Valvoline Inc. Goldman Sachs Global Consumer and Retail Conference

Thanks for having us. Thank you.

Yeah, sure. I think you have covered a lot of the key ingredients that are tailwinds for our business, but Valvoline provides a service that is really considered non-discretionary. As people own a vehicle and want to maintain that vehicle, and the value of that vehicle for as long as they can, they need to do preventative maintenance, and that is exactly what we provide. There are a lot of tailwinds that are things that we benefit from. Cars are getting older. When a car gets older, it needs more preventative maintenance. Two, the drive for convenience. I always talk about if you told my teenage self working at Taco Bell that people would pay three times as much to have tacos delivered to their home, I never would believe it.

The drive to trade money for time is growing, and that is exactly what we give our customers back, is time, by making it quick, easy, and trusted. I think the business is still highly fragmented, and while we are the category leader, we have around 6% market share, so so much more upside. Also, our stores are approximate to only 40% of the car park population. So still so much inherent growth to grow our business, but still benefit from the headwinds that you talked about.

Valvoline, the origins are 160 years old. It is denoted for quality. For us, every technician starts with 270 hours of training, and that's regardless of it's a company or a franchise-operated location. We use a SuperPro process and technology which ensures a very consistent process and service delivery every time. An oil change comes with an 18-point safety check, filling tires, checking lights, wipers, filters. These are things that customers come to rely on, and many times customers want eyes on their vehicle before they start a holiday drive or a busy work schedule. What pulls people is really saving time, but also that consistent experience that they trust with one of the biggest assets on their family's balance sheet. 80% of people use a vehicle to get to work. A vehicle is essential to an American household.

I'll take that one. First I'd like to give a bit of context around the 3,500. That number was first mentioned around four years ago. At that time, the company had about 1,750 stores, and so that implied a doubling of the store population over the course of time. Since that time, we've added a significant number of units. We're just under 2,500 right now and moving towards the 3,500 mark. When we talk about the potential for the network, we really think of it as 3,500-plus. 3,500 is a milestone, but it's not an endpoint, and we're marching towards that milestone with an eye towards continuing to grow. For us, it's all about the profitability and the return on invested capital that is brought from adding a new unit, acquiring an existing unit, and our franchise partners think the same way.

It's not been that long ago that our larger franchise partners signed new development agreements and committed over $1 billion of capital to the store network and their own businesses. These are well-capitalized, very long-term franchise partners who have frankly reaped the benefit of being a part of this brand and a part of the network and want to continue to do so because they see the returns, they see the growth opportunities. Really, we're continuing to be on that journey, and there's still, as you said, a lot of white space. Lori gave you the statistics on that. We just see a ton of opportunity going forward. While I don't want to overplay it or overstate it, there are also some opportunities for, at least potentially, mobile adjacencies.

We're doing some test and learn in that space right now, ways to broaden our scope and our reach of potential customers through a mobile solution. Again, we're not there, but it's something that we're testing right now in a couple of markets.