1. 2 Preliminary Results For The Year Ended 31 July 2004 27 September 2004 This presentation contains certain forward-looking statements as defined under

1

2

Preliminary Results For The Year Ended 31 July 2004

27 September 2004

This presentation contains certain forward-looking statements as defined under US legislation (Section 21E of the Securities Exchange Act of 1934). By their nature, such statements involve uncertainty; as a consequence, actual

results and developments may differ from those expressed in or implied by such statements.

3

Charlie BanksGroup Chief Executive

4

Operating Highlights

• Eighth consecutive year of record results with sales above £10 billion

•UK sales break £2 billion and Canada tops C$1 billion

• Group organic sales growth of 13.1%, includes 25.8% at Stock and

15.0% at Ferguson, (including benefits of commodity price inflation)

• Ferguson achieves a 6.8% trading margin, beating its 6.0% target a

year ahead of schedule

• Improvement in trading margin achieved in each of the businesses in

the US, UK, France and Italy

• Restructuring complete in Stock, Brossette and Ferguson

• Market share gains in key markets

5

Steve Webster Group Finance Director

6

Financial Highlights

• Sales up 23.2% to £10.1 billion (2003: £8.2 billion)

• Trading profit up 30.9% to £619.2 million (2003: £472.9 million)

• Currency translation effect reduces sales by £400.1 million (4.9%) and trading profit by £21.5 million (4.5%)

• Group trading margin up from 5.8% to 6.1%

• Pre-tax profit (before goodwill amortisation) up 31.2% to £598.1 million

• Effective tax rate reduced to 27.1%

• EPS (before goodwill amortisation) up 32.0% to 74.84 pence

• Gearing 49.5% (2003: 46.6%)

• Working capital to sales ratio down from 15.4% to 15.2% of sales

• Return on gross capital employed 18.4% (2003: 16.7%)

• Total dividends up 12.3%

Strong sales, profit and ROGCE growth

7

Summary of Results

Constant£m £m Currency

2004 2003 £m % Basis %

Sales 10,128.1 8,221.0 1,907.1 23.2 29.5Operating profit- before goodwill amortisation 619.2 472.9 146.3 30.9 37.2- goodwill amortisation (39.0) (29.9)

Profit before interest 580.2 443.0 137.2 31.0 37.3

Interest (21.1) (17.0)

Profit before tax- before goodwill amortisation 598.1 455.9 142.2 31.2 37.3- goodwill amortisation (39.0) (29.9)

Total 559.1 426.0 133.1 31.2 37.4

Change

8

Currency Effect

• Reduces sales by £400.1 million (4.9%)• Reduces trading profit by £21.5 million (4.5%)

2004 2003

Currency Effect

US $

Profit & Loss 1.7522 1.5951 -9.0%

Balance Sheet 1.8198 1.6076 -11.7%

Euro

Profit & Loss 1.4635 1.5039 +2.8%

Balance Sheet 1.5144 1.4171 -6.4%

10% currency movement affects profit before tax by 7.9%

9

FY 2003 FY 2004Interest Acquisitions Construction

LoansWorking Capital

Operating Cashflow

Interest Rate Decrease

Foreign Exchange

Interest

£17.0m £13.6m (£0.4m) £4.5m (£9.8m) (£2.7m) (£1.1m) £21.1m

Increase in Interest Charge

Interest cover 27 times (2003: 26 times)

10

Cash Flow

2004 2003£m £m

Operating profit 580.2 443.0Depreciation 107.9 93.1Goodwill amortisation 39.0 29.9Decrease in working capital (401.9) 41.7

Cash flow from operating activities 325.2 607.7Acquisitions (123.5) (507.2)Capital expenditure (135.6) (108.2)Interest paid (13.4) (24.8)Tax paid (128.1) (108.1)Dividends paid (136.0) (113.0)Translation difference 85.0 (19.3)Other 11.7 (8.2)

(Increase)/decrease in net debt (114.7) (281.1)

Gearing 49.5% 46.6%

11

Working CapitalCash Flow

Improved working capital to sales ratio from 15.4% to 15.2% of sales

2004 2003£m £m

Increase in stocks (274.3) (48.3)Increase in debtors (236.3) (32.9)Increase in creditors and provisions 108.6 123.0Increase/(Decrease) in net construction loans 0.1 (0.1)

Working capital cash flow (401.9) 41.7

12

Cash Flow Generation

2004 2003 2002 2001 2000£m £m £m £m £m

Cash flow from operating activities 325 608 584 518 390Maintenance Capex (108) (93) (93) (85) (74)Tax (128) (108) (120) (91) (113)Dividends (136) (113) (100) (91) (81)Interest (13) (25) (23) (37) (24)

Free cash flow (60) 269 248 214 98Acquisitions less disposals (123) (504) (162) (388) (163)Expansion capex (28) (15) (7) (28) (49)Other 96 (31) 69 (37) (31)

Movement in debt (115) (281) 148 (239) (145)

13

Acquisitions

Spend Turnover£m full year

£m

European Distribution 59.5 117.2

North American Plumbing& Heating Distribution 28.1 94.7

US Building Materials Distribution 35.9 92.9

123.5 304.8

Six acquisitions agreed since year end for £143 million will add sales of £205 million in a full year

14

Branch Numbers

31 July 2003

Net new openings

Acquired31 July

2004

UK, including Ireland 1,416 97 - 1,513Mainland Europe 850 7 23 880US Plumbing & Heating 738 15 20 773Canada 223 7 5 235US Building Materials 222 - 14 236

Total Group 3,449 126 62 3,637

15

Balance Sheet

£m £m

Fixed assets- Goodwill 665.9 686.8- Tangible assets 719.0 716.8

1,384.9 1,403.6Net current assets (excluding debt) 1,615.1 1,341.2Net debt (941.4) (826.7)Provisions (156.7) (143.9)

Shareholders' funds 1,901.9 1,774.2

Increase 7.2%

16

Provisions

2004 2003£m £m

Pensions 48.0 52.1Wolseley insurance 33.4 32.1Environmental & Legal 29.4 27.7Deferred Taxation 31.0 22.7Other 14.9 9.3

156.7 143.9

As at 31 July

Estimated liability for asbestos litigation is £27.9 million(2003: £26.2 million)

17

Pensions

2004 2003£m £m

Market Value of Pension Liability 583 546Market Value of Pension Assets (400) (340)

183 206

Pension provisions under current UK GAAP (48) (50)Deferred tax asset (41) (48)

FRS17 adjustment to net assets 94 108

As at 31 July

Actuarial review of UK scheme - £6 million additional charge for 2004/05

18

European Distribution

Constant2003 Acquisition Exchange 2004 Change Currency£m £m £m % £m £m % Change

%

Sales 2,956.7 1,093.0 168.0 5.6 30.3 4,248.0 43.7 42.2

Trading profit 193.2 58.4 10.0 5.1 1.6 263.2 36.2 35.1

Trading margin 6.5% 6.2%

Organic change

19

NA Plumbing & Heating Distribution


%

Sales 3,551.5 109.4 452.3 13.8 (276.8) 3,836.4 8.0 17.2

Trading profit 202.2 5.2 60.5 32.5 (15.9) 252.0 24.6 35.3


Organic change

20


%

Sales 1,712.8 81.6 402.9 25.8 (153.6) 2,043.7 19.3 31.1

Trading profit 77.5 5.5 28.2 40.1 (7.2) 104.0 34.2 47.9


Organic change

US Building Materials Distribution

21

$365$362

$445

$373

$390

$372

$313 $313$287

$378

$200

$250

$300

$350

$400

$450

$500

$550

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

US

$p

er t

ho

usa

nd

bo

ard

fee

t

$365$362

$445

$373

$390

$372

$313 $313$287

$378

$200

$250

$300

$350

$400

$450

$500

$550

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

US

$p

er t

ho

usa

nd

bo

ard

fee

t

Average Lumber Prices 1995 - 2004

Year to July

2004 price of $378 - up 31.7% (2003: $287)

22

International Accounting Standards

• Introduce for year ending 31 July 2006

• Goodwill

• Intangibles

• Property leases

• Share options

• Pensions

• Deferred tax

• Dividends

• Introduce for year ending 31 July 2006

• Goodwill

• Intangibles

• Property leases

• Share options

• Pensions

• Deferred tax

• Dividends

23

Financial HighlightsSummary

• Sales up more than 20% and profits and earnings up more than 30%

• Increase in Group’s trading margin

• Improved working capital to sales ratio

• Significant increase in ROGCE

• Strong balance sheet

• Sales up more than 20% and profits and earnings up more than 30%

• Increase in Group’s trading margin

• Improved working capital to sales ratio

• Significant increase in ROGCE

• Strong balance sheet

24

Charles Banks Group Chief Executive

25

Operational ReviewEurope

Wolseley UK

• Strongest economy in Europe

• Re-branding to Wolseley UK and restructuring to two office locations

• Sales increased 11.5% to £2.1 billion

• Organic growth of 6.3%

• Increase in gross margin

• Trading margin increased from 7.6% to 7.8%

• 97 new locations added

• Distribution centres drive to increased efficiency

• Completed Brooks acquisition in Ireland to complement Heatmerchants

26


Wolseley France

• French market showing signs of improvement• Wolseley France sales up £1.0 billion to £1.6 billion• Brossette sales up 6%, with more than 3% organic growth

• Trading margin back over 6%• Branch and management structure and distribution network

reorganised• PBM performed ahead of expectations with sales and profits up

• Underlying trading margin higher before absorbing the additional costs of restructuring and branch re-branding programme

• More scope for synergies

27


Rest of Continental Europe

• Markets in Continental Europe mainly flat

• Market slow in Austria but business achieves double-digit profit increase

• Sales up more than 10% in The Netherlands despite slow market

• Restructuring branches and logistics

• More diverse product offering for RMI market

• Italian organic sales growth of more than 9%, trading profit up 30% and trading margin of 5% for the first time

• Sales and profits up more than 10% in Luxembourg

• Tobler, in Switzerland, sales ahead and profits up more than 30%

Rest of Continental Europe

• Markets in Continental Europe mainly flat

• Market slow in Austria but business achieves double-digit profit increase

• Sales up more than 10% in The Netherlands despite slow market

• Restructuring branches and logistics

• More diverse product offering for RMI market

• Italian organic sales growth of more than 9%, trading profit up 30% and trading margin of 5% for the first time

• Sales and profits up more than 10% in Luxembourg

• Tobler, in Switzerland, sales ahead and profits up more than 30%

28

Operational ReviewNorth American Plumbing & Heating

• Outstanding performance with increased market share and strong organic sales and profit growth

• Benefit of commodity price inflation

• Residential and remodelling held up well

• Industrial & commercial soft but commercial likely to improve

• Benefits of being a single plumbing and heating company evident

• New Distribution Centre opened in Washington State in November, next one will open in Iowa this financial year

• Sales up 18% (15% organic)

• Net margins of 6.8%, beating 6% target a year early

• 50 new XpressNet branches to be rolled out this year

US

29

Operational ReviewNorth American Plumbing & Heating

• Strong performance with increased market share –

• C$1 billion of sales for first time

• Strong organic sales growth of 5%

• Good residential market supported by low interest rates

Canada

30

Operational ReviewUS Building Materials Distribution

• Resilient housing market overall supported by good job opportunities and low interest rates

• NOVA re-engineering project complete

• Consolidated purchasing, payables and credit across districts

• Cost saving of more than $5 million achieved in 2004

• Deeper focus on customer segments, reducing reliance on new housing, and expanding value-added products

• Helped by higher lumber and structural panel prices although expect these to trend down

• Synergies with Ferguson on indirect spend and market initiatives

• Further improvement in sales and margins to come

31

Corporate Review

• Common IT platform (SWIFT project)

• Design and development

• Common financials implemented in 18 months

• Pilots being developed and branch warehouse management system being tested

• People

• European graduate recruitment

• European team

• Learning centres

• Sourcing and procurement

• Sarbanes-Oxley

32

Outlook

• Good start to year

• UK RMI market will continue to drive growth and should be some benefit from government spending

• France improving and although Continental Europe is expected to remain flat, companies expected to show profitable growth

• US housing demand expected to remain strong and commercial sector may improve. RMI market positive

• Upward trend in US Building Materials should continue

• Environment in Canada remains positive

• Some uncertainty relating to commodity pricing and exchange rates

• Optimistic about future

• Committed to double digit sales and profits growth target

33

Appendices

34

NA Plumbing and Heating

Hawaii

Alaska

Ferguson, FNW and Westburne US2004 - 773 Branches 8-9% overall market share

Wolseley Canada (formerly Westburne) 2004 - 235 Branches27% market share

Distribution Centre

Proposed Distribution Centre

35

Stock Building Supply2004-236 Branches2-3% market share

US Building Materials

36

Wolseley UK19% market share2004 - 1,459 branches

Brossette16% market share1992 - 199 branches2004 - 417 branches

PBM acquired 20038% market share2004 - 293 branches

Heatmerchants10% market share1999 - 20 branches2004 – 54 branchesBrooks acquired 20047% market share2004 – 18 branches

ÖAG20% market shareacquired 1994 Austria 1994 - 47 branches 2004 - 62 branches Czech Republic 1994 - 4 branches 2004 - 22 branches Hungary 1994 - 6 branches 2004 - 25 branches

Manzardo 2% market shareacquired 19991999 - 7 branches2004 - 23 branches

Tobler24% market shareacquired 20032004 - 22 branches

Wasco15% market shareacquired 20022004 - 11 branches

CFM30% market shareacquired 20002 branches

Electro-Oil International acquired 1993, 3 locations

European Distribution

37

Group Sales & Operating Profit


37.9%US Building Materials 20.2%

UK 20.0%

Continental Europe 21.9%

Year Ended 31 July 2004

US Building Materials

16.8%


40.7%

UK 25.4%Continental Europe 17.1%

Sales

Operating profit

38

29%

39%

10%

9%

52%

11%

88%

41%

9%

0%

20%

40%

60%

80%

100%

EuropeanDistribution

North AmericanPlumbing & Heating

US BuildingMaterials

8%

4%

29%

39%

10%

9%

52%

11%

88%

41%

9%

0%

20%

40%

60%

80%

100%

EuropeanDistribution

North AmericanPlumbing & Heating

US BuildingMaterials

8%

4%

Business Drivers

New residential housing RMI IndustrialIndustrial & Commercial RMI Residential

39

Plumbing & Heating Installers 33%

Building Contractors37%

Utilities 7% HVAC 6%

Mechanical Contractors

11%

Industrial 6%

Our Diverse Customer Mix

40

Branches

1357 1443 1615 17992266 2393

504591

911940

9611008

131210

220216

222236

0

500

1000

1500

2000

2500

3000

3500

4000

1999 2000 2001 2002 2003 2004

Year to July

European Distribution North American Plumbing & HeatingUS Building Materials

41

Acquisitions History

0

50

100

150

200

250

300

350

400

450

500

550

1999 2000 2001 2002 2003 2004 2005 ytd

Year to July

£m

European Distribution US Building Materials Distribution

North American Plumbing & Heating

42

225

275

325

375

425

475

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

US

$p

er t

ho

usa

nd

bo

ard

fee

t

2000

2001

2002

2003

2004

225

275

325

375

425

475

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

US

$p

er t

ho

usa

nd

bo

ard

fee

t

2000

2001

2002

2003

2004

Monthly Lumber Prices 2000 - 2004

Year to July

High – May 2004 at US$456

Low – January 2001 and November 2002 at US$271

43

US Housing Starts

1500

1550

1600

1650

1700

1750

1800

1850

1900

1950

2000

2050

2100

Jan-01

Mar-01

May-01

Jul-01

Sep-01

Nov-01

Jan-02

Mar-02

May-02

Jul-02

Sep-02

Nov-02

Jan-03

Mar-03

May-03

Jul-03

Sep-03

Nov-03

Jan-04

Mar-04

May-04

Jul-04

Source: US Census Bureau

Sta

rts

(000

s)

44

New Residential Construction Activity in the US

Total US Housing Starts, 1900–2005E

Source: US Census, National Association of Home Builders (NAHB)

0

500

1,000

1,500

2,000

2,500

1900 1907 1914 1921 1928 1935 1942 1949 1956 1963 1970 1977 1984 1991 1998 2005E

Sta

rts

(000

s)

Single Family Starts Multi-Family Starts

1900-1945Average Single FamilyStarts = 280

1946-2002Average Single FamilyStarts = 1,102

1946-2002Average TotalStarts = 1,4911900-1945

Average Total Starts = 414

45


Source: US Census Bureau, UBS Warburg estimates

Average New Single–Family Home Sizes and Average Real Selling Price per Square Foot, 1950–2002

1,050

1,250

1,450

1,650

1,850

2,050

2,250

2,450

1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002

(Sq

ua

re F

ee

t)

55

60

65

70

75

80

85

90

95

100

($/S

qu

are

Fo

ot)

Average Square Feet Average Real Selling Price/Square Foot

46


Immigration by Decade, 1820–2010E

Source: The Immigration and Naturalization Service, Statistical Yearbook; Joint Center for Housing Studies at Harvard University

0

1

2

3

4

5

6

7

8

9

10

1820s 1840s 1860s 1880s 1900s 1920s 1940s 1960s 1980s 2001-2010E

Pe

op

le (

mm

)

47


Average Housing Starts (in thousands), 2001–2010

2001–2010Household Growth

12,500+

Replacement ofLost Units

3,200

Change inVacancies

2,100=

Total HousingDemand

17,800+

2001–2010Housing Demand

17,800–

Estimated Manufactured Home Activity

2,600=

2001–2010Projected

Housing Starts

15,200

Source: Joint Center for Housing Studies at Harvard University

48

Repair and Remodeling Activity in the US

Residential Repair and Remodeling Expenditure vs Expenditures for New Residential Construction, 1970–2005E

Source: US Census Bureau, UBS Warburg estimates, Joint Center for Housing Studies at Harvard University

0

50

100

150

200

250

300

350

1970 1975 1980 1985 1990 1995 2000 2005E

($bn

)

Residential Repair and Remodeling Expenditures New Residential Construction

49


Residential Maintenance and Repair Expenditures vs Expenditures for Remodeling and Alterations, 1970–2005E


0

20

40

60

80

100

120

140

160

1970 1975 1980 1985 1990 1995 2000 2005E

($bn

)

Residential Maintenance and Repair Expenditure Remodeling and Alterations Expenditures

50


Alterations Adjusted Implied Total Housing Starts of New Housing Started, 1970–2005E


1970 Equivalent Square Feet Square Footage Effect of Home Size Increases

Alterations Adjusted Incremental Square Feet

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

1970 1975 1980 1985 1990 1995 2000 2005E

(Sq

ua

re F

ee

t)

51

Wolseley Group Total - Sales & Profits Sterling Millions 1982-2004

-

200

400

600

800

1,000

1,200

82/3

83/4

84/5

85/6

86/7

87/8

88/9

89/90

90/91 91

/292

/393

/494

/595

/696

/797

/898

/999

/0000

/0101

/0202

/03 0

3/04

-

10 %

20 %

30 %

40 %

50 %

60 %

70 %

80 %

90 %

100 %

SALES PROFIT ROC

13%

£10bn

£8bn

£6bn

£4bn

£2bn

0

£1,000m

£800m

£600m

£400m

£200m

0

52

This communication is directed only at persons who (i) have professional experience in matters relating to investments or (ii) are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc") of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (as amended) or (iii) to whom it may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”). This communication must not be acted on

or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons

Documents

1. 2 Preliminary Results For The Year Ended 31 July 2004 27 September 2004 This presentation contains certain forward-looking statements as defined under