Slide 1: Q1 FY2021 Earnings Release Presentation
AZZ Inc. Q1 FY2021 Earnings Release Presentation July 9, 2020
Slide 2: Safe Harbor Statement
Q1 FY2021 EARNINGS PRESENTATION Safe Harbor Statement Certain statements herein about our expectations of future events or results constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. You can identify forward-lookin
Slide 3: COVID-19 Update
Q1 FY2021 EARNINGS PRESENTATION COVID-19 Update Impact on Financial Suspended previously issued FY2021 guidance Results Energy platform has been negatively affected by turnaround deferrals and lower project bookings due to customer slow-downs Cash balance of $26.4 million as of Q1 FY2021 Balan
Slide 4: Segment Revenue and Market Drivers
Q1 FY2021 EARNINGS PRESENTATION Q1 FY2021 Segment Revenue and Market Drivers Total Q1 FY2021 Revenue: $213.3 million Metal Coatings Energy Segment Segment $119.0 $94.3 -2.6% vs. Q1 FY2020 -43.5% vs. Q1 FY2020 Market Drivers • Galvanizing plants performed exceptionally well • Spring turnarounds defer
Slide 5: Q1 FY2021 Summary - Consolidated
Q1 FY2021 EARNINGS PRESENTATION Q1 FY2021 Summary - Consolidated In $millions, except per share amounts Revenue Net Income Diluted EPS -26.2% -74.0% -73.9% $289.1 $0.81 $213.3 $21.3 $0.21 $5.5 FY2020 FY2021 FY 2020 FY2021 FY 2020 FY2021 • Lack of spring refining turnarounds • Industrial operating le
Slide 6: Segment Results – Metal Coatings
Q1 FY2021 EARNINGS PRESENTATION Q1 FY2021 Segment Results – Metal Coatings In millions $ except percentages Revenue Operating Income Operating Margin -2.6% -14.7% -300 bps Key Statistics FY2020 Revenue $122.2 $122.2 $119.0 $29.4 24.1% $25.1 21.1% Organic $(7.6) Acquisitions $4.4 FY2021 Revenue $119.
Slide 7: Segment Results – Energy
Q1 FY2021 EARNINGS PRESENTATION Q1 FY2021 Segment Results – Energy In millions $ except percentages Revenue Operating Income Operating Margin -43.5% -108.3% -860 bps Key Statistics $167.0 FY 2020 Revenue $167.0 $12.6 7.5% FY2020 Book to Ship .82 to 1 $94.3 FY2021 Revenue $94.3 FY2021 Book to Ship .8
Slide 8: Full Year Financial Guidance
Q1 FY2021 EARNINGS PRESENTATION Full Year Financial Guidance FY2021 Range Key Drivers: In millions , except for EPS Metal Coatings: COVID-19 impact on future quarters Revenue $970-$1,060 Lower zinc costs & Digital Galvanizing System Suspended FY21 Guidance Energy: $2.65-$3.15 Fall refining tur
Slide 9: Consolidated Results
Q1 FY2021 EARNINGS PRESENTATION Q1 FY2021 Consolidated Results In millions, except for EPS and percentages Q1 FY 2021 Q1 FY 2020 % Change vs. Prior Year Revenue $213.3 $289.1 -26.2% Gross Profit $42.2 $66.1 -36.2% Gross Margin 19.8% 22.9% -310 bps Operating Profit $14.3 $31.0 -53.8% Operating Margin
Slide 10: Q1 FY2021 Cash Flow Highlights
Q1 FY2021 EARNINGS PRESENTATION Q1FY 2021 Cash Flow Highlights In millions, except for percentages Q1 FY 2021 Q1 FY 2020 Cash flows used in operating activities $(11.2) $(17.9) Less: Capital Expenditures $(10.8) $ (4.7) Free Cash Flow $(22.0) $(22.6) Net Income $5.5 $21.3 Free Cash Flow/Net Income (
Slide 11: Capital Allocation Focused on Growth
Q1 FY2021 EARNINGS PRESENTATION Capital Allocation Focused on Growth In millions Q1 2021 Capital Deployment • Safety, Health and Environmental Capital • Facility expansion • Product growth initiatives Expenditures Growth $10.8 • No acquisitions in Q1 FY2021 • Pandemic-related deal travel Acquisition
Slide 12: Key Indicators
Key Indicators 12
Slide 13: Key Indicators
Q1 FY2021 EARNINGS PRESENTATION Key Indicators Metal Coatings Segment • Fabrication activity remains solid for Q2, but seeing some steel shortages • Zinc cost level remains low and cost of zinc in our kettles continues to drop • Surface Technology customers are anticipated to return to more normal p
Slide 14: Strategic Direction
Q1 FY2021 EARNINGS PRESENTATION Strategic Direction • Long term strategy to continue to grow Metal Coatings organically and with a robust acquisition program, while targeting sustainable 21-23% Operating Margins • Focus on operating excellence and providing outstanding customer service • Assumes con
Slide 15: Q&A
Q&A
Slide 16: Reg G Tables
Reg G Tables
Slide 17: Non-GAAP Disclosure of EBITDA
Q1 FY2021 EARNINGS PRESENTATION Non-GAAP Disclosure of EBITDA • In addition to reporting financial results in accordance with Generally Accepted Accounting Principles in the United States ("GAAP"), AZZ has provided EBITDA, which are non-GAAP measures. Management believes that the presentation of the
Slide 18: Non-GAAP Disclosure of Consolidated EBITDA
Q1 FY2021 EARNINGS PRESENTATION Non-GAAP Disclosure of Consolidated EBITDA In millions Consolidated Consolidated Q1 FY 21 Q1 FY 20 GAAP Net Income $5.5 $21.3 Adjustments to reconcile GAAP to non- GAAP Financial Measures Interest Expense $2.6 $3.6 Income Tax Expense $4.7 $5.7 Depreciation and Amortiz
Slide 19: Non-GAAP Disclosure of Metal Coatings and Energy EBITDA
Q1 FY2021 EARNINGS PRESENTATION Non-GAAP Disclosure of Metal Coatings and Energy EBITDA In millions Metal Coating Metal Coating Energy Energy Q1 FY 21 Q1 FY 20 Q1 FY 21 Q1 FY 20 GAAP Operating Income $25.1 $29.4 $(1.0) $12.6 Adjustments to reconcile GAAP to non- GAAP Financial Measures Other Income