Q4 2019 Earnings Call

Teams continue to deliver a superior in store experience based on convenience interest.

Our focus on operations, along with the new stores were adding and the ones. We added over the past two years will combine to fuel and anticipated low to mid teens growth in segment EBITDA.

We continue to invest in our model, including new technology to further build transparency and trust with our customers in 2020 will be focused on rolling out and further penetrating our company store markets with our breakthrough new App that we discussed last quarter.

We're also investing in new capabilities to service more vehicles, we're expanding our marketing programs to target owners of luxury cars and as heavy.

And light duty trucks, we expect these new offerings to help grow our customer base.

Let's discuss called North America on the next slide.

In Q4 core North America's year over year performance improved for the second consecutive quarter.

Volume declined 4%.

Sales were down 1% and adjusted EBITDA grew 2%.

The decline in segment volume was primarily due to a decrease in branded volume in the retail channel driven by the market challenges that have affected core North America throughout the year.

We made progress addressing these challenges, but the market remains unsettled.

The underlying base business volume in the installer channel remains steady as we continue to have success with our differentiated selling approach our value added proposition has helped us improve customer retention and increased premium mix.

Adjusted EBITDA in the quarter benefited from better than expected cost and expense savings driven primarily by our ongoing operating expense reduction program.

Let's review the core North America outlooks on the next slide.

As our strategy indicates our goal is to maintain call North America, using a strong cash flow generation to invest in growth opportunities.

In 2020, our focus is on stabilizing the business.

In the installer channel, we're making progress with targeted segments are recall awareness program is helping us win new customers and bolster our current business growth car dealership groups by referring valvoline instant oil change customers to our dealership partners for needed safety recall services.

We're also encouraged by the early results of our Salesforce partnership with comment which is designed to leverage their strong relationships with fleets to help us grow in the heavy duty market.

Retailer driven dynamics in the DIY category are still evolving we continue to strengthen our consumer messaging focused on the value of our brand we're working with our key retail partners to develop the right merchandising plans for the valve for valvoline going forward.

However, the growth of private label is expected to continue pressuring our branded volume in the retail channel next year.

We expect modest installer growth to be partially offset by continued declines in branded retail volume the negative channel mix between lower margin installer and higher margin retail is the primary driver of modestly lower unit margin expectations of 3050 cents to 3060 cents for.

The coming year.

Ongoing cost savings program gives us flexibility to.

Invest to help stabilize the business opportunities include strengthening our DIY promotional plans and launching additional value added services in the installer channel.

Overall, we anticipate low single digit volume declines in mid single digits EBITDA declines for the segment.

Let's move to international on the next slide.

Volume growth was essentially flat for Q4 and for the year and international with mixed results by region.

Europe has been a bright spot of growth during the year and that continued in Q4, which included the benefits of our recent acquisition in Eastern Europe .

A slow manufacturing sector in China continues to weigh on the heavy.

The aftermarket and pressure our volumes.

Outside of China continued to grow.