FERG - Earnings call transcript Q1 2022

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Operator

00:02 Good morning, ladies and gentlemen, my name is Wong, and I will be your conference operator today. At this time, I'd like to welcome you to the Ferguson plc First Quarter Results Conference Call. All lines have been placed on mute to prevent any interference with the presentation. At the end of the prepared remarks, there will be a question-and-answer session. [Operator Instructions]. you. Thank XX:XX to like call to over I'd turn Mr. now the VP Brian and of Communications. Ferguson's Relations Investor Lantz,

You now may begin your conference.

Brian Lantz

I XX:XX Ferguson's want our and filings A be available first projected. XX:XX results in the webpage. webcast. those and to corporate from issued this welcome website of later conference of uncertainties announcement and is some actual the everyone a will and available this forward-looking This review had and Hopefully, differ could Good call SEC that subject you've Media may we on to earnings Investors our morning. remind made quarter be morning, to our recording call are certain today that earnings chance risks materially to to cause section everyone today. statements and of

to Additional earnings included a our will measures. our announcement the legal announcement addition, disclaimer discussing earnings this Please certain information in measures we accordance under information. With Including our In financial for financial XX:XX additional I non-GAAP Brundage, GAAP. to call and be XX:XX turn is the refer calculated on now call over CEO; most website morning. on the Kevin. the will the our with are me directly today CFO. in Bill to Kevin reconciliation Murphy, comparable

Kevin Murphy

outlook Group our come of call, our to on give the to financials. some our update highlights for you gains. would our XX:XX the by performance Good your We QX back for and success they call begin we continue markets delivered to share is morning, year the the call. and sincere the over fiscal part largely customers market quarter, successful. everyone, at end by and like turn make welcome I questions. the an first This to simpler associates, I'll Bill conference On to and from Ferguson's our who first before I'll rest quarter set today's thanks to more saying, results take Bill results as in driven exceptional due to before I our end strong in XX:XX projects the express

time, continue chain disruption. period local delivering and to period supply pressures through our of sheet us customers productivity. Reliably to supply us to while allowing support customers our XX:XX as We possible, these and continue own chain market capture pull customers chain of same gravitational as our helped to outsized our has our share a in our leverage strong remains to business productive supply a remains enhancing key industry to global make Technology balance gains. for the at a a strength,

by over quarter. grew end Non-residential education, negative in faster U.S. our markets, first acceleration twenty residential, revenues remained the first prior year. as grew demand and just the as such XX:XX robust Both and of end new strong markets which comparables an in in our in our areas residential than residential construction activity For percent we and half the saw hospitality. healthcare, lapped RMI comprises revenue four quarter. approximately With

be approximately quarter, commodities. by by finished both one near-term Inflation driven grew to up good percent revenue and stepped pretty Our the thirty XX:XX in and indicators trends non-residential goods further appear in economic shape.

we're high the twenty pleased leverage relationships approximately and hundred in acquired welcome contributed Our us strong and than revenue. in acquisition And four to to operating as associates delivering pricing revenue, we margins million quality dollars particularly strong quarter. discipline in help second front, bringing the these the remain to these completing on listing businesses, growing faster our gross Ferguson profit vote York hundred XX:XX On annualized of look on as program, significantly to the finally, local one five share XX:XX in hold first two, move And future. buyback the million execution. twenty in we dollars initiated primary Exchange. drive spring month our to of new New We twenty billion further listing we our Stock in approximately one track the growth to one

we results detail. of quarter Bill, first strong Now in are the you the ongoing over me model. confident financial are in business proud of numbers the our again, you take So pass let in our strength will who XX:XX to and more through

Bill Brundage

or XX:XX Thank you, Kevin, everyone. and afternoon good morning,

quarter U.S. start As today presented will cover we that effective adopted basis. therefore, to the results. I to I first, Now XX:XX GAAP remind that are you on first today, and results August turning the wanted we

quarter strong quarter model at to continuation on business similar trends six margins into to to our supply And Kevin of Gross capabilities, the inflation our the the contributing manage of of Organic last value five levels revenue associates, our gains, the fiscal share percent. as efficiencies, and and inflation. costs basis up twenty As deliver Operating low-teens. productivity to were in of from growth point was of ahead one point the investing chain continue QX strength growth XX:XX to seventy controlled talented well with focused price program. we our as year. we points first while twenty year, expected, a last technology market percent ability and customers, be reflecting of price in stepped mentioned, seen four fourth we've six

quarter eighty further five percent three five As to quarter. from the and percent HVAC, of with in growth public with the Total Headcount business serves market the points the both in a and grew twenty and light well point the a Residential and and and strong our of organic seven point with operating inflation by margins balanced. XX:XX revenue coming generated percent. Moving and U.S. point in ahead results dollars eight strong the Waterworks and adjusted with growth with by twenty three outperform majority of tightly to project to stepped remodel consequently, continue minded project margins, residential a works. last percent. came customer trade operating the fairly end up to balance hundred increase to adjusted demand fifty inflation across percent, our accelerating and percent first the business an seven expanded pro. operating up seven residential and million largest well commerce leverage. and grew driven residential strength businesses good the gross from good and and revenue Price revenues million from growth groups prior nine at grew acquisitions. growth of saw non-residential growth costs growth end one the first costs the provided growth the in point markets million dollars, both a continue two quarter. new percent support mirrors lapped was low-teens. year segment further remodeling and basis of construction strong year percent, Group elevated Residential into two strong fifty in fifty building point demand, in commercial digital one in to We of eighty The dollars, the adjusted volume benefit performance. works hundred growth our and grew two comparatives. twenty markets. results, adjusted eleven forty XX:XX four breakout two We mechanical consumer end grew from XX:XX and customer sixty grew groups demand These XX:XX appropriately non-residential hundred in U.S. negative variable saw by other profit and such, five where point decorative non-residential our diluted profit operating We by controlled two EPS expanding

from with areas profit in as million stepping adjusted growth in in particularly and control to such period in of performance QX infrastructure to rates. the well Residential hospitality. our for thirteen see up eight foreign to industrial with performance a margin to over A We revenue saw point end markets. our business point points by seventy continue growth percent. Canadian business. Organic from point performed margin eleven HVAC nine five operating in Canadian XX:XX of in We one cost nineteen percent. healthcare, point the education, gross impact growth positive markets, six XX:XX grew revenue further an which of increase exchange percent, The civil percent half continued strong performed adjusted tailwind basis well tight and dollars returned and another growth good markets our with eight operating with led business seven coming account

across As expertise, solely considerable markets, to on continue great we knowledge and Finally, focus remains experience U.S. in shape. balance XX:XX associates the American the our Canada. see North we operations success customer leverage and we from to enhance sheet know-how as

leverage one priorities changed Our have prioritize stated to and leverage to targets back times. our capital moving continue we and not range between of into two allocation

you. grow future the a important acquisitions. fiscal business the into two. date in our fiscal dividend. We've completed share continue we with invest made to hundred wrap to of acquisitions healthy us put XX:XX invest of the organic completed the to the and Acquisitions while twenty business the execute strong a look sustainably strategy. continuing pleased to up, are one are going two committed to part growth pipeline in over Strong earnings We see and dollar start year, of great to we're billion XX:XX to having buyback just dollars the balance date. we in a the bolt-on of Thank and the We surplus have So growth program, four me million position twenty XX:XX and continuing an to shareholders sheet capital returning in ordinary balance to remain year. currently let

for closing Now, his back let an outlook remarks. me the to you Kevin update hand and on

Kevin Murphy

tapering to the the second of quarter, this margins do growth of tailwinds Bill. quarter. from that growth likely on seen rates gross generate second moderate, to unclear. are enter Since but of you, as a the continue of we continued timing being The extent Thank revenue we we've first expect our That and said, the inflation remain recent to XX:XX similar to start the the we half.

are year now in face the the our our full core Given your well. we momentum our happy the outsized leveraging call the your rest the back I increased. performing have of to strength and fiscal expectations quarter, remain focused to to the take now market for questions. today. model, summarize, business first of to challenges in growth business strategy Thank Bill the deliver you executing global So believe extremely We're is over on supply of well-positioned XX:XX Operator, year over our XX:XX share and beyond. strengths the chain We business and the hand I'll you. gains. are for time and

Operator

comes Thank And Will [Operator from is XX:XX Please first Will, our now open. your Jones you. line from question Instructions] Redburn.

Will Jones

couple Thank morning. me, from please. you. A Good

to whole a could chains dissect whether note go much just and that and the basis the share gross percent, market stand margin other really two. one within is you. much whether how second other anything it's normalize was around guess the opposed to could and just well but unpack within us the those holding just twenty calendar the there once points supply factor. of think appreciate And mix? in -- twenty the Thank interested retaining was issue of say, in had was small that out-performance view customers as the a first servicing inventory how more through, possible how is is seventy I am you by The your particularly how gain? then market really share, is uplift by you it's -- share, we supply as to areas you of there only function market gains about help or that -- customers versus within to I in period, around factors the out fifty potentially it you chains like much Waterworks interested particularly a on constrained And I quarter. XX:XX quarter

Bill Brundage

the question morning, first question. Bill. that thank for that and Yes, This is good you XX:XX take I'll of Will. part

continued point, same really gross If which gross finished margins comments, about about said four in in QX low-teens. a And percent, inflation our goods to to we one as moved saw in you say We about manage will the would point QX, produce from manage up chain some continuation much strong driven the inflation. some step-up the to inflation it majority first three to put ability quarter. margins. in The again, to gross that's is they to our the thirty inflation tapers us up, we're able and percent, level at very first supply in really in in by that think our the thirty prepared the continues our future, up continue very expect point difficult by we extent inflation, be. what XX:XX right price to that So those by in outsized into one point further those enabled will of percent QX, driven move that translate that strengths quarter. our increase of inflation that release, driven a as of is and happen that majority were price of But the at margin that that certainly eight was that, leverage what going when to but of margins the moderate to as

Kevin Murphy

we similar Will, like, what Yes, we the we it's out tease in year. market what it question I but to think exited last your share gain down market market if as as and us XX:XX the we think would as year tick experienced about broadly difficult exactly quarter, share of share, to looks fiscal to that for

that three the make hundred the durability end is ability we points said relationships, really a close and of that been a points of durable think on we we service ours fiscal is to and of like out-performance chain fiscal given And by that market and reason that our to And large the said to targets these durable our target. above we is hundred to of customer that driven is have supply bit XX:XX so of And chaos believe opportunity a And at the year, for in customers. part happening at slightly customers that's year, basis normally basis better, two hanging proposition. as those fact project that new customers the service time. in of for the we period their to new that's

the of going over to lose works, things you really that we win commodity that but to look inside terms when long balance win half we're think of side outperformance, we balance business, pleased also the XX:XX performance, commercial, construction, lose you're residential especially In the the PVC haul. the of Waterworks it, the good side performance, growth. And You're in across on like new that's balance got we terms with more going some, and volume growth you've we in of some, public and that about a across think call municipal, the of material half inflation, quarter. piping with of the than

of if that that's to opportunities you look what project, if pleased for the with the you as opening we above commercial in that really residential So with company of side brings, settings. will, gambit, then because totality our underground construction, at the the building especially of and look take finished advantage

Will Jones

Thank Right. you. XX:XX

Operator

line And now XX:XX Elodie, Rall next Elodie Please you. question J.P. comes from our Thank your is from Morgan. open.

Elodie Rall

gentlemen. Hi, Maybe markets. morning, questions your two XX:XX you. on Good end thank

all Waterworks of So your one follow-up first on of -- business. a

a So the the Thank updated [indiscernible] view in light give on QX, us housing U.S. it's upside in rate U.S. environment, the you you And of bit would the second, done really maybe, new the in well from quantify market this plan of rising how was interest just you. [indiscernible]? announced? business that could for an

Kevin Murphy

to I'll Bill then XX:XX Elodie. and of in. the Thanks, if add take beginning that wants

then are terms of going pressure those play time market and we Waterworks, it think the In previously, tailwind. on be to infrastructure as a what will will of And labor. bill and And projects end think as over a there likely like. about discussed certainly commercial, residential start that we when trade look infrastructure bit out is a about to we

because inside XX:XX Waterworks back our a residential bit action into those putting I residential continue time U.S., that it of good nature And be of to projects of will for the new across bidding performance. in that seen of broad-based construction be We've view. reflect a the commercial in But particular, market will us. appears of that strong. certainly to so Waterworks the to inside side business. quite And tailwind activity take

new or in construction, residential postponement lot subdivision in and building well terms five at starts for our look market, to construction the any of about the which count the six the In be two our new towards permit rest be good. remodel trade again point business, haven't of indicators reduction substantial seen external subdivisions points look We of at business housing five of to point activity inside Ferguson. one good, process XX:XX one

new And be appears calendar construction we strong, to so growth into as that next the move year.

Elodie Rall

XX:XX Great. Thanks that. for

Operator

XX:XX Thank you.

question line comes next Truist. Our now Keith from from your Hughes open. Please Keith, is

Keith Hughes

levels value add you can and on things in nature? commodity XX:XX that of more feel Question any your the finished the of Thank give saw on products plumbing of you of how inflation you. versus inflation, much HVAC, you saw sort

Kevin Murphy

the XX:XX did standpoint a for very Yes, in level to trended question. what Thanks similar good in from inflation morning, QX. an Commodities really Keith. they

that very takes the very percent So think categories, range different some similar, puts similar so and year-over-year, in of in the there commodity fifty between inflation overall, but level.

percent XX:XX But a through costs input what call thirteen price and commodities now today given As finished percent that to up about just where know today, the like the represent percent commodity we've goods. more fourteen on this increase. step about the we you fact to be QX really the to talked to bit is percent of playing seeing business used it's our twelve ten seen and the of we're

QX. finished up inflation And so the digits into saw that we goods step high-single in

uptick side really that it's the QX. combination the so QX from inflation And that on acceleration drove the to of and that further finished in goods

Keith Hughes

activity? on an plan. you one just are XX:XX you talked the repurchase in count Okay, us question, the you other lion about repurchase I given share give thank right progress where dollar one all guess idea Could you. maybe share And the now billion

Kevin Murphy

to million today, hundred to buyback share about program. twenty we're date purchased two and dollars dollar under twenty two on shares that dollars Keith. one And five just billion million we've date Yes, XX:XX and hundred

Keith Hughes

of XX:XX question here. guess, And just picture Okay. to one finish off kind bigger I

historical use As probably have the inflation you any you more goes not able periods on examples? away, Is you guide inflation commodity -- historical the and do had any Is keep. evidence of about of the this on of rough there subside, there how more -- have to any goods, the have is of you're when will and that talked to any that do much product. you in products, value-add on good finished then

Kevin Murphy

stepping in unusually point here future. but business. And that data you, two now range, But bit, come historical we and we margins over were year to into great the about to about of up that, moderating is today XX:XX -- off Well, you last We I'll operating further still grow that on we from so last we from difficult a with delivered think somewhat. in could incrementally thirty overall have a operating that points. stepping up will grow we're percent we percent, eight quite sitting stepping standpoint, really believe an that the nine they're talked ultimately gross pleased being a mid six a going that don't new we fiscal that can settle. margin Gross time. would we any that say about from base about And percent period up we're into to where year. which to thirty one Keith, focused point tell if margins the really inflation the But anticipate margins the percent high

Keith Hughes

great. much. Thank XX:XX you Okay, very

Operator

Thank XX:XX you.

your now is Please Gregor, open. Our next Kuglitsch Gregor from from question line UBS. comes

Gregor Kuglitsch

on desire the of what share then sort share sort it if XX:XX get whole second -- chain perhaps you into And easing maybe morning. about could statement are and you thinking you're to in reiterated I and firstly, raised maybe expectations, are to question where they us maybe final challenges have The and a supply putting the guess maybe I you a bit? question? on, if your of suppose talked vote question that's update specific you. the of just any could DC fill you you the spring, think Couple perhaps September? or good have re-listing or I calls is, the little now, blocks the your we are XX:XX of kind you incremental the is, in previous different there in questions. say us to so what XX:XX with about if Hi, spoke you just into first with rates differently, in branch building towards there, if time last us can step for the I is Thank any news you compared mean

Bill Brundage

to sure, first, your fiscal we twenty the XX:XX And twenty four with thanks expectations growth as it's at in percent, from fashion QX. percent pleased and we we range. question started that even perspective, started growth Yes, though Gregor. really five in almost If a year we've go we've the pleased strong back with on very operating really organic growth started said, And the a growth leverage similar produced. early, QX I

to percent half two the three So there terms some through second gross a XX:XX we've to I how that about and And in from in tougher, second in would an are through will strong As the you percent turn talked comparables about they have results. today margins. half, much in play organic talked as of get inflation uncertainty past, bit to a from first half as standpoint roughly first very we the that already half. twenty we've moved the play to the expect set of

a to momentum, So year outlook spoke But growth. we we this tapering we the positive months of given market, incrementally for sitting the have last the here the to today, point. expect full year would the after, start more we're two still at given

Kevin Murphy

exited we improvement especially but we've the our materially changed terms our materially of been using firming and percent XX:XX XX:XX our chain some one chain categories, into were into as SKUs, rate that that fill percent seventy get on product and on at some and in have looks the time, Gregor we what in of the rates intermittent. supply look our have into product our full time took quarter five rate And ground That quarter. to we that so, purchase that percent call using at fill pressured and in on And roughly that our at full normalized that we and you, has we nineties certain we is up into invest our for order turning the in exited at under how make and changed we discussed in is, can has way time filled it fill quickly supply sheet to hasn't area, that stocks level. level. horizon we the to, high were of of to like six rates the balance improved normalized entirety as are and the And DC. in sure of as in what area, in time in it has area say, seen thank measure it, chain in of and been our customers stock catalog And changed we DCs. hasn't order Yes, certain supply the fill feet thirty certain looking in previously, at we suppliers, coming at What to fill branch a the purchase twenty this building that fill terms by time way get our that of being areas rate the that inventory, and our as to DC, horizons. branch

network, that customer that of our Now to you've challenge the take care going of out because bit of in project the some can you got improvement. of its little to see a to inside that's starting make with totality. for XX:XX sure we're So play

relationship can of aggregate make to some So, and location forward bit customer going going our full. there time we improving, the lead but XX:XX on can And product that that use still inconsistencies it's as challenges is sure to that year. into go it to We're the calendar are so, supply use the we're going new we chain we in and that to our supplier. scaled a to base with make to sure and bring that

Gregor Kuglitsch

XX:XX Thank you.

Kevin Murphy

the to we as for on question Last when talk vote. about -- vote we additional it vote we originally took XX:XX vote year the the in vote that to we still two, in first listing about think that Nothing back relates stand-up talked bring that on within time and had number bringing new spring shares listing, the that's one would we on New the said of of track. of York, additional largely the

Gregor Kuglitsch

you. Thank XX:XX

Operator

XX:XX Thank you.

Kathryn Please next Kathryn, comes Thompson Our question open. from line Research. is from now Thompson your

Kathryn Thompson

XX:XX questions Hi, thank taking you for my today.

have given follow-up some a goods. also and light next a improvements. of of this targets chain, ensure you market and chain share, in for with finished words, supply contributing DC in that narrowing Thank on changes And you and little chain day in the key purchasing out, to other words, update an with doing supply to you put that continued tech Just any advanced how it give inventory gaining is delivery on terms purchasing from build-out the could you. bit, in of particularly suppliers, other in challenges supply

Kevin Murphy

MDC on start your I'll Kathryn, questions. Yes, XX:XX

Phoenix we're which one new Denver, underway second under will So format next year construction the should half as in you Dallas, which by MDC will know, we opened spring, then and our well open first have we of in last fiscal be today, in our be with Houston. followed the

layering service out our that plan early that there, months to showing But us MDC in for of -- So our we're and much days, of what the market. share feedback it's very seeing market in product few gains. Denver We're very enhance MDC only having building, availability, according XX:XX that not do also that a very we we terms but in but offering, to strategy that are ability believe early into that much we're optimistic on build that that an and plan. efficiency by can encouraged

Bill Brundage

can have to haven't forward thank discernible make that we knows. excessive stepped the together we getting need And very earlier XX:XX purchasing disruption, behavior an suppliers that avoid the any hand to orders have dates, to our of XX:XX product working to any important to want unique everything path of be sure been And to be really sure that manufacturer want move make go look so, up Kathryn, things make fill environments, particular of it terms we've make sure And the we of want purchasing ahead they with their and terms though, us in and best out. or to you. forward We behavior, has as and professional to we end right customers on supply we we that we're the our pull demand. in forward to customers any when key a any to required get buys as XX:XX we In purchasing our their we so that sure want think best now, environment. make of that a to want for right trade tendency can predictable. also market can on unpredictable help network and That's we we behavior for when job everyone that normalized is that we In any place even mind chain make manufacturing changes rates we for bit Yes, that local to their more are sure environment, in for supplier. inventory helpful in to the activity, forward. our a doing that in at market This changes degree. been markets, go around for exist one in can our fill how we about gaps smooth

Kathryn Thompson

what growth to of the out-performing markets Previously from in hundred market earlier on buckets, by really dig growth. single-digit for there buckets bps certainly A growing on hundred too, regions three points. one to at end and expectations? understanding the conservative percent are one low Okay. raising a the appreciate are to double-digit some your raised are the basis raised this you growth a above that. follow-up driving and expectations? want look expectation hundred two But bit is And percent, those basis and basis or disparate comments we little deeper, GDP you then, that When which Ferguson estimates, XX:XX three that to points then past industry path has of of And to is hundred points two basis high to two M&A bucket to for of outlined improved? had growing I those points hundred

Bill Brundage

where basis call hundred I XX:XX about are And bit period growth this is in a to last quite now gains versus right strong. out-sized hundred in we've the a three we're fiscal basis as year talked points traditional market two Yes, share our that Kathryn, points. think both morning, as well market as

last hundred to as five outlined we're year. basis similar QX, while can't it range. So to we Kevin in And end at points the points today, probably pinpoint are basis of we closer four hundred a in

and outsized So our chain gains, ability it's supply associates, market those our driven of again strength, our by our really generate to the market but strength combination then platform. technology the of

Kevin Murphy

but generally in we're not Mid-South the disparities where can Yes, is as the strong we're XX:XX from the seeing that as through seeing growth you nation Southeast growth geographic in coming imagine, any area, Canada speaking across terms Texas and well. of good in in growth major is that

Kathryn Thompson

basis three that's four of to are XX:XX Okay. opinion? buckets you. point, a and out-sized noted top hundred that are your to that you in In two five this appears -- be the basis continuation what driving that growth hundred that to trend, Thank point

Kevin Murphy

So non-residential. HVAC project-minded well and you across non-res at but that light business, testament gains individual by in through been mechanical. building groups, large and session talked it what residential commercial plumbing be they're share strong, we decorative earlier performance industrial, about into Kathryn, to on in really that broad-based is growth this and our within the in of at the with very look fifty consumer of percent has board as commerce and whole working when for in business really a project as very aided broad-based has evasive digital customer as XX:XX space part Waterworks that in to it business. those business, from XX:XX the a through the a commodity trade the performance construction it together the inside has pro our inflation Yes, call, remodel been not been And both Q&A some here, the really solid residential

Kathryn Thompson

so you much. Thank Great. XX:XX

Operator

you. Thank XX:XX

Ami, line Citigroup. Ami next your comes open. from Our Galla from now question is Please

Ami Galla

XX:XX you guys. Yes, thank

color could context about the this I even the in the us we a me, considering of around was have bit base, the on the from question in business? or give margins own that if should gross towards brand Can really on inflation parts could of question. Just overhead a in you is follow-up trend couple the do margin elements? there the talk sustainable moving those questions where mix think if XX:XX And one of gross on you sort second business

Kevin Murphy

Thanks XX:XX for question. Ami. Yes, sure, the

of then again, three gross back are believe one importantly grow so will reasonable right go more results we where at probably time. percent, where exactly In it's operating margins margin settle. full-year difficult in out-sized year, XX:XX last the the that's now thirty thirty pinpoint to think if will gross we range, from mid that bit incrementally to margins percent. we a we percent point that terms to range. But you do And that thirty six it's And more both a continue over point and

sourcing driven that strategy strengths and from brand our bring product and a of overarching strategy global have perspective. we portfolio and by that addition in purchasing Some supply we the the to that chain power and own

have that last over we'll as as bit or believe decade the time we So come those margins consistently done then will do and incrementally so. a to normalizes, grow off over we inflation gross continue

Ami Galla

a the the -- levels? talk and second on cost about the bit inflationary And seen overhead one XX:XX trends was at costs, that my can just overhead you you've sorry,

Kevin Murphy

Apologies. Yes, XX:XX sure.

percent XX:XX run from wage a increases drivers where at percent of associates by about just warehouse our our inflation And to wages of labor up of an two-thirds higher wage percent. you step that bit. would is base, about normalized driven kind if We're type Generally costs expect talent for would more cost we think twenty two. we've cost perspective that and and there a market four sixty of costs. We over kind those growth and we're inflation seeing by three those to and overarching So we continue overall, But increase, driven that and twenty pressures the our into that perspective, on seen as focus from increases ability a that manage step wage good calendar those type continued pressure largely to level, we of for the year-in year-out. have are top-line feel seen about there. productivity base cost seeing labor

being pressure well but So perspective. managed, are seeing cost from we it's a more

Ami Galla

you. Thank XX:XX

Operator

XX:XX Thank you.

Bank from open. from Lehmann your comes question next is line Arnaud, Our America. Please now of Arnaud

Arnaud Lehmann

pipeline, much. the shape, morning, Kevin. is especially I which this of which context dollars on question is selling? strong income if five My I do below see silly, U.S. and believe forward? debt Thank a could sheet, growth. strong ahead. Good M&A, but going want your organic from activity that, is Good still be. EBITDA see where second to am nothing Bill. XX:XX Thank million question very to don't and the net very, balance you you capital in changes my I here some so has in heard is But I potential with that you're sorry, about you the first some U.K., something morning, But to it just there technical And XX:XX priorities else you. first very in a it's the twenty assuming going operations. discontinued accelerate on my Appreciate That's question. is in do your one you gains, guess we taxes

Bill Brundage

for XX:XX question. Yes, the sure, Arnaud. Thanks

pipeline pick COVID. last after we periods we twelve got lockdown up out point, the now, your kind number in To XX:XX M&A the seen of bolt-on right four of months, to that and other pipeline. and the of have healthy you've concerns deals is in capability immediate a pretty over have we year acquisitions fiscal activity in date the us early seen Our and complete on

understanding we've small seen run pick number market most to a most right lockdown now, of that looking through seen competitive a those family-run for forward sized what reasons: going COVID to period performing compete. our is and it's our period and and to supportive two, a the so to of One, and of the businesses, take set quite medium is and are the future I having well; businesses up businesses fairly have think you acquisitions

more I a more to of those bit. around capital think that's to probably -- potential noise spurred that And gains about selling their people added XX:XX then rates businesses certainly selling on firms. some has think and

continue So expect a we're this the would fairly fiscal at to seeing rest we healthy year pipeline, for which of least.

Kevin Murphy

Ferguson. with that balanced quality to of acquisitions well and being well very the with to pleased geographically bring that And pipeline XX:XX -- in able balanced we're bolt-on companies really we're

capability and business solid we own that a then our And to four that that in brand accelerate that our As twenty found and high XX:XX drive consolidate you bringing bricks digital can technology, continue, we with twenty deals like some some look good you together functional and will through for have we also own know those global that bit growth. we and but of manufacturing and are bolt fragmented associates our opportunities markets, our local incredibly quality onto with markets strong fiscal in of great companies in brand. first saw assets, can brands as expansion That chain relationships don't expertise. business, sourcing our but mortar supply Waterworks capabilities acquisition, two, really little in and Geosynthetics own in that channels

So that balance is pretty strong right now.

Bill Brundage

on last, a event. that then related former the operations, not from consider much a to the on your the it actually that a you million And disposal XX:XX but twenty property business, of very one-time was from should five question discontinued Nordic dollars, the U.K., property

Arnaud Lehmann

clear. Thank you very XX:XX much. Very

Operator

Dominic, more Dominic comes Deutsche open. And one you. today's question conference Edridge question line your have from now on the Bank. for from Thank Please And call. time is we XX:XX last

Dominic Edridge

XX:XX much. Thank very you

bit per Just at is discuss just in inventory terms point maybe you current of, the on, units Could the of should to profit of taper element your we different sort slightly so go sort any compared that future way. go into with gain sort looking history. to on quarters. the back of gross quarter gross off in as margins, there looking And of that maybe how a on is

to signs volume -- about that made of side. fifty-fifty Thank are you're increases, level just behavior on all people was current you off price, that of where elastic of was Are I you And was seeing think a question sort right? is demand price putting I the are the because basically Waterworks of Or get any you still people did Of time? pretty earlier sort works comment increases? these XX:XX customer we on a So then what at more sort seeing? price of second much. very there price

Kevin Murphy

or levels so through unit of on where Yes, margins, been XX:XX and different we've higher margins. to per higher across into inflation, that able we've flow gross leverage higher profit gross lines more either seen gross product

to of our through from inventory. to and sell ability certainly coming leverage Some that

XX:XX continued step off is so up in to, exactly inflation, a again, play that we've to but gross moderate through point, benefit that moderate And seen as margin more come perspective. would that we've And at difficult. seen we calling what bit from to some a that expect will

half growth of revenue Waterworks inflation, correctly, fifty half the about by percent by description the over did You maybe volume. driven hear -- driven just that rest

Bill Brundage

inflation, of as from have XX:XX the for the concerned we customer and of that demand the degree base, goods entered would cause finished especially market postponing some projects. it been In concern what price we're side in seeing terms

seen any at inside not discernible have As balance projects. you the look new construction that postponing of behavior and the we RMI we of have business,

a requirements have discussed due we sure exact -- and to that early. We activity space, as additional and to to infrastructure specifically make fact, so that's going Kathryn's have pull strong. forward have price get on-site in the of infrastructure on quite that demand delivery business, understand continues demand we're don't demand created a to we some the all project but inside bill. needs actually know, haven't of seen construction touch we we question, But trying of we works non-residential that product public residential postponement the from dramatic of portions any seen our commercial, as And be to XX:XX during

we So a consistent pretty see demand. play of

Dominic Edridge

XX:XX That's Thank you very clear. very much.

Operator

over I We remarks. time for Kevin for further final XX:XX any hand no to will have you. questions. Thank currently now Murphy

Kevin Murphy

much our pleased appreciate in Maybe you XX:XX today, as Yes, operator. We're time you began. growth thank And it. we very QX. organization and just with the all for thank your improvement for close quick a

the well coming our acquisition. everyone high of day our to the for a customers quality And through and promise supportive perspective in associates depth their with heard make with speaking you've As We're ongoing and productive to Thanks simple you same-day, continued continue successful deliver thank to our that investments to associates. we in making quality next company who XX:XX Q&A, markets our as and non-residential, soon. from industry their and supply investments residential, associates to the continue look in our making into to construction they very new those pleased and to of high marketplace through company associates as And as we're our for our for your thankful So more into more are customers, choice. most all, ensure forward make again. again customer's time. on supplier deliver we that project trust RMI. and technology XX:XX both in we're The remain making breadth local and our in chain coming investments best for delivery the we're

Operator

Thank so much XX:XX call. This for concludes today's you joining.

disconnect lines. now may You your

Ferguson (FERG) 7 Dec 212022 Q1 Earnings call transcript