Valhi (VHI) investor relations material

Executive summary

• Net income attributable to stockholders was $0.9 million ($0.03/share) for Q2 2025, down from $19.9 million ($0.70/share) in Q2 2024, mainly due to lower Chemicals segment results and higher real estate income from infrastructure reimbursement.

• For the first six months of 2025, net income attributable to stockholders was $17.8 million ($0.62/share), compared to $27.7 million ($0.97/share) in the prior year period.

• Decrease in net income was primarily due to lower operating results from the Chemicals segment, partially offset by improved results in Real Estate and Component Products.

• Operating income for the first half of 2025 was $85.6 million, nearly flat year-over-year.

• Acquisition of the remaining 50% interest in Louisiana Pigment Company (LPC) in July 2024, making LPC a wholly-owned subsidiary.

Financial highlights

• Q2 2025 consolidated net sales were $540.4 million, down 3% year-over-year; six-month net sales were $1,079.0 million, down 1%.

• Q2 2025 gross margin was $78.1 million (14% of sales), down from $121.3 million (22%) in Q2 2024; six-month gross margin was $200.6 million (19%), down from $207.6 million (19%).

• Q2 2025 operating income was $35.5 million, down from $54.8 million in Q2 2024; six-month operating income was $85.6 million, compared to $86.3 million.

• Q2 2025 EPS was $0.03, down from $0.70; six-month EPS was $0.62, down from $0.97.

• Interest expense increased to $13.8 million in Q2 2025 from $11.9 million in Q2 2024, and to $27.0 million for six months 2025 from $23.2 million in 2024.

Outlook and guidance

• 2025 consolidated operating income is expected to be lower than 2024, mainly due to lower Chemicals segment results from decreased sales volumes and higher production costs.

• Real Estate Management and Development segment is expected to see higher operating income in 2025 due to increased infrastructure reimbursements.

• Component Products segment is expected to benefit from higher marine components sales in 2025.

• Chemicals segment expects continued demand challenges due to high interest rates, inflation, and global trade tensions, with lower operating results anticipated for the full year.

• Management notes ongoing global uncertainty, trade policy impacts, and customer hesitancy are deferring market recovery and affecting sales volumes and pricing momentum in the Chemicals segment.