Slides
Page 1
Results Presentation Update on Market Opportunities and Strategy Period Ended December 31, 2025
Page 2
Legal Disclaimer 2 2 Cautionary note on forward-looking statements Certain information included in this presentation and discussed on the conference call that this presentation accompanies is forward-looking, including within the meaning of the Private Securities Litigation Reform Act of 1995, and involves risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied by forward-looking statements. Forward-looking statements cover all matters which are not historical facts and speak only as of the date on which they are made. Forward-looking statements can be identified by the use of forward-looking terminology, including terms such as “believes,” “estimates,” “anticipates,” “expects,” “forecasts,” “guidance,” “intends,” “continues,” “plans,” “projects,” “goal,” “target,” “aim,” “poised”, “positions,” “may,” “will,” “would,” “could” or “should” or, in each case, their negative or other variations or comparable terminology and other similar references to future periods. Examples of forward-looking statements include, among others, statements or guidance regarding or relating to: our future financial position, results of operations and growth, including our ability to expand profit margins and capitalize on structural trends; plans and objectives for the future including our capabilities and priorities, such as implementation of artificial intelligence (“AI”); proposed new products or services; expectations regarding global and regional economic, market and political conditions; our ability to manage supply chain challenges; our ability to manage the impact of product price fluctuations and changes in demand for our products and services; the overall performance of, including demand levels for, the markets in which we operate; our acquisition pipeline and ability to achieve potential benefits from future acquisitions; capital deployment strategy, including the amount and timing of our dividends and share repurchases; investments and capital expenditures; legal or regulatory changes; and other statements concerning the success of our business and strategies. Many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those contained in such forward-looking statements, including but not limited to: weakness in the economy, market trends, uncertainty and other conditions in the markets in which we operate and the macroeconomic impact of factors beyond our control (including, among others, inflation/deflation, recession, labor and wage pressures, trade restrictions such as tariffs, sanctions and retaliatory countermeasures, interest rates, and geopolitical conditions); failure to rapidly identify or effectively respond to direct and/or end customers’ wants, expectations or trends, including costs and potential problems associated with new or upgraded information technology systems or our ability to timely deploy new omni-channel capabilities; decreased demand for our products as a result of operating in highly competitive industries and the impact of declines in the residential and non-residential markets and our ability to effectively manage inventory as a result; changes in competition, including as a result of market consolidation, new entrants, vertical integration or competitors responding more quickly to emerging technologies (such as generative or agentic AI); failure of a key information technology system or process as well as payment-related risks, including exposure to fraud or theft; privacy and protection of sensitive data failures, including failures due to data corruption, cybersecurity incidents, network security breaches or the use of AI; ineffectiveness of or disruption in our domestic or international supply chain or our fulfillment network, including delays in inventory availability at our distribution facilities and branches, increased delivery costs or lack of availability due to loss of key suppliers; failure to effectively manage and protect our facilities and inventory or to prevent personal injury to customers, suppliers or associates, including as a result of workplace violence; unsuccessful execution of our operational strategies, including the failure to quickly adapt our strategy to emerging technologies; failure to attract, retain and motivate key associates; exposure of associates, contractors, customers, suppliers and other individuals to health and safety risks and fleet incidents; risks associated with acquisitions, partnerships, joint ventures and other business combinations, dispositions or strategic transactions; risks associated with sales of private label products, including regulatory, product liability and reputational risks and the adverse impact such sales may have on supplier relationships and rebates; the failure to achieve and maintain a high level of product and service quality or comply with responsible sourcing standards; inability to renew leases on favorable terms or at all, as well as any remaining obligations under a lease when we close a facility; changes in, interpretations of, or compliance with tax laws and accounting standards; our access to capital, indebtedness and changes in our credit ratings and outlook; fluctuations in product prices/costs (e.g., including as a result of the use of commodity-priced materials, inflation/deflation, trade restrictions and/or failure to qualify for or maintain supplier rebates) and foreign currency; funding risks related to our defined benefit pension plans; legal proceedings in the ordinary course of our business as well as any failure to comply with domestic and foreign laws, regulations and standards, as those laws, regulations and standards or interpretations and enforcement thereof may change; the occurrence of unforeseen developments such as litigation, investigations, governmental proceedings or enforcement actions; our failure to comply with the obligations associated with being a public company listed on the New York Stock Exchange and London Stock Exchange and the costs associated therewith; the costs and risk exposure relating to sustainability matters and disclosures, including regulatory or legal requirements and disparate stakeholder expectations; and other risks and uncertainties set forth under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended July 31, 2025 filed with the Securities and Exchange Commission (“SEC”) on September 26, 2025, and in other filings we make with the SEC in the future. Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Other than in accordance with our legal or regulatory obligations, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Page 3
Legal Disclaimer 3 3 Important note regarding calendar year results reported in this presentation All historical calendar quarter and calendar year results contained in this presentation have not been audited and have been derived from the books and records of the Company. As such, these results have not been subject to external audit or review procedures, and may be subject to adjustment. We expect to file a Transition Report on Form 10-KT on February 27, 2026, which will include audited results for the transition period from August 1, 2025 to December 31, 2025, and for the fiscal years ended July 31, 2025 and 2024. Investors are encouraged to review the information presented in this presentation in conjunction with our Transition Report on Form 10- KT, when available. 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, operating cash flow to adjusted net income ratio, adjusted earnings per share - diluted, adjusted EBITDA, adjusted effective tax rate, net debt, net debt to adjusted EBITDA ratio, free cash flow, flowthrough and return on capital employed. 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 because they exclude items that may not be indicative of our core operating results and provide a better baseline for analyzing trends in our underlying businesses, and they are consistent with how business performance is planned, reported and assessed internally by management and the 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 investors 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 February 24, 2026, that may arise in the future. The variability of these items is unpredictable and may have a significant impact. Market and Industry Data This presentation includes market, industry and other statistical data, estimates and forecasts that are derived from third-party sources, as well as company estimates. Industry publications generally state that their information is obtained from sources they believe reliable but that the accuracy and completeness of such information is not guaranteed and that the projections they contain are based on a number of significant assumptions. Although we believe these sources are reliable, we have not independently verified this information. This information may prove to be inaccurate due to the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties, including those identified under “Cautionary Note on Forward Looking Statements.” In addition, our internal estimates are based upon our understanding of industry conditions and make certain assumptions regarding the markets we operate in. Such information has not been verified by any independent sources. Accordingly, we cannot guarantee the accuracy or completeness of the market and industry data contained herein nor do we undertake to update such data after the date of this presentation.
Page 4
Introduction and CY2025 Highlights Kevin Murphy, CEO
Page 5
5 *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. ** Shareholder returns include dividends paid and shares repurchased under our share repurchase program. Calendar year 2025 financial highlights Our associates delivered a strong year $31.3B Net sales +5.0% vs. CY24 $3.0B Adj. operating profit* +11.3% vs. CY24 9.6% Adj. operating margin* +50bps vs. CY24 $10.58 Adj. EPS – diluted* +13.4% vs CY24 $2.2B Operating cash flow $1.6B Shareholder returns** 8 Number of acquisitions 31.1% Return on capital employed*
Page 6
Balanced approach to US end markets * Residential / Non -residential proportions derived from management estimates for the year ended December 31, 2025. 6 % of US net sales* Twelve months ended December 31, 2025 US net sales growth/(decline) Twelve months ended December 31, 2024 US net sales growth/(decline) Residential ~50% Flat +1% Non-residential ~50% +11% +2% 100% +5.1% +1.4%
Page 7
US net sales 7* For twelve months ended December 31, 2025. ** 2024 customer group allocations recast for Ferguson Home. Customer group % of US net sales* 2025 net sales growth/(decline) 2024 net sales growth/(decline)** Waterworks 23% +13% +5% Ferguson Home 21% +1% (4%) Residential Trade Plumbing 15% (3%) Flat HV AC 12% (1%) +10% Commercial / Mechanical 15% +18% +5% Fire & Fabrication 3% +3% (11%) Facilities Supply 4% +2% (5%) Industrial 7% +4% Flat US 100% +5.1% +1.4% Twelve months ended December 31,
Page 8
Financial Review Bill Brundage, CFO
Page 9
$m (except per share amounts) 2025 2024 Change Net sales 31,316 29,818 +5.0% Gross margin 31.0% 30.3% +70 bps Adjusted operating profit* 3,011 2,705 +11.3% Adjusted operating margin* 9.6% 9.1% +50 bps Adjusted earnings per share – diluted* $10.58 $9.33 +13.4% Adjusted EBITDA* 3,243 2,905 +11.6% Net debt : adjusted EBITDA* 1.1x 1.2x CY2025 financial highlights *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 prov ided on a rolling 12 month basis. 9 Twelve months ended December 31, Strong performance in challenging markets
Page 10
CY2025 Fourth quarter financial highlights *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. 10 $m (except per share amounts) 2025 2024 Change Net sales 7,495 7,234 +3.6% Gross margin 30.6% 29.7% +90 bps Adjusted operating profit* 625 549 +13.8% Adjusted operating margin* 8.3% 7.6% +70 bps Adjusted earnings per share – diluted* $2.10 $1.88 +11.7% Adjusted EBITDA* 686 601 +14.1% Three months ended December 31,
Page 11
Customer group % of US net sales* 2025 net sales growth/(decline) 2024 net sales growth/(decline)** Waterworks 24% +9% +10% Ferguson Home 21% Flat (1%) Residential Trade Plumbing 15% (4%) (1%) HV AC 11% (7%) +16% Commercial / Mechanical 15% +18% +5% Fire & Fabrication 3% +4% (11%) Facilities Supply 4% +3% (3%) Industrial 7% +7% +4% US 100% +3.7% +3.9% US net sales 11 * For three months ended December 31, 2025. ** 2024 customer group allocations recast for Ferguson Home. Three months ended December 31,
Page 12
$m 2025 2024 Adjusted EBITDA* 3,243 2,905 Working capital (294) (106) Interest and tax (763) (759) Other items (5) 31 Operating cash flow 2,181 2,071 Capex (354) (328) Proceeds from the sale of assets 92 17 Free cash flow* 1,919 1,760 Cash flow – Full year * This is a non -GAAP measure. See the appendix to this presentation for more information and a reconciliation of adjusted EBITDA to the most comparable U.S. GAAP measure. Free cash flow is calculated as net cash provided by operating activities less capital expenditures plus proceeds from the sale of assets and divestitures, and the reconciliat ion is shown above where net cash provided by operating activities is reflected as operating cash flow. 12 Twelve months ended December 31,
Page 13
Calendar 2026 guidance 13 Calendar 2026 Guidance January 1 – December 31, 2026 Net sales Low to mid-single digit growth Adjusted operating margin* 9.4% - 9.8% Interest expense ~$200m Capital expenditures ~$350-400m Adjusted effective tax rate* ~26% * This is a non-GAAP measure. See slide 3 of this presentation for more information on forward-looking non-GAAP financial information.
Page 14
Market opportunities and strategy
Page 15
Ferguson is North America’s largest value-added distributor of essential water and air solutions, serving specialized professionals in our $340B residential and non- residential construction markets ~1/2 Residential ~2/3 Repair, Maintenance and Improvement (RMI) ~1/3 New construction Our balanced market exposure ~1/2 Non-residential $3.0B Adjusted operating profit* 9.6% adjusted operating margin* $31.3B Net sales 31.1% Return on capital employed* CY25 Compounding growth, delivering shareholder value Who we are Scale deployed locally • Multi-customer group approach • World-class supply chain • Value-added solutions and digital tools • Expert associates Structural trends • Large capital projects • Water infrastructure • Climate and comfort • Aging and underbuilt housing Strong financial performance • Above-market organic growth • Margin expansion • Cash generation • Disciplined capital deployment For additional information and footnotes, refer to appendix. 15 *This is a non -GAAP measure. See the appendix to this presentation for more information and a reconciliation of the non -GAAP mea sure to the most comparable U.S. GAAP measure. Adjusted operating margin is calculated as adjusted operating profit divided b y net sales.
Page 16
Essential water and air solutions Water and wastewater treatment Stormwater retention Geosynthetics Soil stabilization Stormwater solutions Data center Pipe, valves and fittings Fire protection Water transmission and distribution Smart metering solutions Industrial pipe, valves and fittings Fire protection Commercial plumbing Mechanical room solutions Commercial HVAC Fire protection Residential rough and finished plumbing Residential HVAC Appliances and lighting 16
Page 17
~37K Suppliers ~60M ft² Footprint 1,700+ Locations 6,000+ Fleet vehicles ~35K Associates 1M+ Products Highly-fragmented market 10,000+ small to midsized competitors ~1M Customers 17 For additional information and footnotes, refer to appendix
Page 18
18 ~1M Customers 33.5% Construction employment growth from 2014 to 2024 92% Of construction firms report difficulty filling skilled trades positions ~649K Average job openings per year through 2034 41% Of the construction workforce will retire by 2031 With the growing shortage of skilled trades professionals We help drive construction productivity For additional information and footnotes, refer to appendix
Page 19
19 People, products and solutions When and where our customers need them Locations within 60 miles of 95% of our customers Continual network optimization ~60M ft2 total footprint 1,700+ locations 6,000+ fleet vehicles Best breadth and depth 1M+ products 37K+ suppliers Own Brand 21 brands 10% of revenue Experts serving experts ~35K associates 250+ trainees annually Deep industry knowledge, commitment to service and long-term customer relationships Import Center Regional Distribution Center Branch Market Distribution Center
Page 20
20 HVAC $80B Market $4B Revenue Residential Trade Plumbing $30B Market $5B Revenue Ferguson Home $60B Market $6B Revenue Commercial / Mechanical $30B Market $5B Revenue Multi-customer group approach We engage early with owners, engineers and general contractors to deliver project success across multiple trades Waterworks $35B Market $7.5B Revenue Fire & Fabrication $4B Market $1B Revenue Facilities Supply $60B Market $1B Revenue Industrial $40B Market $2B Revenue For additional information and footnotes, refer to appendix
Page 21
Driving construction productivity for the specialized professional Value-added solutions End-to-end project management enabled by digital tools Virtual design and construction engineers delivering ~1,000 projects annually 60+ ~24% Of revenue transacted digitally Fabrication locations across the country with over 400 fabricators 40+ Strategically located valve automation centers 25+ 21
Page 22
22 Structural trends Large capital projects Water infrastructure Climate and comfort Aging and underbuilt housing
Page 23
Large capital projects Ferguson brings • Early engagement with owners, developers and general contractors • Expert associates including dedicated large capital projects teams • Multi-customer group approach • World-class supply chain • Tailored value-added solutions • Scale of vendor relationships 23 Focus areas Data centers Semi-conductors and chips Advanced manufacturing Energy Biotech production Healthcare Project cost $6T Project opportunity ~$90B We are in a multi-year build out of large-scale technology, infrastructure and manufacturing construction 4,000+ planned projects through 2031 For additional information and footnotes, refer to appendix
Page 24
Hyperscale data center 24 • Won with hyperscaler because of our multi-customer group capabilities • Led development of build strategy for liquid cooling assemblies • Partnered with customer on virtual design and modeling • Offsite fabrication with cutting-edge automated/robotic technology • Pre-assembled and tested components inclusive of pipe, valves and fittings • Implemented use of sustainable shipping containers • Integrated project management capabilities Waterworks, Commercial, Industrial and Fire & Fabrication Customer groups CASE STUDY $10B+ T otal project cost $40M Sales to date $100M Current open orders 5,700 Liquid cooling assemblies 57K Valves 12 miles Copper pipe 19 miles Water & fire lines
Page 25
Water infrastructure 25 Ferguson brings Focus areas • Water and wastewater treatment plants • Process solutions • Meter and metering technology • Geosynthetics and stormwater management • Infrastructure – public and private utilities Early engagement with public and private utilities and engineers Expertise from pre-bid to post-sale • Project management • Local specification knowledge • Digital estimation and value engineering • Design-build capabilities Intelligent utility solutions • Automated metering • Predictive AI technology and leak detection • Pressure and flow monitoring >$1T Expected investment needed for drinking water and clean water infrastructure over the next 20 years 81% Of utilities are implementing capital improvement plans 49 years Average age of US water pipe For additional information and footnotes, refer to appendix
Page 26
Climate and comfort 98% Of new single-family homes in 2024 had a central AC system Regulatory environment drives need for improved efficiency 800+ Contractor consolidations since 2022 leading to growing dual-trade contractor base 14% increase in cooling degree days since 2000 Ferguson brings 650+ full-service dual-trade HVAC and plumbing locations Broad access to multiple equipment lines, parts and supplies Focus areas • Counter expansion • Greenfield locations • M&A • OEM national partnerships • Own Brand • Digital investment • AHRI system builder • Comprehensive parts tool • Warranty verification and submission • Vendor managed inventory Digital tools and solutions Technical training and expertise 26 For additional information and footnotes, refer to appendix
Page 27
Aging and underbuilt housing 44 years Median age of housing 30% RMI growth over the next 10 years 2.8M Current housing shortage $36T In home equity value drives future RMI investment Ferguson brings Multi-customer group approach • Waterworks: Water, wastewater, stormwater, metering and erosion control • Residential Trade: Rough and finished plumbing and water heaters • Ferguson Home: Finished plumbing, lighting and appliances • HVAC: Broad access to equipment lines, parts and supplies • Ferguson Fire and Fabrication: Residential fire suppression • Facilities Supply: Multi-family renovation 250 best-in-class Ferguson Home showrooms Expert salesforce Inside sales | Outside sales | Showroom consultants | Builder sales Connected, digital experience Project management solutions Consultative approach for design and selection 27 For additional information and footnotes, refer to appendix
Page 28
28 Scale deployed locally • Multi-customer group approach • World-class supply chain • Value-added solutions & digital tools • Expert associates Structural trends • Large capital projects • Water infrastructure • Climate and comfort • Aging and underbuilt housing + = Strong financial performance • Above-market organic growth • Margin expansion • Cash generation • Disciplined capital deployment
Page 29
Revenue (US and Canada) Adjusted Operating Profit* (US, Canada and Central Costs) $14.2B $1.1B 7.5% 2015-2025** Adjusted operating profit* ~11% CAGR Adjusted operating margin* +210 bps Revenue ~8% CAGR FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 29 CY25 Total shareholder return*** +545% S&P 500 TSR over equivalent period +434% $31.3B $3.0B 9.6% Long-term track record of financial outperformance
Page 30
Strong cash generation ($B) 30 5-year ratio of operating cash flow to adjusted net income*107% $1.5 $2.1 $2.0 $2.0 $2.0 $2.1 $1.3 $1.1 $2.7 $1.9 $1.9 $2.2 FY21 FY22 FY23 FY24 FY25 CY25 * Ratio of operating cash to adjusted net income is calculated as net cash provided by operating activities divided by adjust ed net income. Here the ratio is calculated for the cashflows from FY21 through FY25. ** This is a non -GAAP measure. See the appendix to this presentation for more information and a reconciliation of the non -GAAP meas ure to the most comparable U.S. GAAP measure. Adjusted net income** Operating cash flow (continuing operations)
Page 31
Disciplined capital deployment 1-2X Target net leverage range ~$12B capital deployed over past 5 years* Returned via dividends $3.6B Invested in capex $1.6B Invested in M&A $2.1B Returned via share buybacks $4.4B 1. Invest in above- market organic growth 2. Invest in bolt-on geographic and capability acquisitions 3. Sustainably grow our dividend 4. Return surplus capital to shareholders * For fiscal years ended July 31, 2021 through fiscal year ended July 31, 2025 31
Page 32
10,000+ Total market competitors ~1,500 Competitor database ~300 Target list 100 Top strategic targets Accretive acquisitions 32 Geographic acquisitions • Consolidating fragmented markets • Associate expertise • Customer relationships • Leveraging market-leading capabilities Capability acquisitions • New products and solutions • Leverage across existing platform • Associate expertise • Customer and vendor relationships Generating $2B+ Incremental revenue ~2% Annual revenue growth 1-3% Incremental annual revenue growth opportunity 50+ Acquisitions made in the last five fiscal years Over the last five fiscal years
Page 33
Driving continued long-term growth 33 3-4% Over-market growth Market-leading capabilities drive consistent outperformance 1-3% Acquisition growth Further consolidating fragmented markets 6-11% Annual sales growth expectation 2-4% Market growth Our markets have historically outgrown GDP due to structurally attractive characteristics + + = The figures on this page are projections and estimates. See slide 2 of this presentation for more information on forward -looking statements.
Page 34
Driving sustainable margin expansion 34 • Project-based tools for sales, operations and supply chain • Incentives to drive collaboration and margin • AI investments to augment expert teams serving expert customers • Automation and AI for back-office productivity • Analytics-guided project bids and quotes • Dynamic pricing tailored to segment, service level and project complexity • Increased margins on expanded value - added solutions • Investment in distribution network to lower cost -to-serve • AI enabled demand forecasting to improve inventory efficiency • Automation and robotics to drive productivity • Technology and analytics to optimize fleet size, routing and delivery Pricing People Supply chain • Strategic vendor partnerships • Higher margin product mix • Expansion of product offering • Own Brand category growth Products
Page 35
5-year history** Long-term expected outlook Revenue ~9% 6-11% Flowthrough ~12% 11-14% Adjusted operating margin* expansion Avg. ~20 bps / year 10-30 bps / year Ratio of operating cash to adjusted net income* 107% ~100% Adjusted diluted earnings per share* growth ~15% Low double digit to mid-teens% Continued growth and improvement 35 Annual Report Compounding growth, delivering shareholder value
Page 36
36 Large, fragmented and growing markets Scale deployed locally Capitalizing on structural trends Disciplined capital allocation Our next milestone Medium-term Expected outlook $40B+ Revenue $4B+ Adjusted operating profit* 10%+ Adjusted operating margin* CY25 $31B Revenue $3B Adjusted operating profit* 9.6% Adjusted operating margin* * This is a non -GAAP measure. See the appendix to this presentation for more information and a reconciliation of the non -GAAP me asure to the most comparable U.S. GAAP measure. See slide 3 of this presentation for more information on forward -looking non -GAAP financial information. Adjusted operating marg in is calculated as adjusted operating profit divided by net sales.
Page 37
37 North America’s largest value-added distributor of essential water and air solutions Operating in large, fragmented and growing markets Leveraging scale with unique multi -customer group approach, world class supply chain, value -added solutions and expert associates Capitalizing on long-term structural trends of large capital projects, water infrastructure, climate & comfort and aging & underbuilt housing Track record of growth and strong financial performance Disciplined capital allocation, with a goal of compounding growth and shareholder returns Why Ferguson
Page 38
Appendix
Page 39
Earnings reconciliations
Page 40
40 Reconciliation of Net Income to Adjusted Operating Profit and Adjusted EBITDA (In millions) 2025 2024 2025 2024 Net income $389 $356 $2,006 $1,651 Provision for income taxes 145 109 578 695 Interest expense, net 48 48 190 179 Other expense, net 14 (4) 15 3 Operating profit 596 509 2,789 2,528 Restructuring activities(1) (5) — 74 26 Adjusted EBIT 591 509 2,863 2,554 Amortization of acquired intangibles 34 40 148 151 Adjusted Operating Profit 625 549 3,011 2,705 Depreciation and impairment of PP&E 55 44 204 170 Amortization and impairment of non-acquired intangibles 6 8 28 30 Adjusted EBITDA $686 $601 $3,243 $2,905 1. For the three and twelve months ended December 31, 2025, restructuring expenses primarily related to the Company’s implementa tion of targeted actions to streamline operations, enhancing speed and efficiency to better serve customers and drive further pr ofitable growth, including a gain on the sale of a closed distribution center in November 2025. For the twelve months ended December 31, 2024, restructuring expenses related to incremental costs in connection with establishing a new corporate structure to domicile our parent company in the United States as of August 1, 2024, and related transition activities thereafter. Three months ended December 31, Three months ended December 31, Twelve months ended December 31,
Page 41
Net Debt : Adjusted EBITDA reconciliation 41 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. (In millions, except ratios) 2025 2024 Long-term debt $3,978 $3,798 Short-term debt 148 400 Bank overdrafts(1) — 124 Derivative liabilities 2 6 Cash and cash equivalents (557) (722) Net debt $3,571 $3,606 Adjusted EBITDA(2) $3,243 $2,905 Net Debt / Adjusted EBITDA 1.1x 1.2x % of US net sales* 2025 net sales growth/(decline) 2024 net sales growth/(decline)** 24% +9% +10% 21% Flat (1%) 15% (4%) (1%) 11% (7%) +16% 15% +18% +5% 3% +4% (11%) 4% +3% (3%) 7% +7% +4% US 100% +3.7% +3.9% 1. Bank overdrafts are included in other current liabilities in the Company’s Consolidated Balance Sheets. 2. Adjusted EBITDA is on a rolling 12-month basis. As of December 31,
Page 42
Adjusted EBITDA (rolling 12-month) reconciliation 42 Adjusted EBITDA is net income before charges/credits relating to depreciation, amortization, impairment and certain non-GAAP adjustments. 1. For the twelve months ended December 31, 2025, restructuring expenses primarily related to the Company’s implementation of ta rgeted 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 distribution center in November 2025. For the twelve months ended December 31, 2024, restructuring expenses related to incremental costs in connection with establishing a new corporate structure to domicile our parent company in the United S tates as of August 1, 2024, and related transition activities thereafter. (In millions, except ratios) 2025 2024 Net income $2,006 $1,651 Provision for income taxes 578 695 Interest expense, net 190 179 Other expense, net 15 3 Restructuring activities(1) 74 26 Depreciation and amortization 380 351 Adjusted EBITDA $3,243 $2,905 Net Debt: Adjusted EBITDA 1.1x 1.2x Twelve months ended December 31,
Page 43
Return on Capital Employed 43 (In millions) 2025 Average net debt(1) $3,441 Average stockholders' equity(2) 5,751 Average capital employed 9,192 Return on capital employed (ROCE)(3) 31.1% 1. Management employs the following averaging method: net debt is on a rolling four quarter average as presented and defined on slide 51. 2. Management employs the following averaging method: GAAP total stockholders' equity on a rolling four quarter average. • Stockholders’ equity as at March 31, 2025 was $5,423 million; as at June 30, 2025 was $5,726 million; as at September 30, 202 5 was $5,997 million; and as at December 31, 2025 was $5,857 million. 3. ROCE is calculated as adjusted EBIT divided by average capital employed. See slide 40 for a reconciliation of adjusted EBIT. We have changed the averaging methodology used in our ROCE calculation from a beginning and end of year average calculation to a rolling four-quarter average calculation as this approach better reflects the seasonality of our business. As of December 31,
Page 44
44 Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS - Diluted (In millions, except per share amounts) 2025 2024 2025 2024 per share(1) per share(1) per share(1) per share(1) Net income $389 $1.99 $356 $1.78 $2,006 $10.16 $1,651 $8.18 Restructuring activities(2) (5) (0.03) — — 74 0.38 26 0.13 Amortization of acquired intangibles 34 0.18 40 0.20 148 0.75 151 0.75 Discrete tax adjustments(3) (2) (0.01) (10) (0.05) (87) (0.44) 94 0.46 Tax impact on non-GAAP adjustments(4) (5) (0.03) (10) (0.05) (53) (0.27) (39) (0.19) Adjusted net income $411 $2.10 $376 $1.88 $2,088 $10.58 $1,883 $9.33 Diluted weighted average shares outstanding 195.9 200.2 197.4 201.9 1. Per share on a dilutive basis. 2. For the three and twelve months ended December 31, 2025, restructuring expenses primarily related to the Company’s implementation 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 distribution center in November 2025. For the twelve months ended December 31, 2024, restructuring expenses related to increm ental costs in connection with establishing a new corporate structure to domicile our parent company in the United States as of August 1, 2024, and related transition activities thereafter. 3. For the three and twelve months ended December 31, 2025 and the three months ended December 31, 2024, discrete tax adjustments generally included the release of uncertain tax positions following the lapse of statute of limitations, adjustments in connection with amended returns and the tax treatment of certain compensation items, none of which were individually material. For the twelve months ended December 31, 2024, discrete tax adjustments primarily related to non-recurring, non-cash deferred tax charges of $137 million, resulting from the elimination of certain pre-existing U.K. tax attributes as part of the establishment of our parent company’s domicile in the United States as of August 1, 2024. This charge was partially offset by other discrete tax adjustments as noted for the three and twelve months ended December 31, 2025 and three months ended December 31, 2024. 4. For the three and twelve months ended December 31, 2025, the tax impact on non-GAAP adjustments primarily related to restructuring activities and the amortization of acquired intangibles. For the three and twelve months ended December 31, 2024, the tax impact on non-GAAP adjustments primarily related to the amortization of acquired intangibles. Twelve months ended December 31,Three months ended December 31,
Page 45
Historical Calendar Year Results
Page 46
Calendar Year Financial Highlights 46 US$ (In millions, except per share amounts) March 31, 2024 June 30, 2024 Sept, 30, 2024 Dec. 31, 2024 Dec. 31, 2024 Net sales 7,001 7,847 7,736 7,234 29,818 Gross profit 2,147 2,352 2,397 2,148 9,044 Gross margin 30.7% 30.0% 31.0% 29.7% 30.3% Net income 404 369 522 356 1,651 Adjusted operating profit* 622 766 768 549 2,705 Adjusted operating margin* 8.9% 9.8% 9.9% 7.6% 9.1% Adjusted earnings per share – diluted* $2.13 $2.66 $2.65 $1.88 $9.33 Adjusted EBITDA* 671 813 820 601 2,905 * This is a non -GAAP measure. See slides 49 - 50 for more information and a reconciliat ion of the non -GAAP measure to the most comparable U.S. GAAP measure. Adjusted operating margin is calculated as adjusted operating profit divided by net sales . Twelve months endedThree months ended
Page 47
Calendar Year Financial Highlights 47 US$ (In millions, except per share amounts) March 31, 2025 June 30, 2025 Sept. 30, 2025 Dec. 31, 2025 Dec. 31, 2025 Net sales 7,213 8,363 8,245 7,495 31,316 Organic revenue growth 3.8% 5.5% 5.5% 3.0% 4.5% Gross profit 2,216 2,613 2,583 2,296 9,708 Gross margin 30.7% 31.2% 31.3% 30.6% 31.0% Net income 345 634 638 389 2,006 Adjusted operating profit* 597 906 883 625 3,011 Adjusted operating margin* 8.3% 10.8% 10.7% 8.3% 9.6% Adjusted earnings per share – diluted* $2.09 $3.22 $3.18 $2.10 $10.58 Adjusted EBITDA* 651 963 943 686 3,243 * This is a non -GAAP measure. See slides 49 - 50 for more information and a reconciliat ion of the non -GAAP measure to the most comparable U.S. GAAP measure. Adjusted operating margin is calculated as adjusted operating profit divided by net sales . Twelve months endedThree months ended
Page 48
Calendar Year Segment Results 48 US$ (In millions) March 31, 2024 June 30, 2024 Sept. 30, 2024 Dec. 31, 2024 Dec. 31, 2024 Net sales: USA 6,695 7,439 7,337 6,878 28,349 Canada 306 408 399 356 1,469 Total net sales 7,001 7,847 7,736 7,234 29,818 Adjusted operating profit*: USA 630 766 756 545 2,697 Canada 4 20 19 17 60 Central and other costs (12) (20) (7) (13) (52) Total Adjusted operating profit* 622 766 768 549 2,705 * The Company uses adjusted operating profit as a measure of segment profit under U.S. GAAP. Three months ended Twelve months ended US$ (In millions) March 31, 2025 June 30, 2025 Sept. 30, 2025 Dec. 31, 2025 Dec. 31, 2025 Net sales: USA 6,904 7,947 7,821 7,135 29,807 Canada 309 416 424 360 1,509 Total net sales 7,213 8,363 8,245 7,495 31,316 Adjusted operating profit*: USA 611 899 875 639 3,024 Canada 6 23 22 3 54 Central and other costs (20) (16) (14) (17) (67) Total Adjusted operating profit* 597 906 883 625 3,011
Page 49
Reconciliation of Net Income to Adjusted Operating Profit and Adjusted EBITDA 49 US$ (In millions) March 31, 2025 June 30, 2025 Sept. 30, 2025 Dec. 31, 2025 Dec. 31, 2025 Net income $345 $634 $638 $389 $2,006 Provision for income taxes 124 156 153 145 578 Interest expense, net 46 49 47 48 190 Other (income) expense, net (8) 3 6 14 15 Operating profit 507 842 844 596 2,789 Restructuring expenses(1) 51 25 3 (5) 74 Amortization of acquired intangibles 39 39 36 34 148 Adjusted operating profit 597 906 883 625 3,011 Depreciation and impairment of PP&E 47 49 53 55 204 Amortization of non-acquired intangibles 7 8 7 6 28 Adjusted EBITDA $651 $963 $943 $686 $3,243 1. For periods presented in 2025, restructuring expenses primarily related to the Company’s implementation of targeted actions to streamline operations, enhancing speed and efficiency to better serve customers and drive further profitable growth, including a gain on the sale of a closed distribution center in November 2025. 2. For periods presented in 2024, restructuring expenses related to incremental costs in connection with establishing a new corporate structure to domicile our parent company in the United States as of August 1, 2024, and related transition activities thereafter. Three months ended Twelve months ended US$ (In millions) March 31, 2024 June 30, 2024 Sept. 30, 2024 Dec. 31, 2024 Dec. 31, 2024 Net income $404 $369 $522 $356 $1,651 Provision for income taxes 128 307 151 109 695 Interest expense, net 41 44 46 48 179 Other expense (income), net - 3 4 (4) 3 Operating profit 573 723 723 509 2,528 Restructuring expenses(1) 14 4 8 - 26 Amortization of acquired intangibles 35 39 37 40 151 Adjusted operating profit 622 766 768 549 2,705 Depreciation and impairment of PP&E 42 39 45 44 170 Amortization of non-acquired intangibles 7 8 7 8 30 Adjusted EBITDA $671 $813 $820 $601 $2,905
Page 50
Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS-Diluted 50 March 31, 2025 June 30, 2025 Sept. 30, 2025 Dec. 31, 2025 Dec. 31, 2025 US$ (In millions, except per share amounts) per share(1) per share(1) per share(1) per share(1) per share(1) Net income $345 $1.73 $634 $3.21 $638 $3.24 $389 $1.99 $2,006 $10.16 Restructuring expenses(2) 51 0.26 25 0.12 3 0.02 (5) (0.03) 74 0.38 Amortization of acquired intangibles 39 0.20 39 0.20 36 0.18 34 0.18 148 0.75 Discrete tax adjustments(3) 3 0.02 (46) (0.23) (42) (0.21) (2) (0.01) (87) (0.44) Tax impact on non-GAAP adjustments(4) (23) (0.12) (16) (0.08) (9) (0.05) (5) (0.03) (53) (0.27) Adjusted net income $415 $2.09 $636 $3.22 $626 $3.18 $411 $2.10 $2,088 $10.58 Diluted weighted average shares outstanding 199.0 197.5 196.9 195.9 197.4 1. Per share on a dilutive basis. 2. For periods presented in 2025, restructuring expenses primarily related to the Company’s implementation of targeted actions t o streamline operations, enhancing speed and efficiency to better serve customers and drive further profitable growth, including a gain on the sale of a closed distribution center in November 2025. 3. For the periods presented in 2025, discrete tax adjustments primarily related to the release of uncertain tax positions following the lapse of statute of limitations, adjustments in connection with amended returns and the tax treatment of certain compensation items, none of which were individually material. 4. For the periods presented in 2025, the tax impact on non-GAAP adjustments related to the restructuring expenses and the amortization of acquired intangibles. 5. For periods presented in 2024, restructuring expenses related to incremental costs in connection with establishing a new corporate structure to domicile our parent company in the United States as of August 1, 2024, and related transition activities thereafter. 6. For the three months ended June 30, 2024, the discrete tax adjustments primarily related to non -recurring, non-cash deferred tax charges of $137 million, resulting from the elimination of certain pre -existing U.K. tax attributes as part of the establishment of our parent company’s domicile in the United States as of August 1, 2024. For each of the periods presented in 2024, discrete tax adjustments generally included the release of uncertain tax positions following the lapse of statute of limitations, adjustments in connection with amended returns and the tax treatment of certain compensation items, none of which were individually material. 7. For the periods presented in 2024, the tax impact on non-GAAP adjustments primarily related to the amortization of acquired intangibles. Three months ended Twelve months ended (In millions) March 31, 2025 June 30, 2025 Sept. 30, 2025 Dec. 31, 2025 Dec. 31, 2025 $345 $634 $638 $389 $2006 Provision for income taxes 124 156 153 145 578 Interest expense, net 46 49 47 48 190 Other (income) expense, net (8) 3 6 14 15 507 842 844 596 2,789 Restructuring expenses(1) 51 25 3 (5) 74 Amortization of acquired intangibles 39 39 36 34 148 597 906 883 625 3,011 Depreciation and impairment of PP&E 47 49 53 55 204 Amortization of non-acquired intangibles 7 8 7 6 28 $651 $963 $943 $686 $3,243 March 31, 2024 June 30, 2024 Sept. 30, 2024 Dec. 31, 2024 Dec. 31, 2024 US$ (In millions, except per share amounts) per share(1) per share(1) per share(1) per share(1) per share(1) Net income $404 $1.99 $369 $1.82 $522 $2.59 $356 $1.78 $1,651 $8.18 Restructuring expenses(5) 14 0.07 4 0.02 8 0.04 - - 26 0.13 Amortization of acquired intangibles 35 0.17 39 0.20 37 0.18 40 0.20 151 0.75 Discrete tax adjustments(6) (10) (0.05) 136 0.67 (22) (0.11) (10) (0.05) 94 0.46 Tax impact on non-GAAP adjustments(7) (9) (0.05) (10) (0.05) (10) (0.05) (10) (0.05) (39) (0.19) Adjusted net income $434 $2.13 $538 $2.66 $535 $2.65 $376 $1.88 $1,883 $9.33 Diluted weighted average shares outstanding 203.5 202.6 201.6 200.2 201.9
Page 51
Net Debt: Adjusted EBITDA Reconciliation 1. Adjusted EBITDA is on a rolling 12 -month basis. 51 March 31, 2025 June 30, 2025 Sept. 30, 2025 Dec. 31, 2025 Dec. 31, 2024 US$ (In millions, except ratios) Debt 3,908 3,989 4,129 4,128 4,328 Cash and cash equivalents (596) (407) (832) (557) (722) Net debt 3,312 3,582 3,297 $3,571 3,606 Adjusted EBITDA(1) 2,885 3,035 3,158 $3,243 2,905 Net Debt : Adjusted EBITDA(1) 1.1x 1.2x 1.0X 1.1x 1.2x Net debt comprises bank overdrafts, bank and other loans and derivative financial instruments, excluding lease liabilities, less cash and cash equivalents. 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.
Page 52
Condensed Consolidated Statement of Earnings 52 March 31, June 30, September 30, December 31, December 31, (In millions, except per share amounts) 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 Net sales $7,213 $7,001 $8,363 $7,847 $8,245 $7,736 $7,495 $7,234 $31,316 $29,818 Cost of sales (4,997) (4,854) (5,750) (5,495) (5,662) (5,339) (5,199) (5,086) (21,608) (20,774) Gross profit 2,216 2,147 2,613 2,352 2,583 2,397 2,296 2,148 9,708 9,044 Selling, general and administrative expenses (1,565) (1,476) (1,650) (1,539) (1,640) (1,577) (1,610) (1,547) (6,465) (6,139) Restructuring expenses (51) (14) (25) (4) (3) (8) 5 - (74) (26) Depreciation and amortization (93) (84) (96) (86) (96) (89) (95) (92) (380) (351) Operating Profit 507 573 842 723 844 723 596 509 2,789 2,528 Interest expense, net (46) (41) (49) (44) (47) (46) (48) (48) (190) (179) Other expense, net 8 - (3) (3) (6) (4) (14) 4 (15) (3) Income before income taxes 469 532 790 676 791 673 534 465 2,584 2,346 Provision for income taxes (124) (128) (156) (307) (153) (151) (145) (109) (578) (695) Net earnings $345 $404 $634 $369 $638 $522 $389 $356 $2,006 $1,651 Earnings per share - Basic: $1.74 $1.99 $3.21 $1.83 $3.25 $2.60 $1.99 $1.78 $10.18 $8.19 Earnings per share - Diluted: $1.73 $1.99 $3.21 $1.82 $3.24 $2.59 $1.99 $1.78 $10.16 $8.18 Weighted average number of shares outstanding: Basic 198.8 202.9 197.4 202.0 196.5 201.1 195.7 200.0 197.1 201.5 Diluted 199.0 203.5 197.5 202.6 196.9 201.6 195.9 200.2 197.4 201.9 Three months ended Twelve months ended
Page 53
Condensed Consolidated Balance Sheet 53 (In millions) 2025 2024 Assets Cash and cash equivalents $557 $722 Accounts receivable, net 3,312 3,160 Inventories 4,588 4,363 Prepaid and other current assets 1,031 970 Assets held for sale 48 26 Total current assets 9,536 9,241 Property, plant and equipment, net 1,911 1,802 Operating lease right -of-use assets 1,832 1,616 Deferred income taxes, net 165 187 Goodwill 2,470 2,363 Other non-current assets 1,238 1,282 Total assets $17,152 $16,491 Liabilities and stockholders’ equity Accounts payable $3,117 3,111 Other current liabilities 2,008 2,132 Total current liabilities 5,125 5,243 Long-term debt 3,978 3,798 Long-term portion of operating lease liabilities 1,436 1,234 Other long-term liabilities 756 783 Total liabilities 11,295 11,058 Total stockholders' equity 5,857 5,433 Total liabilities and stockholders' equity $17,152 $16,491 As of December 31,
Page 54
(In millions) Dec. 31, 2025 Dec. 31, 2024 Cash flows from operating activities: Net income $2,006 $1,651 Other operating activities 175 420 Net cash provided by operating activities 2,181 2,071 Cash flows from investing activities: Purchase of businesses acquired, net of cash acquired (276) (297) Capital expenditures (354) (328) Other investing activities 85 10 Net cash used in investing activities (545) (615) Cash flows from financing activities: Cash dividends (656) (637) Other financing activities (1,192) (1,662) Net cash used in financing activities (1,848) (2,299) Change in cash, cash equivalents and restricted cash (212) (843) Effects of exchange rate changes 20 (27) Cash, cash equivalents and restricted cash, beginning of period 773 1,643 Cash, cash equivalents and restricted cash, end of period $581 $773 Condensed Consolidated Statements of Cash Flows 54 Twelve months ended Twelve months ended
Page 55
Footnotes to Market Update and Strategy section
Page 56
Notes All information is as of December 31, 2025 unless otherwise indicated Slide 15 | Our balanced market exposure 1. Residential/Non-residential proportion and RMI/New construction proportion are approximate and derived from management estimates as of CY2025 Slide 17 | Our business model 1. 10,000+ small to midsize competitors are approximates and derived from management estimates as of CY2025 Slide 18 | Growing shortage of skilled trades professionals. 1. 33.5% - Construction employment growth from 2014 to 2024 | U.S. Bureau of Labor Statistics, Employment Projections program, published August 28, 2025 2. ~649K - Average job openings per year through 2034 | U.S. Bureau of Labor Statistics, Occupational Outlook Handbook, published Aug 28, 2025 3. 92% - Of construction firms report difficulty filling skilled trades positions | Associated General Contractors of America, 2025 Workforce Survey, published 2025 4. 41% - Of the construction workforce will retire by 2031 | National Center for Construction Education and Research, How Apprenticeships Empower Adult Learners and Bridge the Construction Workforce Gap, published April 30, 2025 Slide 20 | Multi-customer group approach 1. Total addressable market calculations are approximate and derived from management estimates as of CY2025 2. Customer group revenue has been rounded based on CY2025 totals Slide 23 | Large capital projects 1. 4,000+ planned projects through 2031 | Management estimates as of January 2026 based on third-party data from Dodge Data and Analytics and Industrial Info Resources for planned projects >$400m. 2. $6T project cost and ~$90B project opportunity | Management estimates as of CY2025 based on third-party data from Dodge Data and Analytics and Industrial Info Resources that was adjusted to more accurately reflect projects and opportunities that are realistically addressable by the Company’s products and solutions. 56
Page 57
Notes Slide 25 | Water infrastructure 1. 49 years - Average age of US water pipe | Center for Sustainable Systems, University of Michigan. 2025. "U.S. Water Supply and Distribution Factsheet." Pub. No. CSS05 -17 2. >$1T - Expected investment needed for drinking water and clean water infrastructure over the next 20 years | EPA, 2022 Clean Watersheds Needs Survey, Report to Congress , published April 24, 2025 and EPA, "Drinking Water Infrastructure Needs Survey and Assessment, 7th Report to Congress", published September 2023 3. 81% of utilities are implementing capital improvement plans | American Water Works Association, State of the Water Industry, published June 5, 2024 Slide 26 | Climate and comfort 1. 14% increase in cooling degree days since 2000 | Management estimates as of January 2026 based on third -party data from NOAA National Centers for Environmental information, Climate at a Glance: National Time Series, published February 2026 2. 98% of new single -family homes in 2024 had a central AC system | National Association of Home Builders Economic Research Blog, https://eyeonhousing.org/2025/09/hvac -in-new-construction- in-2024/, published September 4, 2025 3. 800+ Contractor consolidations since 2022 leading to growing dual -trade contractor base | Wall Street Journal, “ America’s New Millionaire Class: Plumbers and HVAC Entrepreneurs”, published October 12, 2024 Slide 27 | Aging and underbuilt housing 1. 2.8M Current housing shortage | J.P. Morgan Private Bank, https://privatebank.jpmorgan.com/nam/en/insights/markets -and-investing/tmt/a-shortage-of-supply-the-housing-market-explained, published October 17, 2025 2. 44 years - Median age of housing | U.S. Census Bureau, U.S. Department of Commerce. "Median Year Structure Built." American Com munity Survey, ACS 5 -Year Estimates Detailed Tables, Table B25035, https://data.census.gov/table/ACSDT5Y2023.B25035 , accessed January 2026 3. $36T - In home equity value drives future RMI investment | Board of Governors of the Federal Reserve System (US), Households; Owners' Equity in Real Estate, Level OEHRENWBSHNO, retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/OEHRENWBSHNO , updated January 15, 2026 4. 30% - RMI growth over the next 10 years | Management estimates from an annual growth rate of the Home Improvement Research Institute (HIRI), US Home Improvement Products Market Forecast, September 2025 in addition to the NAHB Private Residential Improvements Spending Forecast and Age of Housing Report, January 2026 Slide 29 | Long-term track record of financial outperformance 1. For the fiscal years ended 2015 -2021, revenue was calculated in accordance with International Financial Reporting Standards ("IF RS") and underlying trading profit, an IFRS -derived alternative performance measure, was most analogous to adjusted operating profit. There are nonmaterial differences between ( i) revenue as calculated in accordance with IFRS and U.S. GAAP; and (ii) underlying trading profit (as derived from IFRS profit for the year) and adjusted operating profit (as derived from U.S. GAAP net income). 57
Page 58
Reconciliations to Market Update and Strategy section
Page 59
Reconciliation of Net Income to Adjusted Operating Profit (In millions) 2025 Net income $2,006 Provision for income taxes 578 Interest expense, net 190 Other expense, net 15 Operating profit 2,789 Restructuring activities(1) 74 Adjusted EBIT 2,863 Amortization of acquired intangibles 148 Adjusted Operating Profit 3,011 59 Twelve months ended December 31, 1. For the twelve months ended December 31, 2025, restructuring expenses primarily related to the Company’s implementation of ta rgeted 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 distribution center in November 2025.
Page 60
Return on Capital Employed (In millions) 2025 Average net debt(1) $3,441 Average stockholders' equity(2) 5,751 Average capital employed 9,192 Return on capital employed (ROCE)(3) 31.1% 60 1. Management employs the following averaging method: net debt is on a rolling four quarter average as presented and defined on slide 61. 2. Management employs the following averaging method: GAAP total stockholders' equity on a rolling four quarter average. • Stockholders’ equity as at March 31, 2025 was $5,423 million; as at June 30, 2025 was $5,726 million; as at September 30, 202 5 was $5,997 million; and as at December 31, 2025 was $5,857 million. 3. ROCE is calculated as adjusted EBIT divided by average capital employed. See slide 59 for a reconciliation of adjusted EBIT. We have changed the averaging methodology used in our ROCE calculation from a beginning and end of year average calculation to a rolling four -quarter average calculation as this approach better reflects the seasonality of our business. As of December 31,
Page 61
Net debt comprises bank overdrafts, bank and other loans and derivative financial instruments, excluding lease liabilities, less cash and cash equivalents. March 31, June 30, Sept. 30, Dec. 31, US$ (In millions) 2025 2025 2025 2025 Debt 3,908 3,989 4,129 4,128 Cash and cash equivalents (596) (407) (832) (557) Net debt 3,312 3,582 3,297 $3,571 Net Debt 61
Page 62
Reconciliation of Net Income to Adjusted Net Income (In millions) 2021 2022 2023 2024 2025 2025 Net income $1,472 $2,122 $1,889 $1,735 $1,856 $2,006 Loss (income) from discontinued operations (net of tax) 158 (23) - - - - Income from continuing operations 1,630 2,099 1,889 1,735 1,856 2,006 Business restructuring activities(1) (11) - 18 - 73 67 Corporate restructuring expenses(2) 22 17 - 28 7 7 Amortization of acquired intangibles 131 114 133 144 156 148 Impairments and other charges(3) - - 107 - - - Discrete tax adjustments(4) (203) (72) (36) 101 (52) (87) Tax impact on non-GAAP adjustments(5) (51) (21) (73) (36) (59) (53) Adjusted net income $1,518 $2,137 $2,038 $1,972 $1,981 $2,088 62 1. For the tw elve months ended July 31, 2025 and December 31, 2025, business restructuring primarily related to the Company’s implementation of targeted actions to streamline operat ions, enhancing speed and efficiency to better serve customers and drive further profit able growth, including a gain on the sale of a closed dist ribution cent er in November 2025. For the twelve months ended July 31, 2023, business rest ruct uring primarily related to charges associated with t he closure of certain smaller, underperforming branches in the United States. For the twelve mont hs ended July 31, 2021, business rest ruct uring reflects the release of provisions in connection with previously ant icipated COVI D-19 cost actions recorded in fiscal 2020. 2. For the tw elve months ended July 31, 2025 and December 31, 2025, the Company recorded corporate rest ruct uring expenses that were primarily related to transition activities following the establishment of our parent company’s domicile in the United States. During t he t welve months ended July 31, 2024, corporate restructuring expenses primarily related to establishing a new corporate structure t o domicile our parent company in the United States. For the twelve months ended July 31, 2022 and 2021, corporate restructuring costs primarily related to t he incremental costs of the Company’s list ing in the United St ates. 3. For the tw elve months ended July 31, 2023, impairments and other charges related to $107 million in software impairment charges. 4. For the tw elve months ended December 31, 2025, discrete tax adjustments generally included the release of uncertain tax positions following the lapse of statute of limitations, adjustment s in connection with amended returns and t he t ax treat ment of certain compensat ion it ems, none of which were individually material. For t he t welve months ended July 31, 2025, discret e tax adjustments primarily related to the release of uncertain tax positions following t he lapse of statute of limit ations, as w ell as adjust ments in connection with amended returns. For the tw elve months ended July 31, 2024, discrete tax adjust ments primarily related to non-recurring, non-cash deferred tax charges of $137 million, resulting from the elimination of certain pre-existing U.K. tax at tributes as part of t he est ablishment of our parent company’s domicile in the United States, partially off set by the release of uncertain tax posit ions, as well as the t ax treat ment of certain compensation items t hat were not individually signif icant . For the tw elve months ended July 31, 2023, discrete tax adjust ments primarily related to the release of uncertain tax positions following t he lapse of statute of limit ations, as well as adjustments in connection with amended returns. For the tw elve months ended July 31, 2022, the discrete tax adjust ments primarily related to the release of uncertain tax positions following the closure of tax audits and prior year adjustments, including amended t ax return items. For the tw elve months ended July 31, 2021, the discrete tax adjust ments primarily related to the release of uncertain tax positions following the closure of t ax audits, as well as t he impact of changes in tax rat es. 5. For the tw elve months ended July 31, 2025 and December 31, 2025, the tax impact on non-GAAP adjustments primarily related to restructuring activit ies and t he amort ization of acquired intangibles. For the twelve months ended July 31, 2024, 2022 and 2021, the t ax impact of non-GAAP adjustments primarily related to the amortizat ion of acquired intangibles. For t he t welve months ended July 31, 2023, the tax impact on non-GAAP adjustments primarily related to the software impairments, business restructuring expenses and amortization of acquired int angibles. Twelve months ended July 31, Twelve months ended December 31,
Page 63
Thank you