Ferguson : EXCERPTS FROM THE U.K. PROSPECTUS - Form 8-K

EXCERPTS FROM THE U.K. PROSPECTUS

The following definitions apply throughout this exhibit unless the context otherwise requires:

PART V - PROFIT FORECAST

General

On March 5, 2024, Ferguson issued its financial results for the six months ended January 31, 2024 containing the following information, which includes a profit forecast (the "Profit Forecast"):

"FY2024 Guidance (unchanged)

Kevin Murphy, Ferguson CEO, commented, "Our associates continued to execute well during our seasonally lightest quarter. While sales were slightly lower than the prior year, organic performance improved from the first quarter. Current open orders and sales per day trends support our expectation of improvement through the balance of the fiscal year against easing comparables. We are appropriately managing costs as we prepare for our seasonally stronger second half. We delivered strong operating cash flow during the first half of our fiscal year and our strong balance sheet positions us for continued investment in organic growth, sustainable dividend growth, consolidation of our fragmented markets through acquisitions and the continued return of capital to shareholders.

"Our FY2024 financial guidance is unchanged. We are well positioned to leverage emerging multi-year structural tailwinds in non-residential construction and opportunities to further support the residential trade professional.""

The Profit Forecast constitutes a profit forecast under the Prospectus Regulation Rules. The Board has considered and confirms that the Profit Forecast continues to be valid at the date of the U.K. Prospectus.

Adjusted operating margin is defined as adjusted operating profit divided by net sales, where adjusted operating profit is defined as operating profit before restructuring costs, impairments and other charges, and acquisition related intangible amortization. For more information, see "Non-GAAP Financial Measures and Supplementary Information".

Basis of preparation

The Profit Forecast has been properly compiled on the basis of the assumptions stated below and on a basis consistent with Ferguson's accounting policies, which are in accordance with U.S. GAAP and are those which Ferguson anticipates will be applicable for the financial year ending July 31, 2024, subject to the early adoption of standards where the Directors believe appropriate.

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The Directors have prepared the Profit Forecast on the basis of (i) the Audited 2023 Financial Statements; (ii) the Unaudited Q2 Financial Statements; and (iii) a forecast for the six months ending July 31, 2024.

Assumptions

Factors outside the influence of the Directors

During the financial year ending July 31, 2024:

Factors within the influence of the Directors

During the financial year ending July 31, 2024:

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PART IV - CAPITALIZATION AND INDEBTEDNESS

The capitalization and indebtedness information set out below has been extracted without material adjustment from the Unaudited Q2 Financial Statements.

Capitalization

The table below sets out the capitalization of Ferguson as at January 31, 2024.

Notes:

Indebtedness

The table below sets out the net indebtedness of Ferguson as at January 31, 2024.

There has been no material change in Ferguson's capitalization and indebtedness position since January 31, 2024.

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Cautionary Note Regarding Forward-Looking Statements

Certain information included in this exhibit is forward-looking, including within the meaning of the Private Securities Litigation Reform Act of 1995, and involves risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied by forward-looking statements. Forward-looking statements cover all matters which are not historical facts and include, without limitation, statements or guidance regarding or relating to our future financial position, results of operations and growth, the Profit Forecast, the Merger, the benefits of the Merger, our ability to manage the risks relating to the Merger, plans and objectives for the future including our capabilities and priorities, risks associated with changes in global and regional economic, market and political conditions, ability to manage supply chain challenges, ability to manage the impact of product price fluctuations, our financial condition and liquidity, legal or regulatory changes and other statements concerning the success of our business and strategies. Forward-looking statements can be identified by the use of forward-looking terminology , including terms such as "believes," "estimates," "anticipates," "expects," "forecasts," "guidance," "intends," "continues," "plans," "projects," "goal," "target," "aim," "may," "will," "would," "could" or "should" or, in each case, their negative or other variations or comparable terminology and other similar references to future periods. Forward-looking statements speak only as of the date on which they are made. They are not assurances of future performance and are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Therefore, you should not place undue reliance on any of these forward-looking statements. Although we believe that the forward-looking statements contained in this exhibit are based on reasonable assumptions, you should be aware that many factors could cause actual results to differ materially from those in such forward-looking statements, including, but not limited to: any changes in the underlying assumptions of the Profit Forecast, the Merger may be delayed, cancelled, suspended or terminated; unexpected costs for us and any unanticipated or other adverse consequences to us or our shareholders relating to the Merger; the conditions to the completion of the Merger, including shareholder approval, may not be satisfied; the benefits of the Merger may not be realized; weakness in the economy, market trends, uncertainty and other conditions in the markets in which we operate, and other factors beyond our control, including disruption in the financial markets and any macroeconomic or other consequences of political unrest, disputes or war; 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, as well as the repair, maintenance and improvement ("RMI") and new construction markets; changes in competition, including as a result of market consolidation or competitors responding more quickly to emerging technologies (such as generative artificial intelligence ("AI")); failure of a key information technology system or process as well as exposure to fraud or theft resulting from payment-related risks; privacy and protection of sensitive data failures, including failures due to data corruption, cybersecurity incidents or network security breaches; ineffectiveness of or disruption in our domestic or international supply chain or our fulfillment network, including delays in inventory availability at our distribution facilities and branches, increased delivery costs or lack of

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availability; 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; failure to attract, retain and motivate key associates; exposure of associates, contractors, customers, suppliers and other individuals to health and safety risks; inherent risks associated with acquisitions, partnerships, joint ventures and other business combinations, dispositions or strategic transactions; regulatory, product liability and reputational risks and the failure to achieve and maintain a high level of product and service quality; inability to renew leases on favorable terms or at all, as well as any remaining obligations under a lease when we close a facility; changes in, interpretations of, or compliance with tax laws in the United States, the United Kingdom, Switzerland or Canada; our indebtedness and changes in our credit ratings and outlook; fluctuations in product prices (e.g., commodity-priced materials, inflation/deflation) and foreign currency; funding risks related to our defined benefit pension plans; legal proceedings as well as failure to comply with domestic and foreign laws, regulations and standards, as those laws, regulations and standards or interpretations and enforcement thereof may change, or the occurrence of unforeseen developments such as litigation; our failure to comply with the obligations associated with being a U.S. domestic issuer and the costs associated therewith; the costs and risk exposure relating to environmental, social and governance ("ESG") matters, including sustainability issues, regulatory or legal requirements, and disparate stakeholder expectations; adverse impacts caused by a public health crisis; and other risks and uncertainties set forth under the heading "Risk Factors" in the definitive proxy statement filed by Ferguson plc with the Securities and Exchange Commission (the "SEC") on April 18, 2024 and the prospectus filed by New TopCo with the SEC on April 18, 2024, and in other filings we or New TopCo 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.

Non-GAAP Financial Measures and Supplementary Information

This exhibit contains certain financial information that is not presented in conformity with U.S. GAAP. These non-GAAP financial measures include adjusted operating margin and adjusted effective tax rate. 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 Board. Such non-GAAP adjustments include amortization of acquired intangible assets, discrete tax items, and any other items that are non-recurring.Non-recurring items may include various restructuring charges, gains or losses on the disposals of businesses which by their nature do not reflect primary operations, as well as certain other items deemed non-recurring in nature and/or that are not a result of the Company's primary operations. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These non-GAAP financial measures should not be considered in isolation or as a substitute for results reported under U.S. GAAP. These non-GAAP financial measures reflect an additional way of viewing aspects of operations that, when viewed with U.S. GAAP results, provide a more complete understanding of the business. The Company strongly encourages investors and shareholders to review the Company's financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. The Company does not provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures on a forward-looking basis because it is unable to predict with reasonable certainty or without unreasonable effort non-recurring items, such as those described above, that may arise in the future. The variability of these items is unpredictable and may have a significant impact.

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