Valvoline (VVV) 2026 Baird Global Consumer, Technology & Services Conference summary

Business overview and growth strategy

• Operates over 2,400 quick lube locations in North America, split evenly between company-owned and franchised units.

• Recognized as a top automotive franchise and aims to expand to over 2,900 stores by 2028, with a long-term goal of 3,500 units.

• Strong unit economics with mature stores generating around 30% cash-on-cash returns and mid to high teen IRR.

• Franchise partners have committed to developing approximately 650 new units over the next five years, incentivized by lubricant purchase agreements.

• Growth strategy focuses on core business optimization, sustainable network expansion, and innovation to meet evolving customer needs.

Financial performance and outlook

• Delivered 19 consecutive years of same-store sales growth, including during economic downturns and COVID.

• Updated full-year outlook with increased same-store sales growth and higher adjusted EBITDA and EPS guidance.

• Medium-term commitments include 3%-5% comp growth, 9%-11% top-line growth, low to mid-teens EBITDA growth, and mid to high teens EPS growth.

• Plans to significantly increase free cash flow and return to target leverage of 1.5x-2.5x EBITDA within 18-24 months.

• Intends to resume share repurchases once leverage targets are met, viewing current share price as undervalued.

Operational excellence and customer experience

• Leadership and franchise partners are highly tenured, with many having decades of experience within the system.

• Customer and employee experience is guided by the Super-Pro process, resulting in NPS scores above 80% and Google ratings of 4.7 from over 1 million reviews.

• Consistent, high-quality service is supported by a unified point-of-sale system and 270 hours of technician training.

• Preventive maintenance is viewed as non-discretionary, with 85% repeat customers and resilient demand regardless of economic or fuel price fluctuations.

• Premiumization trend is strong, with 80% of oil changes being semi-synthetic or full synthetic, driving higher margins.