Valvoline Inc. · NYSE:VVV
Valvoline — Q1 2017 Earnings Presentation
17 slides from Valvoline's earnings presentation, Jan 27, 2017
Slide 1: Valvoline First Quarter Fiscal 2017 Earnings Presentation
Valvoline First Quarter Fiscal 2017 Earnings Presentation Sam Mitchell, CEO Mary Meixelsperger, CFO Jason Thompson, VP Finance, Treasurer January 27, 2017
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Valvoline has identified some of these forward-looking statements with wor
Slide 3: First Quarter Results
Notes on reporting and year-over-year (YoY) impacts First Quarter Results Separation-related items • Reported EPS of $0.35 up $0.03 YoY – New capital structure adds interest expense this year • Operating income up 25% to $120 – Transfer of pension plans drive increase in YoY pension income million K
Slide 4: Q1 Fiscal 2017 Highlights
Q1 Fiscal 2017 Highlights Progress on Core Priorities Solid Results in Q1 1) Drive business results in each segment; growing market share and unit margins Volume growth across all three segments • Adjusted1 EPS of $0.35 up 9% System-wide VIOC same-store sales growth of 9% • Volume growth of 7%
Slide 5: Time-It Lube Acquisition – Announced in January 2017
Time-It Lube Acquisition – Announced in January 2017 Accelerates expansion of VIOC presence in Texas and Louisiana 28 locations will become VIOC company-owned stores Expected to close in fiscal Q2 5
Slide 6: Operating Segment Highlights
Operating Segment Highlights Core North America Volume up 2%; Premium Mix up 410 bps; EBITDA down 5% – Continued volume growth, driven by share gains and promotions • Volume increased in all segments – Managing raw material cost pass-through • EBITDA from operating segments1 grows 8% to $109 million
Slide 7: Adjusted Results
Adjusted1 Results ($ in millions) Fiscal First Quarter Preliminary Three months ended Dec. 31, Results from Operating Segments 2016 2015 Change Lubricant gallons (in millions) 43.1 40.4 7 % Factors affecting year-over-year EBITDA Sales $ 489 $ 456 7 % from Operating Segments1 Gross profit $ 185 $ 17
Slide 8: Adjusted EPS
Adjusted1 EPS Three Months Ended December 31, 2016 2015 Change EPS from Operating Segments $ 0.32 $ 0.30 $ 0.02 Interest Expense $ (0.03) $ ‐ $ (0.03) Pension & OPEB Income $ 0.06 $ 0.02 $ 0.04 Adjusted1 EPS $ 0.35 $ 0.32 $ 0.03 1 For reconciliation of adjusted amounts to amounts reported under GAAP
Slide 9: Fiscal 2017 Q1 Corporate Items
Fiscal 2017 Q1 Corporate Items • Effective tax rate of 34.5% • Capital expenditures totaled $9 million • Free cash flow1 generation of $79 million – YoY increase of $44 million – Ending cash balance of $236 million • Total debt of $740 million – Including $75 million of short-term debt related to ou
Slide 10: Fiscal 2017 Outlook
Fiscal 2017 Outlook Current Expectations Updated Outlook Prior Outlook Operating Segments • Lubricant gallons 3‐5% 2‐3% • Revenues 4‐7% 3‐5% • New stores • VIOC company‐owned 31‐33 5‐10 28 acquired, 3‐5 new builds new builds • VIOC franchised no change 15‐25 • VIOC same‐store sales 5‐7% 3‐5% • EBITD
Slide 11: Q1 Fiscal 2017 Summary
Q1 Fiscal 2017 Summary Great start to the fiscal year Progress on Core Priorities Confident in delivering updated 2017 outlook 11
Slide 12: Appendix
Appendix WJ Valvoline
Slide 13: Key Items Affecting Income
Key Items Affecting Income ($ in millions, except per share data) First Quarter Impact Preliminary Total Operating Earnings 2017 Income Pre-tax After-tax per Share OPEB remeasurement $ 8 $ 8 $ 5 $ 0.02 Separation Costs $ (6) (6) (4) (0.02) Total $ 2 $ 2 $ 1 $ 0.00 2016 $ - $ - $ - $ - Total $ - $ -
Slide 14: Core North America
Core North America ($ in millions) Fiscal First Quarter Factors affecting year-over-year EBITDA Preliminary Three months ended Dec. 31, 2016 2015 Change Lubricant gallons (in millions) 24.1 23.6 2 % 3 Sales $ 237 $ 241 (2) % 1 Operating income $ 51 $ 53 (4) % (6) (1) 0 Depreciation and amortization
Slide 15: Quick Lubes
Quick Lubes ($ in millions) Fiscal First Quarter Factors affecting year-over-year EBITDA Preliminary Three months ended Dec. 31, 2016 2015 Change Lubricant gallons (in millions) 5.3 4.6 15 % 3 2 3 3 Sales $ 127 $ 100 27 % Operating income $ 29 $ 23 26 % (4) Depreciation and amortization $ 5 $ 4 25 %
Slide 16: International
International ($ in millions) Fiscal First Quarter Factors affecting year-over-year EBITDA Preliminary Three months ended Dec. 31, 2016 2015 Change Lubricant gallons (in millions) 13.7 12.2 12 % 4 1 Sales $ 125 $ 115 9 % 0 0 (1) 0 Operating income $ 20 $ 16 25 % Depreciation and amortization $ 1 $ 1
Slide 17: WJ Valvoline
WJ Valvoline