER GROWTH, DEVELOPING PROJECTS TO CREATE A REFINER HIGHER MARGIN SAF HIGHER VALUE ETHANOL PRODUCT GROWTH PROJECTS FOCUSED ON COST CONTROL, OPTIMIZATION A
Slide 4: Demonstrated commitment to capital discipline, innovation and unmatched execution
Demonstrated commitment to capital discipline, innovation and unmatched execution Operations Earnings Growth Capital Discipline Excellence Steadfast in the Unmatched Execution with a Proven Growth Through Innovation Demonstrated Commitment to execution of our History of Operations Excellence Stockho
Slide 5: Premier refining portfolio found resilient in carbon-constrained scenario
SIZE, SCALE AND GLOBAL REACH LOWEST COST PRODUCER DISCIPLINED INVESTMENTS EXTENSIVE CONNECTIVITY AND GLOBAL OPTIMIZATION RELIABLE TOP QUARTILE OPERATIONS GROWTH WITH LOWER VOLATILITY PREMIER REFINING PORTFOLIO INDEPENDENTLY FOUND TO BE RESILIENT EVEN IN A CARBON-CONSTRAINED SCENARIO(1) Long-term, su
Slide 6: High operational and supply flexibility coupled with low cost operations
High operational and supply flexibility coupled with low cost operations are driving profitability through-cycle Refining Segment Cash Operating Expenses Refining Segment Adjusted EBITDA Per Barrel of Throughput Per Barrel of Throughput (excludes turnaround and D&A expenses) (excludes turnaround exp
Slide 7: Improving margin capability through refining optimization and growth projects
Improving the margin capability of our portfolio through disciplined refining optimization and strategic growth projects St. Charles Fluid Catalytic Cracker (FCC) Optimization Select Refining Optimization and Strategic Growth Projects ($ in millions) • Project is estimated to cost $230 million and e
Slide 8: Leadership in low-carbon renewable fuels underpinned by high returns
Leadership in low-carbon renewable fuels underpinned by high economic returns DGD Renewable Fuels Capacity Renewable Diesel Realized Cash Flow Profile (million gallons per year) ($ in millions) 1,220 1,220 $2,957 million cumulative EBITDA(1) 20 50 $1,986 million cumulative Capex(1) $3,000 235 235 Re
Slide 9: Expanding competitive advantage with sustainable aviation fuel
Expanding our competitive advantage with sustainable aviation fuel (SAF) DGD Port Arthur SAF Project • Large-scale SAF project at the DGD Port Arthur plant was completed in the fourth quarter of 2024 − The plant has the capability to upgrade up to 50% of its current renewable diesel production capac
Slide 10: Developing paths to reduce carbon intensity of ethanol business
Developing economic paths to further reduce the carbon intensity of our ethanol business • Connecting to Summit Carbon Solutions’ large-scale carbon capture and storage project o Valero is expected to be a shipper with eight ethanol plants connected to the carbon capture system, representing approxi
Slide 11: Refining business generates significant cash to support growth and returns
Refining business generates significant cash to support growth and stockholder returns Sources and Uses of Cash – Cumulative: December 31, 2014 to December 31, 2024 ($ in billions) Sources of Cash Uses of Cash $61.1 ($22.8) Sustaining capital ($14.5) Growth capital ($7.1) Acquisitions ($1.2) ($34.5)
Slide 12: Disciplined capital allocation is a constant in our strategy
Disciplined capital allocation is a constant in our strategy 1 Maintain a Strong Balance Sheet Maintain an investment grade credit rating Target 20% to 30% net debt-to-cap ratio 2 Non-discretionary Sustaining Capex Dividend • Target approximately $1.5 billion annually • Commitment to stockholders •
Slide 13: Steady investments to maintain asset base and enhance margin capability
Growth capital Steady investments to maintain our asset base and investments underpinned by a 25% unlevered enhance the margin capability of our portfolio after-tax IRR hurdle rate Annual Capital Investments Attributable to Valero Growth Capital Investments Attributable to Valero ($ billion) Low-Car
Slide 14: Delivering on commitment of cash returns to stockholders
Delivering on our commitment of cash returns to stockholders Stockholder Returns(1) ($ in billions) Payout Ratio Buybacks $6.6 Buybacks 184% $6.1 Dividends Dividends $4.3 $5.2 $3.7 $4.6 $3.1 $2.6 78% $2.4 $2.9 $2.3 65% 63% $2.8 56% 47% 60% $1.9 $1.7 $1.8 54% 50% $1.3 $1.4 $0.8 $1.6 45% $1.4 $0.2 30%
Slide 15: Cash returns through dividend growth and buybacks
Delivering cash returns through sustainable dividend growth and discretionary buybacks Shares Outstanding (in millions) Annual Dividend Per Share 552 $4.52 536 $4.28 $4.08 514 $3.92 $3.92 $3.92 $3.60 43% reduction in Dividend Per Share 473 shares outstanding $3.20 CAGR since 2012 vs. since 2012 Peer
Slide 16: Demonstrated lower volatility in earnings and free cash flow
Demonstrated lower volatility in earnings and free cash flow Average Free Cash Flow Volatility S&P 500 Free Cash Return Profile 2012 – 2024 2012 – 2024 2012 – 2024 Peer Range Valero has VLO 10% demonstrated 10% Refining Peers 7% higher $3,552 Financials 6% average free Communication Services 5% cash
Slide 17: Delivering higher return on investment
Disciplined allocation of capital and execution of our strategy is delivering higher return on investment ROIC Including Amounts Attributable to the Other Joint Adjusted Return on Equity (ROE) Attributable to Valero Venture Members 18% 25% Peer Range Peer Range 17% Premier Refining portfolio indepen
Slide 18: Appendix contents
Appendix contents Topic Slide Global scale with concentration in advantaged U.S. Gulf coast 19 Crude supply advantage in the U.S. Gulf coast and Mid-Continent 20 Global optimization of operations, ratable global wholesale supply and product exports 21-24 Completed projects 25-28 U.S. Natural gas cos
Slide 19: Global scale with concentration in advantaged U.S. Gulf Coast
Global scale with concentration in advantaged U.S. Gulf Coast 2.7 mmbpd Refining Capacity (mbpd, % of overall crude capacity) U.S. West Coast CANADA 230 UNITED 9% North Atlantic 440 IRELAND KINGDOM 16% 1,534 U.S. Gulf Coast 461 58% UNITED U.S. Mid-Continent 17% STATES Gulf Coast Refining Capacity(1)
Slide 20: Crude supply advantage in the U.S. Gulf Coast and Mid-Continent
Crude supply advantage in the U.S. Gulf Coast and Mid-Continent Valero U.S. Gulf Coast Feedstock Ranges Local Crude Gathering (quarterly averages) Cushing McKee Diamond Pipeline Memphis 54% Cushing-McKee Connection Collierville Childress Crude System Station Ardmore Hewitt Wasson To Nederland To St.
Slide 21: Operational flexibility and refinery optimization provide competitive advantage
Operational flexibility and refinery optimization provide competitive advantage • VLO has demonstrated a wider Refinery Product Yield Ranges (monthly averages) range of yields for gasoline, VLO Industry kerosene, jet fuel, and diesel versus the industry 59% 40% 38% • Our operational flexibility and
Slide 22: Growing ratable global wholesale supply business
Growing a ratable global wholesale supply business Stable branded and through an extensive marketing network unbranded demand Valero’s Global Wholesale Volumes million barrels per Rack blending (% of total light products production, mbpd) >1.5 day of ratable partially offsets our U.S.(1) Europe and
Slide 23: Competitive global light products supply
Product shortages Competitive global light products supply in Latin America, Eastern Canada, VLO U.S. Product Exports Europe, and (thousand barrels per day) Africa expected to Gasoline Distillate drive U.S. export 348 demand growth 250 97 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2
Slide 24: Investing to grow product exports into higher netback markets
Expansion of supply Investing to grow product exports chain to high demand growth markets into higher netback markets provides a ratable product outlet and improves margin Advantaged Refineries and Logistics U.S. Product Exports capture MCKEE (12-month moving average, mbpd) EL PASO PORT UNITED ARTHU
Slide 25: Investing to improve access to North American crude
Investing to improve access to North American crude and lower refinery operating cost structure GROWTH PROJECTS FOCUSED ON OPTIMIZATION AND MARGIN CAPTURE Completed Diamond Pipeline project with 200 MBPD capacity connecting Provides additional Mid-Continent Improves crude oil supply Memphis to Cushi
Slide 26: Investing to improve margins and light product yields
Port Arthur Delayed Coker Unit Investing to improve margins and light product yields Port Arthur Coker • 55 MBPD delayed coker and sulfur recovery unit was Project provides additional crude flexibility started up in the second quarter of 2023 Incremental Feedstock & Product Ranges (MBPD) • Creates t
Slide 27: Investing to upgrade product value
Houston Alkylation Unit Investing to upgrade product value Houston and St. Charles Alkylation Units • Octane demand expected to grow due to Tier 3 sulfur regulations and CAFE standards • Abundant, low cost North American NGL supply provides advantage for Gulf Coast capacity additions • Both units up
Slide 28: Investing to supply higher demand markets and expand exports
Investing to supply higher demand markets and expand product export and biofuels blending capabilities Central Texas pipelines and terminals to supply high-growth refined products market Extending • Started up in 2019 • Approximately 205 miles of pipe(1), 960,000 barrels of product total storage cap
Slide 29: U.S. natural gas provides cost advantages for U.S. refiners
U.S. natural gas provides operating expense and feedstock cost advantages for U.S. Refiners Historical: 2019 Natural Gas Impact Current: 2024 Natural Gas Impact ($ per barrel of throughput) ($ per barrel of throughput) $3.25 ~$1 per barrel U.S advantage versus Europe ~$2.70 per barrel U.S. advantage
Slide 30: Reliability and safety are imperative for profitability
Investments in reliability have Reliability and safety are imperative for profitability contributed to operations 2024 was our best year ever for Employee and Contractor Safety and Tier 1 Process Safety Event rate excellence Personnel Safety Tier 1 Process Safety (Annual) Valero Employee & Contracto
Slide 31: Global low-carbon fuel policies driving renewable diesel demand
Global low-carbon fuel policies driving demand growth for renewable diesel Diesel Demand RD and BD In Select Markets(1) Consumption(1) ~7,200 ~550 Active Low-carbon EU & UK 195 Up to 80% 1,105 Mandates Canada reduction in life Low-Carbon Mandates Under Development 5,525 565 340 20 cycle GHG Select U
Slide 32: SAF mandates are expanding globally
SAF mandates are expanding globally SAF Mandates Program aims to offset growth in CO2 emission from international aviation above 85% of 2019 emissions CORSIA Participation is voluntary over 2021-2026 and becomes mandatory for participating nations starting in 2027 EU(1) 2% in 2025, 6% in 2030, 20% i
Slide 33: Our competitive advantage with Diamond Green Diesel
Our competitive advantage with Applying our Diamond Green Diesel (DGD) refining and liquid fuels DGD is Designed to Process Low-carbon Feedstocks for Higher Product Value manufacturing LCFS Carbon Intensity (g CO2 e / MJ) expertise to $0.86 $0.77 $0.71 LCFS credit value ($ per gallon) $0.37 81 87 op
Slide 34: Ethanol
Operations Outlook • 12 plants with 1.7 billion gallons annual Ethanol • Ethanol will remain a significant part of the production capacity domestic fuel mix o Dry mill production process, where corn is • Global renewable fuel mandates should drive U.S. Fuel Ethanol Exports ground into flour and mixe
Slide 35: Our refining capacity and Nelson Complexity Index
Majority of refineries designated as Our refining capacity and Nelson VPP Star Sites by OSHA, recognizing exemplary occupational safety, Complexity Index process safety and health programs Capacities (mbpd)(1) Nelson Complexity Refinery Throughput Crude Index(1) Corpus Christi(2) 370 290 14.4 Housto
Slide 36: Valero's logistics assets
Pipelines(1) Racks, Terminals and Storage(1) Rail Marine(1) Valero’s logistics assets • Over 3,000 miles of active • Over 130 million barrels of • Approximately 5,200 railcars • Over 50 docks pipelines active shell capacity for crude oil and products • Expected to serve long-term • Two Panamax class
Slide 37: Roadmap to further reduce emissions
Comprehensive roadmap to further reduce emissions with innovative projects consistent with our strategy GHG Emissions 2035 GHG Emissions Target In 2024, our performance Reduction and Displacement (Global Refinery Scope 1 & 2) exceeded our 2025 target to (Global Refinery Scope 1 & 2) Independently Ve
Slide 38: A commitment to environmental stewardship, beyond regulations
A commitment to environmental stewardship, beyond regulations E ENVIRONMENTAL Reducing, Reusing, Recycling, and Repurposing Carbon Capture Flare-gas recovery systems Recycled more than 16 times the Our Port Arthur refinery resulted in more than amount of fresh water consumed became the first industr
Slide 39: Sharing our success with communities with strong governance
Sharing our success with the communities where we operate with strong governance and ethical standards S SOCIAL G GOVERNANCE 62.4 years average age 8 of 9 members are independent Best year ever for Personnel Safety and Tier 1 Process 8.1 years average tenure 5 new independent directors since Safety
Slide 40: Renewable diesel vehicle emits fewer emissions than an EV
A vehicle running on renewable diesel emits RENEWABLE DIESEL A DROP-IN FUEL fewer emissions than an electric vehicle U.S. Light-Duty Vehicle Life Cycle Emissions U.S. Heavy-Duty Long-Haul Vehicle Life Cycle Emissions A single light-duty vehicle 2022 Southwest Research Institute Study 2022 Southwest
Slide 41: Electric Vehicle (EV) myth: zero emissions
Electric Vehicle (EV) myth: zero emissions Myth: Zero Emissions Fact: significant emissions from EV life cycle Mining/Extraction Cobalt & Rare Earth Processing Manufacturing EVs Power Generation Before it leaves the showroom, an EV emits twice the CO2 Embedded CO2 Emissions • Life cycle emissions fr
Slide 42: Notes
Notes Payout Ratio Payout Ratio is the sum of dividends and cash payments for purchases of common stock for treasury in the respective period and a 1% excise tax associated with those purchases that commenced in 2023, divided by adjusted net cash provided by operating activities. Adjusted net cash p
Slide 43: Notes
Notes Slide 7 Texas City Crude Flexibility: Upgraded crude receipt and tankage logistics to increase the number of crude segregations and allow import and processing of discounted crude oils. Port Arthur Butane Rail Rack: Added railcar LPG loading and unloading rack, associated rail track, and LPG t
Slide 44: Notes
Notes Slide 29 VLO Refining system used as a proxy for U.S. refining and compared to a European refinery with similar processing unit configuration. Platts Houston Ship Channel natural gas price quotes used for the U.S. and the ICE UK National Balancing Point quotes used for Europe. Historical natur
Slide 45: Non-GAAP Disclosures
Non-GAAP Disclosures Return on Invested Capital (ROIC) VLO defines return on invested capital (ROIC) as adjusted net income (loss) attributable to VLO stockholders before adjusted net interest expense after-tax, divided by average adjusted invested capital. VLO defines adjusted net income attributab
Slide 46: Non-GAAP Disclosures
Non-GAAP Disclosures Renewable Diesel Net Cumulative Cash Flow VLO defines renewable diesel net cumulative cash flow as DGD’s cumulative adjusted EBITDA attributable to VLO, less DGD’s cumulative capital expenditures attributable to VLO. VLO defines DGD’s adjusted EBITDA attributable to VLO as 50% (
Slide 47: Non-GAAP Disclosures
Non-GAAP Disclosures Adjusted Net Cash Provided by Operating Activities VLO defines adjusted net cash provided by operating activities as net cash provided by operating activities excluding the items noted below. VLO believes adjusted net cash provided by operating activities is an important measure
Slide 48: Non-GAAP Disclosures
Non-GAAP Disclosures DGD Adjusted EBITDA per Gallon DGD adjusted EBITDA is defined as DGD’s operating income excluding depreciation and amortization expense, adjusted for the effect of items that VLO believes are not indicative of DGD's core operating performance and that may obscure underlying busi
Slide 49: Non-GAAP Disclosures: Return on Invested Capital (ROIC)
Non-GAAP Disclosures: Return on Invested Capital (ROIC) RETURN ON INVESTED CAPITAL (ROIC) (in millions) Year Ended December 31, 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Numerator: Net income (loss) attributable to VLO stockholders $3,990 $2,289 $4,065 $3,122 $2,422 ($1,421) $930 $11,52
Slide 50: Non-GAAP Disclosures: Free Cash Flow
Non-GAAP Disclosures: Free Cash Flow RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES UNDER GAAP TO FREE CASH FLOW (in millions) Year Ended December 31, 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Net cash provided by operating activities $5,270 $5,564 $4,241 $5,611 $
Slide 51: Non-GAAP Disclosures: Refining Segment Adjusted EBITDA per Barrel
Non-GAAP Disclosures: Refining Segment Adjusted EBITDA per Barrel RECONCILIATION OF REFINING SEGMENT OPERATING INCOME (LOSS) TO REFINING SEGMENT ADJUSTED EBITDA PER BARREL (in millions except per barrel amounts) Year Ended December 31, 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Refining
Slide 52: Non-GAAP Disclosures: Renewable Diesel Net Cumulative Cash Flow
Non-GAAP Disclosures: Renewable Diesel Net Cumulative Cash Flow RECONCILIATION OF DGD OPERATING INCOME (LOSS) AND TOTAL CAPITAL INVESTMENTS TO RENEWABLE DIESEL NET CUMULATIVE CASH FLOW ATTRIBUTABLE TO VALERO (in millions) Year Ended December 31, 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Slide 53: Non-GAAP Disclosures: Ethanol Segment Adjusted EBITDA per Gallon
Non-GAAP Disclosures: Ethanol Segment Adjusted EBITDA per Gallon RECONCILIATION OF ETHANOL SEGMENT OPERATING INCOME (LOSS) TO ETHANOL SEGMENT ADJUSTED EBITDA PER GALLON (in millions except for per gallon amounts) Year Ended December 31, 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 202
Slide 54: Non-GAAP Disclosures: Capital Investments Attributable to Valero
Non-GAAP Disclosures: Capital Investments Attributable to Valero RECONCILIATION OF TOTAL CAPITAL INVESTMENTS TO CAPITAL INVESTMENTS ATTRIBUTABLE TO VALERO (in millions) Year Ended December 31, 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Capital expenditures (excluding VIEs) $2,7
Slide 55: Non-GAAP Disclosures: Sustaining Capex and Growth Capital Investments
Non-GAAP Disclosures: Sustaining Capex and Growth Capital Investments Attributable to Valero RECONCILIATION OF SUSTAINING AND GROWTH CAPITAL INVESTMENTS TO SUSTAINING AND GROWTH CAPITAL INVESTMENTS ATTRIBUTABLE TO VALERO (in millions) Year Ended December 31, 2012 2013 2014 2015 2016 2017 2018 2019 2
Slide 56: Non-GAAP Disclosures: Adjusted Net Cash from Operations and Payout Ratio
Non-GAAP Disclosures: Adjusted Net Cash Provided by Operating Activities and Payout Ratio RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED NET CASH PROVIDED BY OPERATING ACTIVITIES (in millions) Year Ended December 31, 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 202
Slide 57: Non-GAAP Disclosures: ROIC Including Other Joint Venture Members
Non-GAAP Disclosures: Return on Invested Capital (ROIC) Including Amounts Attributable to the Other Joint Venture Members RETURN ON INVESTED CAPITAL (ROIC) INCLUDING AMOUNTS ATTRIBUTABLE TO THE OTHER JOINT VENTURE MEMBERS (in millions) Year Ended December 31, 2014 2015 2016 2017 2018 2019 2020 2021
Slide 58: Non-GAAP Disclosures: Adjusted Return on Equity
Non-GAAP Disclosures: Adjusted Return on Equity (ROE) Attributable to Valero ADJUSTED RETURN ON EQUITY (ROE) ATTRIBUTABLE TO VALERO (in millions) Year Ended December 31, 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Numerator: Net income (loss) attributable to VLO stockholders $3,990 $2,289
Slide 59: Non-GAAP Disclosures: DGD Adjusted EBITDA per Gallon
Non-GAAP Disclosures: DGD Adjusted EBITDA per Gallon RECONCILIATION OF DGD OPERATING INCOME TO DGD ADJUSTED EBITDA PER GALLON (in millions except for per gallon amounts) Year Ended December 31, 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 DGD operating income $157 $147 $57 $319 $728 $630 $709 $
Slide 60: Non-GAAP Disclosures: Adjusted EBITDA
Non-GAAP Disclosures: Adjusted EBITDA RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA (in millions) Year Ended December 31, 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Net income (loss) $2,080 $2,728 $3,711 $4,101 $2,417 $4,156 $3,353 $2,784 ($1,107) $1,288 $11,879 $9,149
Slide 61: Investor Relations contacts
Scan this QR code to Homer Bhullar Eric Herbort Gautam Srivastava see what Valero is doing RIGHT NOW. Vice President, Investor Relations and Finance Director, Investor Relations and Finance Director, Investor Relations 210.345.1982 • Homer.Bhullar@Valero.com 210.345.3331 • Eric.Herbort@Valero.com 21