TIDMFERG
RNS Number : 1433S
Ferguson PLC
07 March 2023
March 7, 2023
Ferguson plc reports second quarter results
CONSISTENT EXECUTION DELIVERS SOLID PERFORMANCE
Second quarter highlights
- Sales growth of 4.9%, with 2.7% organic growth, on top of a
31.8% total prior year comparable.
- Gross margin of 30.2%.
- Delivered solid operating margins of 8.0% (8.5% on an adjusted
basis) in the quarter, with first half operating margins of 9.4%
(9.8% on an adjusted basis).
- Diluted earnings per sha re of $1.80 ($1.91 on an adjusted basis).
- Strong net cash provided by operating activities of $1.2
billion on a fiscal year to date basis.
- Declared quarterly dividend of $0.75, implying an annualized
increase of 9% over the prior year.
- Completed four acquisitions during the quarter with aggregate
annualized revenues of approx. $300 million.
- Share repurchases of $198 million during the quarter.
- Balance sheet remains strong with net debt to adjusted EBITDA of 1.1x.
- Full year net sales and adjusted operating margin guidance remain unchanged.
FY2023 Guidance
Total Company* 2023 Guidance
Net sales Low single digit growth
----------------------------
Adjusted operating margin 9.3% - 9.9%
----------------------------
Interest expense $185 - $205 million
----------------------------
Adjusted effective tax rate Approximately 25%
----------------------------
Capital expenditures $400 - $450 million
----------------------------
*Net sales guidance continues to reflect market outperformance,
completed acquisitions and one additional sales day. Adjusted
effective tax rate guidance remains unchanged. Interest expense and
capital expenditure guidance increased by $15 million and $50
million, respectively.
Kevin Murphy, Ferguson CEO, commented "The year is unfolding as
we expected and our associates continue to deliver solid results by
leveraging our scale and core strengths to help our customers
deliver their complex projects. We continue to appropriately manage
costs to position the business for challenging end markets.
Importantly, working capital management led to strong cash
generation which enables us to continue investing for organic
growth, consolidating our fragmented markets through acquisitions
and returning capital to shareholders.
"Looking forward, our balanced exposure to both residential and
non-residential end markets, combined with an agile business model,
positions us well for near term uncertainties. Our financial
guidance continues to reflect market outperformance, both
organically and from acquisitions, and we believe our scale and
advantaged platform position us to capture growth from emerging
structural trends in our end markets."
Three months ended January 31,
US$ (In millions, except per 2023 2022 Change
share amounts)
------------------------------------------------------ -----------------
Reported(1) Adjusted(2) Reported(1) Adjusted(2) Reported Adjusted
--------------------------------- ----------- ------------ ------------ ------------- ----------------- --------
Net sales 6,825 6,825 6,508 6,508 +4.9% +4.9%
(40)
Gross margin 30.2% 30.2% 30.6% 30.6% (40) bps bps
Operating profit 549 582 555 588 (1.1)% (1.0)%
(50)
Operating margin 8.0% 8.5% 8.5% 9.0% (50) bps bps
Earnings per share - diluted 1.80 1.91 1.97 1.93 (8.6)% (1.0)%
Adjusted EBITDA 630 648 (2.8)%
--------------------------------- ----------- ------------ ------------ ------------- ----------------- --------
Six months ended January 31,
US$ (In millions, except per 2023 2022 Change
share amounts)
------------------------------------------------------ -----------------
Reported(1) Adjusted(2) Reported(1) Adjusted(2) Reported Adjusted
--------------------------------- ----------- ------------ ------------ ------------- ----------------- --------
Net sales 14,756 14,756 13,311 13,311 +10.9% +10.9%
(50)
Gross margin 30.4% 30.4% 30.9% 30.9% (50) bps bps
Operating profit 1,380 1,446 1,294 1,355 +6.6% +6.7%
(40)
Operating margin 9.4% 9.8% 9.7% 10.2% (30) bps bps
Earnings per share - diluted 4.64 4.87 4.38 4.43 +5.9% +9.9%
Adjusted EBITDA 1,542 1,462 +5.5%
Net debt(2) : Adjusted EBITDA 1.1x 0.8x
--------------------------------- ----------- ------------ ------------ ------------- ----------------- --------
(1) The results are presented in accordance with U.S. GAAP on a
continuing operations basis.
(2) The Company uses certain non-GAAP measures, which are not
defined or specified under U.S. GAAP. See the section titled
"Non-GAAP Reconciliations and Supplementary Information."
Summary of financial results
Second quarter
Net sales of $6.8 billion were 4.9% ahead of last year, with a
sequential step down in growth rates from the first quarter as
expected, against a prior year comparable growth of 31.8%. Organic
revenue growth was 2.7% with a further 2.6% contribution from
acquisitions, partially offset by a 0.3% adverse impact from
foreign exchange rates and 0.1% impact from one fewer sales day in
Canada. Inflation in the second quarter was approximately 10%.
Gross margins of 30.2% were 40 basis points lower than last year
driven primarily by very strong prior year comparables. Operating
expenses continued to be diligently managed and we remain focused
on productivity and efficiencies while investing in core
capabilities for future growth.
Reported operating profit was $549 million ( 8.0% operating
margin), 1.1% lower than last year. Adjusted operating profit of
$582 million (8.5% adjusted operating margin) was 1.0% lower than
last year, during our seasonally weakest quarter.
Reported diluted earnings per share was $1.80 (Q2 2022: $1.97),
a decrease of 8.6% , and adjusted diluted earnings per share of
$1.91 decreased 1.0% with the decrease due to slightly lower
adjusted operating profit and higher interest expense, partially
offset by the impact of share repurchases.
USA - second quarter
The US business grew net sales by 5.4%, driven by 2.6% organic
growth with a further 2.8% from acquisitions.
Residential end markets, which comprise just over half of US
revenue, slowed meaningfully during the quarter as expected. New
residential housing start and permit activity declined while
repairs, maintenance and improvement ("RMI") work remained more
resilient. Overall, residential revenue grew by approximately 1% in
the second quarter.
Non-residential end markets, representing just under half of US
revenue, experienced continued growth. Non-residential revenu e
grew by approximately 11% in the second quarter.
Adjusted operating profit of $579 million was 0.5% or $3 million
ahead of last year.
We completed four acquisitions during the quarter that included
Airefco, a leading regional HVAC distributor serving customers in
the Pacific Northwest across 11 locations and Guarino Distributing
Company, an HVAC distributor operating in Louisiana and
Mississippi. Additionally, we acquired Pipelines, a waterworks
distributor serving markets in Eastern Ohio and Western
Pennsylvania; and Power Process Equipment, an industrial
distributor strengthening our position in the upper Midwest. In
aggregate these four businesses generate annualized revenues of
approximately $300 million and the annualized revenues of the five
businesses acquired year to date is approximately $330 million.
Canada - second quarter
Net sales compressed by 4.5%, with organic revenue growth of
3.0%, offset by 1.2% due to one fewer sales day, and a further 6.3%
due to the adverse impact of foreign exchange rates. Similar to the
US segment, non-residential end markets have been more resilient
than residential end markets. Adjusted operating profit of $14
million declined by $9 million compared to last year.
Segmental overview
Three months ended January Six months ended January
31, 31,
US$ (In millions) 2023 2022 Change 2023 2022 Change
----------- -------------- -------- ----------- --------- ----------
Net sales:
USA 6,504 6,172 5.4 % 14,036 12,590 11.5 %
Canada 321 336 (4.5)% 720 721 (0.1)%
----------- -------------- -------- ----------- --------- ----------
Total net sales 6,825 6,508 4.9 % 14,756 13,311 10.9 %
Adjusted operating profit:
USA 579 576 0.5 % 1,424 1,328 7.2 %
Canada 14 23 (39.1)% 47 57 (17.5)%
Central and other costs (11) (11) (25) (30)
----------- -------------- -------- ----------- --------- ----------
Total adjusted operating
profit 582 588 (1.0)% 1,446 1,355 6.7 %
--------------------------- ----------- -------------- -------- ----------- --------- ----------
Financial position
Net debt at January 31, 2023 was $3.4 billion and during the
quarter we completed share repurchases of $0.2 billion, leaving
approximately $0.4 billion remaining under our current share
repurchase program.
We have declared a quarterly dividen d of $0.75, having
transitioned from a semi-annual distribution schedule earlier in
the fiscal year. This implies a 9% increase, as compared to a
quarter of the prior year's total dividend, and will be paid on May
5, 2023 to shareholders on the register as of March 17, 2023.
There have been n o other significant changes to the financial
position of the Company.
Foreign private issuer status
As of January 31, 2023, we have determined that we no longer
qualify as a foreign private issuer, as defined under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
As a result, effective as of August 1, 2023, we will no longer be
eligible to use the rules designed for foreign private issuers and
will be considered a U.S. domestic issuer. We will be required to
comply with, among other things, U.S. proxy requirements and
Regulation FD and our officers, directors and principal
shareholders will become subject to the beneficial ownership
reporting and short-swing profit recovery requirements in Section
16 of the Exchange Act. We will continue to file annual reports on
Form 10-K, quarterly reports on Form 10-Q, and current reports on
Form 8-K with the Securities and Exchange Commission ("SEC").
For further information please contact
Ferguson
Brian Lantz, Vice President IR and Communications Mobile: +1 224 285 2410
Pete Kennedy, Director of Investor Relations Mobile: +1 757 603 0111
Media inquiries
John Pappas, Director of Financial Communications Mobile: +1 484 790 2727
Investor conference call and webcast
A call with Kevin Murphy, CEO and Bill Brundage, CFO will
commence at 8:30 a.m. ET (1:30 p.m. GMT) today. The call will be
recorded and available on our website after the event at
www.corporate.ferguson.com .
Dial in number UK: +44 (0) 20 3936
2999
US: +1 646 664 1960
Ask for the Ferguson call quoting 872421. To access the call via
your laptop, tablet or mobile device please go to
www.corporate.ferguson.com. If you have technical difficulties,
please click the "Listen by Phone" button on the webcast player and
dial the number provided.
About us
Ferguson plc (NYSE: FERG; LSE: FERG) is a leading value-added
distributor in North America providing expertise, solutions and
products from infrastructure, plumbing and appliances to HVAC,
fire, fabrication and more. We exist to make our customers' complex
projects simple, successful and sustainable. Ferguson is
headquartered in the U.K., with its operations and associates
solely focused on North America and managed from Newport News,
Virginia. For more information, please visit
www.corporate.ferguson.com or follow us on LinkedIn
www.linkedin.com/company/ferguson-enterprises.
Analyst resources
For further information on quarterly financial breakdowns, visit
www.corporate.ferguson.com on the Investors menu under Analyst
Consensus and Resources.
Provisional financial calendar
Q3 Results for period ending April June 6, 2023
30, 2023
Timetable for the quarterly dividend
The timetable for payment of the quarterly dividend of $0.75 per
share is as follows:
Ex-dividend date: March 16, 2023
Record date: March 17, 2023
Payment date: May 5, 2023
The quarterly dividend is declared in US dollars and since March
2021, the default currency for dividends is also US dollars. Those
shareholders who have not elected to receive the dividend in pounds
sterling and who would like to make such an election may do so
online by going to Computershare's Investor Center and returning
the completed form to the address located in the upper--right
corner of the form. The deadline to elect to receive the quarterly
dividend in pounds sterling, or to amend an existing election, is
5:00 p.m. ET on April 5, 2023 and any requests should be made in
good time ahead of that date.
The form is available at
www--us.computershare.com/investor/#home and navigating to Company
Info > FERG > GBP Dividend Election and Mandate Form.
The completion of cross-border movements of shares between the
U.K. and the U.S. is contingent upon the receiving broker
identifying and acknowledging any such movements. Where a
cross-border movement of shares has been initiated but not
completed by the relevant dividend record date (being March 17,
2023 for this quarterly dividend), there is a risk that the
dividend in respect of such shares will not be received on the
dividend payment date. Accordingly, shareholders are advised not to
initiate any cross-border movements of shares during the period
from March 15, 2023 through March 17, 2023 inclusive.
Cautionary note on forward-looking statements
Certain information included in this announcement is
forward-looking, including within the meaning of the Private
Securities Litigation Reform Act of 1995, and involves risks,
assumptions and uncertainties that could cause actual results to
differ materially from those expressed or implied by
forward-looking statements. Forward-looking statements cover all
matters which are not historical facts and include, without
limitation, statements or guidance regarding or relating to our
future financial position, results of operations and growth,
projected interest in and ownership of our ordinary shares by
domestic US investors, plans and objectives for future
capabilities, risks associated with changes in global and regional
economic, market and political conditions, ability to manage supply
chain challenges, ability to manage the impact of product price
fluctuations, our financial condition and liquidity, legal or
regulatory changes, and other statements concerning the success of
our business and strategies. Forward-looking statements can be
identified by the use of forward-looking terminology, including
terms such as "believes", "estimates", "anticipates", "potential",
"expects", "forecasts", "guidance", "intends", "continues",
"plans", "projects", "goal", "target", "aim", "may", "will",
"would", "could" or "should" or, in each case, their negative or
other variations or comparable terminology and other similar
references to future periods. Forward-looking statements speak only
as of the date on which they are made. They are not assurances of
future performance and are based only on our current beliefs,
expectations and assumptions regarding the future of our business,
future plans and strategies, projections, anticipated events and
trends, the economy and other future conditions. Therefore, you
should not place undue reliance on any of these forward-looking
statements. Although we believe that the forward-looking statements
contained in this announcement are based on reasonable assumptions,
you should be aware that many factors could cause actual results to
differ materially from those in such forward-looking statements,
including but not limited to: weakness in the economy, market
trends, uncertainty and other conditions in the markets in which we
operate, and other factors beyond our control, including any
macroeconomic or other consequences of the current conflict in
Ukraine; failure to rapidly identify or effectively respond to
direct and/or end customers' wants, expectations or trends,
including costs and potential problems associated with new or
upgraded information technology systems; decreased demand for our
products as a result of operating in highly competitive industries
and the impact of declines in the residential and non-residential
markets, as well as the RMI and new construction markets; changes
in competition, including as a result of market consolidation;
failure of a key information technology system or process as well
as exposure to fraud or theft resulting from payment-related risks;
privacy and protection of sensitive data failures, including
failures due to data corruption, cybersecurity incidents or network
security breaches; ineffectiveness of or disruption in our domestic
or international supply chain or our fulfillment network, including
delays in inventory, increased delivery costs or lack of
availability; failure to effectively manage and protect our
facilities and inventory; unsuccessful execution of our operational
strategies; failure to attract, retain and motivate key associates;
exposure of associates, contractors, customers, suppliers and other
individuals to health and safety risks; inherent
risks associated with acquisitions, partnerships, joint ventures
and other business combinations, dispositions or strategic
transactions; regulatory, product liability and reputational risks
and the failure to achieve and maintain a high level of product and
service quality; inability to renew leases on favorable terms or at
all, as well as any remaining obligations under a lease if we close
a facility; changes in, interpretations of, or compliance with tax
laws in the United States, the United Kingdom, Switzerland or
Canada; our indebtedness and changes in our credit ratings and
outlook; fluctuations in foreign currency and product prices (e.g.,
commodity-priced materials, inflation/deflation); funding risks
related to our defined benefit pension plans; legal proceedings as
well as failure to comply with domestic and foreign laws and
regulations or the occurrence of unforeseen developments such as
litigation; risks associated with the relocation of our primary
listing to the United States and any volatility in our share price
and shareholder base in connection therewith; the costs and risk
exposure relating to environmental, social and governance matters;
adverse impacts caused by the COVID--19 pandemic (or related
variants); and other risks and uncertainties set forth under the
heading "Risk Factors" in our Annual Report on Form 10-K for the
fiscal year ended July 31, 2022 as filed with the SEC on September
27, 2022 and in other filings we make with the SEC in the
future.
Additionally, forward-looking statements regarding past trends
or activities should not be taken as a representation that such
trends or activities will continue in the future. Other than in
accordance with our legal or regulatory obligations, we undertake
no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise.
Ferguson plc
Non-GAAP Reconciliations and Supplementary Information
(unaudited)
Non-GAAP items
This announcement contains certain financial information that is
not presented in conformity with U.S. GAAP. These non-GAAP measures
include adjusted operating profit, adjusted operating margin,
adjusted net income, adjusted earnings per share, adjusted earnings
per share - diluted, adjusted EBITDA, adjusted effective tax rate,
net debt and net debt to adjusted EBITDA ratio. The Company
believes that these non-GAAP measures provide users of the
Company's financial information with additional meaningful
information to assist in understanding financial results and
assessing the Company's performance from period to period.
Management believes these measures are important indicators of
operations because they exclude items that may not be indicative of
our core operating results and provide a better baseline for
analyzing trends in our underlying businesses, and they are
consistent with how business performance is planned, reported and
assessed internally by management and the Board. Such non-GAAP
adjustments include amortization of acquired intangible assets,
discrete tax items, and any other items that are non-recurring.
Non-recurring items may include business restructuring charges,
corporate restructuring charges, which includes costs associated
with the Company's listing in the United States, gains or losses on
the disposals of businesses which by their nature do not reflect
primary operations, as well as certain other items deemed
non-recurring in nature and/or that are not a result of the
Company's primary operations. Because non-GAAP financial measures
are not standardized, it may not be possible to compare these
financial measures with other companies' non-GAAP financial
measures having the same or similar names. These non-GAAP financial
measures should not be considered in isolation or as a substitute
for results reported under U.S. GAAP. These non-GAAP financial
measures reflect an additional way of viewing aspects of operations
that, when viewed with U.S. GAAP results, provide a more complete
understanding of the business. The Company strongly encourages
investors and shareholders to review Company financial statements
and publicly filed reports in their entirety and not to rely on any
single financial measure.
The Company does not provide a reconciliation of forward-looking
non-GAAP financial measures to the most directly comparable U.S.
GAAP financial measures on a forward-looking basis because it is
unable to predict with reasonable certainty or without unreasonable
effort non-recurring items, such as those described above, that may
arise in the future. The variability of these items is
unpredictable and may have a significant impact.
Summary of Organic Revenue
Management evaluates organic revenue growth as it provides a
consistent measure of the change in revenue year-on-year. Organic
revenue growth is determined as the growth in total reported
revenue excluding the growth (or decline) attributable to currency
exchange rate fluctuations, trading days, acquisitions and
disposals, divided by the preceding financial year's revenue at the
current year's exchange rates.
A summary of the Company's historical revenue and organic
revenue growth is below:
Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022
Organic Organic Organic Organic Organic
Revenue Revenue Revenue Revenue Revenue Revenue Revenue Revenue Revenue Revenue
------------ ------- -------- ------- -------- ------- -------- ------- -------- -------
USA 5.4% 2.6% 17.4% 13.0% 22.1% 19.8% 23.9% 23.7% 32.6% 29.4%
Canada (4.5)% 3.0% 3.6% 8.2% 10.5% 14.2% 8.8% 11.3% 18.7% 13.8%
------------ ------- -------- ------- -------- ------- -------- ------- -------- -------
Continuing
operations 4.9% 2.7% 16.6% 12.7% 21.4% 19.5% 23.1% 23.1% 31.8% 28.5%
------------ ------- -------- ------- -------- ------- -------- ------- -------- -------
For further details regarding organic revenue growth, visit
www.corporate.ferguson.com on the Investors menu under Analyst
Consensus and Resources.
Reconciliation of Net Income to Adjusted Operating Profit and
Adjusted EBITDA
Three months ended Six months ended
January 31, January 31,
----------------------------------------------
(In millions) 2023 2022 2023 2022
---------------------- ---------------------- ---------------------- ----------------------
Net income $374 $436 $969 $996
Income from discontinued
operations
(net of tax) - - - (25)
Provision for income taxes 121 96 318 272
Interest expense, net 47 22 88 49
Other expense, net 7 1 5 2
---------------------- ---------------------- ---------------------- ----------------------
Operating profit 549 555 1,380 1,294
Corporate restructurings(1) - 6 - 7
Amortization of acquired
intangibles 33 27 66 54
---------------------- ---------------------- ---------------------- ----------------------
Adjusted Operating Profit 582 588 1,446 1,355
Depreciation & impairment of PP&E 36 34 73 70
Amortization & impairment of
non-acquired
intangibles 12 26 23 37
---------------------- ---------------------- ---------------------- ----------------------
Adjusted EBITDA $630 $648 $1,542 $1,462
====================== ====================== ====================== ======================
(1) For the three and six months ended January 31, 2022, corporate
restructuring costs related to the incremental costs of the Company's
listing in the United States.
Net Debt : Adjusted EBITDA Reconciliation
To assess the appropriateness of its capital structure, the
Company's principal measure of financial leverage is net debt to
adjusted EBITDA. The Company aims to operate with investment grade
credit metrics and keep this ratio within one to two times.
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 January 31,
(In millions) 2023 2022
----------------------- ----------------------
Long-term debt(1) $3,936 $2,749
Short-term debt(2) 91 296
Derivative liabilities (assets) 17 (10)
Cash and cash equivalents (597) (828)
----------------------- ----------------------
Net debt $3,447 $2,207
======================= ======================
(1) The increase in long-term debt as of January 31, 2023 primarily
reflects the Company's $1 billion bond financing completed in
April 2022, as well as the $500 million in term loans entered
into in October 2022, net of other borrowings and repayments
since January 2022.
(2) Includes bank overdrafts of $36 million and $46 million,
respectively.
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
Company's financial leverage.
Twelve months ended
(In millions, except ratios) January 31,
2023 2022
------------------- -----------------------
Net income $2,095 $2,039
Loss from discontinued operations (net of tax) 2 (31)
Provision for income taxes 655 377
Interest expense, net 150 97
Other expense, net 4 (7)
Corporate restructurings(1) 10 13
Depreciation and amortization 317 318
------------------- -----------------------
Adjusted EBITDA $3,233 $2,806
------------------- -----------------------
Net Debt: Adjusted EBITDA 1.1x 0.8x
=================== =======================
(1) For the rolling twelve months ended January 31, 2023 and 2022,
the corporate restructuring costs primarily related to incremental
costs in connection with the Company's listing in the United States.
Reconciliation of Net Income to Adjusted Net Income and Adjusted
EPS
Three months ended Six months ended
January 31, January 31,
---------------------------------------------- ----------------------------------------------
(In millions, except
per share
amounts) 2023 2022 2023 2022
---------------------- ---------------------- ---------------------- ----------------------
Net Income $374 $436 $969 $996
Income from
discontinued
operations
(net of tax) - - - (25)
---------------------- ---------------------- ---------------------- ----------------------
Income from
continuing
operations 374 436 969 971
Corporate
restructurings(1) - 6 - 7
Amortization of
acquired
intangibles 33 27 66 54
Discrete tax
adjustments(2) (3) (39) (3) (39)
Tax impact on
non-GAAP
adjustments(3) (8) (4) (16) (10)
---------------------- ---------------------- ---------------------- ----------------------
Adjusted Net Income $396 $426 1,016 983
====================== ====================== ====================== ======================
Adjusted earnings
per share:
Basic $1.91 $1.94 $4.89 $4.45
Diluted $1.91 $1.93 $4.87 $4.43
Weighted average
number of shares
outstanding:
Basic 207.1 220.0 207.9 220.7
Diluted 207.8 221.2 208.8 222.0
(1) For the three and six months ended January 31, 2022, corporate
restructuring costs related to the incremental costs of the Company's
listing in the United States.
(2) For the three and six months ended January 31, 2023, discrete
tax items primarily related to adjustments in connection with amended
returns. For the three and six months ended January 31, 2022, the
discrete tax adjustments primarily related to prior year tax adjustments,
including amended tax return items.
(3) Represents the tax impact of non-GAAP adjustments, including
the tax impact on the amortization of acquired intangibles.
Ferguson plc
Condensed Consolidated Statements of Earnings
(unaudited)
Three months ended Six months ended
January 31, January 31,
------------------------------------------------------
(In millions,
except per
share
amounts) 2023 2022 2023 2022
-------------------------- -------------------------- -------------------------- --------------------------
Net sales $6,825 $6,508 $14,756 $13,311
Cost of sales (4,763) (4,519) (10,273) (9,195)
-------------------------- -------------------------- -------------------------- --------------------------
Gross profit 2,062 1,989 4,483 4,116
Selling,
general and
administrative
expenses (1,432) (1,362) (2,941) (2,676)
Depreciation
and
amortization (81) (72) (162) (146)
-------------------------- -------------------------- -------------------------- --------------------------
Operating
profit 549 555 1,380 1,294
Interest
expense, net (47) (22) (88) (49)
Other expense,
net (7) (1) (5) (2)
-------------------------- -------------------------- -------------------------- --------------------------
Income before
income taxes 495 532 1,287 1,243
Provision for
income taxes (121) (96) (318) (272)
-------------------------- -------------------------- -------------------------- --------------------------
Income from
continuing
operations 374 436 969 971
Income from
discontinued
operations
(net of tax) - - - 25
-------------------------- -------------------------- -------------------------- --------------------------
Net income $374 $436 $969 $996
========================== ========================== ========================== ==========================
Earnings per
share - Basic:
Continuing
operations $1.81 $1.98 $4.66 $4.40
Discontinued
operations - - - 0.11
-------------------------- -------------------------- -------------------------- --------------------------
Total $1.81 $1.98 $4.66 $4.51
========================== ========================== ========================== ==========================
Earnings per
share -
Diluted:
Continuing
operations $1.80 $1.97 $4.64 $4.38
Discontinued
operations - - - 0.11
-------------------------- -------------------------- -------------------------- --------------------------
Total $1.80 $1.97 $4.64 $4.49
========================== ========================== ========================== ==========================
Weighted
average number
of shares
outstanding:
Basic 207.1 220.0 207.9 220.7
Diluted 207.8 221.2 208.8 222.0
Ferguson plc
Condensed Consolidated Balance Sheets
(unaudited)
As of
January July 31,
(In millions) 31, 2023 2022
---------------------------- ------------------------------
Assets
Cash and cash equivalents $597 $771
Accounts receivable, net 3,166 3,610
Inventories 4,173 4,333
Prepaid and other current assets 813 834
Assets held for sale 19 3
---------------------------- ------------------------------
Total current assets 8,768 9,551
Property, plant and equipment, net 1,482 1,376
Operating lease right-of-use assets 1,294 1,200
Deferred income taxes, net 214 177
Goodwill 2,094 2,048
Other non-current assets 1,364 1,309
---------------------------- ------------------------------
Total assets $15,216 $15,661
============================ ==============================
Liabilities and shareholders' equity
Accounts payable $3,155 $3,607
Other current liabilities 1,759 2,192
---------------------------- ------------------------------
Total current liabilities 4,914 5,799
Long-term debt 3,936 3,679
Long-term portion of operating lease liabilities 961 878
Other long-term liabilities 680 640
---------------------------- ------------------------------
Total liabilities 10,491 10,996
---------------------------- ------------------------------
Total shareholders' equity 4,725 4,665
---------------------------- ------------------------------
Total liabilities and shareholders' equity $15,216 $15,661
============================ ==============================
Ferguson plc
Condensed Consolidated Statements of Cash Flows
(unaudited)
Six months ended
January 31,
--------------------------------------------------
(In millions) 2023 2022
------------------------ ------------------------
Cash flows from operating activities:
Net income $969 $996
(Income) from discontinued operations - (25)
------------------------ ------------------------
Income from continuing operations 969 971
Depreciation and amortization 162 146
Share-based compensation 27 30
Decrease (increase) in inventories 237 (463)
Decrease (increase) in receivables and other
assets 512 (117)
Decrease in accounts payable and other liabilities (634) (261)
Other operating activities (98) (77)
------------------------ ------------------------
Net cash provided by operating activities
of continuing operations 1,175 229
Net cash used in operating activities of discontinued
operations (4) -
------------------------ ------------------------
Net cash provided by operating activities 1,171 229
Cash flows from investing activities:
Purchase of businesses acquired, net of cash
acquired (179) (245)
Capital expenditures (242) (122)
Other investing activities (4) (5)
------------------------ ------------------------
Net cash used in investing activities of continuing
operations (425) (372)
Net cash provided by investing activities
of discontinued operations - 25
------------------------ ------------------------
Net cash used in investing activities (425) (347)
Cash flows from financing activities:
Purchase of own shares by Employee Benefit
Trusts - (92)
Purchase of treasury shares (564) (417)
Net change in debt and bank overdrafts 74 510
Cash dividends (403) (364)
Other financing activities (13) (9)
------------------------ ------------------------
Net cash used in financing activities (906) (372)
------------------------ ------------------------
Change in cash, cash equivalents and restricted
cash (160) (490)
Effects of exchange rate changes 19 (10)
Cash, cash equivalents and restricted cash,
beginning of period 785 1,342
------------------------ ------------------------
Cash, cash equivalents and restricted cash,
end of period $644 $842
======================== ========================
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END
IR EANDXEASDEEA
(END) Dow Jones Newswires
March 07, 2023 06:45 ET (11:45 GMT)
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