FERG - Earnings call 1 2021

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Operator

Good day, and welcome to the Ferguson Plc 2021 First Quarter Results Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Mr. Kevin Murphy. sir. ahead, go Please

Kevin Murphy

Good quarter afternoon, results Molly. to and Ferguson's first conference morning, you, everyone, good welcome Thank call.

through an You've today. got end of on markets you the outlook thinking the And presenting quarter trading update rest on today's and how Bill call, we'll about and we're the first I financial for and the give year.

I if highlights. turn the to So

address through to continue COVID-XX the guiding business We challenges the pandemic. of

delivering time. And safety critical and environment strong thank This than all now in we QX supporting be and principle. to a to First creating for we do, in work at we'd while this more embed our we're safe all as the a to foremost, associates primary driver for like committed performance. continues to our associates ever, customers fundamental that efforts their continue a our

costs, growth strategy delivery. the growth. good remains Turning continue control of to QX in which balance the with and to in invest results, to performance we we and our excellent, underpins and disciplined resilient strong, generation was another leading strong revenue as sheet demonstrated profitable margins Cash profit

unlock see our strong an us. which, More enhancing remains as to the to of to our be turn, and differentiation. customer continue associates priority, benefits Organic our customers, them and matter At efficiency we'll first allows We're how we productivity no to provide customers business. do ever, money, technology guiding will relationships. with area primary same and digital to overall investments productivity, our more investment our a for our in business thus time capital We seamless for focus. than want service spend to save experience for want this providing time look they time, and tools customers our

April. next payment week's dividend week. AGM, due to dividends approval and of paid pleased resumed following the be is full up withdrawn a We're ordinary catch shareholder final dividend the have for the in This to includes at last interim

have weeks. presentation. strategy, Additionally, M&A I'll the more an on later pleased completed recent in bolt-on of we've our some give important color you deals we're to the in and also recent is resumed This part

So overall, we but go way still many close in a financial QX on out progress good fronts, to have the year. to long

numbers. So you let Bill, me pass to take the through who'll you over

Bill Brundage

Thank afternoon, everyone. And Kevin, It been morning you, year our to spoke about with meeting then, at September. been end results good or we since we've long you hasn't of shareholders. the and last full since

seen and we've during end As with against first this business flat broadly expected, the pleased backdrop. quarter, the markets of U.S. we're performance really our

X was growth by ongoing the in X.X%, a balance the the X.X%, offset revenue day. and revenue added Organic trading up for was quarter. with Total X.X% group further growth acquisitions fewer

due were basis in slightly but points mix, and generating expenses total controlled, sales. Gross of lower were points basis leverage margins on operating well operating to down XX XX

announced cost base year-end. benefited in the expected, at we the actions restructuring As from QX

in had and In areas addition, customer such travel, health also engagement savings as care. we've

from over benefit to near-term savings normalizing in continue to these expect the these We time. costs with

basis So representing underlying of growth overall, ahead underlying came million, $XXX million in in the margins trading quarter, XX.X% of last $XX trading profit at XX X.X%. year, ahead with at points

to the results. regional Moving

trading actions the the last underlying controlled, up in covered restructuring which And as revenue performance. the benefiting U.S., largest X.X%. our represents operating XX% expenses Organic profit, strong delivered region, was announced a year. from over were First, of ongoing overview, well I

supply XX.X% We us Collectively, chain. invest trading to continued growth improvements underlying organic and in an in allowed in deliver technology of to the profit. through business increase our this the

this pleased really our model. agility the business to highlight that of continues performance are We

X.X% or margins the business were Canadian in in in than $X to drag underlying restructuring trading The U.S., year, performed million conditions were markets, last organic challenging strong X.X% well basis, Similar of Canada. to the growth, slightly Revenues residential of increase Western HVAC profit. with growth outweighing on up including control an but lower in led a gross and tight benefits QX. cost

to continue positioned opportunities capitalize to on recover. markets We growth well as be the

P&L, constant So with now in we're operations really approximately me were businesses, ongoing pleased year also of and worth the Gross up government slightly organic the the the that U.K. the with lower, currency see benefits increased revenue gone performance any we restructuring Revenue remembering have underlying benefits we've through the of and up of margins on focus coming profit X%, furlough million U.K. actions took last taken quarter. nonongoing the that not X.X% money current cover the let clear trading in through our in a to $XX It's our but customer quarter. basis. no of

a As we is sale process, we've which are prioritizing progressing exit, well. moving the discussed, we are along currently and with U.K.

continue balance strong we flow and is sheet generate And the to X.Xx. paid to year the is finally, be December, adjusting in forma EBITDA dividend adjusted pro the After shape. good debt payment to in full cash for net

allocation capital leverage priorities and targets have Our changed. not

to pipeline our organic We ordinary our dividends. X important We've deals of seeing an completed growth are of since have a are we're year-end, invest further. bolt-on Overall, Kevin to and of strategy. resume part reengaged forward the are acquisitions. the the payment will pipeline business, discuss continuing normal and Acquisitions which in growth pleased we of

committed paused. remain at this capital program we while shareholders, Finally, time, to the uncertainty, returning surplus the remains given buyback to share

going business pleased We're strong earnings to balance continuing us Good we So the position while let balance me the put and year. XXXX. start in a into sheet, in the great invest up. a have to with the of made wrap

for your Thank you time.

an hand update. me Kevin back let Now operational you for to

Kevin Murphy

Thanks, Bill.

exceptions, remained in active COVID with and rates. the group's turn little trading we're and say let the few ground. recent a more locations to give about increases bit pretty what have the infection So seeing me pleased despite you color to current counter on I'm that open

can that and ensure safe. branch we As are where flexing become our rates open associates you this imagine, we're our more networks has stay but to infection challenging high, local keep

The other carefully higher as operating balancing we're fill particularly categories a of meet environment. demand, appliances, vendors rates the area in challenges COVID product very while in are to struggle like monitoring some

us. are our We the so ensuring our balance customers, and we can can meet them appropriately the support of depend right needs using levels having we're to the of inventory sheet on customers by

eBusiness, aren't the trade our capitalized residential going in residential with growth line, We've we cadence new We've seen and monthly businesses. to RMI trading in the quarter. together showroom and good markets. have growth and first strong been a top While on through we relatively particularly consistently residential give both on HVAC residential

challenging QX, but more areas growth pockets attractive. markets like Commercial and have industrial very in there warehousing and distribution, of are faced in are where much projects

evenly, The well private in split Waterworks a fairly challenging. public municipal pretty serving mixed environment. with in business markets good growth is up has held and residential, but remaining

order healthy, us the to revenue a low the remains coming months. leads single-digit of expect continuation growth Overall, which pipeline rates in

at markets. Turning to specifically the of our performance end look

recovery. market quarter. flat overall, they've continues estimate lead Residential, is the revenue, largest the first in by broadly that best our end to remained Our

much residential residential also of about in sales We markets down market digits residential where we have Overall, challenging, X/X up strong, our residential more end our generate by with commercial contraction offset with digits. office is partially is distribution well. think and nonresidential remain New markets and mid-single data been high total centers. markets retail, and single growing RMI, quite currently, hospitality,

industrial down digits and markets down manufacturers are and prices oil high by single COVID. low hard Civil with depressed teens hit

data numerous well our track and measuring from as our we sources research points know, order industry economic, customers you As various surveying and books. as

view markets flat. mix, our overall for applying it Looking best data at of roughly XXXX our this and to business remains

change our outlook no fiscal So results at of from September the 'XX presentation. to time our

U.S. trajectory economy but pretty COVID adapt remain surge good the to market are given future in cautious we disruption. about cases, We to current the shape the in any of

greater part area, Maryland of acquisition Virginia. Washington, would Dominion D.C. serve geographic central high-quality within our the either The market, September, strategy. expand in a HVAC our reach program, our of businesses and M&A customers synergies to acquisition giving or our resume Old Northern the In and Metro vendor we continues expansion that announced us remains our of better the that our product broaden capabilities we

Waterworks Construction geotextile, our bolt-ons. erosion adds through Coast, East Fabrics pipeline a existing we and the geographic integrating and healthy and network, future along businesses Atlantic to meaningful potential presence into customers. large these control footprint a our have offering existing storm more management We're rapidly capabilities of new us a to water giving

good year markets. continued considering to well as whole, quarter, the to expectations be for turning potential cautious are of year in finally, on headwinds, start flat We should prepared for Since pandemic the growth unchanged. management's generate shape, XXXX business second in we're So the Overall, outlook the trends. the we've low single-digit current remain is further a revenue outlook. and any the there fiscal Despite market-related disruption. very broadly

to focused to customers. investing of business world-class We're our delivering remain delivery extremely every operational the proud a chain This the well. in COVID and supply approach to in QX digital is of first trading associates with to our pleased So the the rise summarize quarter, day. how continue challenge We're executing means our strategy. our out and capabilities, consultative on building we and technology

for you your thank So today. time

any questions happy very that's or anything you may to be take will I and comments Bill and clarify unclear Now have.

over I'll hand back call the to you. Operator,

Operator

[Operator Hughes, of Securities. Instructions] Truist come Our from Keith first the question today line will

Keith Hughes

residential in your numbers stepping signs deteriorated are guess, kind those the or of improvement you the medium markets, from something of rates I the could show from any some more maybe you markets. -- back all seeing negative term? views and kind the -- are or life us that the on saw on you of growth what the quarter? non-resi those in market, numbers quotations the of future last Just Are gave at that of your

Kevin Murphy

Yes, And it's a mix. I Keith, bit you. think of a thank

gone look I if and has as at QX. gotten so QX if we stronger touch residential feel through into we've And residential, a as

starts can you with activity recently. we've seen permit As imagine, and that

pretty New good res is in shape.

of see inside inside on e-commerce activity project-minded showroom that pro our focus our We and business, decorative good consumer. businesses continue that that of to

a So those residential more markets solid. are getting bit

utility contractors more still very seeing with and and are bidding and candidly, our capital pieces general, in then available that through spend. have good of data terms box On started bounce as it's enough, centers on care opportunities call those as in some that to commercial of bit contractors yes, towards different we're they back manufacturing mechanical distribution underground Interestingly quarter then, commercial big and activity work, the opportunities around activity shift a out our And quotations projects health with the more there. distribution it, challenging. commercial bidding centers we've gone side, some

market has which towards challenging in line commercial the output some is digit we what overall, why of gotten a we're But we've seeing, the much is in mid-single bit decline, speaking, which generally of seen. numbers more that terms point with very that

terms we place high we'll and In the of of industrial out start bottoming there. think we're see degree teens decline. probably troughing, a And where getting to some we're to improvement and a markets, that's

We of the as much continue. the look are of and what engaged we're marketplace, pressures but like civil gas improvement, that some as in might as given business is funding funding and bit more then degree COVID not just oil a uncertain albeit some market minimal, municipal seeing

Keith Hughes

period were give the costs a is United at this some where States. to back particularly these be come margins to back and have of some the your question, when we going going to greater? second you in contribution point margin the are outstanding demand of some in Are margin facing quarter, And absolutely

Bill Brundage

end will QX, QX, The restructuring you the thanks in that actions Yes, costs labor and throughout as of remaining in benefits next go around really markets really very targeted collectively make the we are with base. base. and those that infrastructure from cost to the pleased highlighted. types are majority we supportive, If of which our we at costs for Certainly, actions about the play of pretty question. comes coming put just the months. Keith, more the of several the costs performance costs, of cost as flex We're those XX% cautious our up it when

be to We invest the going next several cautious months. for the we're over will growth in But future. pretty

operating in on so care we highlighted like just areas benefits the find I and in, we some prepared customer engagement even that and As based travel the are getting ourselves health costs. environment comments,

of majority costs, environment. over quite more do the that I that's to gets While back savings, the those normalize honestly, once, not time, to cost world normal expect a operating

that over time. So you'll see of come some back cost

Keith Hughes

Okay.

biggest the United the and California I push your shutdown branches open, the, one. however? having California quick States final X are in right Just guess, Are now. still

Kevin Murphy

today. Keith, recent a remain Yes. open Obviously, and very we that's development,

we'll to business the so and it nature of retail local authorities as nature the work that state with facing and essential even business business. continue relates And and to that our of

Now facilities. and cautious say we've will been appropriately our way inside what that in of I approached customer we've is conservative the interaction

remember, time spring/summer we of can as was fiscal locations that as you horizon we on, good branches. made If back earlier sure activity. really 'XX, we we've down local And that back brought into the there our customer limited brought to the in social the distancing. We've go into back good PPE, shut that amount associates we

productive. still the operating fact, you that in in In if have technology virtual being XX,XXX utilizing very associates are U.S., a XX,XXX environment, we over day XX,XXX, a think about and

about conservative put as we're open measures we've I sat taken we the good here. place, So California reiterate, in safety do and very approach. remain We we feel that in just a

Operator

question the next Jones Redburn from come will of Will line Our Partners.

William Jones

me, I could, Three from if please.

we wondered how perhaps please? within in those segment residential it, between high categories I bucket, and new seeing retail? seeing And you any the overall first, single-digit of are guess, the just specific explore build? momentum sign, including residential pro Is inside RM&I, just The changing difference that the X within residential the of particular. I could RM&I growth also

is Second recently. as was but picture quarters We've few the just we has think been around inflation some had in seen have, think, areas commodity a you broad I where inflation some Do price pricing. might explore flat earlier of returning bit around inflation there be really the your pipeline. you the line? top the a look you And the one to second perhaps half, could last acquisition into just comments

normal. million this far? you've few comfortable spend was you over I be think little the of spend. level compared guess, look to before I year no this you one done had it a obviously, you so said with $XXX At or point, would you current as what with quarters that

Kevin Murphy

Yes. Maybe growth. single-digit one, high or RMI start we'll To Will. tag residential not the on team experiencing whether with side and this we're

tend think If Joint a that at which they little look you Studies is up X%. remodel is number perspective, and a we look to at a Harvard LIRA, for over from and focus that I Center that's what Housing the on,

so specifically. again, And that more inside seeing to single good activity, mid- think that showroom low business you to digits. We're

a balance look And which -- be, home turnover at can existing in existing what leading market. remodel when so at us residential towards rates for in you indicator believe sales, home that a RMI activity look is also we strong, high single-digit good to terms growth driving of the fairly which leads there's

of consumer that of take inside our the positivity we're If our portion question, on well. performing and COVID better. clearly, current down our your retail, then business the But slightly what's pandemic to, pro remodel based rates given the it seeing is DIY eBusiness. side I connected business, And the on with is the market, happening versus performing pro

that well, it's XX% Our and the decorative quarter. up consumer extremely that and eBusiness performing minded focuses project light principally pro, in on

So strong balanced customer across good growth product very segments types. those very for different growth, the

and Bill, the I'll fact, In at carbon over pace. But see terms velocity steel. we it QX, to inflation. moving pretty as relates are, it's a quick seeing turn then of as those you're we stainless fairly commodity in copper, QX good plastic, right, inflation, it upticks And enter steel, and is to didn't

the our do go and commodities second but second we commodity half. product we So inflation. expect Bill? see that XX% Remember, as do about we expect quarter represent we'll that overall portfolio, of into

Bill Brundage

normal the pipeline. it on pipeline, call a Yes. I Will, And acquisition would

to pinpoint lives. a most year. with is know, is see expect number remainder going with family-run the difficult, the their Nothing some throughout and but because pleased businesses, of to the large, It deals or you pick of of we've fiscal really sellers. these of you So to that we're biggest the for are decision that do engagement should potential we're had additional bolt-ons to these businesses this as very

move So pinpoint several the those year. as the see timing throughout But we more always and difficult. will deals trying culminate to is deals you

William Jones

it you've get profit possible just a think would And it what you contribution that, of sorry, those Great. broadly speaking? done, the follow-up would be to X just to -- is as

Bill Brundage

Yes.

contribution. about about do, So the you the profit if exact have them we think in balance, we half That pinpoint we that of of acquisitions but depending about think can won't that will generally, you deals trading flow But range. of ebb and the type do margin on type that the on we deliver.

Operator

Our Group. next Kathryn Research Thompson, from question Thompson will come

Kathryn Thompson

segment. First, focusing HVAC on the

is are airflow give seeing little in seeing tease terms additional given momentum could the increases more HVAC, color understanding bit more COVID? it there's more a to of with you're you If in comfort just little North see Or where you bit could more if throughout in construction, market. you're what demand starting of process retrofitting? of the cadence new you out terms any given And HVAC greater American for a

Kevin Murphy

start. Kathryn. you, Maybe I'll Thank

terms retro construction and versus well, growth in a it, grew, QX. In good rate, the versus business, north in very Canadian XX% that of good both repair and U.S. of business call south or also border. HVAC HVAC growth was performed rates. In solid business, RMI U.S., our the new replacement our HVAC HVAC and

the lines new balance XX-XX a construction. commercial about So that good of residential HVAC and business, business. is went HVAC growth repair and rates light inside to our It with along which roughly replacement typical

rates some air people We're a with It's on space of early of residential both across good keen air overall a indoor small resources interest relatively doing In quality. at and dedicated growth that But have the retrofit still our part days. taken side. really air and terms quality, quality commercial indoor we solid business. the towards

to, perspective, way growth add a of really, from see markets. value But in our in approach sales So we across all it's that consultative again, that. our do

our America got our terms balance 'XX decent fiscal the capabilities where branches And some year-end again, our results transactional talked inside well our across branches, customers In to maintain offering choice presentation, HVAC year North that during perspective We've we things we HVAC the do we overall of mechanical dealer-based of business fairly a of if that growth, OEM to inside and about go balanced. the and for from blended an back really of U.S. I market and look see good stand-alone U.S. the across plumbing

Kathryn Thompson

helpful. That's Okay.

side, seeing the going themes our makes experience Going increasing types now or this when And 'XX, type RMI wide is profile year out on you When based how homeownership back home, people which at of and look going you're if are expect in of some terms to of industry what bit you RMI just into to into sense. type the changed the that seeing there of there's difference the we're the projects what business. more, little over bigger months, different at effect last residential margin forward? in your speak of one several past past flesh work those? a the variety of versus contacts we the could ripple their in a And least any you right business, the in you has sell particular, product more is year,

Kevin Murphy

Maybe last then back. start our Yes. and from I'll work question your way

sets seeing selling markets residential what through. now the real that don't of different we're margin In we're across any profile differences, with difference we right margin profile RMI see product terms in

more expected we from I points from our saw be channels Bill As a over be associates and business, channel mix and to sales business product locations, interaction that overall inside phone. counter as of challenged, we is then our order versus perspective and an a mix really delivered margin with our of were highlighted, on saw the e-commerce order which perspective, bit traditional guess pressure

still as of project-minded question, residential channels good, terms In growth RMI you have decorative and much what gym, you that has pieces terms inside consumer indicated see some to well that residential been. the business from that has showroom than really I as to I we'll market. than home better we even normal we're and the RMI at as look of looks e-commerce pro start especially of unlocking we some side there. on I trade to our start experienced living, the as like, professionals office what RMI think outdoor it at DIY the And think we do in-home as as been clearly, dwelling, of there's in as that bullish mix good side, Will fairly solid of do we have the see But at asked look becomes COVID. And have emerge you and more light, we a on strong. some -- look growth when we have improvement home

Kathryn Thompson

on Could and improved fundamental we've you the changes kind playing speak do see how also forward showroom, to speak velocity sales, that the you e-commerce to tagging has seen where going of of business COVID? given with

Kevin Murphy

Yes.

make that But consumer. for you So wide builder, approach been together variety holistic terms sure showroom appliances, omnichannel really connected consumer we're of been architect business plumbing, parts of the evolution that if a customer. that trade bringing connected HVAC, walk-in that connected that about also a business, unattached customer, showroom care different in that professional, who's core. with take in think that, designer, part lighting, renovation project it what heart of coming growing we is to And is it to for and our that making really of has our a the remodeler, from a experience to sure of that of showroom consultative has project true

the small our small And Ferguson. a able the experience. so project -- for that together efficiency convenience added as walk-in together customer, at base, work Build.com had about think build project And bringing aid really platform, has we technology looks our associates with project omnichannel having customer and room associates true real the as to a the showroom that aid in with be that for

COVID has our navigated been it's the So of but been we've environment. evolution, helpful as it certainly part

Kathryn Thompson

there types final types any Any And and of terms overall or Okay. focus your of targeting focusing of in given buy? on you been terms in change has that you companies change are acquisitions. COVID businesses to of update the just are experience question and

Bill Brundage

Yes. geographic as change bring M&A our still good capabilities well individual footprint geographies as enhanced bolt-on in into to expand then our our and based or Thanks, to more acquisitions. Kathryn. organization look our capabilities leverage to footprint. certain focus geography on No in We bring our to across in

think of own like So et areas areas of fabrication, think brand, like cetera.

change So no we're continue continuing to and on that that, path. real to

Operator

w at next Our ill question Barclays. come from the Rose line of James

James Rosenthal

Two for me.

there one, of impact so back talk I you're in business really then U.K. sounds there First you touching the nature, And mean strong Is just anything risks which improvements see the you'd I sustainable last on there. to on first you mean, if And seen And and just there? just lockdowns you were versus well identify? touching the year? call time. one-off throughout Canada, of in lockdowns quarter prepared you U.S. a state-by-state profit what about remainder think the Can the tighter sort secondly, out do have on like pretty any far? they're it

Kevin Murphy

what haven't impact? have Yes, U.K. it, generally Thank lockdowns, well, seen to we needed gone spacing and think maybe on like, a as I'll James. the we the discernible on second and took you, what's impact in distancing surge, to and appointments do we've back go what -- in as distancing to I approach happening that Again, environment we've Bill call looked of the conservative safety speaking, trading. gone seen as touch will counters in appropriately the showrooms. our we inside a through, inside of terms any through we very think I

experience, if terms based to look again, what if it of restrictions, a taken additional If we've it in should Things Text ability things amount I with it order like like drive lockdowns customers could happen local, to to the alerts be up as mobile I we increase. them actions. the and that messages that, have see out use lot, and us what truck it role bit impact, will The the that a ready great all lockdowns of our become ramp-up, that a to our happen we text of Branch again, tools the this positioning these will get the curbside, bring not become tremendous and will is do their in on lockdowns parking to certainly lockers, e-mail more for pickup all as region. fleet, rolled out So we've these and and of able useful restrictive. And of happen the think for brought state have a or Prokeep of and things, will play Ferguson geo tools will help

Bill Brundage

the Yes, have James, on performance, supportive. have pretty returned and markets Canadian been and U.K. in residential Canada,

Kevin Canada similar digit As kind highlighted, the mid-double range been in growth strong, U.S. to HVAC has the business. of

through. cost And but pleased also restructuring we're coming on the So side. the with in nature, pleased in discipline with the performance the top actions line one-off Canada. Nothing really

and coming So with bottom line, flowing with line happy the then through that the improved top performance to through Canada. in that really

the the come on with last continues build In perform back. hold on touch month, the lockdowns, over well. and up on up the to Even gradually lockdown U.K., there. has performance your market business and just maybe to first that X.X also question through pleased The

last I think all we aligning focus, over or what on of clear that that. individual have repositioned have then done customer year so business and to resources our types customer the really against aligning a has

with in you is side, a very QX in result couple performance actions on the U.K. restructuring the the the strong and that cost So

Operator

JPMorgan. Rall Elodie will question from come next Our of

Elodie Rall

X gross One on Just the maybe margin. follow-ups.

little You need in we think to this a likely mentioned the that a on mix due the line, deceleration, time bit detail, and more My factor process is if moment. second temporary slight the impact. more whether is impact bit process, being to you contemplating you Could give sales, the you Could on term? you or us a at U.K. a on mentioned long the you that come can? question back sales something disposal a especially

Bill Brundage

Elodie. Yes. Thanks,

first by the XX to quarter. And highlighted, It in a a driven just First on bit actually gross the were They rounds that mix. basis down touch. business off, Kevin margin. as points

grew So serve lower comments, in Ferguson some to if a go the first because similar of at the net a back very but the which margin earlier HVAC cost drags is you margin overall gross has profile, gross down slightly lower. the XX% HVAC to quarter. margin,

there. a there's business mix of bit So

we're channel with then the counter just on that today, that piece about the less walk-in in Kevin And mix that talked traffic. slightly environment operating

an up on our our gross the they're branches come purchase products good when while door. coming into and the and have opportunity to have profile We people counters to margin pick them into counters through for

that, assume and temporary. that will back again, to normal in as can alleviate continue I So pressure the world will term. that a somewhat be will And environment, but near the operating more come normalizes probably

business, and disposal, more very On of are we back with from which we'll point, your let the the we line the that's yes, to really process, pleased concrete in performance know. process. to is come of a a and on you sale U.K. process market that certainly supportive where something I pleased, today; that sit prioritizing U.K. as when And standpoint, we have that definitive time said,

Kevin Murphy

gross the for around you thank Elodie, margin. And question

different it the we best driving that we successful a still margins to value margin gross remain we're the makes individual sure times for as Are to it our and make on drive points the be, specified XX going year. Just that we're individual SKUs, being channel as the where we a as be long-term that margin represents company. that have a can for strategy said, expansion project are products project and sustainable the best on making an are and things best as we're business reflection Bill committed we gross but it mix that quarters there not marketplace impact? growing also we that firmly only that, mix durable. provide see go the committed product to committed Sure, individual the in to still and gross And but build gross months sure to margin what is that through a and profile basis of

Elodie Rall

that and guess, negative little could on of well a the it as have mix And that, a maybe down has slowed own bit could you lately, given had comment margin? add brand, I as well on

Kevin Murphy

Yes.

growth quarter, roughly than has in point, is rate. grow about Ferguson think overall typically our order been that the brand order with a channels. bit what growth happened counteractivity what to driven has in your grew channel own placement growing the line slightly partially, roughly we in of traditional slower Again, rate as which, is from it the the that I by overall it at twice rates, challenging Ferguson's terms of than more being So

that so as more And we'll return environment. normalized out to we see smooth a

will business mix of commitment own we do, You've that go-to-market a got product of of what focus. But there. little we vendors those overall in that is a with our partners again, to strategy of also towards that that that our be part continue our brand an to products bit specifying XX% works remain, long-term

Operator

next Gregor Our from will question with come Kuglitsch UBS.

Gregor Kuglitsch

Only a please. left, couple

of could just are, impact buyback. criteria unsuspending But on reacquisition you bit thoughts, your of just suspended. program any, point I Depot's want secondly, said Home suspended what the on kind first the guess, you view to do to your if -- at you Then that has would a either whether I any of us on not give buyback launching if the you it get be What little mean, is or that? continues one to HD I new particularly? obviously Supply, perhaps consider color The buybacks. or a in continues be to

Bill Brundage

the take take Kevin I'll question. buyback question. the Gregor. acquisition I'm will Thanks, sure Supply Yes. HD

range, are we range that's dividend the under comfortable given that several the our yes, slightly that being if in quite going end at today, paid X.X, markets point, under next operating of be leverage QX, X.X uncertain slightly your the include we're days. in. here Sitting to to So still you the

we'll think the that play I So next let out over months. few

think of you early an update I in be position half back year, views in in front be which give frame. to to we'll come on our time will at back the a and you mid-March

bit little quite balance range. today, sitting the a and operating to leverage be on prudent that sheet under I'm comfortable So here continuing

Kevin Murphy

COVID the were addressing that terms case Yes, think questions prudent. lockdown, given build rate we're on seeing we to that. what I Obviously, from that's just of and in

sense that facility business HD CMRO Depot Depot time or acquired a and pure-play the it Supply with that coming is interline to suppose the HD I Home As ago. business relates supply now as Supply, Home together makes some

very it's see market, attractive large and very we that's for how a that, a of market terms us. In

we've depending you're the network, Now we've with foundation in together place, have center, sell to of place $XX terms we the with that billion that structure national billion center in focus up. that $XX individual with branch that terms and things offer we've a contractor. pleased to we what in very is aging and between and opportunity that in uniquely put We're customer in with health overall market, our service the the what education, chain, set on that supply pleased put segment on local national see we somewhere you service, We're contact how care, and them what about talking ability the worth of got the multifamily call extremely like business fragmented. of very building

attractive us. So for very segments

of good We pools after, for and product and grow. room profit in good those have go plenty to compete to to a there's have us portfolio markets

Operator

comes Our of of question America. Bank from next Arnaud Lehmann

Arnaud Lehmann

Just a from of couple questions me.

on think could visibility have And half said I of on give color you mean U.S., you the XXXX, months? dual you've bit us a listing, the U.S. timing? the just more And first probably is bit little I are but related that? you days. for actual to wait GAAP U.K., on on to Firstly, a will that, reporting? to trading do a full the move the bit eventually second my listing Or you on U.S. a planning to do question technicality,

that trading day the bit QX? trading you give the on in negative to X for quarters? QX. clarity X a expect next days recover mentioned us Can you in think of Do I you

Bill Brundage

Yes.

me first on let dual listing. the So take question

secondary we is deliver to really exchange. Sarbanes-Oxley, bring registration Setting not listing through that selecting the fruition, to on to setup focused going getting that process. least have of and of that the SEC processes So streams up which are the a number we work

go today timing But first year. more are we those nothing in and on of So will will definitive live. good of with the we when on the calendar processes that half that deliver secondary track feel that listing

U.S. GAAP convert reporting, of will GAAP. to we U.S. terms eventually In

on to market part forward. U.S. the between to GAAP. will that We're the It time that certainly change notify differences focused path align will give will enough I U.S. a those GAAP. It's provide attention listing. warning turn When we peers. foremost our to IFRS we then and and sense. U.S. decision, think understand and with towards us of that first secondary reconciliation we right our advanced you make And our makes we'll and

X In in up day, We'll terms trading QX, QX. QX. and we'll we of lose the pick X did lose in X in

will we year, be day. the for X trading down So

Operator

last Our of Suhasini Goldman come from Varanasi today question will Sachs.

Suhasini Varanasi

me, please. Just for X question

how as You color as gave also Can industrial the have color on QX? in very quarter. eBusiness trends on branches blended trended helpfully to whole compared a HVAC when some whole you maybe Waterworks, versus a and give

Kevin Murphy

Yes.

So from they nature. in in fact, a blended are, brands blended perspective, truly

the also builder And residential commercial they group. will They'll so our business trade and construction RMI, in markets. group cases, they industrial. in will business new showroom be be HVAC many through residential In residential our through address

outperformed down high and that market, is decline, that the of terms market in teens we In we market. industrial think

production natural as be in we're really, inside speaking, focused is environment do been do seeing refresh earlier, gas But to manufacturers work we and put shutdown work and to oil that tend associates what facilities a want on has call pressure touch. we to up that as and indicated as people and off not continue generally buildings I market in point less that a retrofit their manufacturing the to they outside PVF stressed COVID or ramp

space. expect blended market And our But the trade, fact, of a inside lot and we branch HVAC. environment, that inside terms res with speaking, to generally builder would together so view business in that we've of be, recover. that in commercial, And outperformed of that res industrial

Operator

conclude today. any will to to or question-and-answer for additional our I would That hand back speakers session closing like our remarks.

Kevin Murphy

happened nature rate Yes. what we'll perspective. continue And uncertainty deal for your that customers, that with for again our associates, time. from to case sure we business. our as efforts that very sure enter a care and their our from Thank QX take Again, essential safe QX, pleased of we focus COVID has the for in we're on make environment making results and with a operate we you very of

further Pete time are you And questions, thank don't So your any myself. Thank Bill, if today. hesitate please or there Mark, contact Molly. you, for to

thank So much. you very

Operator

participation. Thank today's conclude you will This conference call. for all your

disconnect. now may You

Ferguson (FERG) 8 Dec 202021 Q1 Earnings call transcript