Valvoline Inc. · NYSE:VVV
Valvoline — Q4 FY2019 Earnings Presentation
21 slides from Valvoline's earnings presentation, Nov 7, 2019
Slide 1: Fourth-Quarter Fiscal 2019 Earnings
Fourth-Quarter Fiscal 2019 Earnings Sam Mitchell, CEO Mary Meixelsperger, CFO November 7, 2019 http://investors.valvoline.com Sean Cornett, Investor Relations
Slide 2: Forward-Looking Statements; Regulation G: Adjusted Results
Forward-Looking Statements Certain statements in this presentation, other than statements of historical fact, including estimates, projections and statements related to Valvoline’s business plans and operating results, are forward-looking statements within the meaning of the Private Securities Litig
Slide 3: Fourth-Quarter & FY19 Reported Results
Fourth-Quarter & FY19 Reported Results (in millions, except per-share data) Q4 FY19 Notes on reporting and year-over-year (YoY) Operating income $113 $398 impacts Net income $27 $208 EPS $0.14 $1.10 Revenue recognition - Adopted new revenue recognition accounting standard in fiscal 2019 - Primarily
Slide 4: Fourth-Quarter & FY19 Adjusted Results Overview
Fourth-Quarter & FY19 Adjusted1 Results Overview (in millions, except per-share data) Q4 FY19 • Adjusted1 EBITDA growth of 7% in Q4 Adjusted1 Operating $111 $417 • Full-year adjusted1 EBITDA growth of 3% income Adjusted1 EBITDA $129 $478 • Adjusted1 EPS growth of 18% in Q4 Adjusted1 EPS $0.40 $1.39
Slide 5: Segment Results Summary
Segment Results Summary Quick Lubes Core North America International Q4 FY19 Q4 FY19 Q4 FY19 (YoY change) (YoY change) (YoY change) SSS1 (system-wide) 10.0% 10.1% Total Volume -4% -7% Volume Flat -1% Sales +23% +25% Sales -1% -4% Volume with JVs1 +2% Flat Net new stores 33 143 53.6%, 52.6%, (company
Slide 6: Quick Lubes
Quick Lubes Record annual SSS1 performance; Targeted pipeline development driving 13th consecutive year of growth ongoing unit expansion System-wide SSS Growth 10.1% • 33 net new stores added in Q4 8.3% ‐ 15 franchise stores 7.7% 7.5% 7.4% ‐ 18 company stores, including 4 in Canada • 143 net new sto
Slide 7: Quick Lubes – Outlook
Quick Lubes – Outlook FY20 – Growth expected to continue 1. Unit additions: ~100 systemwide • Company-owned stores: 30 – 35 newly built stores • Franchise: 30 – 40 additions • Acquisitions 2. Operational execution and new units anticipated to drive strong growth • SSS1 growth of 6 – 8%: Balance betw
Slide 8: Core North America
Core North America Modest growth in Q4 adjusted1 Volume declines slow in Q4 EBITDA • Sales down 1%, volume down 4% • Drivers of YoY decline ‐ Branded volume in the retail channel • Cost and expense savings better than ‐ Roughly flat sequentially anticipated ‐ Normalized installer channel volume rema
Slide 9: Core North America – Outlook
Core North America – Outlook FY20 – Focus on stabilization 1. Modest growth anticipated in installer channel • Continue to drive value-added selling approach with installer customers • Leverage opportunities in heavy duty and newer service offerings 2. Challenging dynamics expected to continue in re
Slide 10: International
International Volume flat in Q4 Sales and profitability impacted by FX • Continued volume growth in Europe • Adjusted1 EBITDA flat • Benefits of recent acquisition • Unfavorable FX headwinds continue • Pivot to volume growth in Latin America • Volume with unconsolidated JVs1 up 2% 1 For a discussion
Slide 11: International – Outlook
International – Outlook FY20 – Focus on reigniting growth 1. Capture growth opportunities in most regions/markets • EMEA – Europe base business and acquisition growth • Latin America – heavy duty growth and expanded passenger car product portfolio • Asia-Pacific – expand OEM relationships and grow k
Slide 12: Fourth-Quarter & FY19 Financials
Fourth-Quarter & FY19 Financials ($ in millions, except per-share data) Fiscal Fourth Quarter Fiscal Year Preliminary and unaudited Three months ended Sept. 30, Twelve months ended Sept. 30, 1 Adjusted P&L Results and Ratios 2019 2018 Change 2019 2018 Change Lubricant gallons (in millions) 46.4 46.6
Slide 13: Corporate Items
Corporate Items • Net interest and other financing expense of $18 million in Q4, flat YoY • Net interest and other financing expense of $73 million in FY19, up $10 million YoY • Effective tax rate of 3.6% in Q4; adjusted1 effective tax rate of 19.4% • Full-year effective tax rate of 21.5%; adjusted1
Slide 14: Fiscal 2020 Guidance Update
Fiscal 2020 Guidance Update 2020 • Quick Lubes momentum Outlook expected to continue Operating Segments • Lubricant gallons growth 2-3% • Strong SSS growth • Revenue growth 4-6% • New Quick Lube stores (excluding Valvoline acquired stores and • Unit additions franchise conversions) • Company-owned 3
Slide 15: Summary
Summary • FY19 added to foundation for long-term success • FY20 expect further progress accelerating shift to a service-driven model FY16 Adjusted1 EBITDA Mix FY19 Adjusted1 EBITDA Mix Quick Core Lubes Core North Quick Lubes America North America Int’l Int’l 1 For reconciliation of adjusted amounts
Slide 16: Appendix
Click to edit Master title style Appendix 16
Slide 17: Key Items Affecting Income
Key Items1 Affecting Income ($ in millions, except per-share data) Fourth-Quarter Impact Preliminary and unaudited Total Operating Earnings Fiscal 2019 Income Pre-tax After-tax per Share Net Pension & OPEB expense $ - $ (67) $ (50) $ (0.27) Acquisition- and divestiture-related gains $ 4 $ 4 $ 4 $ 0.
Slide 18: Quick Lubes
Quick Lubes ($ in millions) Fiscal Fourth Quarter Fiscal Year Preliminary and unaudited Three months ended Sept. 30, Twelve months ended Sept. 30, 2019 2018 Change 2019 2018 Change Lubricant gallons (in millions) 7.4 6.6 12 % 28.1 24.4 15 % Sales $ 222 $ 181 23 % $ 822 $ 660 25 % Operating income $
Slide 19: Core North America
Core North America ($ in millions) Fiscal Fourth Quarter Fiscal Year Preliminary an unaudited Three months ended Sept. 30, Twelve months ended Sept. 30, 2019 2018 Change 2019 2018 Change Lubricant gallons (in millions) 23.9 24.9 (4) % 92.1 98.8 (7) % Sales $ 259 $ 262 (1) % $ 994 $ 1,035 (4) % Opera
Slide 20: International
International ($ in millions) Fiscal Fourth Quarter Fiscal Year Preliminary and unaudited Three months ended Sept. 30, Twelve months ended Sept. 30, 2019 2018 Change 2019 2018 Change Lubricant gallons (in millions) 15.1 15.1 - % 58.2 58.7 (1) % Sales $ 148 $ 151 (2) % $ 574 $ 590 (3) % Operating inc
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