On this page of StockholderLetter.com we present the latest annual shareholder letter from VALVOLINE INC — ticker symbol VVV. Reading current and past VVV letters to shareholders can bring important insights into the investment thesis.
ANNUAL REPORT
2023
Forward-Looking Statements:
Certain statements in this Annual Report, other than statements of historical fact, including estimates, projections and statements related to
our business plans and operating results, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995. We have identified some of these forward-looking statements with words such as    anticipates,       believes,       expects,       estimates,       is
likely,       predicts,       projects,       forecasts,       may,       will,       should,    and    intends    and the negative of these words or other comparable
terminology. These forward-looking statements are based on our current expectations, estimates, projections and assumptions as of the date
such statements are made and are subject to risks and uncertainties that may cause results to differ materially from those expressed or
implied in the forward-looking statements. Additional information regarding these risks and uncertainties are described in our Form 10-K,
which has been included in this Annual Report and is available on our website at http://investors.valvoine.com/sec-filings and on the SEC   s
website at http://www.sec.gov. We assume no obligation to update or revise these forward-looking statements for any reason, even if new
information becomes available in the future, unless required by law.
Non-GAAP Measures:
This Annual Report includes certain financial measures that do not conform to generally accepted accounting principles in the U.S. (U.S.
GAAP), and should not be construed as an alternative to the reported results determined in accordance with U.S. GAAP. Management believes
including this non-GAAP information assists investors in understanding the ongoing operating performance of Valvoline   s business by
presenting comparable financial results between periods. The non-GAAP information provided may not be consistent with the methodologies
used by other companies. Information regarding Valvoline   s definitions, calculations and reconciliation of non-GAAP measures is included in
the fiscal 2023 form 10-K, which has been enclosed with this Annual Report.
DEAR VALVOLINE INC. STAKEHOLDERS,
Fiscal year 2023 was a transformational year for Valvoline Inc., as it was our    rst year as a pure play retail business. We added 137 stores
to bring our total system store count to 1,852 service centers. Revenues increased nearly 17% to $1.4 billion from 17% higher systemwide store sales which increased to $2.8 billion. System-wide same store sales saw strong and consistent growth across the network of
11.9%. From a pro   t perspective, income from continuing operations grew over 80% to $199 million and adjusted EBITDA expanded 20%
to $380 million.
In addition to delivering strong results, we completed the sale of our Global Products business for $2.65 billion in cash and made
substantial progress on our commitment to increase shareholder value by returning $1.5 billion to shareholders through share
repurchases made this year. We also successfully completed a leadership transition with former CEO Sam Mitchell   s retirement in
September after a stellar 21-year legacy of leading the Valvoline business.
As the leader in automotive preventive maintenance, Valvoline has a proven track record of growth, with    scal 2023 marking a
phenomenal 17th consecutive year of positive system-wide same-store sales. We have a simple, but highly e   ective formula for
continuing to deliver long-term value for our shareholders, including:
1. Drive full potential in the core business. We continue to invest in our people, processes and technology to strengthen our ability to
e   ciently deliver Quick, Easy, Trusted service across all of our stores     every day. The result is a consistent customer experience which
drives retention and ticket growth. In addition, our marketing sophistication continues to be a standout in the automotive services industry.
This, along with our strong brand, helps us drive new customer acquisition.
2. Accelerate network growth. Both our team and our franchise partners recognize the signi   cant opportunity we have to expand our
store footprint. Auto care remains a growing, highly fragmented market that o   ers signi   cant whitespace for expansion. We see potential
to grow our store network to 3,500 plus stores, with a focus on accelerated franchise growth. We continue to target 250 new store openings
by 2027 with 150 of those coming from franchise. There are multiple levers to fuel this growth including partnering with our existing
franchisees, adding new franchise partners and building ground-up stores and opportunistic acquisitions.
3. Target customer & service expansion. As a more than 150-year-old brand, Valvoline has a history of innovating to meet the changing
needs of the customer and the evolving car parc. One example today is the opportunity to continue growth in our    eet business. Our
quick, easy, trusted service is not only convenient for    eet owners but helps keep their vehicles safe and on the road. Another focus is on
our non-oil-change service penetration. As we think about the needs of an evolving car parc, it will be increasingly important for us to
help customers understand the preventive maintenance needs of their vehicle, regardless of engine type (ICE, EV or hybrid) and o   er a
convenient, trusted way to meet those needs.
This proven formula will drive higher revenue, strong margins, free cash    ow and attractive return on invested capital.
The key to this success starts with our people. I want to sincerely thank our talented team of more than 10,000 and our strong franchise
partners for the hard work that delivered these results in    scal 2023.
We have a resilient and durable business and I   m excited about the momentum we are taking into    scal 2024!
Sincerely,
Lori Flees
President and Chief Executive O   cer
 • shareholder letter icon 12/15/2023 Letter Continued (Full PDF)
 • stockholder letter icon More "Consumer Services" Category Stockholder Letters
 • Benford's Law Stocks icon VVV Benford's Law Stock Score = 85


VVV Shareholder/Stockholder Letter Transcript:

ANNUAL REPORT
2023

Forward-Looking Statements:
Certain statements in this Annual Report, other than statements of historical fact, including estimates, projections and statements related to
our business plans and operating results, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995. We have identified some of these forward-looking statements with words such as    anticipates,       believes,       expects,       estimates,       is
likely,       predicts,       projects,       forecasts,       may,       will,       should,    and    intends    and the negative of these words or other comparable
terminology. These forward-looking statements are based on our current expectations, estimates, projections and assumptions as of the date
such statements are made and are subject to risks and uncertainties that may cause results to differ materially from those expressed or
implied in the forward-looking statements. Additional information regarding these risks and uncertainties are described in our Form 10-K,
which has been included in this Annual Report and is available on our website at http://investors.valvoine.com/sec-filings and on the SEC   s
website at http://www.sec.gov. We assume no obligation to update or revise these forward-looking statements for any reason, even if new
information becomes available in the future, unless required by law.
Non-GAAP Measures:
This Annual Report includes certain financial measures that do not conform to generally accepted accounting principles in the U.S. (U.S.
GAAP), and should not be construed as an alternative to the reported results determined in accordance with U.S. GAAP. Management believes
including this non-GAAP information assists investors in understanding the ongoing operating performance of Valvoline   s business by
presenting comparable financial results between periods. The non-GAAP information provided may not be consistent with the methodologies
used by other companies. Information regarding Valvoline   s definitions, calculations and reconciliation of non-GAAP measures is included in
the fiscal 2023 form 10-K, which has been enclosed with this Annual Report.

DEAR VALVOLINE INC. STAKEHOLDERS,
Fiscal year 2023 was a transformational year for Valvoline Inc., as it was our    rst year as a pure play retail business. We added 137 stores
to bring our total system store count to 1,852 service centers. Revenues increased nearly 17% to $1.4 billion from 17% higher systemwide store sales which increased to $2.8 billion. System-wide same store sales saw strong and consistent growth across the network of
11.9%. From a pro   t perspective, income from continuing operations grew over 80% to $199 million and adjusted EBITDA expanded 20%
to $380 million.
In addition to delivering strong results, we completed the sale of our Global Products business for $2.65 billion in cash and made
substantial progress on our commitment to increase shareholder value by returning $1.5 billion to shareholders through share
repurchases made this year. We also successfully completed a leadership transition with former CEO Sam Mitchell   s retirement in
September after a stellar 21-year legacy of leading the Valvoline business.
As the leader in automotive preventive maintenance, Valvoline has a proven track record of growth, with    scal 2023 marking a
phenomenal 17th consecutive year of positive system-wide same-store sales. We have a simple, but highly e   ective formula for
continuing to deliver long-term value for our shareholders, including:
1. Drive full potential in the core business. We continue to invest in our people, processes and technology to strengthen our ability to
e   ciently deliver Quick, Easy, Trusted service across all of our stores     every day. The result is a consistent customer experience which
drives retention and ticket growth. In addition, our marketing sophistication continues to be a standout in the automotive services industry.
This, along with our strong brand, helps us drive new customer acquisition.
2. Accelerate network growth. Both our team and our franchise partners recognize the signi   cant opportunity we have to expand our
store footprint. Auto care remains a growing, highly fragmented market that o   ers signi   cant whitespace for expansion. We see potential
to grow our store network to 3,500 plus stores, with a focus on accelerated franchise growth. We continue to target 250 new store openings
by 2027 with 150 of those coming from franchise. There are multiple levers to fuel this growth including partnering with our existing
franchisees, adding new franchise partners and building ground-up stores and opportunistic acquisitions.
3. Target customer & service expansion. As a more than 150-year-old brand, Valvoline has a history of innovating to meet the changing
needs of the customer and the evolving car parc. One example today is the opportunity to continue growth in our    eet business. Our
quick, easy, trusted service is not only convenient for    eet owners but helps keep their vehicles safe and on the road. Another focus is on
our non-oil-change service penetration. As we think about the needs of an evolving car parc, it will be increasingly important for us to
help customers understand the preventive maintenance needs of their vehicle, regardless of engine type (ICE, EV or hybrid) and o   er a
convenient, trusted way to meet those needs.
This proven formula will drive higher revenue, strong margins, free cash    ow and attractive return on invested capital.
The key to this success starts with our people. I want to sincerely thank our talented team of more than 10,000 and our strong franchise
partners for the hard work that delivered these results in    scal 2023.
We have a resilient and durable business and I   m excited about the momentum we are taking into    scal 2024!
Sincerely,
Lori Flees
President and Chief Executive O   cer




shareholder letter icon 12/15/2023 Letter Continued (Full PDF)
 

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