U.K.-based Ferguson Plc — known as the world's largest distributor of plumbing supplies — reported its 2020 fourth quarter and full-year financial results on Tuesday for its fiscal year that ended July 31, and the figures reflected ongoing weakness in the United States' industrial products market.
Pertaining to the US industrial supply market, Ferguson said that its US industrial organic sales — comprising 7 percent of the company's total US sales — were down 11.8 percent year-over-year. The company estimates that its US industrial unit's market growth fell 13 percent, including a 6 percent decline in the first half of fiscal 2020 and a 13 percent drop in the second half.
"(US) Industrial markets have remained challenging through the year due in part to depressed oil prices and a tough operating environment for manufacturing during the pandemic," the company said in its earnings release.
Ferguson's total US sales in 2020 were $18.9 billion, with its US industrial sales at $1.32 billion. Ferguson is the parent company of Newport News, VA-based industrial distributor Wolseley Industrial Group (No. 13 on Industrial Distribution's 2020 Big 50 List), which reported 2019 total sales of $1.75 billion to Industrial Distribution. Ferguson's 2020 US total sales were up 2.7 percent year-over-year as organic sales managed 0.4 percent growth. Organic growth progressed from growth of 3.1 and 2.1 percent in Q1 (Aug-Oct '19) and Q2 (Nov '19-Jan '20) to declines of 1.0 and 2.4 percent in Q3 (Feb-Apr) and Q4 (May-July), respectively.
Recapping its 2020 cost-savings measures in the US, Ferguson said those included a hiring freezer, reduced associate hours, overtime and temporary staff and temporary layoffs implemented in the worst-hit regions. Ferguson had reduced its permanent net US headcount by approximately 1,400 as of late September and consolidated 78 branch locations to "appropriately size the business for the post-COVID-19 operating environment."
Ferguson's Canada total sales of $1.08 billion were down 9.1 percent year-over-year, with organic sales down 8.0 percent.
Also Tuesday, Ferguson announced the appointment of Bill Brundage as the company's new chief financial officer and an executive director, effective Nov. 1. Brundage is currently CFO of subsidiary Ferguson Enterprises, where he has 17 years of experience in senior finance roles.
Brundage succeeds Mike Powell, who will step down as group CFO and an executive director on Oct. 31.