Valvoline : Second Quarter 2024 Presentation

Second Quarter

Fiscal 2024 Earnings

Lori Flees, CEO & President

Mary Meixelsperger, CFO

Elizabeth Russell, Investor Relations

05.08.2024

SAFE HARBOR

Forward-Looking Statements

Certain statements herein, other than statements of historical fact, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include, without limitation, executing on its growth strategy to create shareholder value by driving the full potential in the Company's core business, accelerating network growth and innovating to meet the needs of customers and the evolving car parc; realizing the benefits from the sale of Global Products; and future opportunities for the remaining stand-alone retail business; and any other statements regarding Valvoline's future operations, financial or operating results, capital allocation, debt leverage ratio, anticipated business levels, dividend policy, anticipated growth, market opportunities, strategies, competition, and other expectations and targets for future periods. 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-filingsor on the SEC's website at http://www.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.

Regulation G: Adjusted Results

Information regarding Valvoline's definitions, calculations and reconciliation of non-GAAP measures can be found in the Appendix.

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2Q 2024 KEY HIGHLIGHTS1,3

	Delivered Strong			Deploying Capital to
	Financial Results		Drive Shareholder Value
	$746.1M	7.7%		+38 Net Stores 1,928	8.3%
13.1%		+14 Franchise	System locations
System-wide Store Sales2	System-wide Same Store
		Sales2 Growth		+24 Company
12.8%	$388.7M
	Net Sales			$38.3M Growth Capex
				85% of $44.9M Total Capex
20.7%	$105.1M	27.0%	1	$40.4
	Adjusted EBITDA1	Adjusted EBITDA Margin
				Returned to Shareholders through Share Repurchases
60.9%81.3%	$0.37			1.0M
	Adjusted EPS1			Shares Repurchased

1. For a reconciliation of adjusted amounts to amounts reported under GAAP, please refer to the Appendix.
2. Refer to the Appendix for further information regarding management's use of key business measures.
3. All comparisons are year over year unless otherwise noted.

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Long Runway For Delivering Shareholder Value

Strategic Imperatives

• Drive Full Potential in Existing Business
• Accelerate Network Growth
• Target Customer and Service Expansion

TALENT & CULTURE	TECHNOLOGY
OUR PROVEN FORMULA FOR GROWTH			Long-term
Same Store Sales	New Stores	Service Expansion
Shareholder Value
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2Q 2024 TOPLINE PERFORMANCE

Adj. Net Sales1 Growth

($, Millions)

344.5

+13% 388.7

Highlights

147 net stores YoY

2Q	2Q
2023	2024

System-wide SSS2 Growth

13.5% +21.2%

2-year Stack

7.7%

2Q	2Q
2023	2024

1. For a reconciliation of adjusted amounts to amounts reported under GAAP, please refer to the Appendix.
2. Refer to the Appendix for further information regarding management's use of key business measures.

Strong SSS continues

1. deceleration from PY driven by lapping inflationary price increases

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2Q 2024 FINANCIAL DRIVERS1

Gross Margin

as a % of Net Sales

+80 bps Expansion YoY

36.8% 36.1% 37.6%

2Q	1Q	2Q
2023	2024	2024

Key Drivers:

• YoY labor improvement
• YoY 50 bps of deleverage due to depreciation

SG&A Expense

as a % of Net Sales

-20 bps Decrease YoY

18%	19.2%
17.8%

2Q	1Q	2Q
2023	2024	2024

Key Drivers:

• YoY leverage through topline growth
• Sequential improvement driven by lower travel and meeting costs

Adjusted EBITDA

as a % of Net Sales

+170 bps Expansion YoY

25.3%	29.3%	28.0%		27.0%
	24.2%

2Q	3Q	4Q	1Q	2Q
2023	2023	2023	2024	2024

Key Drivers:

• Leverage from gross margin improvements
• SG&A leverage contributed modest improvement

1. For a reconciliation of adjusted amounts to amounts reported under GAAP, please refer to the Appendix.

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2Q 2024 PROFITABILITY1

Adjusted Net Income

($, Millions)

+20.1% Increase

48.3

40.2

2Q	2Q
2023	2024

• Operating income +19.6% versus prior year
• $3.1M lower net interest expense driven by investment of the remaining Global Products sale proceeds

1. For a reconciliation of adjusted amounts to amounts reported under GAAP, please refer to the Appendix.

Adjusted EPS

+60.9% Increase $0.37

$0.23

2Q	2Q
2023	2024

• Returned $1.6B to shareholders since 2Q 2023 through share repurchases
• Average share count down 42M shares

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2Q 2024 REPORTING HIGHLIGHTS

Balance Sheet Highlights

(Millions)	2Q24
Cash & Cash Equivalents	$494.5
Total Debt	$1,575.1

• Continue to target net leverage ratio1 of 2.5x - 3.5x
• Completed tender offer to repurchase the $600M of 2030 Senior Notes in April 2024

Cash Flow Highlights

(Millions)	2Q24
Cash Flows from Operating Activities	$92.1

• Year-over-yearcash flows from operating activities decreased $81.4M largely driven by separation-related working capital benefits in the prior year

Free Cash Flow2	$4.9	• Interest Income of $4.6M earned during the quarter on
invested net proceeds from the sale of Global Products

1. Based on rating agency adjusted amounts.
2. For reconciliation of adjusted amounts for the continuing operations to amounts reported under GAAP, please refer to the Appendix

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FY24 GUIDANCE- UPDATED

		Updated Outlook	Original Outlook
Same Store Sales Growth1 %	6% - 8%	6% - 9%
System-Wide Store Additions1	No change	140	- 170
Net Revenues	$1.6B - $1.65B	$1.6B	- $1.7B
Adjusted2	EBITDA	$430M	- $455M	$420M	- $460M
Adjusted2	EPS	$1.45	- $1.65	$1.40	- $1.65
Capital Expenditures	No change	$185M - $215M

Delivering on long-term growth algorithm and growth consistent with best-in-classhigh-growth retail

1. For a discussion of management's use of Key Business Measures, please refer to the Appendix.
2. Denotes a forward-lookingnon-GAAP financial measure that Valvoline is unable to reconcile without unreasonable efforts, as the Company is currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP results but would not impact non-GAAP adjusted results.

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SUMMARY

Delivered strong profit growth for the quarter

Added 38 net new stores including 14 franchise stores

Completed $1.6B share repurchase authorization

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