Valvoline Inc.

Welcome to the Vavilene third quarter 2023 earnings conference call and webcast. My name is Brica and I will be your moderator for today's call. All lines are on mute for the presentation portion of the call today with an opportunity for questions and answers at the end. If you would like to ask a question, please press star then one on your telephone keypad. I would now like to hand over to your host, Elizabeth Russell to begin today's call. So, Elizabeth, please go ahead.

Elizabeth Russell Thanks, Brica. Good morning and welcome to Valvoline's third quarter fiscal 2023 conference call and webcast. This morning at approximately 7 a.m. Eastern Time, Valvoline released results for the third quarter into June 30th, 2023. This presentation should be viewed in conjunction with that earnings release, a copy of which is available on our investor relations website at investors.valvoline.com. Please note that these results are preliminary until we file our form 10-Q with the Securities and Exchange Commission. On this morning's call is Sam Mitchell, CEO, Lori Sleese, President of Retail Services, and Mary Meisselberger, CFO. As shown on slide two, any of our remarks today that are not statements of historical facts are forward-looking statements. These forward-looking statements are based on current assumptions as of the date of this presentation and are subject to certain risks and uncertainties that may cause actual results to differ materially from such statements. Babbling assumes no obligation to update any forward-looking statements unless required by law. In this presentation and in our remarks, we will be discussing our results on an adjusted, non-GAAP basis unless otherwise noted. Non-GAAP results are adjusted for key items which are unusual, non-operational, or restructuring in nature. We believe this approach enhances the understanding of our ongoing business. A reconciliation of our adjusted non-GAAP results to amounts reported under GAAP and a discussion of management's use of non-GAAP and key business measures is included in the presentation appendix. The information provided is used by our management and may not be comparable to similar measures used by other companies. As a reminder, the retail services business represents the company's continuing operations, and the former global product segment is classified as discontinued operations for the purposes of GAAP reporting. On slide three, you'll see the agenda for today's call. We'll begin by providing an update on the return of proceeds from the sale of global products. We will then talk about our third quarter and operational highlights and end with a review of our third quarter results. Now I'd like to turn the call over to Sam.

Thanks, Elizabeth, and thank you all for joining us today. As we announced earlier this quarter, we completed the Dutch auction tender offer by successfully repurchasing just over $1 billion of shares. Between the tender offer and open market repurchases, We have repurchased 37.9 million shares and returned approximately $1.4 billion to shareholders this year. This leaves $340 million on the current share repurchase authorization, and we expect that to be returned over the next 12 months, subject to market conditions. This would deliver on our commitment to return a substantial amount of the net proceeds from the sale of global products business in line with the original timeline of 18 months post-close of the transaction. Turning to slide seven, let's take a look at some key highlights from the quarter. We continue to see strong top line growth with $720 million of system-wide store sales this quarter, which is almost an 18% increase compared to prior year. System-wide same store sales growth continues to be strong and consistent across the network with a 12.5% overall increase. From a profit perspective, we saw a 27.8% increase in adjusted EBITDA over prior year, which once again outpaced the revenue growth for the quarter. We added 23 locations this quarter, bringing our system-wide total to 1,804. Slide eight shows our growth in key metrics over recent years. We continue to see the resiliency of the preventive maintenance business and our growth potential. Our performance in the third quarter gives us confidence in our full year outlook for fiscal year 2023. As we wrap up this section, I'd like to address our leadership succession news from this morning. I have announced my plans to retire at the end of this fiscal year. Leading this company over the last 21 years has been the highlight of my career, and I will always be grateful for the experience of working with the talented and dedicated people at Valvoline. Lori Fleece, our current president of retail services, has been named incoming CEO. I've had the privilege of working side by side with Lori for the past year. Throughout her career and in our time working together, she has proven to be a strategic thinker with a natural ability to unite teams and drive results, including the delivery of incredible customer and franchisee experiences. The board and I have great confidence that she is the right leader for Valvoline as the company focuses on its future as a high-growth, high-margin, pure-play retail services business. And with that, I will turn it over to Lori.