Slide 1: AZZ Inc. Strategy and Governance Update December 2022
AZZ Inc. Strategy and Governance Update December 2022
Slide 2: Disclaimers
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Disclaimers Cautionary Statements Regarding Forward Looking Statements — 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
Slide 3: AZZ Snapshot
STRATEGY AND GOVERNANCE UPDATE PRESENTATION 58% 42% 45% 55% AZZ Snapshot By Sales By EBITDA AZZ is North America’s largest independent hot-dip galvanizing and coil coating solutions company with #1 positions in both markets $1.4bn LTM Sales ~$340mm LTM Adj. EBITDA Pre-Fab Coil CoatingPost-Fab Metal
Slide 4: We Value Our Employees, Customers and Shareholders
STRATEGY AND GOVERNANCE UPDATE PRESENTATION We Value Our Dedicated Employees by fully training and equipping them, and providing a safe environment to grow personally, professionally and spiritually We Value Our Customers by reliably providing high- quality products and solutions with outstanding cu
Slide 5: Portfolio Transformation Creates a Market Leader in Protective Coating Solutions
STRATEGY AND GOVERNANCE UPDATE PRESENTATION 45% 55% Pre-Fab Coil Coatings Post-Fab Metal Coatings 31% 69% AZZ Infrastructure Solutions Post-Fab Metal Coatings Portfolio Transformation Creates a Market Leader in Protective Coating Solutions with High Margins AZZ in 20191 AZZ Today2 24.1% Adj. EBITDA
Slide 6: AZZ Provides Technologically Advanced Metal Coatings and Related Value-Added Services
STRATEGY AND GOVERNANCE UPDATE PRESENTATION ` AZZ Provides Technologically Advanced Metal Coatings and Related Value-Added Services POST-FAB METAL COATINGS Protects and extends the life of fabricated steel structures and components from the effects of corrosion, lasting decades Advanced application
Slide 7: Leadership team and mission
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Tom Ferguson President and Chief Executive Officer Philip Schlom Chief Financial Officer David Nark SVP of Marketing, Communications and Investor Relations Matt Emery Chief Information and Human Resources Officer Tara Mackey Chief Legal Officer and Corpora
Slide 8: Strategic and Financial Initiatives to Enhance Shareholder Value
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Strategic and Financial Initiatives to Enhance Shareholder Value Metal Coatings ■ #1 in post-fabrication hot-dip galvanizing ■ Strategic plant network of 41 hot-dip galvanizing locations with superior customer service ■ Highly attractive margins and return
Slide 9: Our Capital Allocation Priorities
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Our Capital Allocation Priorities Acquisitions Opportunistic, highly accretive bolt-on acquisitions Return Capital Committed to sustaining dividends High ROIC Investments Organic growth Strategic customer partnerships Productivity Reduce Leverage
Slide 10: Corporate Governance
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Corporate Governance Board Independence ■ Independent Board (9 of 10 directors) ■ Independent Board Chair ■ All Board Committees comprised of independent directors ■ Regular executive sessions of independent directors Board Practices Board Accountability ■
Slide 11: Our Board of Directors
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Our Board of Directors Daniel Feehan Chairman, FirstCash and AZZ ■ Brings significant executive leadership experience with financial reporting, business controls, accounting and strategic planning expertise ■ Former Chairman, President & CEO at Cash Americ
Slide 12: Board Composition
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Board Composition We have thoughtfully constructed our Board to advance our strategy Summary of Director Experience, Qualifications, Attributes and Skills Feehan Ferguson Berce Eisman Grannum Jackson Kaden McCellon- Allen McGough Purvis CEO / Senior Execut
Slide 13: Board Commitment to Diversity
STRATEGY AND GOVERNANCE UPDATE PRESENTATION 4 Directors 6 - 9 Years 1 Director Less Than 1 Year 2 Directors Greater Than 10 Years 3 Directors 51 - 60 Years Old Board Commitment to Diversity Diversity of Age We believe that diversity helps to create a high functioning Board Diversity of Tenure Gender
Slide 14: Our Board's Evaluation and Refreshment Process
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Our Board’s Evaluation and Refreshment Process Process Overview Commitment to regular refreshment to evolve our Board in line with our strategy Key Selection Criteria ■ Relevant industry knowledge and diversity of background and experience ■ Executive Leve
Slide 15: Board Committees and Risk Oversight
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Board Committees and Risk Oversight Our approach to committee composition and responsibilities ■ Our Board has overall responsibility for the effective oversight of enterprise risk, whether financial, operational or strategic ■ The Board has delegated resp
Slide 16: Shareholder Engagement
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Shareholder Engagement Maintaining an active dialogue with our shareholders is important to our commitment to deliver sustainable, long-term value Process Overview Key Engagement Topics Discussed with Shareholders Our Chair and members of our executive man
Slide 17: Prioritizing Corporate Responsibility and Sustainability
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Prioritizing Corporate Responsibility and Sustainability Approach to Sustainability Committed to growing our business in a sustainable and socially responsible manner ■ Our sustainability framework is integrated into our overall business strategy through o
Slide 18: Recent ESG Highlights
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Recent ESG Highlights Over the past 18 two years, we have made progress on a number of fronts related to our ESG practices Published our first and second corporate sustainability reports, covering fiscal years 2020, 2021 and 2022 Aligned our ESG report
Slide 19: Environmental Stewardship
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Environmental Stewardship Committed to managing our business is an environmentally responsible manner and prioritizing health and safety Meet or exceed all applicable environment, health and safety (“EHS”) regulations and company standards and continuously
Slide 20: Commitment to Human Capital Management
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Commitment to Human Capital Management Our Culture Our employees are our greatest asset – our success is dependent on the expertise of our people ■ AZZ understands the importance of employees who feel valued and united through shared beliefs and guiding pr
Slide 21: Executive Compensation Philosophy and Design
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Executive Compensation Philosophy and Design Compensation Aligned with Value Creation FY 2022 Target Pay MixFY 2022 Incentives Aligned with Strategic Plan Base Salary 21% Short-Term Incentive 29% Long-Term Incentive 50% Base Salary 36% Long-Term Incentive
Slide 22: Our Path to Delivering Long-Term Shareholder Value
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Our Path to Delivering Long-Term Shareholder Value Experienced Board is Advising on Strategy, Overseeing Risk and Supporting Long-Term Value Creation Completed Acquisition of Precoat Metals and Divestiture of Majority Stake in Infrastructure Solutions Focu
Slide 23: Appendix and Additional Information
Appendix and Additional Information
Slide 24: Reconciliation of Segment Financials
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Reconciliation of Segment Financials Fiscal Year 2017 Segment $(millions) As Reported (a) Adjustment As Adjusted Sales 863.5 (99.9) 763.6 Metal Coatings 375.5 (0.2) (1) 375.4 Infrastructure Solutions 488.0 (99.7) (2) 388.3 Operating Profit 98.9 (8.7) 90.2
Slide 25: Reconciliation of Segment Financials (Continued)
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Reconciliation of Segment Financials (Continued) Fiscal Year 2019 Segment $(millions) As Reported (a) Adjustment As Adjusted Sales 927.1 (71.3) 855.8 Metal Coatings 440.3 (0.7) (1) 439.5 Infrastructure Solutions 486.8 (70.6) (2) 416.2 Operating Profit 77.0
Slide 26: Reconciliation of Segment Financials (Continued)
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Reconciliation of Segment Financials (Continued) (a) – Reported in conformity with US GAAP (1) – Reflects impact of Galvabar divestiture (closed in July 2020) and related restructuring and impairment charges (2) – Reflects impact of NLI and SMS divestiture
Slide 27: Thank You
Thank You