Azz Inc. · NYSE:AZZ
Azz — UBS Global Industrials and Transportation Conference 2020
31 slides from Azz's conference presentation, June 2020
Slide 1: AZZ Inc. UBS Global Industrials and Transportation Conference
AZZ Inc. UBS Global Industrials and Transportation Conference June 2020
Slide 2: Safe Harbor Statement
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE 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 id
Slide 3: Overview
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Overview AZZ is a global provider of galvanizing and metal coating services, welding solutions, specialty electrical equipment and highly engineered services to the power generation, transmission, distribution, refining and industrial markets. Sig
Slide 4: COVID-19 Summary
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE COVID-19 Summary Discontinued previously issued guidance Impact on Financial Results Galvanizing business remains solid, Electrical business continuing to process backlog, Industrial seeing shift of projects out of Q1 and into Q2 and Q3. Cas
Slide 5: Full Year FY 2020 Segment Revenue and Market Drivers
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Full Year FY 2020 Segment Revenue and Market Drivers Total FY2020 Revenue: $1.06 Billion Metal Coatings Energy Segment Segment $499.0 $562.8 +13.3% vs. prior year +15.6% vs. prior year Market Drivers • Strong hot-dip galvanizing demand in construc
Slide 6: Strategic Direction
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Strategic Direction • Long term strategy to grow Metal Coatings organically and with a robust acquisition program, while targeting 21-23% Operating Margins • Focus on operating excellence and providing outstanding customer service • Assumes contin
Slide 7: Metal Coatings and Energy Segments
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Metal Coatings Energy Segment Galvanizing, Surface Technologies Electrical Systems Welding Solutions 1 2 3 Multiple Infrastructure Markets Industrial, T&D, Power, Electric Utility Refinery & Power Hot Dip Galvanizing E-houses, Switchgear, Medium a
Slide 8: Metal Coatings
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Metal Coatings 1 The Metal Coatings Segment provides hot-dip galvanizing, powder coating, plating and other metal coatings to the steel fabrication industry through 48 facilities located throughout the United States and Canada 8
Slide 9: Metal Coatings' leading hot-dip galvanizing position offers adjacency opportunities
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Metal Coatings’ leading hot-dip galvanizing market position in North America offers adjacency opportunities in corrosion protection. North America’s largest galvanizer • 41 hot-dip galvanizing locations throughout the U.S. and Canada • Differentia
Slide 10: The Energy Segment
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE The Energy Segment is a manufacturer of specialty electrical equipment focusing on safe and reliable transmission of power from generation sources to end customers, and a specialty welding service provider that ensures the safety and reliability o
Slide 11: AZZ builds, maintains, rehabilitates and strengthens electrical and industrial infrastructure globally
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE 2 AZZ builds, maintains, rehabilitates and strengthens electrical and industrial infrastructure globally Enclosure Systems Switchgear Systems High Voltage Bus Medium Voltage Bus Hazardous Duty Lighting Tubular Products • Manufacturer of custom • L
Slide 12: Worldwide leader in specialized maintenance solutions through automated welding
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Worldwide leader in developing and delivering specialized maintenance solutions through 3 automated welding, weld cladding and weld overlay technologies that extend the lifetime and maximize the value of assets throughout the energy industry. Coke
Slide 13: Financial Overview
Financial Overview 13
Slide 14: Full Year FY 2020 Summary - Consolidated
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Full Year FY 2020 Summary - Consolidated In $millions, except per share amounts Revenue Net Income Diluted EPS +14.5% -5.8% Reported / +39.1% Adjusted -6.1% Reported / +38.3% Adjusted $1,061.8 $71.3 $2.71 $927.1 $51.2 $1.96 $48.2 $1.84 FY2019 FY20
Slide 15: Full Year FY 2020 Segment Results – Metal Coatings
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Full Year FY 2020 Segment Results – Metal Coatings In millions $ except percentages Revenue Operating Income Operating Margin +13.3% +29.1% +260 bps Key Statistics $499.0 $107.9 FY2019 Revenue $440.3 $440.3 $83.6 21.6% 19.0% Organic $25.5 Acquisit
Slide 16: Full Year FY 2020 Segment Results – Energy
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Full Year FY 2020 Segment Results – Energy In millions $ except percentages Revenue Operating Income Operating Margin +4.8% Reported / +34.1 Adjusted -60 bps Reported / +110 bps Adjusted Key Statistics +15.6% $42.0 7.5% $562.8 FY19 Revenue $486.8
Slide 17: Full Year Financial Guidance
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Full Year Financial Guidance FY2020 In millions , except for EPS Range Reported Adjusted Key Drivers: Revenue $1,020-$1,060 $1,061 $1,061 Metal Coatings: Continued operational execution Lower zinc costs Earnings Per Share $2.60-$2.90 $1.84 $2.
Slide 18: Full Year FY 2020 Consolidated Results
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Full Year FY 2020 Consolidated Results In millions, except for EPS and percentages YTD FY 20 YTD FY 20 YTD FY 19 % Change vs. Adjusted Reported Adjusted Revenue $1061.8 $1061.8 $927.1 14.5% Gross Profit $239.2 $237.2 $198.6 20.4% Gross Margin 22.5
Slide 19: Full Year FY 2020 Cash Flow Highlights
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Full Year FY 2020 Cash Flow Highlights In millions, except for percentages Full Year FY 2020 Full Year FY 2019 Cash flows provided by operating activities $144.8 $111.5 Less: Capital Expenditures $(35.0) $(25.6) Free Cash Flow $109.8 $85.9 Net Inc
Slide 20: Capital Allocation Focused on Growth
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Capital Allocation Focused on Growth In millions FY 2020 Capital Deployment • New business and product lines $60.6 Capital • Systems and technology • Safety, Health and Environmental Expenditures Growth • Strategic fit • Accretive within the first
Slide 21: Key Indicators
Key Indicators 21
Slide 22: Key Indicators
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Key Indicators Metal Coatings Segment • Galvanizing • Will fabrication activity remain stable through summer? • Surface Technologies • When will our major customers either reopen, or get back to normal production levels? Energy Segment • IPG • Whe
Slide 23: UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE 23
Slide 24: Reg G Tables
Reg G Tables 24
Slide 25: Non-GAAP Disclosure of EBITDA
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE 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 other financial metrics, which are non-GAAP measures
Slide 26: Non-GAAP Disclosure of Consolidated EBITDA
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Non-GAAP Disclosure of Consolidated EBITDA In millions Consolidated Consolidated Consolidated Consolidated YTD FY 20 YTD FY 19 Q4 FY 20 Q4 FY 19 GAAP Net Income $48.2 $51.2 $(10.6) $8.8 Adjustments to reconcile GAAP to non- GAAP Financial Measures
Slide 27: Non-GAAP Disclosure of Metal Coatings and Energy EBITDA
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Non-GAAP Disclosure of Metal Coatings and Energy EBITDA In millions Metal Coating Q4 Metal Coating Q4 Energy Energy FY 20 FY 19 Q4 FY 20 Q4 FY 19 GAAP Operating Income $22.6 $18.0 $(1.4) $5.6 Adjustments to reconcile GAAP to non- GAAP Financial Me
Slide 28: Non-GAAP Disclosure of Consolidated Adjustments
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Non-GAAP Disclosure of Consolidated Adjustments Full Year FY2020 Consolidated Q4 FY 2020 Consolidated $(millions) except EPS As Reported (a) Adjustment As Adjusted $(millions) except EPS As Reported (a) Adjustment As Adjusted Revenue 1,061.8 1061.
Slide 29: Non-GAAP Disclosure of Energy Adjustments
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Non-GAAP Disclosure of Energy Adjustments Full Year FY 2020 Energy Q4 FY 2020 Energy $(millions) except EPS As Reported (a) Adjustment As Adjusted $(millions) except EPS As Reported (a) Adjustment As Adjusted Revenue 562.8 562.8 Revenue 122.6 122.
Slide 30: Non-GAAP Disclosure of Consolidated Adjusted EBITDA
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Non-GAAP Disclosure of Consolidated “Adjusted” EBITDA In millions Consolidated (1) Consolidated (1) YTD FY 20 Q4 FY 20 Non-GAAP Adjusted Net Income $71.3 $12.4 Adjustments to reconcile non-GAAP to non-GAAP Financial Measures Interest Expense $13.5
Slide 31: Non-GAAP Disclosure of Energy Adjusted EBITDA
UBS GLOBAL INDUSTRIALS AND TRANSPORTATION CONFERENCE Non-GAAP Disclosure of Energy “Adjusted” EBITDA In millions Energy (1) Energy (1) YTD FY 20 Q4 FY 20 Non-GAAP Adjusted Operating Income $42.0 $7.8 Adjustments to reconcile non-GAAP to non-GAAP Financial Measures Other Income / Expense $(1.2) $(0.5
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