Slide 1: First Quarter Results Presentation
FY2023 First Quarter Results Presentation RESULTS TO OCTOBER 31, 2022
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 within the meaning of the Private Securities Litigation Reform Act of 1995, and invol
Slide 3: Highlights and Introduction
01 Highlights and Introduction Kevin Murphy, CEO
Slide 4: First Quarter Financial Highlights
First Quarter Financial Highlights Net sales ($m) Adjusted operating profit* ($m) Adjusted EPS – diluted* 7,931 864 $2.95 6,803 767 $2.50 2022 2023 2022 2023 2022 2023 +16.6% +12.6% +18.0% * This is a non-GAAP measure. See the appendix to this presentation for more information and a reconciliation o
Slide 5: Balanced approach to attractive end markets
Balanced approach to attractive end markets Q1 FY2023 % of US revenue* US revenue growth Residential 54% +15% Non-residential 46% +20% - Commercial 32% +18% - Civil/Infrastructure 8% +27% - Industrial 6% +22% 100% +17.4% Broad based revenue growth * Residential / Non-Residential proportions derived
Slide 6: USA First Quarter Net Sales Growth
USA First Quarter Net Sales Growth % of US net Q1 2023 Customer Group sales* Total growth Residential Trade 19% +15% Residential Building and Remodel 14% +21% Residential Digital Commerce 9% +1% HVAC 11% +18% Commercial / Mechanical 13% +6% Waterworks 21% +27% Other** 13% +25% USA 100% +17.4% Growth
Slide 7: Financial Review
02 Financial Review Bill Brundage, CFO
Slide 8: First Quarter Financial Highlights
First Quarter Financial Highlights $m (except per share amounts) Q1 2023 Q1 2022 Change Net sales 7,931 6,803 +16.6% Gross margin 30.5% 31.3% (80) bps Adjusted operating profit* 864 767 +12.6% Adjusted operating margin* 10.9% 11.3% (40) bps Adjusted earnings per share – diluted* $2.95 $2.50 +18.0% A
Slide 9: USA First Quarter
USA First Quarter $m Q1 2023 Q1 2022 Change Net sales 7,532 6,418 +17.4% Organic revenue growth* +13.0% +25.2% Adjusted operating profit** 845 752 +12.4% Adjusted operating margin % 11.2% 11.7% (50) bps Continued growth from share gains and ability to manage price inflation Cost base well controlled
Slide 10: Canada First Quarter
Canada First Quarter $m Q1 2023 Q1 2022 Change Net sales 399 385 +3.6% Organic revenue growth* +8.2% +13.9% Adjusted operating profit** 33 34 (2.9%) Adjusted operating margin % 8.3% 8.8% (50) bps Solid organic revenue growth against strong comparables Adverse foreign exchange movements impacted adju
Slide 11: Cash Flow – First Quarter
Cash Flow – First Quarter $m Q1 2023 Q1 2022 Adjusted EBITDA* 912 814 Working capital (357) (767) Interest and tax (86) (68) Other items 32 12 Net cash provided by (used in) operating activities of continuing operations 501 (9) Capex (95) (54) Proceeds from the sale of assets and divestitures 2 1 Fr
Slide 12: Capital Allocation
Capital Allocation Surplus 1 Organic Growth 2 Dividends 3 Acquisitions 4 Capital Returns Working Capital • Quarterly dividend of $0.75 • 3 completed since Aug 1st • ~$0.4 billion share per share, implies repurchases completed during • Net investment in WC $357m annualized increase of 9% • ~$270 mill
Slide 13: FY2023 Guidance (unchanged)
FY2023 Guidance (unchanged) • Net sales growth of low single digits driven by market outperformance and completed acquisitions * • Adjusted operating margin of 9.3% to 9.9% • Interest expense of $170 - $190 million * • Adjusted effective tax rate of approximately 25% • Capital expenditures of $350 -
Slide 14: Strategy and closing remarks
03 Strategy and closing remarks Kevin Murphy, CEO
Slide 15: Executing our strategy to create long term value
Leading positions Additional in large, growing and growth from fragmented markets acquisitions Executing our strategy to create long term value through… Scale delivers Long-term track sustainable market record of outperformance outperformance and cash generation Continued value creation
Slide 16: Leading positions in large, growing and fragmented markets
Leading positions Additional in large, growing and growth from fragmented markets acquisitions Scale delivers Long-term track sustainable market record of outperformance outperformance and cash generation Continued value creation
Slide 17: Additional growth from acquisitions
Additional growth from acquisitions Geographic acquisitions • Consolidate fragmented markets • Associate expertise • Customer relationships • Leverage our market-leading capabilities Capability acquisitions • New products and solutions • Leverage across existing platform • Associate expertise • Cust
Slide 18: HVAC Acquisitions
HVAC Acquisitions • Airefco • A leading regional HVAC distributor serving customers in the Pacific NW across 11 locations • Strong vendor relationships, principally with Carrier • Long track record and strong customer relationships supported by knowledgeable associates • Guarino • 5 locations across
Slide 19: Closing Remarks
Closing Remarks Thank you to our associates. 1. Strong start to the fiscal year 2. Balanced business mix 3. Flexible business model 4. Underpinned by a strong balance sheet 19
Slide 20: Join us for Q&A
Join us for O&A #3 FERGUSON’
Slide 21: Appendix
04 Appendix #3 FERGUSON
Slide 22: ~$340b North American Opportunity, $29b Revenue in FY2022
Leading positions in highly fragmented North American markets Balanced approach to attractive end markets ~$340b North American Opportunity 54% 46% RESIDENTIAL NON-RESIDENTIAL 60% 40% RMI NEW CONSTRUCTION $29b Revenue in FY2022 Residential / Non-Residential and RMI / New Construction proportions der
Slide 23: 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 12% Current Share Building $33b market #1 Market Position and Remodel Waterworks $28b market 21% Current Share #1 Market Position $29b revenue with a Commercial / $18b 2
Slide 24: 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 October 31, (In millions) 2022 2021 Net income $595 $560 Income from discontinued operations (net of tax) — (25) Provision for income taxes 197 176 Interest expense, net 41 27 Other (income) loss (2) 1 N
Slide 25: Net Debt
Net Debt Net debt comprises bank overdrafts, bank and other loans and derivative financial instruments, excluding lease liabilities, less cash and cash equivalents. Long-term debt is presented net of debt issuance costs. As of October 31, (In millions) 2022 2021 Long-term debt(1) $3,759 $2,255 Short
Slide 26: Adjusted EBITDA (Rolling 12-month)
Adjusted EBITDA (Rolling 12-month) Adjusted EBITDA is net income before charges/credits relating to depreciation, amortization, impairment and certain non-GAAP adjustments. A rolling 12-month adjusted EBITDA is used in the net debt to adjusted EBITDA ratio to assess the appropriateness of the Compan
Slide 27: Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS
Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS Three months ended October 31, (In millions, except per share amounts) 2022 2021 Net Income $595 $560 Income from discontinued operations (net of tax) — (25) Income from continuing operations 595 535 Non-GAAP adjustments(1) — 1 Amo
Slide 28: Ferguson
44 FERGUSON