Good morning, everyone. Thanks. Welcome to the WD-40 presentation. We're thrilled to have them here. Presenting for the company, Sara Hyzer is going to start, the CFO, and then Steve Brass is also here, and Wendy Kelley with IR is also back in the audience. So take it away, sir.
All right. Great. Thank you, everyone. All right. Is my mic working? I'm good.
Good morning.
Awesome. And the room's not empty. I was saying earlier that that's one of my biggest fears was that we'd get here in the room. So thank you all for joining us today. Quick legal reminder. So as we do talk about forward-looking statements, this is on our website. So I'm just going to do a quick. I'm not going to read this, but just as a reminder, it's there. So oh, how do I go back? Oh, no. OK. So WD-40 Company, WD-40 brand is one of the most recognized brands around the world. It's loved by millions of users, and it's just an iconic brand that's extremely recognizable. It's in movies. We've been quoted in movies. We've been in songs.
But one of my favorite, and I've already ruined the surprise, is actually when good old Hank Hill, does anybody remember Hank Hill when he's sitting there and he can't get the red top, the little red top off of his can of WD-40? And what does he do? Well, he's got a trusty little tool belt with his second can of WD-40. He gets it out and sprays it. I'm going to do a quick demo here and sprays it down. And then the top falls off and he pops off, and he gets to solve whatever solution he was working on that day. I guarantee he solved whatever maintenance solution he was working on. It's an iconic little scene, and we actually love to share it. The interesting thing, though, to me is most people know the brand. It's been around for 70 years.
We come across people all the time, and maybe some of you, even in this room, are not familiar with the company. Well-known brand, less known is about the company. Steve and I are really excited today to hopefully share a little bit of what we think is special about WD-40 Company. Quick overview. We have a simple and easy-to-understand business model. We have a highly sustainable competitive advantage, which we'll talk about. We are the only global brand in our category, and we have a strong defensible moat, which Steve will cover more. Our iconic brand actually delivers resilient, sustainable, and profitable growth over the long term. We have a consistent performance. We strive for mid- to high single-digit growth on a year-over-year basis. Our strong gross margins really allow us to grow profitably.
We got those gross margins back up over 55% this past year. We have a robust balance sheet. We have access to liquidity when we need it, and we have strong free cash flow generation. We have an asset-light operating model, so we are 100% outsourced. We don't actually make anything. We actually partner with a number of third-party fillers all over the world. And we're stockholder-friendly capital allocation. We'll talk about that at the end. But we pay most of our free cash flow that we earn back in the form of dividends and share repurchases. So a little bit of history about WD-40 Company. Hopefully, that doesn't fall over. That can is empty. It was actually founded back in 1953 in San Diego. It was invented to help solve a solution that the Atlas Space Missile Program was dealing with around rust and corrosion.
It took 40 tries to get that perfect formula right to be able to solve that solution. WD-40 actually stands for water displacement on the 40th try or 40th formula. There's actually 39 formulas written in the notebook that's actually locked away in a vault. Steve and I had the privilege of actually seeing that notebook a couple of years ago. WD-40 was also on Jeopardy, actually, and they got it right for water displacement on the 40th try. It was actually a Jeopardy question in the last couple of years. The company went public in 1973 and has never looked back. Today, the WD-40 Multi-Use Product, which Steve had up or I had up earlier, represents nearly 80% of our revenues and is sold in over 176 countries around the world.
We have high engagement, which we'll also talk about, but our people really drive our perpetual motion machine forward and really help us execute on our strategy. So Steve and I took over in 2022, so we actually both started in our new roles at the same time. He's a 30-year veteran, and I'm fairly new blood, and we think that's a pretty good match, actually. So Steve, I'm going to let you cover a little bit more of the company and the strategy.
Excellent. Thank you, Sara, and good morning, everyone. So at WD-40 Company, we believe in the power of focus. We have a mantra of few things, many places. We want to sell the 20% of products within our category that drive 80% of the volume. It starts with the core product, the core multi-use product, as Sara alluded to, which is about 80% of our business. The top section here, the maintenance products, that's where our focus is. And so we've taken the decision to divest our cleaning and home care brands. We made the first sale in that divestiture process last year with the sale of our U.K. business and are actively engaged with multiple buyers in terms of selling the U.S. side of the business.
And so once we've done that, we'll be even more focused on the significant growth opportunities we have around the world for these maintenance products, for even the core brand, and we'll talk about that. On the left-hand side, you have the core product, core multi-use product, the product that most of you have been familiar with. 2,000-plus uses. Our users tell us they use it for 2,000-plus documented uses. It's our flagship brand, one of the most iconic brands in the world, one of the most widely distributed brands in the world, and one of the most consistently executed. The WD-40 can you see in the U.S. is the same can you'll see in every country around the world. In 2012, we made the decision to begin to extend the brand.
We'd built this huge brand equity around the world for the core product, and so it made sense to extend the brand in adjacent categories, so these ranges you see, WD-40 Specialist line was born in 2012 and has grown to become an $82 million business last year and is our fastest growing line, growing about 14% CAGR, and so together, these two approaches represent more than 90% of our business, but almost all of our growth around the world. Warren Buffett talked about WD-40 as an example of a great competitive moat with the brand, this wonderful brand and our business model, and we really do have a world-class brand. Net Promoter Scores, very high scores, rivaling any of the biggest and best brands out there, which drives huge brand loyalty. Once users come into WD-40 brand, they stick with it.
A lot of our marketing efforts is about going out to young tradespeople and professionals around the world. Professionals consume about 70% of our products. The 15% of users that consume 70% of our products, and they're incredibly loyal. Going out and bringing them in while they're getting trained is a big part of what we do. We're also known for our culture. We are a purpose-led, values-driven organization. We'll talk a little bit more about that in a moment. Multi-channel distribution. We sell to 176 countries and territories around the world, 70-plus trade channels. Being available to buy at arm's reach of desire, as Coca-Cola used to say, is a big part of what we do. No one of our customers is more than 5% of our sales. We like that.
We like being broadly distributed and having the brand power that results from that. And then this global infrastructure we've built up over the decades. We truly are a global brand with a great presence already. So it's not as if we're expanding. The U.S. is 35% of our business. Outside of the U.S. is 65% of our business today. And that's where the big growth opportunities are. In terms of people-first mindset, we are known for our culture. Our latest engagement survey, we scored 95%, which is world-class in terms of engagement. What does that mean? It means that people come to our organization, they learn and grow with it, they stay a little longer. We have an average tenure of eight years compared to a typical CPG tenure of three and a half years.
And so put simply, we're gaining more than twice the return on our investment in our people by that average tenure. Very low turnover rates. And we really believe in the old mantra that first you build the people, then the people build the business. And that drives sustainable growth and results for the business. In terms of our forward growth aspirations, well, it's kind of continuing what we've done. And so we do have these really reliable, predictable, consistent results. This is our maintenance product sales over 10 years, consistently delivered CAGR of 6.7% over the past 10 years, all through the pandemic. We went a little sideways in the pandemic. You look back 2008, 2009, we kind of have a flattish year. But we are a remarkably resilient business.
Part of that is because of our business model, but part of it is also because of the nature of our brand. If people aren't buying new tools, machinery, and equipment, they're maintaining their old tools, machinery, and equipment. There's kind of like an anti-cyclical aspect to the business. Going forward, super clear, maintaining that kind of mid- to high-single-digit growth rates. Very clear, Americas is nearly half of our business. A little bit more developed, growing at 5%-8%. EMEA, 38% of our business, growing at 8%-11%. In Asia-Pacific, where we have opportunities everywhere we look, growing in the double digits. We have a really simple strategy, four Must-Win Battles, as we call them, that are revenue-driving Must-Win Battles. I'll start with the biggest one at the moment, which is leading geographic expansion.
One of the things that many investors don't understand about WD-40 is the huge international growth opportunity we have for the core brand before we even start looking at WD-40 Specialist. Four Must-Win Battles, and then the strategic enablers drive operational efficiency for the business as well. In terms of the opportunity for the core brand around the world, using our own algorithm, the challenge we have is that we are a category-defining brand. We can have 80%, 85% share within our own category. We really determine the category. And so we use our own internal benchmarks because of that.
And so, benchmarking our benchmark market, which is France, if all of the markets were operating at a similar level to the penetration of France, which is our number two market after the U.S., we'd be achieving $1.9 billion in sales, which yields a $1.4 billion growth opportunity over last year's sales of just under $500 million for the core. So we're 72 years young, and we have huge growth opportunities everywhere we look around the world, 25% penetration. So very focused on our top 20 growth opportunities around the world. China and India are the single biggest two. And so the size of the bubble you see represented here represents the size of the opportunity directionally. I'll give you a couple of examples here. Brazil and Mexico, you see towards the right side.
Mexico, we took direct as a business four years ago, and we've more than tripled it from $7 million to $25 million over that four-year period. That's on track to become a $30-$40 million market for us. Brazil, we acquired our distributor, bought out our distributor two years ago, and transformed that from a $2 million market to $15 million within two years, in fact, within our first year. You see those relative size of those bubbles. Brazil and Mexico was $30-$40 million opportunities. Then you come over to the big ones, China, India, and see the size of the opportunity we have potentially around the world is pretty phenomenal. Some of the wonderful growth rates we've been achieving, those higher growth rates.
So on top of that consistent growth, our U.S. market has continued to grow. We still have growth, even though we're in 8 out of 10 homes in the U.S. and have almost universal awareness. We've still been growing. Five-year CAGR in the U.S. has been 6.5% over the past five years. And so that's continuing to grow for us as well. We have growth opportunities there in industry with WD-40 Specialist and in the e-commerce and digital channels. But these markets you see here are really where we've grown strongly. So Mexico and Brazil, we already spoke about. But places like China, where we've been in China since 2006, China's our third largest market, around a $30 million, approaching a $30 million market now. And really simple strategy, just expanding distribution and sampling the end user. We have great products.
We just need to put them in the hands of the right end users. That really is our marketing strategy. Expand distribution, sample the right end user. Very simple, and so in China, we're sampling about 25,000 factories each and every year, and we're converting about a quarter of those each and every year, and it becomes like an annuity. India, probably the most exciting market in the world for us as we look out long term. In terms of unit sales, India is already our second largest market globally after the U.S. and has the potential long term, I believe, to really rival the U.S. in terms of market size over the longer term.
And so in India, we partner with a local business called Pidilite, a really professional, wonderful strategic partner, and we've been getting fabulous growth rates, compound annual growth rate over the past five years of 35%. Indonesia, I'll mention briefly, Indonesia has been growing very quickly for us as well. There we have a new hybrid business model where, alongside our distributor partner, we have our own people on the ground as well. And so the bottom line is to kind of complement this strong growth potential we still have in the U.S. and then our European, more direct, more developed markets, these high growth potential emerging markets around the world are where the really high percentage growth comes from. The second revenue battle is around premiumization. And so converting that can that Sara showed earlier, this is a can we sold everywhere in the world previously.
And the one consumer complaint we used to get was people would lose the straw, right? That was the only consumer complaint we got. And so we incorporated the straw in a Smart Straw delivery system. The U.S. has been converted to that for some years now. More recently, we've added this EZ-Reach delivery system in terms of a premium format. If you're an automotive mechanic working under a car, you can save yourself an hour getting exactly where you want to go. And so the Smart Straw sells at a premium of around 30%, and the EZ-Reach is around a 45% premium. So highly margin accretive to the business, refreshes and modernizes the brand and really drives margin expansion. They've been growing very nicely, these products for us, about 9.4% over the past few years.
WD-40 Specialist range really gives us the opportunity to sell a full category range of products, and has been our fastest growing range. So 14% growth over the past five years. You see here, it's a shelf in a DIY, a home center in Spain, where we completely own that shelf between WD-40 brand. We also own the 3-IN-ONE brand as a flanker brand. And so we own that entire category. WD-40, the core product, the multi-use product, is still typically about 60% of the sales of that category. And so the rest of the kind of products flank the core. They take competition off shelves and enable us to be category players within that entire category. And we're only just really getting going on WD-40 Specialist, only at 12% of our benchmarked opportunity, and it's growing very, very quickly for us. Digital is a huge accelerator of our growth.
It may sound strange, but WD-40 is actually a digital brand. End users love to talk about our brand online and tell stories of uses. We are one of the top search brands on many online platforms in the very high top percentage of all brands searched. And so there's a huge amount of organic interest in our brands. And so leveraging digital not only as an e-commerce kind of fast-growing channel, e-commerce has been growing in double digits for us, but also in terms of building our brand with things like the Repair Challenge, which is a global we are the only global brand in our category. And so leveraging these digital tools and programs, which are globally scalable, that goes across 45 countries globally. So with that, I'm going to hand over to Sara to talk through some of our financial drivers.
Great. Thank you. And I have heard we'll get the hook if I don't close this out in eight and a half minutes. So I should be able to do that. So quickly wanted to cover some of our financial drivers and the outcomes that that brings. As I mentioned earlier, our model is very asset-light. It's asset-light by design. We invest in our brands, and we invest in our people. We don't spend money on factories and warehouses. That approach really gives us a solid foundation. We have an extremely strong balance sheet. We have predictable free cash flow year in and year out, and we have strong access to liquidity if and when opportunities arise. Our returns are powered by that iconic brand, and it's supported by that diversified global footprint that we have.
As you heard from Steve, we believe we have a long runway for growth ahead. In short, we invest where it matters most, our brands and our people. We've converted that brand strength into double-digit, sorry, durable double-digit. I'm going to shoot for double-digit growth this year into durable financial outcomes for our stockholders. Steve mentioned focus, and focus for us is really powerful. It goes beyond kind of the product portfolio that we have. It really also leads into us as a global company and really becoming more global synergies, creating those synergies across our trading blocks. We are leaning even further into moving on to shared systems.
We're working very hard to create shared processes across our trading blocks and really stepping into becoming more of a global learning organization and leveraging that global footprint that we have that no other company in our category can match. So we're really focused on fewer things, many places to drive bigger impact, and that mantra we're starting to see is really starting to resonate with our people. Our business model is fairly simple to understand. I've even been told that it has been taught in business schools. For us, we call it the 55-30-25 Business Model, but we also really think about that model in ranges, not necessarily at one data point. Starts with that top line growth, right? Mid to high single digits is what we strive for every year.
We want a gross margin really north of 55%, and we actually were able to get back to that this fiscal year, and then really for us, our midterm goal is to get our EBITDA margins back up to that 20% to 22% range, which is where they were before the inflationary headwinds hit us in FY 2022. We strive to deliver an ROIC of north of 25%, and again, because of the asset-light nature, we're able to deliver that. I mentioned our gross margin recovery.
When Steve and I started, we were down at that 49%, and it was the one thing that we knew we had to get back and had to recover in order to get the business back on track, and so the last three years, we did just that. We got over that 55% in FY 2025. We actually think there's more to go in FY 2026. We've been successful in implementing tactical price increases with those inflationary headwinds that we had in FY 2022. But we've also been executing on our cost initiative. So we've been able to take costs out of our supply chain. We've been able to, as we drive geographic expansion, our geographic expansion is actually margin accretive for us.
Most of the faster growing markets for us are actually at higher gross margin than some of our more mature markets. And so geographic expansion is margin accretive. Along with premiumization, as you heard, and Specialist, both of those Must-Win Battles all help us generate a strong margin. So we don't think we're done. We think we're going to go even further in FY 2026, and we'll see where we can get in FY 2027. Just a quick highlight on our capital allocation priorities.
So, first, obviously, supporting the business for that long-term growth that we've mentioned. And then the strong balance sheet that we have gives us a lot of optionality. Our first priority in returning cash to shareholders is in the form of a dividend. So I was literally threatened with my life when I took over as the CFO to never touch the dividend. We've paid a dividend for over 40 years, and we went back and looked at the data. We think we only didn't raise it one of those years, which was during COVID, where we just put a pause. We didn't go backwards, but we just put a pause on it. So really wanting to commit to that dividend, we target north of 50% of our earnings to be paid out in the form of a dividend and have been well north of that for a while.
Then after that, it's really what's most accretive to the business. The past few years, it's actually been paying down some of our higher interest rate short-term debt. Share repurchases is always a lever that we can pull. Let's look a little bit at how has that played out over the last five years. You can see our dividend has continued to grow. Our board actually just authorized an 8% increase of our dividend recently. That's actually in excess of our five-year CAGR of 7.4%, really demonstrating their belief in not only the long-term growth of the business, but the ability to generate future cash flows. We also have accelerated our share repurchases recently. We did announce at the beginning of this fiscal year that we were going to double our share repurchases just given where the market is and given where our stock price is.
We actually believe that buying back shares at a more aggressive pace is a good practice. So we'll more than double the 12.3 that we bought back last year. All right. I got two and a half minutes, three minutes left. We're good. I think this is the last slide. So what makes WD-40 a compelling investment opportunity? We've talked a lot about the fact that we deliver unique, high-value, and easy-to-use solutions that millions of users around the world take advantage of every day: workshops, factories, and homes. That competitive advantage gives us that ability to drive those 55% plus gross margins and really drive the health of the business. Our culture, really, we can't emphasize enough how that extra effort that our people bring day in and day out and the consistency that it brings in the execution of the strategy, right?
We're not having to retrain people constantly. We have a lot of the same leaders in a lot of our regions that can share information and bring people along to teach them how to deliver on the WD-40 Way. It's really about driving that long-term growth algorithm. We want to maintain an invested capital of north of 25%. We want to continue to be able to raise the dividend on an annual basis.
We are really proud to be a Dividend Aristocrat. And so that's something that we're definitely striving for. We do really appreciate your time today. We have, I think, two breakout sessions, and we know that we talked fast because we knew we only had 25 minutes. So we would love for anybody to swing by, and we can go a little bit deeper in any of our breakout sessions.
But that's the kind of history and story and background of the company. And so you know more about the company, now you don't just know the brand.