VVV - Earnings call transcript Q4 2021

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Operator

Hello everybody, and welcome to the Valvoline, Inc. Fourth Quarter of 2021 Earnings Conference Call. My name is Sam, and I will be coordinating your call today. [Operator Instructions] I'll now hand you over to your host, Sean Cornett of Investor Relations to begin. Sean, please go ahead.

Sean Cornett

Sam. Thanks and webcast. fourth everyone, conference fiscal to and call welcome morning quarter Valvoline's XXXX Good X approximately November On at X:XX p.m. XX, Eastern the Time, September fourth for XXXX. quarter and Valvoline fiscal year released results ended conjunction should presentation earnings be in This with viewed release. that our a at Relations investors.valvoline.com. copy website Investor available of is which on XX-K Please note Form are Securities and we file preliminary that the until Exchange these our results with Commission. Sam Mary Meixelsperger, On and this our CEO; morning's Mitchell, our call is CFO.

noted. approach adjusted this items, non-GAAP of amounts use similar measures used used is The restructuring under and information not comparable believe to GAAP by are statements forward-looking may non-GAAP We any our of These our unless basis today be of may on in unless historical discussion Difficulty] based results such shown actual no of in nature. not of provided on of non-operational fact of update will assumes remarks, [Technical this Non-GAAP our results are the are [Technical required to unusual, as which and to differ In slide statements X by presentation statements subject we presentation and As a adjusted companies. adjusted management's key measures our to assumptions cause this presentation and of statements. the is risks date that or by understanding in key enhances forward-looking remarks current results statements. business uncertainties for our be law. are are non-GAAP and Valvoline are included Difficulty] appendix. on certain an management materially otherwise from discussing to and obligation that other forward-looking results the any

to to call X, slide to turn As Sam. the like turn we over I'd

Sam Mitchell

Valvoline. Fiscal year at growth remarkable John. transformation for XXXX Thanks and year a was

more of contributed business adjusted to was Services total strategy a become our our as XX% Retail Our strengthened segment service-driven segment EBITDA.

Both segments EBITDA and growth year-over-year XX% including sales generated for results year-over-year increase. in a sales strong growth growing XX% same-store seeing exceptional, Products. XX% with Our and XX% sales results, Global were adjusted year-over-year Services Retail

We excited to-date and are the are very pleased with results our seeing. we progress about

next Let's turn slide. to the

[Technical Our helped XX% With our both on a made strategic us shareholders. as evident growth continue both businesses the and inflection and Services the XXXX in for helped critical service-driven returns in success businesses point fiscal a Success expect grow create allow of deliver transformation will significant revenue, capital and are thrive $X our Difficulty] results that to sustainable our pursue invested business value separation have strategic to will their to investments believe and reach our us drive benefits billion to Retail we a since XXXX. in We entities. tremendous both allocate to individual progress capital. of we separate priorities

let's Retail X. highlights, segment slide discuss Services on into Moving

another levers Our auto Lubes XXXX. our The deliver sales of year-over-year America line to Sales in segment North unit XX% The by top XX% driven with XXXX. billion pre-pandemic fiscal Retail fiscal nearly had nearly of services. $X.X and preventive Services of maintenance continues and additions. in growth that is grew be the segment versus performance same-store stores wide operator selection second a outstanding largest X,XXX year Quick

enhances sustainable growth sophistication Our market-leading and profitability. drive scale expand and share and to average and data ticket, our ability gain

business the demonstrating team auto the growth, scale preventive sales superior same-store in-store XX% care of that the across sales line combination the continue plus the X%. unit XXth experience. driven will year $X We highlighting billion, expect results growing forward. by our of growth Store-level increased that marked system our has roughly to superior of Top growth XXXX our same-store XX% consecutive sales, which were reached deliver of going built. business model and

our transactions by the Our year our XXXX low at changes significant we significantly as three the our XX times Pricing Recall that versus top more day fiscal to average synthetic stores outstanding same-store synthetic exited generate the capture performing the which first in changes two system drove industry one-third a We finished growth high average and across changes in The a per XX as was power average, driven of in growth from of than market outperforming conventional. the sales demonstrating ticket. single-digit oil XXs. performance the for is update rate as business the rate service May fiscal revenue strength well day, the and more shift roughly per times of share margin than ticket. oil system. ongoing XXXX oil

over would transaction have oil will cars trusted quick XX% believe synthetic roughly a third new experience our that are of changes a and -- and while our of easy approach We a do future. Just continue for customer in ticket lubricant. the data-driven to growth recommendation synthetic, average

more share generating to expands to further open future, our in locations, the market relationships utilized customer virtuous and In As be customer continue will incremental the services grow as growth evolves. we new park our data cycle. a our drive leverage to base car

Each XX% Products results accelerated pleased seen pre-pandemic next supply selling fiscal retain value-added Global year-over-year led to slide. and and I'm period Global by review our in growth heavy-duty on have grew approach to with in XXXX. Products top line region we international and enhance fiscal the Sales XXXX capabilities customers. uses markets brand this chain XX% Let's the markets. and in growth continue a installer and Products Global strong grew win marketing. international invest business as versus over in

across the are synergy and We growth customers. Global benefit share our accelerate to Products business driving

are to to digital we international into America capital it recently of expertise where North share discretionary of bringing our years, performance this continue duty capabilities heavy over generated in future. several low maintenance expanded our internationally, and example, expect growth flow have strong free has in North past growth profitable America needs and the a cash we percent the North and and from combination higher The For represents America. we mix

Next please. slide

Products technology, helped distribution robust growth all is by market Valvoline to top XXXX. Global which line positioned business Our increase and leading brand, globally, in network of our share well its leveraging fiscal extensive drive

this momentum in close EBITDA second impacted to due in raw cost XX% the fiscal lag as to Margins past material expect margins this by for price/cost in to XXXX. of were spring. XXXX were QX, We half year. the particularly continue Adjusted expected, and significant increases

our auto North of in for discretionary million volume cash channels, and our preventive lag free increases retailers, Products has markets, regions by volume of are performance international volume healthy year versus we from margins, chain at in We delivered COVID-XX chain expect and these to both maintenance XXXX, and Global benefited through. impact products. saw first XXXX, has we pressure fiscal Although new strength Across making supply the good on are and merchandisers channel. half in growth mass progress we another year-over-year flow. cost passing lingering despite with price/cost been parts DIY and Even the in encouraged all over $XXX distribution store of demand challenges. convenience America's supply bottlenecks

is continue The in Products expect are and in Difficulty] Global the North as long-term of XXXX. fundamentals growth America both We business outlook. the international fiscal [Technical markets volume to

review results detail. I'll more to our to Mary in turn Now, over financial things

Mary Meixelsperger

Thanks, Sam.

year-over-year fiscal are XXXX, ongoing testament in the was which our QX summarized particularly lag driven XX. QX services. and than to impacts, and and the primarily pre-pandemic Sales EBITDA XXXX adjusted versus growth by significant Retail slide more costs Year-over-year cost strong to year. of robust in growth for due store We Our results including Services acquisitions. past price a as points is material both on Products from in basis period XXX line raw products saw demand growth declining the top in were Global

rate than to expected in tax discrete which lower in QX tax came due adjusted a benefited effective adjusted favorable EPS. item, Our

EBITDA driven exceptional cover investments Let's quarter, to Services' growth pricing next look to EBITDA segment the was EBITDA to take labor last unit declined Retail strong a made in the through higher same-store closer of additions. during passing margins due slide. raw with on material impact we the costs. in and along compared by sales quarter year margin at the adjusted

results highlighting faster As expected, the lag of through increases. cost adjusted Products. primary cost margin Sales price volume, passing EBITDA in in in declines Global grew than progress was driver in

into sales as expansion our price cost unit growth increases. offset not generally margin rate increases unit However, will translate

margins Focusing on EBITDA a volatile more percentage raw appropriate in rate dollars material environment. and than metrics cash generation,

same-store SG&A to by Acquisitions unit improvement and overall basis fiscal Our XXXX. the gross adjusted and impacted full Retail to roughly sales margin are versus XXX XXXX sales by led contributions segments to growth. summarized growth driven factors results points year leveraging on added key XX. made slide several year-over-year. and was to Services in the top growth XXX basis year points outstanding sales EBITDA growth. last compared line with way profit Both substantial and

we pandemic. year advertising [Technical the Difficulty] due the that of spending reinstated First, we prior severity to

driven increases saw in our results. we Second, compensation variable record by

made growth finally, we drive IT investments due support. and saw Third, investments to And in and we inflation. acquisitions sales FX including to and impacts future increases

million cash holders in to nearly see We of lower remains roughly flow via cash year returns in dividends and cash due the supply to XXXX, repurchases free flow than XX% share business X% X% capital made of three-year we under slide authorization. on fiscal while can recent strong. in continue modestly drive will new and openings. $XX believe you part expected in capitalized delays shareholders. were and to cash share and our Maintenance chain-driven In XX, store nature As our growth $XXX to was million Growth including company business repurchase share generative CapEx returned million fund in model QX discretionary respectively. the repurchases, significant to $XXX sales was the we for

the on review our next XXXX fiscal Let's slide. guidance

the representing teens $XXX year-over-year mid balance. more adjusted We of XXX to growth the $XXX to same-store fiscal line to Unallocated expenses X% X% the of $XXX in continue We while overall Products. continued expected stores, to top of segment Products Services contribute EBITDA Global line range million the comprise by in generate million new growth contribute and million fiscal EBITDA Global in EBITDA is $XXX of corporate high growth. XX% of Retail to million million. driven segment top expect is projected to to to to we XXXX addition $XXX $XXX XXXX million, in sales to XX%, anticipate strong saw be growth momentum than

price level to we quarter. Based profitability interest anticipate Global next the expense roughly rates, on margin the $XXX improved we near-term year impact first to between of per expect to current to in to investments capital should million amortization EBITDA half line, We increase depreciation $XX due Products our the and out through Below half $XXX fiscal second progress with growth-focused as projected lag. and million. cost exceeding XXXX million

company CapEx the for EPS $X.XX XX% to over to rate capital We tax With carryover build, range, $XXX I'll from in leading an range fiscal store be the expect back in million XX% year XXXX share turn fiscal fiscal to the With for of in continue per our $X.XX adjusted leading to cash expect adjusted effective we to XXXX. increase million. of including things flow in to new $XXX free that, to Sam. XXXX, to

Sam Mitchell

pursue to a want Mary. continued business our own spend the minutes our on transformation strategic parts to can stand both We and where Valvoline's of a the separation Products fund for of to because right and their Global priorities has Thanks, discussing time this success. individual progressed is few their Services segments. believe that the We point recent Retail decision

the Retail growth the EBITDA. of now considerable the contributed of adjusted businesses each in With excess million of and segment in $XXX are Services scale two significant

Just stakeholders as contributed executive separation employees growth of note stable confident best for create sustainable ago, to flows. of shareholders, strong important position It's to this years XX% segment Services, generate value business will and Global Board Services long-term four that continued our transformation cash Products continued the both other and for Retail team has and will The success. reflects significant Retail the our that EBITDA. outstanding businesses are strong and

performance in robust is markets. strategically a leaders step company their for and are financial the XX. scale. operational Both respective with Turning are They and stakeholders. and to This its businesses compelling strong slide

We that have for great brand great built services. products a stands and

customer focus We invested intense in both an sets our and have digital long-term businesses up and for teams capabilities that success. have developed

on park evolving In evolve. as its an The to car to base each to needed deploy services business separation best segment customer focus and business compete capital allow where respective effectively to lines the addition, and model in its continues separation position each the needed model enhance product sustainably business environment. the will distinct as evolve and and powertrain will own to

clear a opportunities that Auto look its billion $XXX we attractive continued growing On Services a for see is services aftermarket addressable to With Retail significant XX the separation, path fragmented we is growth. slide unlocking and shareholder and value. highly at resilient. market

is acquisition to the share Our locations, model footprint executing well Retail service opportunities one, expanding growing to continue on segment positioned our drive and development; and best-in-class and growth three, to technology the its leveraging service three-pillar Services our leveraging through data offerings in opportunities -- of: market proprietary market increase world-class to and company-owned a and best evolving franchise new two, its analytics strategy capture customer by consisting experience; market. effectively

we solutions heavy-duty to address maintenance needs. require service comprehensive vehicles, which example, are pursuing and For fleets will medium-

future our vehicles relationships fleet US. exploring intent Additionally, services we with for the rival their and electric of to a including to products joint service OEMs partner are in with EV both

Valvoline customer-centric the leading and our service locations, to brand positions expand delivery X,XXX nearly future. operating offerings best and model Our in

XX. to Moving slide

compared several We against few a on profitability and sales Services peers Retail publicly our metrics. growth segment traded have

is As to value. business like unlock lubricants multiples cash-generating on maintenance shareholder times in to America. the are EMEA. expansion. China, international the provider. we India, driven well growth compelling Products we shift be market the synthetic nondiscretionary, on The potential delivering underscore the should markets North next for Global you by peer can the is which What Products estimated be group have solutions resilience, The believe market-leading slide. opportunity of to positioned Global lubricants addressable metrics. Preventive products for X.X is Products -- see, growth profitable while a than opportunity premium of the market as share automotive America strong these most peer such continue towards these drives Global internationally larger outperforms primarily lubricants Latin provides margin and most our segments

growing changing key network Our industry-leading in and strengths research strong competitive are and capabilities, distribution brand development powerful market. a

address We and of are leaders, with partnering the current technology needs researchers OEMs to vehicles. both and future

the Let's next move slide. to

we here a profitability we did similar companies with retail and against few with growth As just Global business metrics. services, on models Products traded compare publicly sales

trading on in creation can or performed that see value you describe against As peer On Products the separation. the peer multiples we from metrics. believe slide potential favorably these Again, line Global next show XX, group we a compelling steps.

determine accomplish are As XX working outside noted the advisers to separation. best in we way with October to our announcement, the

capital been and diligently executed, how position established each agreements structures and are success. we beneficial While we anticipate completion of supply both business, the Products evaluating commercially no possible the yet Services Retail that for timetable transaction continued Irrespective use has for and will enter for separation. brand of into Global is the businesses will that product separation

for I shareholder of all thank goal businesses approach will with year. closing, for Valvoline We minimizing these the maximizing and upcoming synergies both value. In want decisions to a team great our delivering

business. stronger been the driving of care have and and of continue never teams an do Our taking outstanding customers job to

delivering see on the we open And capture I'll two the in from businesses. compelling year, we to to of to work Q&A. that, value focused things back Sean as results excellent line fiscal the our that are We separation hand with for the new

Sean Cornett

limit Quick to With Sam, open a get Sam. reminder so Thanks, the one that please we follow-up line. to to questions everybody. and can that

Operator

from Instructions] question comes Morgan [Operator Our Stanley. you. Thank Simeon Gutman first from

go line is ahead. open. now Please Your

Michael Kessler

Kessler taking you for on Michael for is This guys. questions. our Hey, Simeon. Thank

about Retail Services. First, I wanted ask to

to general strong. increasing. and you term sales in algo throughput above you also X% think was for and increases traffic alone longer I around mentioned the growth kind It's business XX% of -- then have quarter. your the same-store the ticket the That is been X%

well guys you algo for quite ticket sustainable being guess about, of way So I to I'm above be growth given a business mix thinking are is guided could level that you've if much tailwind how with looks same-store how And I XXXX tailwinds? upside the that these And the given given sales it and strong? guess, factors. there curious, other the

Sam Mitchell

Yes, too which driver side penetration, drivers pointed driver, ticket performance on for us. we primary also this a big sales the is nice the our you but growth, the as was this side, same-store year And were the were both year with out. impressed the ticket on synthetic in transaction certainly which

saw us change synthetic we moves our So few helped in but points the too cover improvement some on costs. oil basis increased also hundred a that penetration, pricing of

on we somewhat we moderating we year, X% point the balance And So for we've next year, been ticket able back be particularly going to to our do rising above between closer do that costs to just but past pretty and year. transaction performance. front. the important will to both to guidance long-term make see labor continue expectations at to effective though a for year, good price that some expect next XX% adjustments I the same-store that But as good expecting I rate. sales But this a next May, with a growth steady still synthetic gave is with we be are regard trend think continue be to in and to that your to on opportunity, have guidance

that's penetration driver. big So is a another nice But for non-oil the services opportunity us. change of the

that. is And focused so team the much very on

come we with share so in this business, future market to driver the back that, counts. say tremendous we're the in a seeing and we're performance growth terms that, performance. great growth. has of when that, that its a of to I And transactions of way this feel seeing But of continued car growth growth in got is kind I long got we run ticket to got And to had

that in both bring in So through that capabilities. more strong through just really bottom and too and it we marketing digital store customers line the capabilities have drive our we the as provides loyalty to we leverage

Mary Meixelsperger

would to add that. And Sam, I

as into pandemic we seeing recovery in driven fiscal some continue they're that's in year periods. Certainly from to versus quarter, some new provided miles-driven fourth improvements seen benefits expect miles recovery from some and have going the We the as so tailwinds prior the the and see to well.

Sam Mitchell

Definitely.

Michael Kessler

Services The follow-up given it was top if on and growth, And on down performance Okay. EBITDA on segments. expected little little margins Retail bit maybe Great. the a both line a is margin better margin. my have maybe bit would

to very the like of, I it think, XXXX? and XX% to to kind there? which position range. Was the Is on going we up Products that maybe does these for are back what labor kind back we can margin in below drove any at XX% be there get we're just the once reason issues environments. to Global It target know, look that? XXXX, through And normalized it end in then So the the we side, feels volatile there won't we base oil get and get least stabilizing, like of to can pricing, probably

Mary Meixelsperger

at longer So, in we of on my to and able we see some half refining the do term, out are terms question, expectation of is increases. price see chain and of longer that supply more see second take the EBITDA of do capacity today of limitations think margins, I once oils normal some think we've base unusually because to to issues term. pass-through will I the your stabilized as been high margins, that return full trading there'll reversion levels the have be

is XXXX about a beyond. guidance, about still we we longer-term So guidance as think think gave to and I reasonable think the the

in quarter to saw interestingly, seeing related that On labor. deleverage the to being in were passed that investments We've our our same-store franchisees. we some and margin. We on fourth quarter, to created the leverage through incremental products labor sales for some related increases made And nice Services some impact Retail year we're deleverage. price had still some margins full business, the for the in

all through more – still franchisees. margin impact of we because chains, know, you transient our our mix a we've margins franchise oil that seen quite some a but finally, mix as strong – some to see company increases deleverage weigh we've of those mixed well. then from franchisees. products heavily the pass-through Unit got passing on as did cost in we noted that in were to caused stores in pricing results the of And and profitability So impacts And modestly margins. that to bit little sell, for margin as fact, deleverage lower some as

these know core So – to think you but to we're performance. in I continuing sales to as as margin for see thing know our our that it is our rates same-store same-store seeing important strong for the and relates performance leverage to businesses, investors we're

Michael Kessler

Thank you.

Operator

Mike line Please comes question next Research open. ahead. Mike, from of go Partners. is Seaport Our now Harrison

Mike Harrison

Good morning. Hi.

Sam Mitchell

morning, Mike. Good

Mike Harrison

the returns? for any operated? affecting up? talk if to between XXX those constructing your about you franchise go system-wide has out inflation year. wondering, impacted economics little about bit new can location store the Maybe the new company have costs seen XXX and Was How you And do talk store additions a break how for a or of

Sam Mitchell

As plan growth ground-up stores those be as new for half to the going stores. of far are next year, about

say range. fiscal a add of too of good that have will that stores I we of of ground us those we've acquisitions a put contributor, growth the new expect roughly We XXXX. coming of So be second to of be would the And in in that – and the then, franchise small pipeline stores. got would largest pipeline growth, good solid new that do a-third would out

for of year unit solid growth another So, Valvoline.

been pressures we're the that some of construction has in real. percent with labor had. that I the a a past have those of seeing. challenge Regarding just don't our builds bit would I year issues inflationary longer taking contractor this are little increase they've biggest say, some

Mike Harrison

within any as about you've Can areas spending as each expectations those of logistics what talk on are inflation you base labor. you And the of what and business. Thanks. for hoping issues and maybe terms on also provide availability of us inflation could more maybe All color focus seeing your oil tricks, you're then was a lot little freight in faced? A terms additives but well that your you're in on overall right. packaging, of

Mary Meixelsperger

aspects Mike. our area. been seeing Sure. certainly in logistics pressures and additives other inflationary of the early sales, which take really I some key the have of that in are cost can We freight

our We be to been pricing we recovery But able those have see pressure significantly have there factoring we're into some ultimately more we're In when pricing to our customers pressure so some the believe costs. at and of side from looking chain we'll that areas how that been. cost the than been that's continued on availability pressure. cost supply has pressures probably additive some the created certainly the

to that cost you'd provide add during Sam, very that's chemical us. been for so some chain team outstanding able has performance. we're that we seeing Our with Coast and signals seen a make space still demand along providers we've the Gulf additive really done and working because us increases. back of that? diligently was just job than done in pressure that in important been advantage an the the the that supply -- down managing the that and damage that challenge that's suppliers have of provide certain competitive space. those this the bigger been us in very base very, challenges additive bigger And But that customer are the products our that's created impacting with to marketplace a But goes down many some freeze actual area The -- constraints some of in time. our frankly in in strong have the in across those to anything to challenge Texas been we've probably allowed

Sam Mitchell

the we're the adjusting But that are prices we're implementing accordingly faster covered to we've are where issue unit have a that I us, margins. the in quarter. protect bit us but here lag an feeling with well is lag significant to than think always it pricing hitting pricing. price/cost that tend we channel DIY price/cost The first costs fact impact most because our got our we Mary for

very the executed see nice position But itself our we adjustment in think pricing is the demand half that as a the of then through second price in the we'll and in of another resolves market in business. of are And all takeaway year. QX. We tightness in we success price to is key having expect the for adjustment first the be some passing another strong

that merchandising the marketing we've have is this plans year we sets well-positioned accounts that of summer, for some fiscal both retail line key producing business our our investing the initiatives with strong XXXX. reviews been but fruits So and the for really in with this past store partnership

in the business the confidence is the our And XXXX. business hear forecast fundamentally. that's strong for side Products you in position a So fiscal why in Global of the

Mike Harrison

All right. Appreciate the color. Thanks.

Operator

of comes next ahead. Wendy go Citi. open. Our question Wendy, now line your is Please from Nicholson

Wendy Nicholson

be you growth and business? all sort business that international of of margin, can the from do Just higher you distribution to going business North will do impact and Hi. region picture looking bigger about next Thanks. years all been has Is America from is has of on margin know you of that. international for And last again to just net sort that minus coming related lower bigger the Good channel plus growth chart Products that the longer-term look kind My sales is morning. I'm business think outside flat over on the margin? If coming it question of the America the of the I US. largely or the of the of longer term at over the picture Global C-store in the talked costs business. three just X, And two, about I let's North four incremental years, Figure meaningful. outlook. which call to talk fine, sort but grow? commodity the by

Sam Mitchell

North some pretty XXXX growth. you channel. significant you say recall The period North that American versus had just in America looks breaking international pressure a so back XXXX into business in But But the DIY multiyear Yes. down if over flat. we

the with we've retail that both And our making been some had. I out we've maps We growth share. of new as in that success our auto in that have distribution of some parts beginning in the we're investments new now stabilizing and and real business some had really pointed that of see channel good to programs and

about fundamentals too. largest of multiyear in signed And regional paying So quite side more on national to the growth solid accounts while. have a really our we're confident and American accounts re-signed feeling are with have we the the smaller We've too. installer contracts than initiatives digital North off our some of been some

So And as really impacted before American's the about rates. strong we with of definitely boy, to able low past we're in track that seeing back very XXXX year on really feel momentum this has good But volume grow international were range. growth shown XXXX. volume front, growth. spring being single-digit our pre-COVID We're the international North in on in

measurably so higher the level effects performance the at we And of markets. XXXX performing XXXX growth like volume as lingering than very beyond we move we're COVID well-positioned feel in for particularly and a

So lot confidence there. rate of obviously growth a

to the pricing our most the On this some in of is the you're we that's North expect Global of the that's with the pressures. carries we margin international the business business the that And international margin able that we've -- North factored inflationary But a America. is correct Products' front holding appropriately been in into move business. up Global guidance first overall lower profit thing American back within The from lag Products year effect and terms business. price/cost of of that in in provided the half really what key growth than

Wendy Nicholson

Got it. Fair much. enough. Thanks so

Sam Mitchell

Sure.

Operator

comes Alexander Laurence Jefferies. next from from question Our

ahead. go Your line now is open. Please

Dan Rizzo

on for This Rizzo, is Laurence. Dan

or see you was costs ballpark, in and stranded wondering You what you synergies relative where be. cost the split. have on would largest the dissynergies mentioned synergy if a I just minimizing

Mary Meixelsperger

We of ballpark a and X.X, years There's from parent we a we've ourselves. a former separated work that ago. Ashland So lot have don't understanding. our the provided We're product of yet. separation

very be there dissynergies a But minimize our arrangements cost separated involve as so standing that work the understand two well working the to of costs separation. created businesses, aware early those. reasonable like how HR understand days, best often as some the support finance approach and within some with dissynergy are better two well Certainly, in areas through businesses. structure and strategically, dissynergies up the think better we're can product the to so between We're completed. is associated to Board the a that more opportunities brand to to with IT structuring do And more commercially beneficial on and in commercially there we're working and come we're through We legal. support

Dan Rizzo

past in I the of accelerated all for in was you was the at that installer then if of think mentioned or And rebound of you channel, you've kind a I seen lagger. still color. somewhat that's kind if that it's Thank lagging wondering the subsegments. the other

Sam Mitchel

we'd expect to has improvement we've be -- versus it's progressed would miles has as improved still It's longer but year in term. where it I driven seen the say lagging

penetration And we've rates. some the a the rates historical accounts of bit lower -- some little installer -- like change at tracking so than our seen oil of being

installer the they labor our seeing based conversations it the cause, back the hardest some hit with was typically all challenges definitely that their in -- to stores of to the because with on do were in and that of they some in XXXX. done improvement And of But are able largest provide customers, we side has have it the being past. services

Dan Rizzo

you Thank much. very

Operator

comes from [Operator Our next Stephanie Truist. Instructions] from question Moore

go open. now line is Please ahead. Your

Stephanie Moore

for question. Thank Hi. the you Good morning.

Sam Mitchel

morning.. Good

Stephanie Moore

Retail I to long-term wanted you to morning. on the I strategy Good wanted on as touch think of bit. on a kind side. little touch

the You the these obviously, or Retail and be currently with retail would just some high a Where large you that might but view extend alternatives and you What type said, it's you're supports strategic provided review. would total addressable to Services? of market strong categories you some you the discussions brand viable margin data options have? having consider the

Sam Mitchel

Yes.

strategies an new evolving too. servicing more and powertrains fleet think thinking we vehicles servicing and car about the about we're hybrid park more long-term when vehicles, retail for services electric So

mentioned we presentation. so in today's that And

car of So care strategy, for the easy, and we owners, vehicle is at not for the it's making core easy today. owners believe fleet

we stronger that ability deliver preventive keep make be digital do fast going And so to a trust the network our via on those than what road. And build and both from creates core a and and easier owners' approach through our convenient our appointments growth fleet is don't customers care to owners' is and with vehicles to maintenance in we what services consistently. way to in think out stores, today. our we're opportunities. our looking vehicle number create we're that growing other offered at we its in longer-term core lot that But that it both a of is can call that's strength and our And In car services. words and a require platforms been

the type So, the attract the These their to retain the built into core services. range it's see digital the some highlighting vehicles. our stores right in that that. the develop than business. leverage larger course, to of initiative train have big we think now right prepared process that are into Class -- stores we bigger capabilities that talent are an fleet talent of strong a X and where and technology And that our things process grow teams the much will making our fleet to is we're capabilities current business handle sure And especially a to our even capabilities that the of and X our have includes opportunity to capabilities. incredibly with, to And them behind of the one broader do something these vehicles

business what So right that we're in will good there a be our a of area. grow of as work it indication, I we capable going on think fleet too. lot of And

And our in Specifically, grow core any out leverage categories and owners. maintenance tremendous time with because just our relationships, this preventive over creating calling car more like with new right out services. not specific is moves we're our at system it now in but point will focus time, more from

Stephanie Moore

so very That’s Great. much. you Thank helpful.

Sam Mitchel

bet. You

Operator

further no [Operator there questions. Instructions] are And

to would Thank for time joining. call. conclude So you at this we today's like

You may your now disconnect lines.

Valvoline (VVV) 6 Nov 212021 Q4 Earnings call transcript