Azz Inc. · NYSE:AZZ
Azz — Investor Presentation (February 2024)
29 slides from Azz's investor presentation, Feb 6, 2024
Slide 1: AZZ Inc. Strategy and Governance Update
AZZ Inc. Strategy and Governance Update February 6, 2024
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 PRESENTATION 3 57% 43% AZZ Snapshot (NYSE: AZZ) Sales EBITDA3 AZZ is North America’s leading independent post- fabrication hot-dip galvanizing & coil coating solutions company with #1 positions in both markets Precoat Metals Metal Coatings (1) 41 galvanizing locations and 6 s
Slide 4: AZZ's Strategic Journey
STRATEGY AND GOVERNANCE PRESENTATION 4 4 AZZ’s Strategic Journey 2013-2018 Optimized Legacy Footprint • Improved capabilities and profitability of Metal Coatings • Combined Electrical and Industrial assets into one operating segment (infrastructure Solutions) 2019-2023 Strategic Transformation – Pos
Slide 5: 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 6: Our Leading Segments
STRATEGY AND GOVERNANCE PRESENTATION 6 6 Our Leading Segments Operating Segment Production Route Value-Added Capabilities Market Size, Share and Position2 5-Year Historical EBITDA Performance ($ in millions) Metal Coatings Precoat Metals Batch Processing Continuous Processing Hot-Dip Galvanizing Spi
Slide 7: Leadership Team and Mission
STRATEGY AND GOVERNANCE PRESENTATION 7 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 Chris Bacius Vic
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 galvanizing1 ■ Strategic plant network of 41 hot-dip galvanizing locations and 6 surface technology locations with superior customer service ■
Slide 9: Our Capital Allocation Priorities
9 STRATEGY AND GOVERNANCE PRESENTATION Acquisitions ◼ Deferred Return Capital ◼ Committed to sustaining dividends Deploying Capital on High ROIC Investments ◼ Organic growth ◼ Strategic customer partnerships ◼ Productivity Reduce Leverage ◼ At or below 3.0x leverage in calendar 2024 19 Our Capital A
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 Board Commitment to Diversity We believe that diversity helps to support a high functioning Board Note: Data above reflects the status of the Board as of February 28, 2023, our last fiscal year-end 13
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 AZZ’s Board in line with its strategy Key Selection Criteria ■ Relevant industry knowledge and diversity of background and experience ■ Executive le
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 FY 2023 Maintaining an active dialogue with our shareholders is important to our commitment to deliver sustainable, long-term value Process Overview Our Chair and members of our executive management team regularly engage with shareho
Slide 17: Shareholder Engagement: Key Topics
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Shareholder Engagement Key Engagement Topics Discussed with Shareholders Financial Performance and Deleveraging Board Oversight of Corporate Strategy and Risk Management Human Capital Management Sustainability, Corporate Responsibility and AZZ’s ESG Commit
Slide 18: 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 19: Recent ESG Highlights
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Recent ESG Highlights ✓ Published our third corporate sustainability report, covering fiscal year 2021, 2022 and 2023 and incorporated our new Precoat Metals segment into the report. ✓ Engaged a third-party consultant to assist AZZ in performing a material
Slide 20: Environmental Stewardship
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Environmental Stewardship Committed to managing our business is an environmentally responsible manner and prioritizing the health and safety of our employees Meet or exceed all applicable environment, health and safety (“EHS”) regulations and company stand
Slide 21: 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 and engagement of all our people ■ AZZ understands the importance of employees who feel valued and united through shared bel
Slide 22: Executive Compensation Philosophy and Design
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Executive Compensation Philosophy and Design Compensation Aligned with Value Creation FY2023 Target Pay MixFY2023 Incentives Aligned with Strategic Plan 1. Adjusted EPS is a non-GAAP number and the FY2023 adjustments are specifically set forth and describe
Slide 23: 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, and
Slide 24: Appendix and Additional Information
Appendix and Additional Information
Slide 25: 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 26: 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 27: 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 28: Reconciliation of Segment Financials (Continued)
STRATEGY AND GOVERNANCE UPDATE PRESENTATION Reconciliation of Segment Financials (Continued) (a) Reported in conformity with US GAAP (b) Corporate adjustments related to acquisition addback 27 Fiscal Year 2023 Segment (in millions) As Reported(a) Adjustment As Adjusted Sales Metal Coatings 637.0 - 6
Slide 29: Thank You
Thank You