Valvoline Inc. · NYSE:VVV
Valvoline — Q3 FY2017 Earnings Presentation
18 slides from Valvoline's earnings presentation, Aug 2, 2017
Slide 1: Valvoline Third Quarter Fiscal 2017 Earnings Presentation
Valvoline Third Quarter Fiscal 2017 Earnings Presentation Sam Mitchell, CEO Mary Meixelsperger, CFO Jason Thompson, VP Finance, Treasurer August 2, 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: Third Quarter Results
Notes on reporting and year-over-year (YoY) impacts Third Quarter Results Separation-related items • Reported diluted EPS of $0.27 – Interest expense of $28 million year to date (YTD) – Transfer of pension plans drives increase in YoY pension income • Operating income of $104 million • Net income of
Slide 4: Core North America
Q1 Fiscal 2017 Highlights Core North America Core North America ongoing mix and share gains Volume and mix dynamics • Volume down 3%; branded volume up 1% – Growing the mix of higher-margin premium branded volume – Overall branded volume up YoY, indicating continued share gain in DIY • Sales up 3% –
Slide 5: Quick Lubes
Q1 Fiscal 2017 Highlights Quick Lubes Quick Lubes continues to drive strong SSS Strength of SSS • SSS up 7.9% – Retail model continues to improve, drive results • Sales up 17% – Increased transactions drove SSS growth in Q3 • EBITDA1 up 11% – Strong store-level execution, ongoing marketing programs
Slide 6: International
Q1 Fiscal 2017 Highlights International International continues volume growth Broad-based volume growth, across emerging and mature markets • Volume up 5%, up 7% including JVs – Confident in our long-term volume growth expectations • Sales up 6% – Volume growth of 10% YTD, growth of 11% including JV
Slide 7: Adjusted Results for Q3
Q1 Fiscal 2017 Highlights Three Months Ended June 30, Adjusted1 Results for Q3 2017 2016 Change Operating Income from: Core North America $ 48 $ 58 $ (10) • EBITDA from operating segments1 of Quick Lubes 34 32 2 $112 million, above guidance International 18 20 (2) Total operating income 100 110 (10)
Slide 8: Adjusted Results: Fiscal Third Quarter
Adjusted1 Results ($ in millions) Fiscal Third Quarter Preliminary Three months ended June 30, Results from Operating Segments 2017 2016 Change Lubricant gallons (in millions) 46.0 45.8 - % Sales $ 534 $ 499 7 % Factors affecting year-over-year EBITDA from Operating Segments Gross profit 197 199 (1)
Slide 9: Fiscal 2017 Q3 Corporate Items
Fiscal 2017 Q3 Corporate Items • Effective tax rate of 40.4% for the quarter – Effective rate impacted by tax treatment of Key Items – Adjusted effective tax rate of 35.5% • YTD capital expenditures totaled $43 million • YTD free cash flow1 generation of $114 million • Share repurchases of $50 milli
Slide 10: Benefits of Pension Funding
Q1 Fiscal 2017 Highlights Benefits of Pension Funding Strategic opportunity to reduce unfunded pension liability $400 million voluntary contribution to U.S. pension plan • Reduces risk and volatility ~$400 million voluntary contribution to U.S. pension plan • Reduces costs Reduces Pension Benefi
Slide 11: FY17 Guidance
Q1 Fiscal 2017 Highlights Updated Outlook Prior Outlook FY17 Guidance Operating Segments • Lubricant Gallons No Change 3-5% • Revenues No Change 4-7% • New Company Stores 30 31-33 • Narrowing Adj. EPS and Segment 29 acquired, 1 new build 28 acquired, 3-5 new EBITDA ranges builds • Raising Free Cash
Slide 12: Q3 Fiscal 2017 Summary
Q3 Fiscal 2017 Summary Performance in Q3 exceeded our expectations Making progress on our core priorities Building a strong foundation for future growth 12
Slide 13: Appendix
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Slide 14: Key Items Affecting Income
Key Items Affecting Income ($ in millions, except per share data) Third Quarter Impact Preliminary Total Operating Earnings 2017 Income Pre-tax After-tax per Share Separation Costs $ (15) (15) (13) (0.07) Tax Matters Agreement activity $ 2 2 - - Total $ (13) $ (13) $ (13) $ (0.07) 2016 $ - $ - $ - $
Slide 15: Core North America
Core North America ($ in millions) Fiscal Third Quarter Factors affecting year-over-year EBITDA1 Preliminary Three months ended June 30, 2017 2016 Change 0 Lubricant gallons (in millions) 25.8 26.7 (3) % 0 (7) Sales $ 258 $ 251 3 % (2) (1) Operating income $ 48 $ 58 (17) % 62 52 Depreciation and amo
Slide 16: Quick Lubes
Quick Lubes ($ in millions) Fiscal Third Quarter Preliminary Three months ended June 30, Factors affecting year-over-year EBITDA 2017 2016 Change Lubricant gallons (in millions) 5.6 5.2 8 % 5 2 0 0 Sales $ 139 $ 119 17 % (3) Operating income $ 34 $ 32 6 % 36 40 Depreciation and amortization 6 4 50 %
Slide 17: International
International ($ in millions) Fiscal Third Quarter Factors affecting year-over-year EBITDA Preliminary Three months ended June 30, 2017 2016 Change Lubricant gallons (in millions) 14.6 13.9 5 % 3 0 Sales $ 137 $ 129 6 % (3) (2) 0 0 Operating income $ 18 $ 20 (10) % 22 20 Depreciation and amortizatio
Slide 18: Valvoline
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