Slide 1: Fourth Quarter & Year End Results Presentation
FY2023 Fourth Quarter & Year End Results Presentation RESULTS TO JULY 31, 2023
Slide 2: Legal Disclaimer
Legal Disclaimer Cautionary note on forward-looking statements Certain information included in this presentation and discussed on the conference call that this presentation accompanies is forward-looking, including w ithin the meaning of the Private Securities Litigation Reform Act of 1995, and invo
Slide 3: Highlights and introduction
01 Highlights and introduction Kevin Murphy, CEO •Kevin Murphy, CEO
Slide 4: FY2023 Financial highlights
FY2023 Financial highlights +4.1% Net sales (1.2%) Adjusted operating profit* +0.8% Adjusted EPS – diluted* $2.7b Net cash provided by operating activities $1.6b 8 1.0x 34.6% Shareholder returns** Number of acquisitions Net debt : adjusted EBITDA* Return on capital employed* Strong performance in ch
Slide 5: Fourth quarter financial highlights
Fourth quarter financial highlights Q4 Net sales ($m) Q4 Adjusted operating profit* ($m) Q4 Adjusted EPS – diluted* 849 $2.85 $2.77 7,971 814 7,838 699 $2.37 6,567 2021 2022 2023 2021 2022 2023 2021 2022 2023 +21.4% (1.7%) +21.5% (4.1%) +20.3% (2.8%) Our teams executed well to drive solid performanc
Slide 6: Balanced approach to attractive US end markets
Balanced approach to attractive US end markets Q4 2023 % of US net sales* US net sales growth Residential 52% (4%) Non-residential 48% +2% Commercial 33% +1% Civil/Infrastructure 8% Flat Industrial 7% +8% 100% (1.5%) Intentional balanced business mix continues to serve us well * Residential / Non-re
Slide 7: USA fourth quarter net sales growth
USA fourth quarter net sales growth Q4 2023 Q4 2022 % of US net Customer group net sales net sales sales* growth growth Residential Trade Plumbing 18% (11%) +21% HVAC 11% +4% +18% Residential Building and Remodel 14% +2% +21% Residential Digital Commerce 8% (9%) +3% Waterworks 21% (1%) +36% Commerci
Slide 8: Market update: Full year US end-market revenue growth
Market update: Full year US end-market revenue growth FY2023 FY2023 Estimated market US organic % of US net sales* growth** revenue growth*** Residential 52% Approx. (6%) (3%) Non-residential 48% Approx. +3% +7% 100% Approx. (2%) +1.5% Continued market outperformance * For y ear ended July 31, 2023.
Slide 9: Consolidating our fragmented markets
Consolidating our fragmented markets Eight acquisitions made during FY2023 • Included three HVAC and two Waterworks businesses • $0.8b of incremental annualized revenue • 57 new branch locations • Bringing new talent into Ferguson • Pipeline for further acquisitions remains healthy 9
Slide 10: Financial review
02 Financial review Bill Brundage, CFO •Kevin Murphy, CEO
Slide 11: Fourth quarter financial highlights
Fourth quarter financial highlights $m (except per share amounts) Q4 2023 Q4 2022 Change Net sales 7,838 7,971 (1.7%) Gross margin 30.6% 30.5% +10 bps Adjusted operating profit* 814 849 (4.1%) Adjusted operating margin* 10.4% 10.7% (30) bps Adjusted earnings per share – diluted* $2.77 $2.85 (2.8%) A
Slide 12: USA fourth quarter
USA fourth quarter $m Q4 2023 Q4 2022 Change Net sales 7,428 7,539 (1.5%) Organic revenue (decline) / growth* (5.5%) +19.8% Adjusted operating profit** 804 829 (3.0%) Adjusted operating margin 10.8% 11.0% (20) bps Disciplined execution delivered strong adjusted operating margin * For f urther detail
Slide 13: Canada fourth quarter
Canada fourth quarter $m Q4 2023 Q4 2022 Change Net sales 410 432 (5.1%) Organic revenue (decline) / growth* (2.7%) +14.2% Adjusted operating profit** 22 35 (37.1%) Adjusted operating margin 5.4% 8.1% (270) bps Continued investment through challenging markets * For f urther details regarding organic
Slide 14: FY2023 Financial highlights
FY2023 Financial highlights $m (except per share amounts) FY2023 FY2022 Change Net sales 29,734 28,566 +4.1% Gross margin 30.4% 30.7% (30) bps Adjusted operating profit* 2,917 2,951 (1.2)% Adjusted operating margin* 9.8% 10.3% (50) bps Adjusted earnings per share – diluted* $9.84 $9.76 +0.8% Adjuste
Slide 15: Cash flow – full year
Cash flow – full year $m FY2023 FY2022 Adjusted EBITDA* 3,105 3,153 Working capital 410 (1,271) Interest and tax (838) (764) Other items 50 31 Operating cash flow 2,727 1,149 Capex (441) (290) Proceeds from the sale of assets 9 4 Free cash flow* 2,295 863 Disciplined working capital management drove
Slide 16: Capital allocation
Capital allocation 1. Organic growth 2. Dividends 3. Acquisitions 4. Surplus capital returns Working capital • Quarterly dividend of $0.75 • Invested $616m in eight • $908m share repurchases per share acquisitions during the fiscal completed during fiscal year • Positive cash flow impact of year • ~
Slide 17: FY2024 Guidance
FY2024 Guidance • Net sales to be broadly flat • Assumes mid-single digit market decline with continued Company market outperformance, contribution from already completed acquisitions and one additional sales day. • Overall impact of price inflation estimated to be broadly neutral for the year. * •
Slide 18: Strategy and closing remarks
03 Strategy and closing remarks Kevin Murphy, CEO •Kevin Murphy, CEO
Slide 19: Leading positions in highly fragmented North American markets
Leading positions in highly fragmented North American markets ~75% of revenue generated from #1 or #2 market positions Residential Trade Plumbing HVAC $31b market 17% Share #2 Market Position ~$70b 5% Share $30b revenue with a market #3 Market Position Residential Building and Remodel $25b $30b mark
Slide 20: We Are Ferguson
We Are Ferguson Customer Groups Bringing together our core strengths across Residential Non-residential customer groups to help make complex projects simple, successful and sustainable. • The trade professional is our core customer. Residential Trade Commercial • But we are expanding our role to inf
Slide 21: Partnering with dual-trade professionals
Partnering with dual-trade professionals Meaningful opportunity to further serve the dual- trade professional across plumbing and HVAC Resi-trade HVAC Dual-trade plumbing • Our strengths across both plumbing and HVAC market Pro market market provide a competitive advantage to service the more than 6
Slide 22: Significant megaproject opportunity
Significant megaproject opportunity Capturing growth “from the ground up” • Large-scale, long-term and high-profile non-residential megaprojects expected to provide a multi-year tailwind to our markets. • We believe the incremental total addressable market on megaproject related work is in excess of
Slide 23: Closing remarks
Closing remarks Thank you to our associates. 1. Strong execution from our teams in Q4 with strong results for the year. 2. Balanced market exposure and agile business positions us well for continued outperformance. 3. Underpinned by a cash generative model and strong balance sheet. 4. We remain conf
Slide 24: Join us for Q&A
Join us for Q&A |e
Slide 25: Appendix
04 Appendix •Kevin Murphy, CEO
Slide 26: Reconciliation of Net Income to Adjusted Operating Profit and Adjusted EBITDA
Reconciliation of Net Income to Adjusted Operating Profit and Adjusted EBITDA Three months ended Twelve months ended July 31, July 31, (In millions) 2023 2022 2021 2023 2022 2021 Net income $584 $580 $674 $1,889 $2,122 $1,472 Loss (income), discontinued operations (net of tax) — 2 (9) — (23) 158 Inc
Slide 27: Net Debt:Adjusted EBITDA reconciliation
Net Debt:Adjusted EBITDA reconciliation Net debt comprises bank overdrafts, bank and other loans and derivative financial instruments, excluding lease liabilities, l ess cash and cash equivalents. Long-term debt is presented net of debt issuance costs. As of July 31, (In millions) 2023 2022 Long-ter
Slide 28: Return on capital employed
Return on capital employed As of July 31, (In millions) 2023 Average net debt(1) $3,197 Average shareholders' equity (2) 4,851 Average capital employed 8,048 Return on capital employed (ROCE)(3) 34.6 % (1) Management employs the following averaging method: beginning balance net debt plus ending bala
Slide 29: Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS - Diluted
Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS - Diluted Three months ended Twelve months ended July 31, July 31, 2023 2022 2021 2023 2022 2021 (In millions, except per share amounts) per share(1) per share(1) per share(1) per share(1) per share(1) per share(1) Net income $584
Slide 30: Thank you
Thank you # FERGUSON