Valvoline (VVV) Piper Sandler Growth Frontiers Conference summary

Business performance and consumer trends

• Demand for preventative maintenance services remains strong and resilient, with no signs of customers deferring maintenance or trading down to lower-value lubricants.

• The aging car park encourages consumers to invest in maintenance rather than vehicle upgrades, supporting steady business growth.

• The business is considered non-discretionary, largely unaffected by broad macroeconomic trends.

• Customer trust and convenience are key drivers, with the quick lube channel gaining share from both dealerships and general automotive service providers.

• The company holds about 5% total market share, or 25% within the quick lube category.

Strategic focus and operational improvements

• Emphasis on driving efficiency in growth, including labor, store expenses, and marketing spend.

• Leveraging technology to modernize service processes and improve customer and employee engagement.

• Reevaluating store design and construction costs to enhance capital efficiency and returns.

• Real estate analytics are used to optimize site selection and reduce risk in new builds.

• Franchise development is supported by exclusive territory agreements and new partner recruitment.

Growth targets and expansion plans

• Multi-year sales growth target set at 14%-16%, split evenly between unit growth and same-store sales.

• Company aims to reach 100 company-owned unit openings per year by fiscal 2025.

• Franchise openings targeted at 150 per year by FY 2027, with two-thirds from existing partners and the rest from new entrants.

• White space opportunities and transitions in franchise ownership are being pursued to accelerate growth.

• Flexible approach to company vs. franchise market development based on capital efficiency and partner readiness.