Slide 1: AZZ Inc. Q1 FY2023 Earnings Release Presentation
AZZ Inc. Q1 FY2023 Earnings Release Presentation July 11, 2022
Slide 2: Safe Harbor Statement
Q1 FY2023 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, including the statements regard
Slide 3: Non-GAAP Disclosure of EBITDA
Q1 FY2023 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 and Adjusted EBITDA, which are non-GAAP measures. Management believes that the p
Slide 4: Company Highlights
Q1 FY2023 EARNINGS PRESENTATION Company Highlights Significantly advanced previously announced strategic and financial initiatives to enhance shareholder value AZZ completed several actions following recommendations emanating from our comprehensive Board-led review of our portfolio – driving the
Slide 5: Sales and Segment Market Highlights
Q1 FY2023 EARNINGS PRESENTATION Q1 FY2023 Sales and Segment Market Highlights Q1 Fiscal 2023 Consolidated Sales: $314 million Metal Coatings Precoat Metals Infrastructure Solutions Segment Segment Segment $160.8M $43.7M $109.9M +25.9% vs. Q1 FY2022 +7.6% vs. Q1 FY2022 Segment Market Highlights AZZ M
Slide 6: Q1 Fiscal Year 2023 Summary – AZZ Consolidated Results
Q1 FY2023 EARNINGS PRESENTATION Q1 Fiscal Year 2023 Summary – AZZ Consolidated Results In $millions, except percentages and per share amounts Sales EBITDA Net Income Diluted EPS +37% +27% / (a) +41% +8% / (a) +61% +9% / (a) +59% $314.4 $1.40 $60.2 $35.9 $229.8 $54.3 $0.96 $42.8 $24.1 $0.88 $22.3 FY2
Slide 7: Segment Results – Metal Coatings
Q1 FY2023 EARNINGS PRESENTATION Q1 FY2023 Segment Results – Metal Coatings In millions $ except percentages Sales Operating Income EBITDA +26% +41% Key Statistics +35% $160.8 $52.7 FY2022 Sales $127.7 $44.4 $127.7 $39.1 Organic $26.0 $31.6 Acquisitions $7.1 27.6% 24.7% FY2023 Sales $160.8 FY2022 FY2
Slide 8: AZZ Precoat Metals Q1-2023 Pro Forma Results
Q1 FY2023 EARNINGS PRESENTATION AZZ Precoat Metals Q1-2023 Pro Forma Results Pro Forma Pro Forma % Actual – Partial May (5/14 to 5/31) as of as of $ Chang • Sales of $43.7M May 31, 2022 May 31, 2021 Change e • Operating Income of $6.6M, or 15.2% of sales Net Sales $ 236.8 $ 169.6 $ 67.2 39.6% • EBIT
Slide 9: Segment Results – Infrastructure Solutions
Q1 FY2023 EARNINGS PRESENTATION Q1 FY2023 Segment Results – Infrastructure Solutions In millions $ except percentages Sales Operating Income EBITDA Key Statistics +7.6% +33.5% +11.5% $15.3 FY 2022 Sales $102.1 $13.7 $109.9 $12.9 $102.1 FY2022 Book to Sales 1.00 to 1 $9.6 FY2023 Sales $109.9 11.7% 9.
Slide 10: Consolidated Results
Q1 FY2023 EARNINGS PRESENTATION Q1 FY2023 Consolidated Results (1) – Increase in shares directly attributable to Preferred Equity shares accounted for on the “as converted” method of accounting. 10
Slide 11: AZZ Consolidated Cash Flow Highlights
Q1 FY2023 EARNINGS PRESENTATION Q1 FY2023 AZZ Consolidated Cash Flow Highlights In millions, except for percentages Q1 FY 2023 Q1 FY 2022 Cash flows provided from operating activities $23.3 $11.1 Less: Capital Expenditures $(7.8) $(7.5) Free Cash Flow $15.5 $3.6 Net Income $24.1 $22.3 Free Cash Flow
Slide 12: Capital Allocation Focused on Growth
Q1 FY2023 EARNINGS PRESENTATION Capital Allocation Focused on Growth In millions Q1 2023 Capital Deployment $1,299.0 • Safety, Health and Environmental Capital • Productivity and capacity initiatives $1,200.0 Expenditures • General maintenance and sustainability Growth $1,000.0 • Focused on APM onbo
Slide 13: GAAP to Non-GAAP Diluted Earnings Per Share Reconciliation
Q1 FY2023 EARNINGS PRESENTATION Q1 FY2023 GAAP to Non-GAAP Diluted Earnings Per Share Reconciliation $0.13 $0.26 EPS impacted by transaction-related $0.22 costs, higher interest and higher $0.14 $0.04 amortization related primarily to the $0.45 $1.40 Precoat Acquisition and AIS definitive agreemen
Slide 14: Rapid De-levering with Prudent Balance Sheet Management
Q1 FY2023 EARNINGS PRESENTATION Rapid De-levering with Prudent Balance Sheet Management Net Leverage (Net Debt / Pro Forma LTM Adjusted EBITDA) Leverage ratio of 5.0x was “as modeled” in acquisition financing Completed Q1-2023 at 4.7x Upon Proxy approval, subordinated notes become exchangeable
Slide 15: Key Indicators And Financial Guidance
Key Indicators And Financial Guidance 15
Slide 16: Key Indicators
Q1 FY2023 EARNINGS PRESENTATION Key Indicators Metal Coatings Segment Markets remain, generally, strong with plenty of opportunities before us Fabrication activity remains solid for Q2; some customers experiencing intermittent steel shortages Surface Technology customers are returning to nor
Slide 17: Fiscal Year 2023 – Financial Guidance
Q1 FY2023 EARNINGS PRESENTATION Fiscal Year 2023 – Financial Guidance • We are not issuing Full Year guidance at this time due to the recently announced transactions o Precoat Metals acquisition, which closed on May 13, 2022 o Divestiture of 60% stake in AIS announced on June 23, 2022 • 2nd Quarter
Slide 18: Strategic Direction
Q1 FY2023 EARNINGS PRESENTATION Strategic Direction AZZ has taken the actions necessary to become a ‘pure play’ metal coatings leader in North America Our focus is on expanding our leading market positions in both AZZ Metal Coatings as well as recently acquired AZZ Precoat Metals to position the
Slide 19: Q&A
Q&A
Slide 20: Reg “G” Tables
Reg “G” Tables
Slide 21: Non-GAAP Disclosure of Consolidated EBITDA
Q1 FY2023 EARNINGS PRESENTATION Non-GAAP Disclosure of Consolidated EBITDA In millions Consolidated Consolidated Q1 FY 23 Q1 FY 22 GAAP Net Income $24.1 $22.3 Adjustments to reconcile GAAP to non-GAAP Financial Measures: Interest Expense 7.5 1.7 Income Tax Expense 7.6 7.6 Depreciation and Amortizati
Slide 22: Non-GAAP Segment Disclosure (Metal Coatings, Infrastructure Solutions and Precoat Metals)
Q1 FY2023 EARNINGS PRESENTATION Non-GAAP Segment Disclosure (Metal Coatings. Infrastructure Solutions and Precoat Metals) In millions Metal Coatings Metal Coatings Infrastructure Infrastructure Precoat Metals Solutions Solutions Q1 Q1 Q1 Q1 Q1 Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Y
Slide 23: Non-GAAP Disclosure of Metal Coatings, Infrastructure Solutions and Precoat Metals EBITDA
Q1 FY2023 EARNINGS PRESENTATION Non-GAAP Disclosure of Metal Coatings. Infrastructure Solutions and Precoat Metals EBITDA Current Quarter to date As As $(millions) except share information Reported Adjustment F/N Adjusted Sales $ 314.4 - $ 314.4 Gross Profit 84.5 - 84.5 Gross Margin 26.9 % 26.9 % SG