Valvoline Inc. · NYSE:VVV
Valvoline — Merger or Acquisition (August 2022)
18 slides from Valvoline's merger presentation, Aug 1, 2022
Slide 1: Separation Update: Announced Sale of Global Products
Separation Update: Announced Sale of Global Products August 1, 2022 Exhibit 99.2
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation, other than statements of historical fact, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include, without limitation, statements about t
Slide 3: Compelling Strategic Transaction
Monetizes Global Products at attractive valuation that will facilitate a substantial capital return to shareholders Creates a pure-play retail auto service provider with expected low-teens topline growth and 20%+ EPS growth Long runway for reinvestment opportunities at 30%+ cash-on-cash1 returns Acc
Slide 4: Transaction structure, consideration and timing
Purchase price of $2.65B in cash Expected use of proceeds: majority for shareholder returns, remainder for debt reduction, including 2030 bonds, and reinvestment Aramco obtains global rights to Valvoline brand related to Global Products sales Valvoline Retail Services maintains global rights to Valv
Slide 5: Sale of Global Products to Aramco
Sale of Global products TO ARAMCO A Global Leader in Lubricants Long-term owner with plans and resources to develop Valvoline’s trusted brand into a global leader Values the Global Products team, track record of innovation and supply-chain capabilities Opportunity to leverage base oil synergies and
Slide 6: Shift to service reduces margin volatility and raw material exposure
20172 2021 Going Forward Reduced margin volatility Reduced raw material exposure Owning the customer Shift to service transition to service drives next level of performance EBITDA contribution as a percentage of total business segment Adjusted EBITDA. For a reconciliation of adjusted amounts to amou
Slide 7: Valvoline's Differentiation and Retail Competitive Advantages
VALVOLINE’S DIFFERENTIATION Trusted brand of 150+ years 1,690 retail locations1 Strong franchisee partnerships Proprietary technology & operating model Valvoline’s Retail Competitive Advantages Strong culture and team BENEFITS Efficient customer acquisition & success in growing non-oil change revenu
Slide 8: Growth Algorithm: same-store sales, store sales and store additions
Average SSS: 10.0% CAGR: 9.1% CAGR: 17.8% Growth Algorithm System-Wide SSS1 Growth System-Wide Store Sales1 (in $B) System-Wide Store1 Additions For a discussion of management’s use of key business measures, please refer to the Appendix. Based on fiscal 2017 segment EBITDA as previously reported pri
Slide 9: Pro Forma Financial Modeling Assumptions and Long-term Targets
Net Corporate Costs and Supply Agreement Pro Forma Financial Modeling Assumptions 18% - 19% 8% - 9% ~4% - 5% ~22% - 23% 3 Long-term Targets FY22E2 Remove Global Products FY22E Pro Forma1 Sales Growth 12 – 14% EBITDA2 Margin 23 – 26% Tax Rate 25 – 27% Leverage Ratio 2.5 – 3.5x EPS Growth4 ~20%+ Valvo
Slide 10: Public comparables: EV/EBITDA multiples
Note: Fiscal year 2022 multiples, stock price and market data as of July 29, 2022 Services, brand-oriented public Comparables Auto Aftermarket Service Peers 18.4x 12.8x 14.1x 16.0x 2022 EV/EBITDA Multiple Peer Average 15.3x High-growth Retail Peers 17.6x 20.1x 24.0x 40.0x 2022 EV/EBITDA Multiple Pee
Slide 11: Roadmap to Unlock Value
Shareholder Returns Driven by accelerated earnings growth, strong ROIC and share repurchases Maximize Potential of Core Business Capture share and maximize non-oil change services revenue Capital Structure Target 2.5x - 3.5x net debt to LTM EBITDA Drive Focus Optimize talent and resource allocation
Slide 12: Appendix
Appendix I< 120
Slide 13: Preliminary 3Q22 Financial Results
Preliminary 3Q22 financial Results ● Preliminary reported net income of $99 million and diluted EPS of $0.55 ● Preliminary adjusted EPS of $0.58 and adjusted EBITDA of $180 million ● Preliminary revenue of $957 million ● Preliminary Retail Services sales growth of 16 % and system-wide same store ● P
Slide 14: Reconciliation of Non-GAAP Data
Reconciliation of non-gaap data – net income, diluted earnings per share and Adjusted ebitda Adjusted net income defined as net income adjusted for key items. EBITDA is defined as net income, plus income tax expense, net interest and other financing expenses, and depreciation and amortization. Adjus
Slide 15: Reconciliation of Historical Adjusted EBITDA
Reconciliation of historical Adjusted EBITDA As reported prior to segment realignment and related changes in fiscal 2021. EBITDA is defined as net income, plus income tax expense, net interest and other financing expenses, and depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for key
Slide 16: Use of Non-GAAP Measures
To supplement the financial measures prepared in accordance with U.S. GAAP, certain items within this presentation are presented on an adjusted basis. These non-GAAP measures have limitations as analytical tools and should not be considered in isolation from, or as an alternative to, or more meaning
Slide 17: Key Business Measures
Valvoline tracks its operating performance and manages its business using certain key measures, including system-wide store counts and same-store sales (SSS); system-wide store sales; and lubricant volumes sold. Management believes these measures are useful to evaluating and understanding Valvoline’
Slide 18: Valvoline
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