Valvoline Inc. · NYSE:VVV
Valvoline — Q4 2017 Earnings Presentation
21 slides from Valvoline's earnings presentation, Nov 9, 2017
Slide 1: Fourth Quarter Fiscal 2017 Earnings Presentation
Valvoline Fourth Quarter Fiscal 2017 Earnings Presentation Sam Mitchell, CEO Mary Meixelsperger, CFO Jason Thompson, VP Finance, Treasurer November 9, 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. All statements, other than statements of historical facts, contained in th
Slide 3: Fourth Quarter & Fiscal 2017 Reported Results
Notes on reporting and year-over-year (YoY) impacts Fourth Quarter & Fiscal 2017 Reported Results Separation-related items – timing of new capital structure – Increase in interest expense YoY – Transfer of pension plans drives increase in YoY pension income (in millions) Q4 FY17 Key items1 Operating
Slide 4: Fiscal 2017 – A Strong Start for Valvoline
Fiscal 2017 – A Strong Start for Valvoline Grew the business in strategic areas Pursued and closed acquisition opportunities De-risked the pension plan Initiated return of capital to shareholders 4
Slide 5: Fourth Quarter & Fiscal 2017 Adjusted Results
Fourth Quarter & Fiscal Q4 & Fiscal 2017 Overview 2017 Adjusted1 Results A good quarter in Q4 – Excellent SSS growth in VIOC Q4 FY17 (in millions) – Strong premium mix shift Adjusted1 Operating – Solid international volume growth $117 $475 Income Adjusted1 EBITDA $129 $517 A great year in FY17 EBITD
Slide 6: Core North America
Q1 Fiscal 2017 Highlights Core North America Core North America mix and share gains continue Q4 FY17 Q4 (YoY Change) Total Volume (1)% (2)% – Significant gains in premium mix Branded volume 2% 1% – Good growth in branded volume Sales 7% 3% – Launched new Easy Pour bottle packaging innovation for DIY
Slide 7: New Easy Pour Bottle
New Easy Pour Bottle Anti-Glug Tube Precision Pour Spout Resealable Overcap Centralized Handle Enhanced Communication Learn more at EasyPour.com 7
Slide 8: Quick Lubes
Q1 Fiscal 2017 Highlights Quick Lubes Quick Lubes continues to drive sales and profit growth Q4 Q4 FY17 (YoY Change) – Exceptional SSS growth primarily driven by transactions SSS 8.6% 7.4% • Boosted by new advertising campaign launched in Q3 Sales 18% 18% – Added 14 net new VIOC stores EBITDA1 11% 1
Slide 9: International
Q1 Fiscal 2017 Highlights International International continues broad-based volume growth Q4 FY17 Q4 (YoY Change) – Emerging markets led by China and India JVs, Asia outside of China Volume 6% 9% Volume with JVs 11% 11% – Europe continues to drive mature markets Sales 11% 9% – Pricing actions implem
Slide 10: Adjusted Results for Fiscal Fourth Quarter
Adjusted1 Results for Q4 ($ in millions) Fiscal Fourth Quarter Preliminary Three months ended Sept 30, Factors affecting year-over-year EBITDA Results from Operating Segments 2017 2016 Change from Operating Segments1 Lubricant gallons (in millions) 45.6 44.5 2 % Sales $ 547 $ 494 11 % 4 Operating in
Slide 11: Adjusted Results for FY17
Adjusted1 Results for FY17 ($ in millions) Fiscal Year Preliminary Twelve months ended Sept 30, Factors affecting year-over-year EBITDA Results from Operating Segments 2017 2016 Change from Operating Segments1 Lubricant gallons (in millions) 179.7 174.5 3 % Sales $ 2,084 $ 1,929 8 % Operating income
Slide 12: Pension De-risking Actions
Q1 Fiscal 2017 Highlights Pension De-risking Actions NPV positive actions reduce pension risk and volatility $400 million voluntary contribution to U.S. pension plan Borrowing to fund U.S. qualified pension plan • Reduces risk and volatility • Reduces costs • Voluntary pension contribution • Net Pre
Slide 13: Fiscal 2017 Q4 Corporate Items
Fiscal 2017 Q4 Corporate Items • Effective tax rate of 40.7% for the quarter impacted by geographic mix of earnings and tax treatment of Key Items; full-year effective rate of 38.0% – Adjusted effective tax rate1 of 34.0% in Q4; full-year adjusted rate1 of 34.6% • Borrowing to fund pension impacted
Slide 14: FY18 Guidance
Q1 Fiscal 2017 Highlights 2018 2017 Outlook Performance FY18 Guidance Operating Segments • Lubricant Gallons 3-4% 3% • Revenues 7-9% 8% • VIOC Company Stores (excluding franchise 23-25 28 • Growing volume, sales, and earnings conversions) • Adding new quick lube stores • VIOC Franchised Stores (excl
Slide 15: 2018 Focus & Expectations – Accelerating Growth
2018 Focus & Expectations – Accelerating Growth • Continued share and mix gains – innovation, targeted marketing and sales execution Core North • Unit margin expansion America • Continued progress on digital initiatives • New unit growth Quick Lubes • Supplemental growth through acquisitions • Conti
Slide 16: Appendix
Appendix WJ Valvoline
Slide 17: Key Items Affecting Income
Key Items1 Affecting Income ($ in millions, except per share data) Fourth Quarter Impact Preliminary Total Operating Earnings 2017 Income Pre-tax After-tax per Share Pension & OPEB remeasurements $ 60 60 37 0.18 Tax Matters Agreement activity $ 14 14 - - Separation Costs $ (5) (5) - - Insurance rese
Slide 18: Core North America
Core North America ($ in millions) Fiscal Fourth Quarter Fiscal Year Preliminary Three months ended Sept. 30, Twelve months ended Sept. 30, 2017 2016 Change 2017 2016 Change Lubricant gallons (in millions) 24.9 25.1 (1) % 99.4 101.2 (2) % Sales $ 256 $ 239 7 % $ 1,004 $ 979 3 % Operating income $ 43
Slide 19: Quick Lubes
Quick Lubes ($ in millions) Fiscal Fourth Quarter Fiscal Year Preliminary Three months ended Sept. 30, Twelve months ended Sept. 30, 2017 2016 Change 2017 2016 Change Lubricant gallons (in millions) 6.1 5.6 9 % 22.5 20.2 11 % Sales $ 147 $ 125 18 % $ 541 $ 457 18 % Operating income $ 36 $ 33 9 % $ 1
Slide 20: International
International ($ in millions) Fiscal Fourth Quarter Fiscal Year Preliminary Three months ended Sept. 30, Twelve months ended Sept. 30, 2017 2016 Change 2017 2016 Change Lubricant gallons (in millions) 14.6 13.8 6 % 57.8 53.1 9 % Sales $ 144 $ 130 11 % $ 539 $ 493 9 % Operating income $ 20 $ 21 (5) %
Slide 21: Valvoline
Ww Valvoline. WJ Valvoline