Financial Performance - Valvoline reported net revenues of $461.8 million for Q1 FY26, reflecting an 11% year-over-year growth[4] - Adjusted EBITDA for the quarter was $117.4 million, a 14% increase compared to the previous year[10] - Valvoline reported a loss from continuing operations of $32.2 million, which is 134% lower than the prior year[4] - Adjusted EPS for the quarter was $0.37, representing a 16% increase year-over-year[10] - Valvoline reported a net loss of $32.8 million for the three months ended December 31, 2025, compared to a net income of $91.6 million in the same period of 2024[23] - Adjusted EBITDA from continuing operations was $117.4 million for the three months ended December 31, 2025, compared to $102.8 million in the same period of 2024, reflecting a year-over-year increase of 14.5%[33] - The company’s adjusted diluted earnings per share from continuing operations was $0.37 for the three months ended December 31, 2025, compared to $0.32 in the same period of 2024[29] - The company experienced a net profit margin of -7.0% for the three months ended December 31, 2025, compared to a net profit margin of 22.7% in the same period of 2024[33] Sales and Store Growth - System-wide same store sales (SSS) increased by 5.8%, contributing to a system-wide store sales total of $923.6 million, up 13%[4] - The company added 200 net stores in the quarter, including 162 from the Breeze acquisition[3] - System-wide store sales reached $923.6 million for the three months ended December 31, 2025, representing a year-over-year growth of 12.6%[24] - The number of company-operated stores increased to 1,196 as of December 31, 2025, up from 1,016 at the end of the previous quarter, marking a growth of 17.7%[25] Cash Flow and Debt - Operating cash flow from continuing operations was $65 million, with free cash flow of $7 million[4] - Cash flows from operating activities totaled $64.8 million for the three months ended December 31, 2025, compared to $41.2 million in the same period of 2024[23] - Free cash flow from continuing operations for Q4 2025 was $7.4 million, compared to a negative $12.2 million in Q4 2024, indicating a significant improvement[36] - Operating cash flows from continuing operations increased to $64.8 million in Q4 2025, up from $41.4 million in Q4 2024, reflecting a growth of 56.5%[36] - Free cash flow excluding growth capital expenditures was $56.0 million in Q4 2025, compared to $35.7 million in Q4 2024, representing a 57.9% increase[36] - Total debt stood at $1.7 billion, which includes the newly issued Term Loan B related to the Breeze acquisition[4] - Valvoline's long-term debt increased to $1,633.6 million as of December 31, 2025, up from $1,050.2 million as of September 30, 2025[22] Assets and Liabilities - Total assets increased to $3,402.1 million as of December 31, 2025, up from $2,670.4 million as of September 30, 2025, reflecting a growth of approximately 27.4%[22] - Valvoline's total current liabilities increased to $363.8 million as of December 31, 2025, compared to $347.4 million as of September 30, 2025[22] Strategic Outlook - The company expressed confidence in its growth strategy, driven by resilient customer demand and network expansion[5] - Valvoline's business model fundamentals remain strong, supporting future growth opportunities and market expansion[5] Non-GAAP Measures and Adjustments - Management emphasizes the importance of free cash flow as a non-GAAP metric for assessing cash generation available for debt and equity holders[39] - Adjusted profitability measures, including adjusted net income and EBITDA, are used to compare financial trends and results across periods[40] - Key items impacting operational results include legacy matters and market-driven events, which are excluded from non-GAAP measures[41] - Information technology transition costs incurred in fiscal 2023 are related to implementing new enterprise resource planning systems following the sale of the former Global Products segment[45] - Investment and divestiture-related costs include expenses associated with significant acquisitions and divestitures, which are not reflective of ongoing operational performance[46]

Core Viewpoint - The investment strategy focuses on long-term investments while also utilizing short-term shorts to identify alpha opportunities through bottom-up analysis of individual companies' fundamentals [1] Group 1: Investment Strategy - The approach emphasizes medium to long-term investment duration [1] - The goal is to identify companies with strong fundamentals, sustainable competitive advantages, and growth potential [1]

Core Insights - The investment strategy focuses on long-term investments while also utilizing short-term shorts to identify alpha opportunities [1] Group 1: Investment Approach - The investment approach is based on bottom-up analysis, examining the fundamental strengths and weaknesses of individual companies [1] - The investment duration is medium to long-term, aiming to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Core Insights - Valvoline Inc. has been recognized for the second consecutive year as the highest-ranked provider among aftermarket service facilities in J.D. Power's 2025 Canada Customer Service Index [1][2] Company Performance - The Great Canadian Oil Change achieved a score of 830 on a 1,000-point scale in the 2025 study, which surveyed nearly 10,000 vehicle owners [2] - Valvoline Inc. operates 133 locations in five provinces in Canada, providing quick oil changes and a range of preventive maintenance services [3] Service Offerings - Each Great Canadian Oil Change service center performs stay-in-your-car oil changes in approximately 15 minutes, along with services like tire rotations, fluid exchanges, and battery replacements [3] - Valvoline Inc. operates over 2,300 service centers across the U.S. and Canada, completing more than 30 million services annually [4]

Core Insights - Valvoline Inc. has released findings from its 2025-2026 winter driving preparedness survey, indicating that many U.S. drivers may be underprepared for cold-weather driving conditions [1] Survey Findings - The survey involved 1,000 U.S. drivers and revealed that 62% of drivers have experienced a cold-weather breakdown at least once [1] - Additionally, 58% of drivers reported losing confidence in their vehicle's reliability during winter months [1]

Core Insights - Valvoline Inc. has been recognized for its strong customer loyalty, ranking 16 on Yelp's "Most Loved Brands" list for 2025, and is the top automotive retail company in this ranking [1] Company Performance - Valvoline Instant Oil Change operates over 2,300 locations across North America, emphasizing its extensive reach and trusted service in the automotive maintenance sector [1]

Group 1 - The presentation aims to showcase how Valvoline's strategy, execution, and disciplined capital allocation deliver superior returns, emphasizing clarity in their plan and confidence in the future [1] - The presentation will feature key executives including the President and CEO, Chief Operating Officer, Chief Franchising Officer, and Chief Financial Officer, followed by a Q&A session [1] Group 2 - The company has provided a safe harbor statement indicating that the presentations may include forward-looking statements based on current assumptions and beliefs, which are subject to risks and uncertainties [2] - There is an invitation to review SEC filings for a detailed discussion of risks and uncertainties related to the company's projections [2]

Valvoline Investor Update Summary Company Overview - **Company**: Valvoline (NYSE: VVV) - **Industry**: Automotive Services, specifically oil change and vehicle maintenance - **Date of Update**: December 11, 2025 Core Points and Arguments Strategic Focus - Valvoline aims to clarify its strategy and financial plan to enhance long-term shareholder value [4][9] - The company has a history of nearly 160 years, focusing on quality and innovation in automotive care [4] - Transitioned to a pure-play retail services provider by divesting its global products business, allowing focus on high-growth, high-margin retail services [5] Financial Commitments - Valvoline targets net sales growth of 9%-11% over the next three years, driven by same-store sales growth and new store openings [20] - The company emphasizes disciplined capital allocation, focusing on high-quality network growth and returning excess cash to shareholders through share repurchases [11] Market Position and Growth Potential - Valvoline holds a 6% market share in oil changes, indicating significant room for expansion [24] - The average age of vehicles is increasing, leading to higher maintenance needs, which benefits Valvoline's service offerings [58] - The company plans to open over 2,900 new stores by the end of 2028, with a long-term goal of 3,500+ locations [24] Customer Experience and Operational Excellence - Valvoline boasts a high customer retention rate, with over 80% of customers being repeat visitors [15] - The company has a strong Net Promoter Score (NPS) above 80%, indicating high customer satisfaction [12] - Operational efficiencies have led to a 270 basis point increase in four-wall margins in mature stores [44] Innovation and Technology - Valvoline is investing in technology to enhance customer experience, including mobile service delivery and improved in-store processes [27][54] - The company utilizes a robust data environment to optimize service delivery and customer interactions [18][53] Franchise Partnerships - Valvoline's franchise partners have an average tenure of 26 years and have committed over $1 billion in future growth, contributing to the company's expansion strategy [19] Additional Important Insights - The company has faced regulatory challenges with the FTC regarding large acquisitions, which may limit future large transactions in the industry [10] - Valvoline's operational model is designed to be replicable and scalable, ensuring consistent service quality across locations [46] - The company is adapting its service menu to meet evolving customer needs, including the introduction of premium synthetic lubricants [29] Conclusion - Valvoline presents a compelling investment opportunity due to its established market position, strong operational performance, and significant growth potential in a fragmented market [34] - The company is committed to delivering attractive shareholder returns while maintaining a focus on customer satisfaction and operational excellence [34]

Valvoline Investor Update Summary Company Overview - **Company**: Valvoline (NYSE: VVV) - **Industry**: Automotive Services, specifically oil change and vehicle maintenance - **Date of Update**: December 11, 2025 Core Points and Arguments 1. **Strategic Focus**: Valvoline aims to clarify its strategy and financial plan to enhance long-term shareholder value, emphasizing a disciplined approach to capital allocation and operational excellence [3][4][9] 2. **Historical Context**: Valvoline has a rich history of nearly 160 years, transitioning to a pure-play retail services provider in 2019 after divesting its global products business, which has allowed for focused growth in high-margin services [4][5] 3. **Growth Metrics**: The company has over 2,300 locations and aims to expand to over 3,500 stores by 2028, with a current market share of only 6% in the oil change segment, indicating significant growth potential [5][25] 4. **Financial Commitments**: Valvoline projects net sales growth of 9%-11% over the next three years, driven by same-store sales growth and new store openings [21][22] 5. **Operational Efficiency**: The company has improved its operational efficiency, with a 270 basis point increase in four-wall margins in mature stores, and aims to leverage technology and data for further enhancements [44][60] Key Financial Insights 1. **Earnings Growth**: Valvoline is focused on increasing operating margins through various strategies, including operational efficiencies and a shift towards premium products, which are expected to drive higher margins [23][60] 2. **Customer Retention**: The company boasts a high customer retention rate, with over 80% of customers returning, supported by a strong Net Promoter Score (NPS) above 80% [12][46] 3. **Franchise Partnerships**: Valvoline's franchise partners have committed over $1 billion in future growth, with an average tenure of 26 years, indicating strong relationships and stability in the franchise model [20] Market Dynamics 1. **Fragmented Market**: The market for oil changes is highly fragmented, with over 70% of oil changes still performed at dealerships and general service providers, presenting an opportunity for Valvoline to capture market share [13][25] 2. **Aging Vehicle Fleet**: The average age of vehicles is increasing, leading to higher maintenance needs, which benefits Valvoline's service offerings [59] 3. **Convenience Factor**: Customer preference for convenience is driving demand for quick and easy service, which aligns with Valvoline's operational model [14][15] Innovation and Technology 1. **Fleet Business Growth**: Valvoline's fleet business has grown at a 17% compound annual growth rate since 2022, with continued investment in technology to streamline account management and service delivery [26] 2. **Data-Driven Decisions**: The company utilizes over nine billion data points to optimize service delivery, pricing, and customer engagement, enhancing operational efficiency [19][55] 3. **Service Menu Adaptation**: Valvoline is adapting its service menu to include premium synthetic lubricants and other high-margin services, responding to evolving customer needs [28][29] Conclusion - **Investment Opportunity**: Valvoline presents a compelling investment opportunity due to its established market position, operational excellence, and significant growth potential in a fragmented industry. The company is committed to disciplined capital allocation and innovation to drive shareholder returns [33]

I N V E S T O R U P D A T E | D E C E M B E R 1 1 , 2 0 2 5 Agenda Welcome and Agenda Built to Win & Built to Last Lori Flees, President & Chief Executive Officer Operational Excellence Linne Fulcher, Chief Operating Officer Break Franchise Advantage & Growth Drivers Adam Worsham, Chief Franchising Officer Clear Roadmap to Accelerating Growth and Driving Performance Kevin Willis, Chief Financial Officer Q&A 2 Safe Harbor Forward-Looking Statements Certain statements herein, other than statements of historic ...