NewMarket Q1 2025 Earnings Report

NewMarket EPS Results

• Actual EPS: $13.26
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

NewMarket Revenue Results

• Actual Revenue: $700.95 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

NewMarket Announcement Details

• Quarter: Q1 2025
• Date: 4/23/2025
• Time: After Market Closes
• Conference Call Date: Thursday, April 24, 2025
• Conference Call Time: 3:00PM ET

NewMarket (NYSE:NEU) is a specialty chemicals and lubricants company headquartered in Richmond, Virginia. Through its Valvoline business, the company markets a broad portfolio of automotive aftermarket products, including engine oils, transmission fluids, greases and vehicle care solutions. Valvoline products are distributed through retail and commercial channels as well as a network of quick-lube service centers that provide oil changes, preventive maintenance and related services.

In its chemical additives segment, NewMarket develops, manufactures and sells performance additives for fuels, lubricants and industrial fluids. These additives are engineered to improve fuel economy, reduce emissions, extend equipment life and enhance engine cleanliness across on-road, off-road and marine applications. The division serves customers in transportation, energy, manufacturing and other heavy-duty industrial markets worldwide.

Founded in 1919, NewMarket has expanded its global footprint through strategic acquisitions and internal growth. The company operates manufacturing and technical centers in North America, Europe, Asia Pacific and Latin America to support local market needs and regulatory requirements. NewMarket’s leadership team emphasizes investment in research and development to advance formulation technologies that meet evolving environmental standards and performance expectations.

NewMarket Q1 2025 Earnings Call Transcript

Key Takeaways

• Net income rose to $126 million ($13.26/share) in Q1 2025 from $108 million ($11.23/share) a year earlier, reflecting strong overall profitability.
• Petroleum additive sales declined to $646 million from $677 million year-over-year, with operating profit down to $142 million as shipments fell across most regions amid macroeconomic and trade uncertainties.
• Specialty Materials segment posted sales of $54 million and operating profit of $23 million, a turnaround from a $5 million loss in Q1 2024 following the Ampac acquisition.
• The company plans a capital investment of up to $100 million in its Cedar City, Utah Ampac facility to boost production capacity by over 50% by 2026 for military and space programs.
• Generated solid cash flow, returning $83 million to shareholders through $57 million of buybacks and $26 million in dividends, while improving net debt/EBITDA to 1.1x from 1.9x a year earlier.

Presentation

[Operator]

Greetings, and welcome to today's NewMarket Corporation scheduled conference call and webcast to review first quarter 2025 financial results. At this time, all participants are on a listen-only mode. If anyone should require operator assistance during the conference today, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Tim Fitzgerald. Sir, the floor is yours.

[Tim Fitzgerald, VP and CFO at NewMarket Corporation]

Thank you, Ali, and thanks, everyone, for joining me this afternoon. As a reminder, some of the statements made during this conference call may be forward-looking. Relevant factors that could cause actual results to differ materially from those forward-looking statements are contained in our earnings release and in our SEC filings, including our most recent Form 10-K. During this call, we will also discuss the non-GAAP financial measures included in our earnings release. The earnings release, which can be found on our website, includes a reconciliation of the non-GAAP financial measures to the comparable GAAP financial measures. We filed our 10-Q for the first quarter of 2025 yesterday, and it contains significantly more details on the operations and performance of our company. Today, I will be referring to the data that was included in last night's press release.

[Tim Fitzgerald, VP and CFO at NewMarket Corporation]

Net income for the first quarter of 2025 was $126 million, or $13.26 per share, compared to net income of $108 million, or $11.23 per share, for the first quarter of 2024. Petroleum Additives sales for the first quarter of 2025 were $646 million, compared to $677 million for the same period in 2024. Petroleum Additives operating profit for the first quarter of 2025 was $142 million, compared to a record first quarter operating profit of $151 million in 2024. The decrease in operating profit was mainly due to lower shipments in the quarter. Lubricant additive shipments decreased in Asia-Pacific and North America, while Europe and Latin America reported slight increases. Fuel additive shipments were lower in all regions except Asia-Pacific, which reported a small increase. Despite the lower shipments, we continue to focus on operational efficiency, which has allowed us to maintain strong operating profit levels.

[Tim Fitzgerald, VP and CFO at NewMarket Corporation]

We are very pleased with the performance of our Petroleum Additives business during the first quarter of 2025 and the work done by our team to achieve these results. However, we remain challenged by the ongoing macroeconomic environment and are monitoring the uncertainty around international trade relations and tariffs. We remain committed to improving efficiency and managing operating costs. Our focus continues to be on investing in technology and our supply network to meet customer demands, enhancing our operational efficiency and improving our portfolio profitability. We report the financial results of our AMPAC business in our Specialty Materials segment. Specialty Materials sales were $54 million for the first quarter of 2025, compared to $17 million for the first quarter of 2024. Specialty Materials operating profit was $23 million for the first quarter of 2025, compared to an operating loss of $5 million for the first quarter of 2024.

[Tim Fitzgerald, VP and CFO at NewMarket Corporation]

Specialty Materials sales and operating profit for the first quarter of 2024 reflect financial results since the acquisition of AMPAC on January 16, 2024. As previously stated, we will see substantial variation in quarterly results for the Specialty Materials segment on an ongoing basis due to the nature of its business. As discussed in AMPAC's April 21st, 2025 press release and as approved earlier today by the NewMarket Board of Directors, we plan to make a capital investment of up to $100 million at our AMPAC facility in Cedar City, Utah. This investment will allow AMPAC to construct an additional production line, increasing capacity by more than 50%. With a projected completion date in 2026, the increased production capacity will allow AMPAC to meet the growing demand of solid rocket motors for U.S. military and space launch programs, while also addressing the needs of U.S. allies in these critical areas.

[Tim Fitzgerald, VP and CFO at NewMarket Corporation]

We view AMPAC as a strategic national asset with a mission-critical role in global safety, security, and space programs. This investment assures capacity to meet our customers' growing needs while adding additional redundancy and security of supply in our production system. Our company generated solid cash flows throughout the quarter, which allowed us to return $83 million to our shareholders through share repurchases of $57 million and dividends of $26 million. As of March 31st, 2025, our net debt-to-EBITDA ratio was 1.1, which is a significant improvement over the 1.9x we reported at the end of Q1 2024. As we look ahead to 2025, we are committed to making decisions that promote long-term value for our shareholders and customers while staying focused on our long-term objectives.

[Tim Fitzgerald, VP and CFO at NewMarket Corporation]

We believe that the core principles guiding our business—a long-term perspective, a safety-first culture, customer-focused solutions, technology-driven products, and a world-class supply chain—will continue to benefit all our stakeholders. Ali, that concludes our planned comments. We are available for questions via email or by phone, so please feel free to contact me directly. Thank you all again, and we will talk to you next quarter.

[Operator]

Thank you. Ladies and gentlemen, this does conclude today's call. You may disconnect your lines at this time. Have a wonderful day, and we thank you for your participation.

Participants

Executives

• Tim Fitzgerald, VP and CFO