Ferguson Enterprises : FY26 First Quarter Results Presentation

Published: 2026-05-05 08:29:12 ET FERG

Published on 05/05/2026 at 08:29 am EDT

First Quarter

Results Presentation

Quarter Ended March 31, 2026

Legal Disclaimer

Non-GAAP Financial Information

This presentation contains certain financial information that is not presented in conformity with U.S. generally accepted accounting principles ("U.S. GAAP"). These non-GAAP financial measures include, but are not limited to, adjusted operating profit, adjusted operating margin, adjusted net income, adjusted earnings per share - diluted, adjusted EBITDA, adjusted effective tax rate, net debt, net debt to adjusted EBITDA ratio and free cash flow. The Company believes that these non-GAAP financial 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 becaus e 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 Company's Board of Directors. 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 in vestors and shareholders to review the Company's financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. Except as otherwise noted, see the appendix to this presentation for more information and a reconciliation of each non-GAAP financial measure to the most comparable U.S. GAAP 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 in our earnings announcement, dated May 5, 2026, that may arise in the future. The variability of these items is unpredictable and may have a significant impact.

Introduction and Q1 Highlights

First quarter financial highlights

Net sales

$7.5b

+3.6% vs Q1 CY25

Adj. operating profit*

$647m

+8.4% vs Q1 CY25

Capital deployment**

$512m

+3.6% growth driven by market outperformance Organic growth +2.8%

Acquisition growth +0.8%

Strong gross margin, productivity and disciplined cost management Adjusted operating margin* of 8.7%, +40 bps

Adjusted diluted EPS* of $2.28, +9.1%

Completed 2 acquisitions during the quarter

Share repurchases of $236m and dividends of $174m

Balance sheet remains strong with net debt to adjusted EBITDA* of 1.0x

* This is a non-GAAP measure. See the appendix to this presentation for more information and a reconciliation of the non-GAAP measure to the most comparable U.S. GAAP measure.

Adjusted operating margin is calculated as adjusted operating profit divided by net sales. Net debt : adjusted EBITDA is provided on a rolling 12-month basis.

** Capital deployment includes cash outflow from capital expenditures, dividends, acquisitions and share repurchases. 5

Balanced approach to US end markets

Three months ended March 31,

% of US net sales*

2026

US net sales growth/(decline)

2025

US net sales growth/(decline)

Residential

~50%

(1%)

Flat

Non-residential

~50%

+8%

+6%

100%

+3.5%

+3.1%

* Residential / Non-residen tial pro portions d erived fro m manag ement estimate s for the year end ed December 31, 2025.

Three months ended March 31,

US first quarter net sales

% of US net sales*

2026

US net sales growth/(decline)

2025

US net sales growth/(decline)

Customer group

Waterworks

23%

+5%

+11%

Commercial / Mechanical

16%

+18%

+9%

Industrial

+10%

+1%

Facilities Supply

+3%

(3%)

Fire & Fabrication

(6%)

(5%)

Ferguson Home

21%

(2%)

Flat

Residential Trade Plumbing

15%

(2%)

(4%)

HVAC

11%

+1%

+5%

100%

+3.5%

+3.1%

* For three months end ed March 31, 202 6. 7

Financial Review

First quarter financial highlights

Three months ended March 31,

$m (except per share amounts)

2026

2025

Change

Net sales

7,472

7,213

+3.6%

Gross margin

31.0%

30.7%

+30 bps

Adjusted operating profit*

647

597

+8.4%

Adjusted operating margin*

8.7%

8.3%

+40 bps

Adjusted earnings per share - diluted*

$2.28

$2.09

+9.1%

Adjusted EBITDA*

Net debt : adjusted EBITDA*

711

1.0x

651

1.1x

+9.2%

Solid performance in challenging markets

* This is a non-GA AP me asu re. Se e the app endix to this pre sen tation for more information and a reconciliatio n of the non-GA AP me asu re to the most comp arable U.S. GAAP mea sur e.

Adju sted oper atin g mar gin is calcu late d as adjusted opera ting pr ofit divided by ne t sales. Net deb t : ad justed EBITDA is prov ided on a rolling 12 month basis. 9

Segment financial highlights

Three months ended March 31,

2026

2025

Change

Net sales

7,146

6,904

+3.5%

Canada

326

309

+5.5%

Total net sales

7,472

7,213

+3.6%

Adjusted operating profit*

656

611

+7.4%

Canada

(16.7%)

Central and other costs

(14)

(20)

Total adjusted operating profit

647

597

+8.4%

* The Company use s adjusted opera ting pr ofit as a measure of seg ment pro fit under U.S. GAAP.

Three months ended March 31,

Cash flow - first quarter

2026

2025

Adjusted EBITDA*

711

651

Working capital

176

481

Interest and tax

(100)

(199)

Other items

(15)

(59)

Operating cash flow

772

874

Capex

(92)

(73)

Proceeds from the sale of assets

Free cash flow*

688

813

* This is a non-GA AP measure. See the appendix to this presentation for more information and a reconciliation of adjusted EBITDAto the most compara ble U.S. GAAP measure. Fre e cash flo w is calculated as ne t cash pr ovid ed

by operating activities le ss cap ital expend itur es plus proceeds fr om the sale of assets and divestitures, a nd the re con ciliat ion is shown above where net cash provided by opera ting activities is reflecte d as oper atin g cash flo w. 11

Capital allocation

Organic growth

Working capital

Inventory to support order

volumes and growth initiatives

Receivables to support sales

growth

Capex investments

Invested $92m into capex in fiscal quarter

Supply chain network optimization

Technology

Branch expansion and

refurbishment

Acquisitions

Completed two acquisitions during the first

quarter, one subsequent to quarter-end and signed

definitive purchase agreements on another three.

Pipeline remains healthy

Dividends

Quarterly dividend of $0.89

per share

1.0x Net debt : adjusted EBITDA*

at March 31, 2026

Surplus capital returns

$236m share repurchases completed in fiscal year to date

New $2 billion share repurchase

program authorization

Target net leverage range

* This is a non-GA AP me asu re. Se e the app endix to this pre sen tation for more information and a reconciliatio n to the most compa rable U.S. GAAP me asu re. 12

Calendar 2026 guidance (unchanged)

Calendar 2026 Guidance

January 1 - December 31, 2026

Low to mid-single digit growth 9.4% - 9.8%

~$200m

~$350 - 400m

~26%

Net sales

Adjusted operating margin*

Interest expense

Capital expenditures

Adjusted effective tax rate*

* This is a non-GAAP measure. See slide 3 of this presentation for more information on forward-looking non-GAAP financial information.

Closing Remarks

Closing remarks

Our associates delivered solid results to start the year, as they continued to serve our customers and execute our strategy in a challenging market environment.

Our investments and focus on key growth initiatives continue to deliver market share gains and are yielding solid results.

While we continue to operate in an uncertain environment, we remain confident in our residential and non-residential markets over the medium-term and continue to invest in scale and capabilities to support the complex project needs of our water and air specialized professional customers.

Join us for

Appendix

Reconciliation of Net Income to Adjusted Operating Profit and Adjusted EBITDA

Three months ended March 31,

2026

2025

(In millions)

Net income

Provision for income taxes

$414

146

$345

124

Interest expense, net

Other expense (income), net

(8)

Operating profit

Corporate restructuring expenses(1) Business restructuring expenses(2)

Adjusted EBIT

Amortization of acquired intangibles

612

614

507

558

Adjusted Operating Profit

Depreciation and impairment of PP&E

647

597

Amortization and impairment of non-acquired intangibles

Adjusted EBITDA

$711

$651

For the three months ended March 31, 2026, corporate restructuring expenses primarily related to increment al costs in connect ion with transition activities following the establishment of our parent company's domicile in the United States.

For the three months ended March 31, 2025, business restructuring expenses primarily related to the Company's implementationof targeted actions to streamline operations, enhancing speed and efficiency to better serve cust omers and drive further profitable growth.

Net Debt : Adjusted EBITDA reconciliation

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. 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.

As of March 31,

2026

2025

$3,979

$3,500

148

400

(820)

(596)

$3,309

$3,312

$3,303

$2,885

1.0x

1.1x

(In millions, except ratios)

Long-term debt Short-term debt Bank overdrafts(1) Derivative liabilities

Cash and cash equivalents

Net debt

Adjusted EBITDA

Net Debt / Adjusted EBITDA

1. Bank overdrafts are included in other current liabilities in the Company's Consolidated Balance Sheets.

Adjusted EBITDA (rolling 12-month) reconciliation

Adjusted EBITDA is net income before charges/credits relating to depreciation, amortization, impairment and certain non-GAAP adjustments.

Twelve months ended March 31,

2026

2025

$2,075

$1,592

600

691

189

184

(5)

384

360

$3,303

$2,885

1.0x

1.1x

(In millions, except ratios)

Net income

Provision for income taxes

Interest expense, net

Other expense (income), net Restructuring activities(1) Depreciation and amortization Adjusted EBITDA

Net Debt: Adjusted EBITDA

1. For the rolling twelve months ended March 31, 2026 and 2025, restructuring activities primarily related to the Company's impel mentation of targeted actions to streamline operations, enhancing speed and

efficiency to better serve customers and drive further profitable growth, including a gain on the sale of a closed distributoi n center in November 2025, as well as increment al costs in connect ion with transition 20

activities following the establishment of our parent company's domicile in the United States.

Disclaimer

Ferguson Enterprises Inc. published this content on May 05, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 05, 2026 at 12:28 UTC.