Ferguson Studies Fourth Quarter and Yr Finish Outcomes; Points FY2025 Steering

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Sturdy Execution Delivers Resilient Full Yr Outcomes

Fourth quarter highlights

• Gross sales of $7.9 billion, a rise of 1.4% regardless of continued deflation of roughly 2%.
• Working margin of 10.2%, up 20 bps on prior yr (10.8% on an adjusted foundation, up 40 bps on prior yr).
• Diluted earnings per share of $2.23 ($2.98 on an adjusted foundation).
• Declared quarterly dividend of $0.79 per share.
• Accomplished 4 acquisitions through the quarter.
• Share repurchases of $213 million through the quarter.

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Full yr highlights

• Gross sales had been $29.6 billion, a lower of 0.3%, with continued market share positive factors.
• Gross margin of 30.5% was 10 bps forward of final yr.
• Working margin of 8.9%, flat to prior yr (9.5% on an adjusted foundation, down 30 bps on prior yr).
• Diluted earnings per share of $8.53 ($9.69 on an adjusted foundation).
• Sturdy money era with $1.9 billion web money offered by working actions.
• Complete dividends declared of $3.16 per share representing 5% progress over the prior yr.
• Invested $260 million in ten acquisitions, producing annualized income of roughly $400 million.
• Share repurchases of $634 million through the yr with an impressive steadiness of roughly $900 million remaining beneath the present share repurchase program at July 31, 2024.
• Stability sheet stays sturdy with web debt to adjusted EBITDA of 1.1x.
• As of August 1, 2024, Ferguson carried out its new company construction and is headquartered in Newport Information, VA.

NEWPORT NEWS, Va. — Kevin Murphy, Ferguson CEO, commented “As soon as once more, our professional associates executed effectively, going above and past to maintain the advanced mission wants of our specialist professional clients. The yr completed in keeping with our expectations. Regardless of market headwinds and deflation through the yr, we continued to outperform our markets, returned to quantity progress, expanded gross margins and delivered strong working margin efficiency. Our sturdy money circulation and steadiness sheet permit for continued funding in natural progress, sustainable dividend progress, consolidation of our fragmented markets via acquisitions and the continuation of our share repurchase program.

“Our fiscal 2025 steerage displays modest full yr progress with continued market outperformance. Whereas we anticipate an ongoing difficult close to time period market atmosphere, we are going to proceed to put money into scale and capabilities to make the most of multi-year structural tailwinds reminiscent of underbuilt and growing older U.S. housing, non-residential giant capital initiatives and our alternative with the dual-trade plumbing and HVAC contractor. Our balanced enterprise combine and skill to deploy scale domestically give us confidence in our skill to outperform as our markets return to progress.”

FY2025 Steering

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Abstract of monetary outcomes

Fourth quarter

Internet gross sales of $7.9 billion had been 1.4% forward of final yr. Natural income declined 0.2% and the opposed impression of overseas change charges was 0.1%, offset by acquisition progress of 1.7%. Weak point in sure commodity associated classes drove modest general value deflation of roughly 2%. Consequently, volumes on an natural foundation had been up roughly 2%.

Gross margin was 31.0%, a rise of 40 foundation factors over final yr, pushed by the worth we offer to our clients in addition to a lower to our stock reserve. Working bills continued to be diligently managed and we stay centered on productiveness and efficiencies whereas investing in core capabilities for future progress.

Reported working revenue was $811 million (10.2% working margin) was 3.7% forward of final yr. Adjusted working revenue of $857 million (10.8% adjusted working margin) was 5.3% forward of final yr.

Reported diluted earnings per share was $2.23 (This fall 2023: $2.85), a lower of 21.8% resulting from one-time, non-cash deferred tax expenses arising from the brand new company construction. Adjusted diluted earnings per share of $2.98 was 7.6% forward of final yr as a result of enhance in adjusted working revenue and the impression of share repurchases.

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Full yr

Internet gross sales of $29.6 billion had been 0.3% under final yr, 2.4% decrease on an natural foundation with an extra 1.8% from acquisitions. An extra promoting day contributed 0.4% to progress whereas the opposed impression of overseas change charges was 0.1%. Deflation through the yr was roughly 2%.

Gross margin of 30.5% was 10 foundation factors forward of final yr. Reported working revenue was $2.7 billion (8.9% working margin), 0.3% decrease than final yr. Adjusted working revenue of $2.8 billion (9.5% adjusted working margin) was 3.2% decrease than final yr.

Reported diluted earnings per share was $8.53 (FY2023: $9.12), a lower of 6.5%, whereas adjusted diluted earnings per share of $9.69 decreased 1.5% as a result of decrease adjusted working revenue, partially offset by the impression of share repurchases.

In the course of the yr we acquired ten companies which in mixture generate annualized income of roughly $400 million.

USA – fourth quarter

Internet gross sales within the US enterprise grew 1.3%, with an natural income decline of 0.2% offset by 1.5% from acquisitions.

Residential finish markets, representing roughly half of US income, remained muted. New residential housing begin and allow exercise weakened through the second half of our fiscal yr. Restore, upkeep and enchancment (“RMI”) work has additionally remained tender. General, residential income was flat within the fourth quarter.

Non-residential finish markets, representing roughly half of US income, confirmed continued resilience with non-residential income rising by roughly 3% within the fourth quarter. Non-residential waterworks initiatives noticed strong demand within the quarter with industrial and industrial revenues additionally rising. We continued to see strong bidding exercise on giant capital initiatives.

Adjusted working revenue of $844 million was 5.0% or $40 million forward of final yr.

We accomplished 4 acquisitions through the quarter that included Southwest Geo-Options, a distributor of abrasion management, containment, geotextile and geogrid merchandise which expands our Waterworks footprint within the central and southwest areas, and United Water Works, a distributor of piping and water, storm and sewer merchandise serving the Orange County and higher Los Angeles areas in California. Moreover we acquired Gerster Gear, an HVAC distributor in New York state, and GAR Engineering, a hearth safety engineering service and design agency based mostly out of North Carolina.

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Canada – fourth quarter

Internet gross sales grew by 2.0%, with an natural income decline of 1.2% and a 2.4% opposed impression from overseas change charges offset by a 5.6% impression from acquisitions. Just like the US phase, non-residential finish markets have been extra resilient than residential finish markets. Adjusted working revenue of $22 million was flat in comparison with prior yr.

Section overview

Monetary place

Internet debt to adjusted EBITDA at July 31, 2024 was 1.1x and through the yr we invested $0.4 billion in capital expenditures, paid $0.8 billion of dividends, invested $0.3 billion in ten acquisitions, and repurchased 3.3 million of our excellent shares equating to $0.6 billion. We’ve got a remaining excellent steadiness of $0.9 billion beneath the present share repurchase program at July 31, 2024.

We’ve got declared a quarterly dividend of $0.79. The dividend can be paid on November 8, 2024 to stockholders of file as of September 27, 2024. This brings the total yr dividend to $3.16, a progress of 5% for the yr.

There have been no different important modifications to the monetary place of the Firm.

Investor convention name and webcast

A name with Kevin Murphy, CEO and Invoice Brundage, CFO will begin at 8:30 a.m. ET (1:30 p.m. BST) right this moment. The decision can be recorded and obtainable on our web site after the occasion at company.ferguson.com.

Ask for the Ferguson name quoting 458942. To entry the decision by way of your laptop computer, pill or cellular system please go to company.ferguson.com. If in case you have technical difficulties, please click on the “Pay attention by Telephone” button on the webcast participant and dial the quantity offered.

About Ferguson

Ferguson (NYSE: FERG; LSE: FERG) is the most important value-added distributor serving the specialised skilled in our $340B residential and non-residential North American development market. We assist make our clients’ advanced initiatives easy, profitable and sustainable by offering experience and a variety of services and products from plumbing, HVAC, home equipment, and lighting to PVF, water and wastewater options, and extra. Headquartered in Newport Information, Va., Ferguson has gross sales of $29.6 billion (FY’24) and roughly 35,000 associates in almost 1,800 areas. For extra info, please go to company.ferguson.com.

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Analyst sources

For additional info on quarterly monetary breakdowns, go to company.ferguson.com on the Buyers menu beneath Analysts and Sources.

Monetary calendar

Timetable for the quarterly dividend

The timetable for cost of the quarterly dividend of $0.79 per share is as follows:

Additional particulars will be discovered on our web site company.ferguson.com, navigating to Buyers, Shareholder Middle, Dividends / Dividend Historical past.

The completion of cross-border actions of shares between the U.Ok. and the U.S. is contingent upon the receiving dealer figuring out and acknowledging any such actions. The place a cross-border motion of shares has been initiated however not accomplished by the related dividend file date (being September 27, 2024 for this quarterly dividend), there’s a danger that the dividend in respect of such shares won’t be acquired on the dividend cost date. Accordingly, shareholders are suggested to not provoke any cross-border actions of shares through the interval from September 25, 2024 via September 29, 2024 inclusive.

Cautionary notice on forward-looking statements

Sure info included on this announcement is forward-looking, together with throughout the that means of the Non-public Securities Litigation Reform Act of 1995, and includes dangers, assumptions and uncertainties that would trigger precise outcomes to vary materially from these expressed or implied by forward-looking statements. Ahead-looking statements cowl all issues which aren’t historic info and embody, with out limitation, statements or steerage concerning or regarding our future monetary place, outcomes of operations and progress, plans and targets for the long run together with our capabilities and priorities, dangers related to modifications in international and regional financial, market and political situations, skill to handle provide chain challenges, skill to handle the impression of product value fluctuations, our monetary situation and liquidity, authorized or regulatory modifications and different statements in regards to the success of our enterprise and techniques. Ahead-looking statements will be recognized by means of forward-looking terminology, together with phrases reminiscent of “believes,” “estimates,” “anticipates,” “expects,” “forecasts,” “steerage,” “intends,” “continues,” “plans,” “initiatives,” “objective,” “goal,” “goal,” “might,” “will,” “would,” “may” or “ought to” or, in every case, their destructive or different variations or comparable terminology and different comparable references to future intervals. Ahead-looking statements communicate solely as of the date on which they’re made. They don’t seem to be assurances of future efficiency and are based mostly solely on our present beliefs, expectations and assumptions concerning the way forward for our enterprise, future plans and techniques, projections, anticipated occasions and traits, the economic system and different future situations. Subsequently, you shouldn’t place undue reliance on any of those forward-looking statements. Though we imagine that the forward-looking statements contained on this announcement are based mostly on cheap assumptions, you ought to be conscious that many components may trigger precise outcomes to vary materially from these contained in such forward-looking statements, together with however not restricted to: weak spot within the economic system, market traits, uncertainty and different situations within the markets through which we function, and different components past our management, together with disruption within the monetary markets and any macroeconomic or different penalties of political unrest, disputes or struggle; failure to quickly determine or successfully reply to direct and/or finish clients’ needs, expectations or traits, together with prices and potential issues related to new or upgraded info expertise methods or our skill to well timed deploy new omni-channel capabilities; decreased demand for our merchandise on account of working in extremely aggressive industries and the impression of declines within the residential and non-residential markets; modifications in competitors, together with on account of market consolidation or rivals responding extra shortly to rising applied sciences (reminiscent of generative synthetic intelligence (“AI”)); failure of a key info expertise system or course of in addition to publicity to fraud or theft ensuing from payment-related dangers; privateness and safety of delicate knowledge failures, together with failures resulting from knowledge corruption, cybersecurity incidents or community safety breaches; ineffectiveness of or disruption in our home or worldwide provide chain or our success community, together with delays in stock availability at our distribution services and branches, elevated supply prices or lack of availability; failure to successfully handle and defend our services and stock or to stop private harm to clients, suppliers or associates, together with on account of office violence; unsuccessful execution of our operational methods; failure to draw, retain and encourage key associates; publicity of associates, contractors, clients, suppliers and different people to well being and security dangers; dangers related to acquisitions, partnerships, joint ventures and different enterprise combos, tendencies or strategic transactions; regulatory, product legal responsibility and reputational dangers and the failure to realize and keep a excessive degree of product and repair high quality or adjust to accountable sourcing requirements; lack of ability to resume leases on favorable phrases or in any respect, in addition to any remaining obligations beneath a lease once we shut a facility; modifications in, interpretations of, or compliance with tax legal guidelines; our indebtedness and modifications in our credit score scores and outlook; fluctuations in product costs (e.g., commodity-priced supplies, inflation/deflation) and overseas forex; funding dangers associated to our outlined profit pension plans; authorized proceedings in the midst of our enterprise in addition to failure to adjust to home and overseas legal guidelines, laws and requirements, as these legal guidelines, laws and requirements or interpretations and enforcement thereof might change, or the prevalence of unexpected developments reminiscent of litigation, investigations, governmental proceedings or enforcement actions; our failure to adjust to the obligations related to being a public firm listed on the New York Inventory Trade and London Inventory Trade and the prices related therewith; the prices and danger publicity regarding environmental, social and governance (“ESG”) issues, together with sustainability points, regulatory or authorized necessities, and disparate stakeholder expectations; opposed impacts brought on by a public well being disaster; and different dangers and uncertainties set forth beneath the heading “Threat Elements” within the Annual Report on Type 10-Ok for the fiscal yr ended July 31, 2023 filed by Ferguson plc with the Securities and Trade Fee (“SEC”) on September 26, 2023, within the Quarterly Report on Type 10-Q filed by Ferguson plc with the SEC on June 5, 2024, and in different filings we make with the SEC sooner or later. Moreover, forward-looking statements concerning previous traits or actions shouldn’t be taken as a illustration that such traits or actions will proceed sooner or later. Aside from in accordance with our authorized or regulatory obligations, we undertake no obligation to publicly replace or revise any forward-looking assertion, whether or not on account of new info, future occasions or in any other case.

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Non-GAAP Reconciliations and Supplementary Data

(unaudited)

Non-GAAP objects

This announcement comprises sure monetary info that isn’t offered in conformity with U.S. GAAP. These non-GAAP monetary measures embody adjusted working revenue, adjusted working margin, adjusted web revenue, adjusted earnings per share – diluted, adjusted EBITDA, adjusted efficient tax charge, web debt and web debt to adjusted EBITDA ratio. The Firm believes that these non-GAAP monetary measures present customers of the Firm’s monetary info with extra significant info to help in understanding monetary outcomes and assessing the Firm’s efficiency from interval to interval. Administration believes these measures are vital indicators of operations as a result of they exclude objects that might not be indicative of our core working outcomes and supply a greater baseline for analyzing traits in our underlying companies, and they’re in step with how enterprise efficiency is deliberate, reported and assessed internally by administration and the Board. Such non-GAAP changes embody amortization of acquired intangible property, discrete tax objects, and another objects which might be non-recurring. Non-recurring objects might embody varied restructuring expenses, positive factors or losses on the disposals of companies which by their nature don’t mirror major operations, in addition to sure different objects deemed non-recurring in nature and/or that aren’t a results of the Firm’s major operations. As a result of non-GAAP monetary measures aren’t standardized, it might not be potential to match these monetary measures with different corporations’ non-GAAP monetary measures having the identical or comparable names. These non-GAAP monetary measures shouldn’t be thought of in isolation or as an alternative choice to outcomes reported beneath U.S. GAAP. These non-GAAP monetary measures mirror an extra approach of viewing points of operations that, when seen with U.S. GAAP outcomes, present a extra full understanding of the enterprise. The Firm strongly encourages buyers and shareholders to evaluate the Firm’s monetary statements and publicly filed studies of their entirety and to not depend on any single monetary measure.

The Firm doesn’t present a reconciliation of forward-looking non-GAAP monetary measures to probably the most straight comparable U.S. GAAP monetary measures on a forward-looking foundation as a result of it’s unable to foretell with cheap certainty or with out unreasonable effort non-recurring objects, reminiscent of these described above, which will come up sooner or later. The variability of these things is unpredictable and will have a big impression.

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Abstract of Natural Income

Administration evaluates natural income because it supplies a constant measure of the change in income year-on-year. Natural income progress (or decline) is set as the expansion (or decline) in whole reported income excluding the expansion (or decline) attributable to forex change charge fluctuations, gross sales days, acquisitions and disposals, divided by the previous monetary yr’s income on the present yr’s change charges.

A abstract of the Firm’s historic income and natural income progress is under:

For additional particulars concerning natural income progress, go to company.ferguson.com on the Buyers menu beneath Analyst Consensus and Sources.

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Internet Debt : Adjusted EBITDA Reconciliation

To evaluate the appropriateness of its capital construction, the Firm’s principal measure of monetary leverage is web debt to adjusted EBITDA. The Firm goals to function with funding grade credit score metrics and hold this ratio inside one to 2 occasions.

Internet debt

Internet debt contains financial institution overdrafts, financial institution and different loans and spinoff monetary devices, excluding lease liabilities, much less money and money equivalents. Lengthy-term debt is offered web of debt issuance prices.

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View supply model on businesswire.com: https://www.businesswire.com/information/house/20240917503337/en/

Contacts

For additional info please contact

Investor relations
Brian Lantz, Vice President IR and Communications
Cell: +1 224 285 2410

Pete Kennedy, Director of Investor Relations
Cell: +1 757 603 0111

Media inquiries
Christine Dwyer, Senior Director of Communications and PR
Cell: +1 757 469 5813

#distro

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