LEXINGTON, Ky., Oct. 12, 2021 /PRNewswire/ -- Valvoline Inc.
(NYSE: VVV), a global leader in vehicle care powering the future of
mobility through innovative services and products, today announced
that it is accelerating its continued transformation by pursuing a
separation of its two business segments, Retail Services and Global
Products.
"Following a comprehensive review of strategic alternatives by
the Valvoline Board of Directors and executive management, we
believe that a separation of our business segments will create
significant and sustainable value for our shareholders, employees
and other stakeholders, and will best position the Retail Services
and Global Products businesses for continued long-term success,"
said Stephen F. Kirk, Chairman of
the Board.
Sam Mitchell, CEO, added, "Our
confidence in separating these two strong businesses reflects the
tremendous progress we have made in our strategic
transformation. Retail Services now generates more than half
of our adjusted EBITDA and is growing at an exceptional pace.
The separation will allow Retail Services to continue its growth
and focus on leveraging its world class service model. Global
Products is a market leading, high cash generating business, which
we believe will thrive well into the future with the opportunity to
focus and allocate capital to its own strategic priorities."
Valvoline is working with its outside advisors on determining
the best way to accomplish the separation. No timetable has
been established for the completion of the separation, and
Valvoline does not intend to disclose further developments with
respect to this process, unless and until its Board approves a
specific transaction or action.
Valvoline will report full year fiscal 2021 financial results on
November 3, 2021. Based on
information currently available, the company expects to report
sales of $3 billion for fiscal 2021,
up 27% versus the prior year. Valvoline also currently expects
adjusted EBITDA and adjusted EPS for fiscal 2021 to be within the
guidance range for each measure as provided in the company's
earnings announcement on August 4,
2021. In addition, based on currently available information,
Retail Services ended the fiscal year with 1,595 system-wide
stores, and the company believes Retail Services experienced fourth
quarter and full year system-wide same store sales growth of 20%
and 21%, respectively, compared to the same prior year periods.
Retail Services Segment Overview
The Retail Services
segment services the passenger car and light truck quick lube
market in the United States and
Canada with a broad array of
preventive maintenance services and capabilities performed through
Valvoline's retail network of Company-operated, independent
franchise and Express Care stores that service vehicles with
Valvoline products. Valvoline operates the second largest quick
lube service chain by number of stores in the United States with Valvoline Instant Oil
ChangeSM and the third largest quick lube service chain
in Canada with the Valvoline Great
Canadian Oil Change brand. With its strong brand awareness and a
loyal, growing customer base, Valvoline believes the Retail
Services business is well-positioned for continued exceptional
growth and operational excellence. Based on currently available
information, the Company expects to report Retail Services segment
sales of $1.2 billion for fiscal
2021, up 38% versus the prior year.
Global Products Segment Overview
With a presence in
more than 140 countries and territories, Valvoline's Global
Products segment sells lubricants and other automotive and engine
maintenance products primarily to automotive retailers, installers
and original equipment manufacturers (OEMs). Valvoline has
established itself as the world's No. 1 supplier of battery
fluids to electric vehicle manufacturers, offering tailored
products to help extend vehicle range and efficiency. Within
the U.S., Valvoline is the number three branded motor oil in the
Do-It-Yourself market by volume. The business has low capital
intensity and is differentiated from competition due to its leading
brand, product quality, and strong distribution partnerships. Based
on currently available information, the Company expects to report
Global Products segment sales of $1.8
billion for fiscal 2021, up 20% versus the prior year.
Advisors
Goldman Sachs & Co. LLC is acting as
financial advisor and Cravath, Swaine & Moore LLP as legal
advisor to Valvoline.
About ValvolineTM
Valvoline Inc. (NYSE:
VVV) is a global leader in vehicle care powering the future of
mobility through innovative services and products for vehicles with
electric, hybrid and internal combustion powertrains. Established
in 1866, the Company introduced the world's first branded motor oil
and developed strong brand recognition and customer satisfaction
ratings over the years across multiple service and product
channels. The Company operates and franchises approximately 1,600
service center locations and is the No. 2 and No. 3 largest chain
in the U.S. and Canada,
respectively, by number of stores. With sales in more than 140
countries and territories, Valvoline's solutions are available for
every engine and drivetrain, including high-mileage and heavy-duty
vehicles, and are offered at more than 80,000 locations worldwide.
Creating the next generation of advanced automotive solutions,
Valvoline has established itself as the world's No. 1 supplier of
battery fluids to electric vehicle manufacturers, offering tailored
products to help extend vehicle range and efficiency. To learn
more, or to find a Valvoline service center near you, visit
valvoline.com.
Key Business Measures
Valvoline tracks its operating
performance and manages its business using certain key business
measures, including system-wide store counts and system-wide same
store sales ("SSS"). Management believes these measures are useful
to evaluating and understanding Valvoline's operating performance
and should be considered as supplements to, not substitutes for,
Valvoline's sales, or operating and net income, as determined in
accordance with U.S. GAAP.
Although Valvoline does not recognize store-level sales from
franchised stores as sales in its Statements of Consolidated
Income, management believes system-wide SSS comparisons and store
counts are useful to assess market position relative to competitors
and overall store and segment operating performance. System-wide
SSS is defined as sales by U.S. Retail Services stores
(company-operated and franchised), with new stores, including
franchised conversions, excluded from the metric until the
completion of their first full fiscal year in operation as this
period is generally required for new store sales levels to begin to
normalize.
Forward-Looking Statements
Certain statements in this
press release, other than statements of historical fact, including
estimates, projections and statements related to Valvoline's
business plans and operating results, are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Valvoline has 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 Valvoline's 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 the
Company's filings with the Securities and Exchange Commission (the
"SEC"), including in the "Risk Factors," "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and
"Quantitative and Qualitative Disclosures about Market Risk"
sections of Valvoline's most recently filed periodic reports on
Forms 10-K and 10-Q, which are available on Valvoline's website at
http://investors.valvoline.com/sec-filings or on the SEC's website
at http://sec.gov. Valvoline assumes 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.
TM Trademark, Valvoline or its subsidiaries,
registered in various countries
SM Service mark, Valvoline or its subsidiaries,
registered in various countries
FOR FURTHER INFORMATION
Sean T. Cornett
Sr. Director, Investor Relations
+1 (859) 357-2798
scornett@valvoline.com
Michele Gaither Sparks
Sr. Director, Corporate Communications
+1 (859) 230-8097
michele.sparks@valvoline.com
Jamie Tully/Warren Rizzi/Devin
Broda
Valvoline-SVC@sardverb.com
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SOURCE Valvoline Inc.