VVV - Earnings call transcript Q1 2018

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Operator

Good morning. My name is Casey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q1 2018 Earnings Conference Call. [Operator Instructions] Thank you. Sean Cornett, Director of Investor Relations, you may begin your conference.

Sean Cornett

Casey. Thanks welcome quarter and call XXXX Valvoline’s webcast. and to morning fiscal first conference Good for ended of at X the at results earnings relations viewed released Valvoline quarter website with conjunction available PM and should that Time on used presentation investor in approximately a December Eastern yesterday, is this investors.valvoline.com. February copy and release, remarks be which X.XX XXXX XX, our file These Exchange our preliminary results we Form and until the Commission. with XX-Q Securities are release has a news furnished to A on the copy been the SEC Form of X-K. Mitchell Valvoline's With Mary me today call Financial on Chief the Chief are Executive Officer, Sam Meixelsperger, Officer. and

of and will reminder, a date and reconciliation presentation of subject forward-looking results adjusted any GAAP remarks, in approach unusual, amounts We from statements understanding our this was not or earnings key business. results of remarks to exclude are ongoing These are and Valvoline discussion restructuring uncertainties materially update differ any certain discussing historical actual fact In such we adjusted management's which as non-operational any included items, our forward-looking believe no cause be As statements statements. our on Adjusted today non-GAAP that results with an in measures assumes basis. enhances this on of nature. the under that results our of forward-looking are to statements. our A to presentation in to are reported based use may statements. this of our are risks of assumptions, obligation current release.

in operating share. QX or reported Valvoline of $X.XX million per see and $XXX $XX As on loss you can X, of million delivered slide a net income

that of enacted by want There Our we the tax driven pension to items few estimated was reform. reported related your call to. the to net attention recently impact are a U.S. loss

adopted classify income as non-operating. has guidance pension OPEB pension new Valvoline as early is First, OPEB in and accounting income. that we

this XXXX the OPEB Tax $XX deferred and year, $XX earnings. reform compared million and repatriation a $X $X $XX in the EPS of quarter. adjusted related impact that was remeasurements. led the OPEB year costs which In adjusted to to was executed Matters of last fiscal was Agreement was EBITDA our were to this interest Also of result, of million $X the net in related implementation to income current is Separation a now re-measurement tax one-time prior the our than impact our transaction and pension QX, million period. Pension additional pre-tax to income. higher and net reported income. related million in QX period. [ph]. Key to current of tax reduction $X expense are with year related assets An foreign exclude incremental in million As fund we our year late is impacted it pension primarily interests debt borrow which due million the excluded The in prior approximately reform million the year in items, adding million of was in from $XX and and Ashland. including the result tax expense, to deemed quarter the

to move me things X, our to turn over details Sam we as slide Now of Sam? let to more results. cover

Sam Mitchell

QX everyone. and start a morning was XXXX. good Sean Thanks good to fiscal

modestly million late of pour our our hurricanes from expectations, was despite costs last $XXX the line of higher EBITDA in bottle. new year launch from and the adjusted easy Our with

quarter looks in off as We year. sequentially most improved we Lubes the even coming was QX in to had performance anticipate further Quick areas margins strong Our we margins in unit and unit improvements expected. QX. excellent better last

mix premium growth. volume overall every and had segment gains in also We

and XX% shareholders. We to more than in shares. we cash Finally, million returned our by repurchased QX X.X raised dividend

year. addition, new meet our and we're for million In authorization. on business the healthy repurchase share is goals track to established we a $XXX The

each Let's take at a look America on starting X. slide segment's closer results with North Core

As XXX maintaining good our in another our business. the basis due mix QX story modest XX.X%. overall. you promotional this decline for moving in We're Branded decreased year-over-year up was segment to can up was points momentum measure for volume changes the premium important to volume to non-branded slightly, see, volume but branded the in timing leading

QX. As SG&A unit we and increases were costs cost year-over-year expected, packaging anticipate is our These the in decline improved last transition and prices costs and in trend in material crude Hurricane impact unit raw versus driving inflation in We in further drove EBITDA primary decline on new higher margins QX. sequentially. improvements drivers for anticipated oil. base our investments recent the year. planned in were in margins segment for the than The

impact look the see QX, As we out higher expect to of costs. to we material raw

impact lag of We second on pricing can X, modest take half that and slide continue year. On in continues. to see our some expect focus cost the innovation appropriate you the price actions

Our gas address is engine performance game more this products available injection. newer are standards charging product design Fuel technologies to emission now than changing in expected in invested our available new synthetic across be XX,XXX our full like efficiency driving to across packaging and later turbo motor innovation new up easy product DIY Shifting is of line direct line issues pour oil innovation, spring. locations and in we've car. and to

poor performance. designs new increased carbon can to deposits lead engine these and However,

Engine both Motor engine our and DIFM build Over Our even just branded launched channels. of designed we new our from both new Premium of new these help pour in problems. will lead system gains build can which DIY fuel carbon in up grow forming. cases are products severe carbon products more up time, that prevent Oil, and easy drive helps mix to GDI Synthetic Modern we clean to volume, share bottle, easy serious expect improve

when Valvoline X sales that second the Instant X.X% and strong Change. on These even up Moving see franchise stores Oil are were last sales transactions of system-wide. results driven same-store system-wide is Company-owned in slide stores in over year, in marketing our to Lube of increase impressive transactions for performance sales results, outstanding platforms. due as and in can X% more they The was same-store demonstrate gains the to up average X.X%. growth by X.X% ticket. QX, growth Quick quarter grew an delivered Same-store you growth

new We to our benefits continue from see year. last campaign advertising launched

EBITDA We system, by our QX, also recent prices also Total which ticket early average driven drove in and increased acquisitions, October. were including sales segment franchise the improvement. in growth closed which

system-wide XX from quarter. added we've the benefiting also QX stores new new XX year, since including stores, We’re during last

X% our at stores segment. year-over-year for for volume system-wide Volume Slide year. new growth than that continued including on in where X%, and on is more shows the XX of was Volume the ventures. in reported success QX Latin X we're our a channel strong up across development. Europe track We our We’re continuing. joint our volume building momentum international quarter America, up unconsolidated ongoing had for

new the additions help and time. and our added expect the over Africa across also region East to these Middle We distributors to volume contribute growth

Asia as, material and record from well results. by Our to supply joint and impacted in costs quarter inside raw certain in margins our Unit lower particularly made of contributions margin strong higher contribution as higher markets would were ventures geographies. overall chain volume come another

planned in cost and We these EBITDA. in QX. are the anticipate adjusting margins improve and SG&A unit pricing margins decline increases to material Lower increases through to unit raw pass in drove

Valvoline discussed in Beyond introduced us authorization common share new is million next to to new stock we repurchase repurchase results, our The segment fiscal up also $XXX slide. a the through XXXX. that on allows authorization

is for enables growth We combined with expect while stability QX. under repurchases once to in The the business of opportunities, complete returning conversion the flow capital end our to cash invest our of one begin us shareholders. to this strength current strong and authorization model

first in across strengthening business back is invest Our international opportunities supply our and chain. infrastructure growth We're the into the our capture priority digital investing segments. to to the

both of will expect growth improved We drive efficiency. opportunities and these

course, capital to Instant share be pursue looking continue time, opportunistic projects. also we focus Valvoline We're to going committed the other authorization. markets. in the dividend on as operating we've Of through Quick returning at XX% our shareholders of company to the growth repurchase adding and in targeting we’re to stores, new share repurchases. Oil to penetrate We'll to Lubes. Over Change the with dividends acquisitions to We're and shareholders XX% which flow demonstrated to return cash we're over new additional

have at phrase Valvoline way franchisees work hands-on-expertise. We partners, customers, with a that we business and describes the our

were of safest Successes Mary At the look might system-wide We financial core ranking top in strategies. recognized led let our in with like system was like top Our me highlight. recognition QX EHS the With for The it. America's health and with our are company. recognized We've Parts it and franchise companies is we're it Today. deeper awards of that with over recognized Valvoline Instant achievements, of demonstrate and U.S., O'Reilly The AutoZone. recognized focus starts our major for development great by team's both building Safety these IOC’s in a our named to magazine. growth and a great Latin our the hands-on-expertise to be some Oil to like been franchise awards results. business OEMs an proud values one relationships all America, Valvoline has to to key was pass and on one the recently including and Change industry also the China I'd honor. partners Quick prove customers also the are Auto distributors that entrepreneur at progress Lubes this retailers, talent our people, from as strong by These results.

Mary Meixelsperger

Thanks, Sam.

of volume fiscal were Our for and offset on these SG&A. adjusted Both up adjusted EBITDA Adjusted growth EBITDA $X decreased $X.XX. XX. X%. mix volume increases EPS by was and items planned and summarized million income. in OPEB million results $XXX now was Adjusted XX% year favorable with Sales QX pension prior versus slide exclude are

prudent The higher high our ad full investments Marketing top of marketing. international quarter, we and SG&A digit SG&A our both product support time single is to over year phased and leverage roughly grew to top the our Overall, will QX that and campaign we're Sales due in affecting was the support SG&A. volume versus drive packaging to able As be line related expect full force in advertising we costs, of in and to bottom drive year sales we including in and said year. related a year at grow remaining plans in public primarily company majority launches DIY last VIOC. sales. making range in investment infrastructure our both in and lines, incremental are which our at SG&A expect to is in to rate increases during smart, investments of growth investment these our in the last XXXX.

net XX% will rate. quarter a rate and the a XX.X%. be one-time of reform. to consolidated XX% XX% XX% to expect of charge tax the federal adjusted we rate reform rate three In XX, tax to tax associated beneficiary tax slide blend on by was expect of at We of higher we XXXX XXXX, XX% result a in and for lower one is of new fiscal see in The XX% tax prior effective driven reform. to XXXX outlined the As fiscal beyond. quarters in anticipate of rate a and tax effective QX with This

benefiting discussed. tax our adjusted rate XX.X%, reduction QX reduced the Our I from just tax rates rate blended taxes. was cash lower The effective

cash no EPS pension material rates the generated XXX% by in the is to of reform expenditures. are this incremental to reduction benefit $X.XX from in as year regulations benefits and offset flow available. Additionally, and maybe we refined we XXXX. The in expensing become additional the saw from EPS impact of NOL by the the our funding the also benefit lower expect QX is certain QX. we guidance to to tax a a future of provisional Lower tax There in reform net results impact benefit as tax value capital executed of adjusted and further rates

The things for capital, items year-over-year activities decline settlements including year. related point I'd XX, working by Cash few items was are operating like driven $XX flow corporate timing prior of there from million. the to separation was Turning in out. the slide a on to

the of free expect We was million. the Capital million flow $XX capital and working timing was to expense $X balance these items reverse over cash generation year.

the acquisition we also closed and in franchise During in XX VIOC system stores. the quarter,

slide, I'd the updated about talk for expectations to XXXX. next turning our like Now to

revenue to growth sales and X% the in to We adjusted due per our our QX raising by are of pricing. $X.XX the our XX%, raising EPS performance share, benefits about and pass-through guidance same-store to to we're also estimates tax growth We're X% X% reflecting reform. $X.XX raising sales to to to on based better primarily same-store XX%

EBITDA guidance our maintaining million million. to $XXX are at $XXX adjusted We

to turn Sam back me over wrap up. it let Now to

Sam Mitchell

Thanks, Mary.

goals the products had international, branded margins stores Core us to innovative our confidence our In With solid XX in had added to slowest to to performance future. improved the launched on for to continue volume we same-store mix and Quick we’re XXXX. system. In and QX, track progress in we sales was improved give expect on quarter. and volume our new the start a unit see In sequential in strong premium Lubes, grow unit to in meet we historically new The QX. growth America, North made margins

to shareholder over returns. and Sean authorization strong open new that, share a growing the formula repurchase hand for total for line to I’ll compelling Our business our it driving With Q&A. combined is model dividend with

Sean Cornett

Sam. Thanks

to one, plus open With questions that, limit follow-up have the let get Before lines. time we that ask to we to move your Casey, me the enough Q&A, you there. please

Operator

Your from open. Instructions] comes [Operator line SunTrust. Stephanie your question go Please is ahead, first with Benjamin

Stephanie Benjamin

morning. material then costs and outlook quarter, going your some saw see from you But raw good for price you looking forward. the to on get year. the I second just question color in higher Sam that have on the commodity I what Thanks. you'll just just a mentioned really the of lag that the affect basis more Hi, just and quarterly expect can we half. during was

Sam Mitchell

costs, as that we're Yeah, that channels. the the us from first launching material noted, raw packaging had DIY we the also hurricane quarter, from the impacted higher and impact new in in

move that impact Core our the in unit and we're Coming said shape felt than That in have we you been where projecting margins of flow why to will mid base and North inflation P&L, the where that's into certainly our there expectations period begin increases into that, through up prices the So, we've increases when will margins unit be. of seen of crude influences in in course, make lower that QX it, in quarter. and we’re will primarily to of WTI a at were XXs America oil QX. significant based going good And a out modestly our improve. announced we're those our look oil

those and QX price price that increases we've and and to Fortunately, hold prices been will able begin to take move announce increases in implement into QX.

in a be very shape we’ll be I cost lag feel price to with we so what And manageable effect. good consider

Stephanie Benjamin

Thanks Great. so much.

Operator

Your ahead, from next with question Gutman is comes Simeon line your Morgan go Stanley. open. Please

Simeon Gutman

just of that three first Can Good percent a input? of you guys. two year are talk group could happening there mix where structural just morning, implication good remind in about, are either costs. us chasing there the a versus just group that you is changes have or on groups refining bad any of area say a different capacity more than were let's those input ago. Can the something Or we as

Sam Mitchell

terms twos group is our segments. group the group Group three synthetic in threes. still of used largest Yeah, Okay. input, growing and in the two is our of mix

becoming twos And but haven’t to – important so, two-thirds well overall of group more threes the and our mix are group the are recently, I mix. mix. looked at more But over

continues synthetics to In three long continues increases there's increase, capacity happen, additions twos, shift terms see fairly so of there. balanced lot in be as been production, that market. production, as of base market the to a the Group of group capacity a more to oil we

Simeon Gutman

then is Okay. on my second more question And guidance.

the mid-ish single EBITDA your the to or expectations, less quarter consistent to the that and achievable? of digits got The midpoint I sort it's guess, run is absolutely for for was that contemplated, those year, did high means the model remainder above of decline was changes X be all but in the average are the what more confidence you of with that. guidance first and but gives which rates what

Sam Mitchell

place continue so protect balance that in we unit our volume look when at and of Yeah, year, our when most prices to adjust solid ability have also to importantly performance, initiatives regions, initiatives is in margins, look in at performance fiscal our to you just to in we the QX drive the our the North Quick growth growth. have business that the Core branded also Lube of international core business the we really feel place strength and we volume America, see certainly in and about good our the in we to that drive results the

implement we've margins So, and to those Based we've later feel margins. segments, those year. to us what's that through really for key unit be good to oil to increases be work those offset increases ability doing price in to to price through the work able on very we got our base, increases to protect all this will we've base our the protect flowing about got that been those customer is,

the So, EBITDA for the the projecting us when the gives together, you that we're two balance put year. confidence in over performance that

it up the the lower volume is higher and at but the a of quite So, really consistent level quarters, time. over is seasonally versus and QX in balance certainly QX. years of is year for up it's where that's we rest versus picks were a EBITDA picks step been where in some the up the

Simeon Gutman

Sam. you Okay, thank

Operator

comes next your go Gabelli line Carolina Jolly is open. Please Your with Research. ahead, question from

Carolina Jolly

taking Hi, thanks my for question.

American recent are big segment I guess, I you of yours, to and you seeing issues with there? some customers of their in any know talk within that passing results, large anything Given about end the seeing are through segment? that distributors can start, Just kind anything you at four the North see market. price do that you're of

Sam Mitchell

Sure.

North contributor accounts significant are when to the to North Those and the we important on performance focus so very our yeah business with retail Core us. in relationships So, Core America. America large DIY

the lot feel the products, of those about XXXX, good them ability of in plans strength margins too. their really protect the pricing do strength taking relationships, – the of the strong I capacity We merchandising be to promoted actions distribution so for and appropriate our working brand, very how they’ll place have to a our that they're with allows with of that to retailers, so the has

we're the And price plans well of implementation increases. so these into

that positive price also beyond are The announced, too. seeing increases we’re competitors is own our other implementing they actions that thing have

America. very feel I Core we So, stand in North important about DIY with confident business. where Certainly

in package growth initiative are behind consumer initiatives got from they far strong. mentioned in quite is we the indicates this exciting retail The partners package our competitors. to place. that our the superior research some I that getting As is that we're pour easy presentation, This and too new that enthusiasm have it we've that the for did and support

Carolina Jolly

lot. Perfect. Thanks a

Operator

Your next go with question open. Citi Nicholson ahead, is comes line from Please Wendy your Research.

Wendy Nicholson

sort improvement an Hi, shift? good there follow-up, to conversation the morning. of longer Or specific shift. a release margins the international for but I a of think just of something sort out where and that some should underlying is called is focus the the weaker that was So, we was if looking wanted this term? there, in the segment I I a the wondered international business how sort on negative little over that temporary, you're think the were and just Thanks. quarter? margins to about bit But I mix press know

Sam Mitchell

great it short-term within We that Yeah, a the do quarter. question. impact as see was

of weak us, relatively profitable business had larger, for which very markets, our in a quarter. is one Australia, mature Our

be have margins Latin But did the look balance back impact Then seeing continuing growth, to lower good in We at America we we a and of versus that plan market we that they'll on see in mature have in China. in Australia. of relative we’re that have the the really the markets. that the year. for some track some strong So, think developing to margins a mix

ventures nice really I and mentioned strong to growth were joint quite too. Europe Our continues to show some

I and feel international about grow. the very business So, to of confident performance ability the our

QX we've through raw results. that see the when our call material implemented this quarter other the now. we We'll our out that price that costs we’re in QX The report first international was quarter. second were That increases as will quarter in impact unit show flowing that higher business impact improvement our in of margin we did in

We’re business. confident overall that we’ll be the with international in margins in good our shape

Wendy Nicholson

Got it.

that is then comment a my sorry it, terrific. and terrific, you. on And sort thrilled and repurchase acquire there of this capital But busy a on shift activity, you regarding this on allocation appetite that. flow outlook acquisition reflection in was the a of it’s question second I'm priority a new or just sort does program if Okay, that's just for reflect your does there for missed opportunities any of about still a sort seem Thank and it are morning, of I share you – the chains, but smaller strong made cash out? to

Sam Mitchell

overall reflect change not Quick in Oil generation of strong some does we the that really to strong will to It Change ability business it Instant and reflects Lube be think additions the our acquisitions Valvoline Yeah, cash model any make itself. the confidence business.

dividend, invest we're we only So, in now throughout we’re we early or with share not started place months, look last with completed the and on a early we program. the the completing repurchase can over it will if Then side. believe the authorization We XX business. in fall. last We our putting be that share dividend because in started new – increased that we repurchase you the

we've a via that's investment be priority. and generate capital returning share dividend, important going chain infrastructure. noted, for to is beyond our confidence then higher authorization. But that this also return Lube I growth even to those continue shareholders of beyond digital cash this needs in that making projects, investments cash growth, and our our in higher repurchase foremost, but that's gives some all business also to But As us to to infrastructure, first part strengthen got acquisitions high investing supply our Quick always going

Wendy Nicholson

sense. much. Makes so Okay. you Thank

Operator

open. Silversteyn line comes Your with next Please your Dmitry from is Longbow question Research. ahead, go

Casey

morning guys. This filling actually for Dimitri. is [ph] good Casey in Hey,

on the basis, quarter geographic you kind any positive there was side or volume either on of saw surprises the negative? a that On

Sam Mitchell

weren’t surprises. really any there No,

Casey

impact a through Okay. you than business of slower the some as you that? American more give international? the of look know to North bit in the Could quarter the you a that color then the increase little in price is on And the little on flow

Sam Mitchell

the be that international it was increases XXXX a felt there. the case different higher fiscal business increases the and increases earlier of of were timing bit in cost in can North really increases QX. some The Core that international by this price covered in those we little markets cost that felt in America in Whereas

So, this is really a price increases business in kind of a shift markets implemented. where we our saw the in resulting being higher now cost in international certain that

Mary Meixelsperger

little And mentioned. lag those the Sam by was for really Casey that impact with hurricane saw very the of the North Core quarter. there that cost price associated caused bottle one-time was we in and America the business lines costs margin Most

Casey

guys. Thanks Okay.

Operator

ahead, comes with open. Zekauskas next question Your Please your line Jeff go from JPMorgan. is

Jeff Zekauskas

industry that's surveys synthetic down on I semi prices semi in XX% been why and you if conventional there's Thanks you core XXXX. semi on is If they that And make oils about done do that said synthetics are, mix come synthetic is But that? very your prices you moving synthetics have much. understand more and some true, year-over-year? are the that down have higher since – than oil up. margin change a

Sam Mitchell

about talk little the of so all, when a bit product Yeah, talk up. first line just you

segment, bit and high at aggressive of the oils, synthetic the segment. then conventional we mileage been call full mentioned, synthetic a pricing. Wal-Mart's mileage high on got where And they’re them, or semi mileage the as more conventional segments, top shelf on segment you pricing close at You've high predominately

that segment. contributed positive good also volume pressure on as it's So, too. relates the prices on retail they to have high put to But it in note, growth mileage the segment

to that's we're to it's and of shift our a seeing hasn't and Valvoline segment. strong. that not in positive then strong segment mileage to the channels. installer net share we been continues in because be – carries in But it high expect but across synthetic high full all So, mileage us continue the significant Instant for contributor and It's the Oil the that the to channels margin conventional Change it a much DIY, in the higher just grow, than where segment

positive to So, growth And that segment, of addition be in the strong. real synthetic be continues got the high a mileage us. you've for to growth to in continues be then very which segment in

Jeff Zekauskas

or different? versus the my what's benefit, mileage if relative materially synthetic, XXXX size tax changes? any, one For of tax is is bigger one the smaller from follow-up, which there Mary, and what's your cash full the which is For your high in

Sam Mitchell

segment now. might the I with than follow-up for in you've synthetic, mileage in the is split segment high to have mileage bigger synthetic faster rates high segment. us versus around the but the specifics synthetic the right Yet got growth

understand we side relates our going full with for have So, trends the DIFM high we business good do-it-for-me on both the like helps and of competitively. DIY it don't installer mileage share particularly what's business. share data us the as exactly the But to and We have good synthetic side. tracking that data

growth DIY some share focused year-over-year. place. On in in that side our And shares we job, we've on done though where increasing a initiatives the market have of full strengthening that's our strongly synthetic the with nice we're particular,

new to us, I is as of engine launch going will not help modern then product the penetrate think help packaging hold. and across only synthetic the us takes this to is but segment the DIY first new continue channels, full

Mary Meixelsperger

[indiscernible], X% benefits that think expensing your will then on expect basis before the I from XXX new diminish the incremental Its our from the XXXX, the do rate question $XX we to time provisions XXXX we is lower on XXX% and million tax, of cash just Jeff, range. points, profit tax that, in from law or XXXX. be over that rate will the in benefit And effective tax expect

it’s but for us. So, tax significant cash benefit a

Operator

Your your go with Please Securities. next line comes from is Seaport Harrison open. question Mike Global ahead,

Jacob

for on Mike. [ph] Jacob is This morning. Good

so with clarification material and question. new packaging packaging the so impact, The Just a was than [indiscernible] trying more in uptick cost out rest of the the just costs. costs a kind the higher assume the for figure that packaging or causing associated that But …? We goes what's of if of previous headwind the launch. just new that with year raw one-time comment [ph] more more that’s a away design to

Sam Mitchell

because good It's two really of package. ask highlighting that to new conversions. a impact is we're the temporary one there elements Yes. plant cost the are the costs increase, And question of of making the those the cost

as a move as packaging QX. packaging, And costs as design lines line. higher is, logistics of cost to reflecting we yet it is convert challenges the across very logistic believe full brings line the consumer negative new new a are those of DIY production in so of ongoing into the what we some and conversion the package subside impact strengthen reflected the an does with higher for the we that. because and And to it our the up to Those there's begin that higher we're forecast. what of brand. to in our us that investment smart however cost value There is And

really us. marketing it's So, important an DIY investment channel for in the in

Jacob

All right. you. Thank

Operator

that go do Tong from America of You line your ahead, Merrill is has Please Instructions] come Olivia a Bank through [Operator have with question Lynch. open.

Olivia Tong

Thanks. Good morning.

still strong. deceleration which ask about of technical continues really a you a having half. a back didn’t difficulty obviously to bit little pretty little But and same-store your here. of fair to want be outlook change we're bit sales, the But Sorry, amount in implies

pricing deceleration a environment? driving frequency you you can how about gas talk maybe higher for expectation to think the the in So,

Sam Mitchell

doing what I the in same-store been first growth. new job also excited seeing Valvoline of continuing customers comp driven sales business. about all nice win transactions, the performance, customers, that's and we’re that's we’re And a Change in too seeing to Oil Instant continued particularly growth mean, by we’re good our Yeah, so that attracting results we're really while new new some seeing customers year-over-year retaining where to we’re and that we're is the we're

same-store not campaigns we marketing And we of the helps sales very same-store look future digital we’re QX so bring the performance, when it With sales the new the because was but same-store those sustainability, messaging, year to for the comes delivery growth, so to all, campaigns to those have a sales and first I and continue going at QX of weak our mean, we're sharpen, from when that only around to learn the in last the bullish regard growth. outlook, strong relatively to targeting customers.

get QX performance both performance. the good we same-store did QX the in we have quite year, and sales half As back in into of

So, kind same-store We in we of did we'll lapping tougher believe still pick took growth the good QX. our solid see nice be that a halfway launched place really see comps. new digital up, But campaign in sales, we'll advertising QX. some when I through

we on we I campaign and the saw be it's that comps, a year expect QX our new last full were think mode results lower. should in spend really excellent in that where bit to those

of consistency store more expect see on terms strength in you overall that's of delivering we because don't business of for the through see to looking to a win of that and half X% that the in say, that year, consumers comps back little ability the trusted bit the just why to likely experience. year. our we’re behind it's of But are So, stores, the really to the execution quick know of drivers what easy in for whole customers the the continue deceleration

stores, execution. just job doing Our an excellent company on our partners franchise are

a that we've for got to great so going business confident continue And here, grow to us. that's we're

organic be our ground. same-store then stores in going some sales exciting First of of and out to of see its top to first performance, that the on come new growth that

program growth store takes year hold. We’re in going the half good as of to back see new company the store our

that call, mentioned would we're The good an conversations system. be present operators with key those earlier that the quality us. operators As continuing to regional in high those for finding and developing our fits is those with pursue our relationships opportunity and Lube I continues Quick to

Olivia Tong

Great. Thank you.

Operator

Shaw with question comes open. Chris next Your Crespi, is ahead, go Monness, from Hardt. line Please you

Chris Shaw

Hi, what last bit to you itself. good Historically, the that does incentive customers actual have I all I at to change environment, want duration inflationary oil typically, a morning price found oil either motor guess, little question. the piggyback or everyone. between or just on of extend oil that do changes, an

Sam Mitchell

Yeah.

is seen an super or the their of intervals change and strong vehicles, that impact that that's on based demand whether business about relatively inflation. great one care economy of weak, not We on take is to are our oil investments, because really their engines. things have is steady people the going It's their

expect oil element prices positive overall synthetic. to the difference The the be a that's in toward with a tends intervals. business. more of margins move we change shift in even don't by up, manageable synthetics on change a and as growth interval So, our oil at very higher gas that's driven But for rate us

that’s years, think a couple very too, years, miles past where this last increases seen still in to driven growth tailwind the but is of versus still outlook that’s few the in X% bit for I over And closer the business, a positive has positive. been the moderated X% rate we’ve previous move. little year, a been and the So,

Chris Shaw

just of as a or then the just and bottle. on volume that premium in one, a some on advantage? for new the that you gain a some quick charging packaging share And is more new Are

Sam Mitchell

we’re increasing really to investment can it’s marketing Yeah, to where product, in for way Valvoline how to come premium Valvoline you like how programs, flat think business so our the use and we’re on improve said, to a grow relatively and market share this, going marketing mix. demand that in partners new for environment, I bullish about packaging, in that is us segment share wins our we’re not and Valvoline competitive in our going significant to we’re this like our and our prices when This North putting in Really going support drive drive to that another it’s bottle, is from place is DIY growth advantage America, we’re Core business. us. the in a grow going to their innovations help in move a market

Chris Shaw

a Thanks Great. lot.

Operator

And there today’s may call are This much you no now today. further you conference and questions for joining disconnect. gentlemen, thank time. at this and concludes Ladies very

Sam Mitchell

everyone. thanks right, All

Valvoline (VVV) 8 Feb 182018 Q1 Earnings call transcript