Valvoline Inc. · NYSE:VVV
Valvoline — Bernstein Strategic Decisions Conference 2018
21 slides from Valvoline's conference presentation, Jun 1, 2018
Slide 1: Bernstein Strategic Decisions Conference 2018
Bernstein Strategic Decisions Conference 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation, other than statements of historical fact, including estimates, projections, statements related to Valvoline’s business plans and operating results are forward-looking statements within the meaning of the Private Securities Litigatio
Slide 3: Who We Are
Click to edit Master title style Who We Are 3
Slide 4: Our Brand is Driving a Growing Global Platform
Our Brand is Driving a Growing Global Platform ~$2.1B Top 3 Over 140 In Annual Sales Premium Motor Oil Brand(1) Countries With Valvoline Sales Our Sales Are Diversified Across 3 Segments 48% 26% 26% Core North America Quick Lubes International Commercial Commercial Do-It-Yourself Do-It-For-Me and In
Slide 5: A Proven Track Record of Earnings Growth
A Proven Track Record of Earnings Growth Fiscal Year Ended September 30th (Millions) $480 - $490 $440 $447 $412 $359 $331 2013 2014 2015 2016 2017 2018 Outlook (1) Adjusted EBITDA Mix Shift Toward 11 Consecutive Consistent Product Pricing Premium Years of SSS Volume Growth in and Raw Material Produc
Slide 6: Large Market with Solid Fundamentals
Large Market with Solid Fundamentals 6.4B Gallons, ~$50B Global Transportation Lubricants Market(1) Global volume(2) <1% Consumer Commercial Light Duty Heavy Duty Premium(2) volume ~6% Emerging Markets Driving Overall Volume Growth Mature Markets Driving Strong Need for Routine, Preventative Mainten
Slide 7: Our Strategy
Our Strategy Building Significant Competitive Advantage in Each Channel with Products, Services and Technology that Drive Customer Value DIY RETAILERS INSTALLERS OEM HEAVY DUTY QUICK LUBES 7
Slide 8: Core North America Overview
Core North America Overview Fiscal Year Ended September 30th 45.8% (Percent of U.S branded volume) 41.4% 36.6% 33.7% 30.0% -1.0% 2013 2014 2015 2016 2017 Core NA Premium Mix(1) Targeted, Digital Marketing Products & Packaging Enhanced Services 1. As a percentage of branded U.S. volume. 8
Slide 9: Quick Lubes Overview
Quick Lubes Overview Fiscal Year Ended September 30th (000s) $947 11 Years of Same-store Sales Growth(1) $882 $824 $774 $738 $713 $649 $672 $613 $579 $550 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Valvoline Instant Oil Change System-wide Average Sales per Same-store Customer Experience
Slide 10: International Overview
International Overview 120.0 Fiscal Year Ended September 30th (Millions of lubricant gallons) 85.3 94.7 95.0 80.1 75.3 77.8 70.0 45.0 20.0 (5.0) 2013 2014 2015 2016 2017 International Segment Volume Reported Unconsolidated JV Volume(1) Channel Development Brand Awareness New Market Segments 1. Joint
Slide 11: Our Future
Our Future 11
Slide 12: Core North America Strategy
Core North America Strategy DIY Installer Heavy Duty Non-Branded Premium Mix & OEM Modest Volume Double-digit + Growth Volume Growth Maintain Modest Share Gains + Portfolio Penetration Steady, low-single digit topline growth with strong cash generation 12
Slide 13: Quick Lubes Strategy
Quick Lubes Strategy SSS Company Franchise Express Care (Mid-single Digit Growth) +25 New Stores +25-35 New Stores +25-35 New Stores Transactions Annually Annually Annually + + Ticket Acquisitions High-single digit topline growth with strong profitability 13
Slide 14: International Strategy
International Strategy Cummins JVs China/Asia & Europe & (India/China) LatAm Australia Strong Share-gain Strengthen Channels Opportunity to Market Modest Share Gains + + + Developing OEM Passenger Car & Cost Efficiencies Relationships Heavy Duty Growth High-single digit topline growth with building
Slide 15: Growth Opportunities Will Impact Our Mix of Sales
Growth Opportunities Will Impact Our Mix of Sales Segment Mix Potential Core North America low single- Fiscal 2017 Fiscal 2023 digit growth Quick Lubes high single-digit growth. International high single-digit growth. Core NA Quick Lubes International 1. Organic growth only; independent of acquisiti
Slide 16: Our Business Model
Our Business Model Characteristics of our business Capital Allocation Priorities • Preventative maintenance drives steady demand 1.Organic growth • Multi-channel model provides growth opportunities 2.Inorganic growth, primarily bolt-on quick lube • Strong cash conversion acquisitions • Deploy capita
Slide 17: Shareholder Value Proposition
Shareholder Value Proposition Organic Earnings Capital Allocation Value Proposition MSD Volume and Continued Revenue Growth Dividend Growth HSD EBITDA Share Repurchase Compelling Total Growth and/or Acquisitions Shareholder Return Target Payout(1) HSD-LDD EPS Ratio of 45-60% Growth Over Time 1. Payo
Slide 18: Investment Thesis
Investment Thesis Recognized Brand with a History of Innovation that Fuels Competitive Advantage Multi-channel Model with Bright Future Expected for Significant Expected Growth Opportunities Valvoline and Our Investors Strong Cash Generation Expected to Fund Growth and Shareholder Returns 18
Slide 19: Appendix
Appendix 19
Slide 20: Historical Adjusted EBITDA Reconciliation
Historical Adjusted EBITDA Reconciliation Fiscal Year Ended September 30th ($ in millions) 2013 2014 2015 2016 2017 Net income $246 $173 $196 $273 $304 Income tax expense 135 91 101 148 186 Net interest and other financing expense - - - 9 42 Depreciation and amortization 35 37 38 38 42 EBITDA $416 $
Slide 21: Accelerating Into the Future
ACCELERATING INTO THE FUTURE || Valvoline. 21
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