Slide 1: Fourth Quarter Fiscal 2024 Earnings
Fourth Quarter Fiscal 2024 Earnings Lori Flees, CEO & President Mary Meixelsperger, CFO Elizabeth Clevinger, Investor Relations 11.19.2024
Slide 2: Safe Harbor: Forward-Looking Statements
SAFE HARBOR Forward-Looking Statements Certain statements herein, 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, executing on the gro
Slide 3: Key Messages
KEY MESSAGES 1 Delivered compelling growth and results in line with our expectations in FY2024 Our performance is driven by a market-leading position and our competitive 2 advantages, including a quality and well-recognized brand, well-capitalized franchisee network, operating excellence, proprietar
Slide 4: Fiscal Year 2024 Key Highlights
FISCAL YEAR 2024 KEY HIGHLIGHTS Best-in-Class Retail Service Provider Focused on Growth $3.1B 18 Years 2,010 System-wide Store Sales1 Of System-wide Same System-wide Stores1 Increased 12% YoY Store Sales (SSS) Growth1 with 9% Annual Growth Ranked 28M+ #18 53% System-wide Transactions1 Forbes Best Cu
Slide 5: Consistent Track Record of Financial Performance
CONSISTENT TRACK RECORD OF FINANCIAL PERFORMANCE Store Count1 System-Wide Same Store Sales1 Growth ’16 – ’24 CAGR: 8% 2,010 1,852 1,594 1,715 21% 1,385 1,462 1,127 1,242 950 1,068 790 876 14% 519 584 719 12% 462 Average: 10% 10% 342 384 8% 8% 9% 7% 866 878 875 925 976 1060 2% 726 743 780 2016 2017 2
Slide 6: Executed at a High Level in FY 2024
EXECUTED AT A HIGH LEVEL IN FY 2024 FY 2024 FY 2024 Guidance1 Adjusted2 Results Net Revenues $1.6B - $1.65B $1.62B Store Additions3,4 140 - 170 158 Company 85-100 97 Franchise 55-70 61 SSS4 6% - 8% 6.7% Adj.2 EBITDA $430M – $455M $442.6M Adj.2 EPS $1.45 - $1.65 $1.57 Capital $185M - $215M $224.4M Ex
Slide 7: Proven Formula for Value Creation
PROVEN FORMULA FOR VALUE CREATION Quick, Easy, Trusted 11.19.2024 || Fourth Quarter Fiscal 2024 Earnings 7
Slide 8: Long Runway For Delivering Shareholder Value
Long Runway For Delivering Shareholder Value Strategic Priorities • Drive Full Potential in Existing Business • Accelerate Network Growth • Target Customer and Service Expansion TALENT & CULTURE TECHNOLOGY OUR PROVEN FORMULA FOR GROWTH Long-term Same Store Sales New Stores Service Expansion Sharehol
Slide 9: Driving Full Potential in Existing Business
DRIVING FULL POTENTIAL IN EXISTING BUSINESS Source of New VIOC Customers1 Company Store New Build Mature Company Store2 Revenue Ramp Revenue & EBITDA - Per Store 1.7M Quick DIY 1.1M Lubes Dealership Tire & Auto Services FY19 FY24 Net Sales EBITDA Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 • Attracting new customers f
Slide 10: Accelerating Network Growth
ACCELERATING NETWORK GROWTH Store Additions1 Ground-up Additions Gross Store Additions1 Company Franchise Company Franchise Company Franchise 48 49 158 38 38 102 137 35 33 121 31 82 23 54 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY22 FY23 FY24 FY22 FY23 FY24 2023 2023 2023 2023 2024 2024 2024 2024 • Improving capabi
Slide 11: Target Customer and Service Expansion – Fleet & NOCR Highlight
TARGET CUSTOMER AND SERVICE EXPANSION – FLEET & NOCR HIGHLIGHT Fleet business remains a source of Additional services expected to support strength and opportunity long-term ticket growth System-wide Fleet Transactions System-wide Non-Oil Change Revenue ($, millions) ’21 – ’24 CAGR: 14% ’21 – ’24 CAG
Slide 12: FY24 Financial Performance
FY24 FINANCIAL PERFORMANCE Quick, Easy, Trusted 11.19.2024 || Fourth Quarter Fiscal 2024 Earnings 12
Slide 13: Revenue Performance
REVENUE PERFORMANCE 4th Quarter FY 2024 Net Sales Growth Net Sales1 Growth ($, Millions) ($, Millions) 1,619 +11.7% 435.5 1,443 +12.2% 390.0 FY23 FY24 4Q 4Q 2023 2024 System-Wide SSS2 Growth System-Wide SSS2 Growth 10.0% 10.5% 11.9% 12.2% 6.0% 6.7% 7.1% 5.4% 4Q 4Q 4Q 4Q FY23 FY24 FY23 FY24 2023 2024
Slide 14: 4Q Financial Drivers
4Q FINANCIAL DRIVERS1 Gross Margin SG&A Expense Adjusted EBITDA as a % of Net Sales as a % of Net Sales as a % of Net Sales 50 bps Increase YoY 29.2% 28.5% 28.0% 27.0% 38.0% 39.7% 39.1% 17.8% 17.7% 17.8% 24.2% 4Q 3Q 4Q 4Q 3Q 4Q 4Q 1Q 2Q 3Q 4Q 2023 2024 2024 2023 2024 2024 2023 2024 2024 2024 2024 Ke
Slide 15: Full Year 2024 Financial Drivers
FULL YEAR 2024 FINANCIAL DRIVERS1 Gross Margin SG&A Expense Adjusted EBITDA as a % of Net Sales as a % of Net Sales as a % of Net Sales 100 bps Increase YoY 26.3% 27.3% 37.7% 38.2% 18.2% 18.1% 2023 2024 2023 2024 2023 2024 Key Drivers: Key Drivers: Key Drivers: • Labor efficiency in front half of th
Slide 16: 2024 Profitability
2024 PROFITABILITY1 Adjusted Net Income Adjusted EBITDA Adjusted EPS ($, Millions) ($, Millions) 7% Increase 17% Increase 33% Increase 206 443 191 $1.57 380 $1.18 2023 2024 2023 2024 2023 2024 • Increase of operating income of 16%, • Driven by increased topline and • Increase primarily driven by: pa
Slide 17: 2024 Reporting Highlights
2024 REPORTING HIGHLIGHTS Balance Sheet Highlights • Material weakness reported in Q2 remains in process of remediation (Millions) FY24 • Ended fiscal year below rating agency adjusted net Cash & Cash Equivalents $68.3 leverage ratio of 3.5x $1,093.8 Total Debt Cash Flow Highlights • Cash flows from
Slide 18: Valvoline delivered compelling growth and financial results in fiscal year 2024
Valvoline delivered compelling growth 1 and financial results in fiscal year 2024. Accelerating network through organic growth, 2 refranchising of certain markets and welcoming new franchise partners. Positioned to deliver strong and durable growth in 3 fiscal year 2025 and beyond. Quick, Easy, Trus
Slide 19: Fiscal Year 2025 Guidance
FISCAL YEAR 2025 GUIDANCE FY24 Actual FY24 Pro Forma1,2 FY25 Results Results Outlook2,4 Same Store Sales Growth % 6.7% 7.1% 5% – 7% System-Wide Store Additions2 158 158 160 – 185 Net Revenues $1.62B $1.52B $1.67B – $1.73B Adjusted3 EBITDA $443M $419M $450M – $470M Adjusted3 EPS $1.57 $1.45 $1.57 – $
Slide 20: Appendix
Quick, Easy, Trusted 11.19.2024 || Fourth Quarter Fiscal 2024 Earnings 20
Slide 21: Retail Services – Q4 System Results
RETAIL SERVICES – Q4 SYSTEM RESULTS (Preliminary and unaudited) Three months ended Twelve months ended September 30 September 30 2024 2023 2024 2023 Sales information System-wide store sales - in millions (a) $ 826.8 $ 738.3 $ 3,104.3 $ 2,761.8 Year-over-year growth (a) 12.0 % 15.0 % 12.4 % 17.0 % S
Slide 22: Retail Services – Store Information
RETAIL SERVICES – STORE INFORMATION (Preliminary and unaudited) Company-operated Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter 2024 2024 2024 2024 2023 Beginning of period 937 919 895 876 854 Opened 26 12 14 14 14 Acquired 10 6 10 5 8 Net conversions between company-operat
Slide 23: Reconciliation of Non-GAAP Data – Income from Continuing Operations & Diluted EPS
RECONCILIATION OF NON-GAAP DATA – INCOME FROM CONTINUING OPERATIONS & DILUTED EARNINGS PER SHARE (Preliminary and unaudited) Three months ended Twelve months ended September 30 September 30 (in millions, except per share amounts) 2024 2023 2024 2023 Reported income from continuing operations $ 89.1
Slide 24: Reconciliation of Non-GAAP Data – Q4 Adjusted EBITDA
RECONCILIATION OF NON-GAAP DATA – Q4 ADJUSTED EBITDA (Preliminary and unaudited) Three months ended Twelve months ended September 30 September 30 (in millions) 2024 2023 2024 2023 Reported net revenues $ 435.5 $ 390.0 $ 1,619.0 $ 1,443.5 Key items: Suspended operations — — — (0.2) Adjusted net reven
Slide 25: Reconciliation of Non-GAAP Data – Annual Adjusted EBITDA
RECONCILIATION OF NON-GAAP DATA – ANNUAL ADJUSTED EBITDA (Preliminary and unaudited) (In millions) 2024 2023 2022 2021 2020 Income from continuing operations $ 214.5 $ 199.4 $ 109.4 $ 200.1 $ 69.6 Income tax expense 69.1 37.1 34.7 59.9 53.4 Net interest and other financing expenses 71.9 38.3 69.3 10
Slide 26: Reconciliation of Non-GAAP Data – Adjusted Net Revenues, SG&A, & Operating Income
RECONCILIATION OF NON-GAAP DATA – ADJUSTED NET REVENUES, SG&A, & OPERATING INCOME Three months ended September 30 Selling, general and administrative Net revenues expenses Operating income In millions - preliminary and unaudited 2024 2023 2024 2023 2024 2023 As reported $ 435.5 $ 390.0 $ 81.1 $ 70.3
Slide 27: Reconciliation of Non-GAAP Data – Free Cash Flows
RECONCILIATION OF NON-GAAP DATA – FREE CASH FLOWS (Preliminary and unaudited) Year ended (In millions) September 30 Free cash flow (a) 2024 2023 Operating cash flows from continuing operations $ 282.9 $ 353.0 Adjustments: Additions to property, plant and equipment from continuing operations (224.4)
Slide 28: Consolidated GAAP Income Statement
CONSOLIDATED GAAP INCOME STATEMENT (Preliminary and unaudited) Three months ended Twelve months ended September 30 September 30 (In millions, except per share amounts) 2024 2023 2024 2023 Net revenues $ 435.5 $ 390.0 $ 1,619.0 $ 1,443.5 Cost of sales 265.2 241.7 1,000.2 899.0 Gross profit 170.3 148.
Slide 29: Use of Non-GAAP Measures
USE OF NON-GAAP MEASURES This presentation includes the following non-GAAP measures: Adjusted operating income; adjusted operating margin; adjusted selling, general, and administrative expenses; adjusted selling, general, and administrative margin; adjusted net revenues; EBITDA, adjusted EBITDA, and
Slide 30: Use of Non-GAAP Measures, Continued
USE OF NON-GAAP MEASURES, CONTINUED Refer to the below for descriptions of the key items that comprise the adjustments which depart from the computations in accordance with U.S. GAAP: Net pension and other postretirement plan expenses (income): Includes several elements impacted by changes in plan a
Slide 31: Key Business Measures
KEY BUSINESS MEASURES Valvoline tracks its operating performance and manages its business using certain key measures, including system-wide, company-operated and franchised store counts; SSS; system-wide store sales; and system-wise transactions. Management believes these measures are useful to eval