Valvoline Inc at Goldman Sachs Global Retailing Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : I think a good place to start might be to -- because someone in the audience may not be familiar with how the quick lube model is different from the auto service that they see at the local garages on the corner, right? And so can you describe how it differentiates from that service? And maybe talk about what's offered at Valvoline Instant Oil Change store? What makes Valvoline stand out? And what the value proposition is for your customers?

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : Well, I've been getting reminded by Valvoline that I'm overdoing my oil change. So you'll see me come in the bay in the next couple of days here.

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : Yes, yes. And I would say, I think the biggest thing that resonates with investors is oil changes are, for most vehicle owners, a very inconvenient scheduled maintenance. But your model introduces convenience to this. On their time, they come in, but as you said, don't leave their vehicle, it's quick, it's easy, it's trusted. The same service at every location. And so it's really winning share in my mind from those garages where you have to call and schedule an appointment and maybe they're not ready for you when you get there and you have to drop your car off or wait in a waiting room, which is maybe not as clean as you might like, right? And so it's really helping the customer and introducing convenience. Okay. And as we think about the broader market for oil change services, there's a couple of different components. But one of the big things is the shift from do-it-yourself to do-it-for-me. There's not many DIYers left, but there's still quite a few that do it for budget reasons or because they're enthusiasts. But over the long term, there is a shift to that do-it-for-me. So can you maybe size those two markets? What's left in DIY? And how big is the DIFM market?

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : Yes, I've done DIY myself, and it is messy. I got oil all over me. So a good learning experience. So -- okay. So it sounds like Valvoline, over time, continue to benefit from this channel shift in general. But then as we think about quick lube, the last stat I saw was still only about 1/4 of the do-it-for-me oil change market. So what's that remaining 75% look like between service operator, maybe dealers, local garages and whatnot?

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : That's excellent. You make a good point, right? So that 35% to 40% that's not at the dealers, but in other service channels. It's a great opportunity there because you're convenience, right?

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : Yes, exactly. And so the convenience helps win that customer. Anyone I recommended to go to Valvoline has everyone anywhere else. So maybe I should get paid as a spokesman here for the brand to get a commission.

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : Yes. But I think one question for investors is skipping around a little bit. It's always top of mind is battery electric vehicles and the threat to the business model. I think the concern now is a little -- or actually, it's much less than it was a couple of years ago, right?

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : Yes. It used to be a larger topic of discussion. And now it's just kind of, well, maybe it will come back, maybe more of a concern. But as we think about it, can you kind of walk through your approach, your framework to thinking about it longer term and how you expect your addressable market to perhaps evolve over the coming decades?

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : Perfect. Perfect. And then thinking about the consumer oil change intervals generally pretty regular, right, based on miles driven or months that have passed since the last oil change. And as you mentioned, it's a regularly scheduled maintenance for people, its second most valuable asset most people have. So you don't want to skip that oil change or lengthen it. But if we think about periods of economic stress in the past, have there been times where you've seen a temporary increase in that oil change interval? People say, well, I'll defer it for a couple of months or what not. Have you seen that in the past?

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : Perfect. Perfect. That ties in nicely to how -- well, one of the core drivers of your business, and maybe it's one of the more important ones is car counts, right, or cars per day. I know you've been doing some work with your real estate and marketing teams to help improve that. Can you talk about some of the initiatives you're doing with that to try and position the stores in the right place to get the traffic? And then once the stores are up and running, market them appropriately to get the traffic. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2025 / 3:40PM, VVV.N - Valvoline Inc at Goldman Sachs Global Retailing Conference

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : Perfect. You mentioned greeting customers while they're out in the queue. Is that one of the things where if someone sees three or four cars ahead of them, you can kind of get ahead of that when they might turn around and say, I thought it was going to be a quicker trip. You can get them onboarded, tell them what they need, then you'll retain them faster.

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : Perfect. Perfect. And then on the flip side of transactions, you have ticket. It's been a strong driver of same-store sales in recent years. But as we think about ticket, there's many more drivers except just net price. So can you talk about the various drivers there? And maybe just in terms of price, how do you approach price relative to the broader market?

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : And in terms of premiumization, the big thing, as you both mentioned, is the OEM requirements, which obviously is just very naturally going to flow through. But I think there's also the trade-up opportunity where you see a higher mileage vehicle come in, maybe the vehicle requires conventional oil. But because it's a higher mileage, older vehicle, you can trade them up because the synthetic blend or fully synthetic is more appropriate for them to have them last longer. When that happens, do you ever see them trade down? Or is that trade up very sticky?

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : Is there an education component though, if they're sticky on conventional for price reasons and you say, well, it's better for your vehicle?

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : Perfect. Okay. And then, Kevin, you were touching on the non-oil change and the different quartiles that you have at the top and the bottom. What is the big driver there? What is the top quartile doing right? And what can the bottom quartile improve on? And my guess is this a lot to do with training and retention of employees.

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : Perfect. Perfect. And then I think moving to fleet. I think that's an underappreciation opportunity for growth in the business, right, both in terms of transactions and ticket. Can you just guys give a broader overview of your fleet business? Maybe how the average fleet transaction differs from retail and then what you're doing to grow that business?

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : Keeping the fleets running, keeping them in operation.

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : Perfect. Perfect. And then I think the company has great white space opportunity targeting over 3,500 locations longer term. More recently, you brought on some newer franchise partners to help accelerate growth in that side of the business. And that remains in the early stages of their development. But can you talk about the progress you're making or they're making and how you incentivize them to grow?