Valvoline Inc. · NYSE:VVV
Valvoline — Q3 2024 Earnings Presentation
21 slides from Valvoline's earnings presentation, Aug 7, 2024
Slide 1: Third Quarter Fiscal 2024 Earnings
Third Quarter Fiscal 2024 Earnings Lori Flees, CEO & President Mary Meixelsperger, CFO Elizabeth Russell, Investor Relations 08.07.2024 1
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 its gro
Slide 3: 3Q 2024 Key Highlights
3Q 2024 KEY HIGHLIGHTS1 Delivered Strong Deploying Capital to Financial Results Drive Shareholder Value $808.5M 6.5% +33 New Stores in Q3 1,961 8.7% 12.4% System-wide Same Store +15 Franchise System locations3 System-wide Store Sales3 Sales3 Growth +18 Company 12.0% $421.4M Net Sales $56M Growth Ca
Slide 4: Long Runway For Delivering Shareholder Value
Long Runway For Delivering Shareholder Value Strategic Imperatives • Drive Full Potential in Existing Business • Accelerate Network Growth • Target Customer and Service Expansion TALENT & CULTURE TECHNOLOGY OUR PROVEN FORMULA FOR GROWTH Long-term Same Store Sales New Stores Service Expansion Shareho
Slide 5: 3Q 2024 Top-Line Performance
3Q 2024 TOP-LINE PERFORMANCE Net Sales Growth ($, Millions) 421.4 376.2 +12.0% Highlights 157 net stores YoY 3Q 3Q Ticket is primary contributor to 2023 2024 Same Store Sales System-wide SSS1 Growth +19.0% NOCR penetration up across service menu 12.5% 2-year Stack 6.5% 3Q 3Q 2023 2024 1. Refer to th
Slide 6: 3Q 2024 Financial Drivers
3Q 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 40 bps Decrease YoY 40 bps Increase YoY 10 bps Decrease YoY 29.3% 28.0% 29.2% 40.1% 39.7% 27.0% 37.6% 17.8% 17.7% 24.2% 17.3% 3Q 2Q 3Q 3Q 2Q 3Q 3Q 4Q 1Q 2Q 3Q 2023 2024 20
Slide 7: 3Q 2024 Profitability
3Q 2024 PROFITABILITY1 Adjusted Net Income Adjusted EPS ($, Millions) 4.7% Increase 15.6% Decrease $0.45 $0.43 69.1M 58.3M 3Q 3Q 3Q 3Q 2023 2024 2023 2024 • Operating income growth of $7.5M versus prior year • Average share count down 32.3M shares • YoY reduction in interest income of $23M related t
Slide 8: 3Q 2024 Reporting Highlights
3Q 2024 REPORTING HIGHLIGHTS Balance Sheet Highlights • Continue to target rating agency adjusted net leverage (Millions) 3Q24 ratio of 2.5x – 3.5x Cash & Cash Equivalents $65.7 Total Debt $1,149.5 • Completed tender offer to repurchase the $600M of 2030 Senior Notes in April 2024 Cash Flow Highligh
Slide 9: FY24 Guidance
FY24 GUIDANCE Outlook Same Store Sales Growth1 % 6% - 8% System-Wide Store Additions1 140 – 170 Net Revenues $1.6B – $1.65B Adjusted2 EBITDA $430M – $455M Adjusted2 EPS $1.45 – $1.65 Capital Expenditures $185M – $215M 1. For a discussion of management’s use of Key Business Measures, please refer to
Slide 10: Summary
SUMMARY Delivered substantially in line with our expectations Added 33 new stores including 15 franchise stores Surpassed $3 billion in system-wide store sales over last 12 months 08.07.24 || Third Quarter Fiscal 2024 Earnings 10
Slide 11: 08.07.24 || Third Quarter Fiscal 2024 Earnings
08.07.24 || Third Quarter Fiscal 2024 Earnings 11
Slide 12: Retail Services – Q3 System Results
RETAIL SERVICES – Q3 SYSTEM RESULTS Three months ended Nine months ended June 30 June 30 2024 2023 2024 2023 Sales information System-wide store sales - in millions (a) $ 808.5 $ 719.6 $ 2,277.5 $ 2,023.5 Year-over-year growth (a) 12.4 % 17.9 % 12.6 % 17.8 % Same-store sales growth (b) Company-opera
Slide 13: Retail Services – Store Information
RETAIL SERVICES – STORE INFORMATION Company-operated Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter 2024 2024 2024 2023 2023 Beginning of period 919 895 876 854 832 Opened 12 14 14 14 12 Acquired 6 10 5 8 8 Net conversions between company-operated and franchised — — — — 2 Cl
Slide 14: Reconciliation of Non-GAAP Data – Income and Diluted EPS
RECONCILIATION OF NON-GAAP DATA – INCOME FROM CONTINUING OPERATIONS & DILUTED EARNINGS PER SHARE Three months ended Nine months ended June 30 June 30 2024 2023 2024 2023 Reported income from continuing operations $ 48.2 $ 64.5 $ 125.4 $ 124.4 Adjustments: Net pension and other postretirement plan ex
Slide 15: Reconciliation of Non-GAAP Data – Q3 Adjusted EBITDA
RECONCILIATION OF NON-GAAP DATA – Q3 ADJUSTED EBITDA Three months ended Nine months ended June 30 June 30 2024 2023 2024 2023 Reported net revenues $ 421.4 $ 376.2 $ 1,183.5 $ 1,053.5 Key items: Suspended operations — — — (0.2) Adjusted net revenues (a) (b) $ 421.4 $ 376.2 $ 1,183.5 $ 1,053.3 Income
Slide 16: 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 June 30 Selling, general and administrative Net revenues expenses Operating income In millions - preliminary and unaudited 2024 2023 2024 2023 2024 2023 As reported $ 421.4 $ 376.2 $ 77.2 $ 65.6 $ 93
Slide 17: Reconciliation of Non-GAAP Data – Free Cash Flows
RECONCILIATION OF NON-GAAP DATA – FREE CASH FLOWS Nine months ended June 30 Free cash flow (a) 2024 2023 Operating cash flows from continuing operations $ 170.0 $ 249.9 Adjustments: Additions to property, plant and equipment from continuing operations (153.0) (125.9) Free cash flow from continuing o
Slide 18: GAAP Results – Total Company
GAAP RESULTS – TOTAL COMPANY Three months ended Nine months ended June 30 June 30 2024 2023 2024 2023 Net revenues $ 421.4 $ 376.2 $ 1,183.5 $ 1,053.5 Cost of sales 253.9 225.5 735.0 657.3 Gross profit 167.5 150.7 448.5 396.2 Selling, general and administrative expenses 77.2 65.6 224.0 194.2 Net leg
Slide 19: 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 20: 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: Includes several elements impacted by changes in plan assets and
Slide 21: 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 and SSS; and system-wide store sales. Management believes these measures are useful to evaluating and understandin