Slide 1: Fourth Quarter and Fiscal Year 2020 Earnings Presentation
AZZ Inc. Fourth Quarter and Fiscal Year 2020 Earnings Presentation April 29, 2020
Slide 2: Safe Harbor Statement
Q4 AND FULL YEAR FY2020 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
Slide 3: Full Year FY20 Segment Revenue and Market Drivers
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION Full Year FY20 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 construction • Str
Slide 4: Full Year FY20 Summary - Consolidated
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION Full Year FY20 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 FY2020 FY2019
Slide 5: Full Year FY20 Segment Results – Metal Coatings
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION Full Year FY20 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 Acquisitions $33.2
Slide 6: Full Year FY20 Segment Results – Energy
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION Full Year FY20 Segment Results – Energy In millions $ except percentages Revenue Operating Income Operating Margin +15.6% +4.8% Reported / +34.1 Adjusted -60 bps Reported / +110 bps Adjusted Key Statistics $42.0 7.5% $562.8 FY19 Revenue $486.8 6.4% $486.
Slide 7: COVID-19 Summary
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION COVID-19 Summary Discontinuing 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. Cash bala
Slide 8: Full Year Financial Guidance
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION 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 $2.71 Ener
Slide 9: Q4 FY2020 Consolidated Results
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION Q4 FY2020 Consolidated Results In millions, except for EPS and percentages Q4 FY 20 Q4 FY 20 Q4 FY 19 % Change vs. Adjusted Reported Adjusted Revenue $245.4 $245.4 $202.5 21.2% Gross Profit $53.1 $51.1 $43.3 22.6% Gross Margin 21.6% 20.8% 21.4% 20 bps Op
Slide 10: Full Year FY 2020 Consolidated Results
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION 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% 22.3%
Slide 11: Full Year FY 2020 Cash Flow Highlights
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION 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 Income $48
Slide 12: Capital Allocation Focused on Growth
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION 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 year A
Slide 13: Key Indicators
Key Indicators 13
Slide 14: Key Indicators
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION 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 • When will
Slide 15: Strategic Direction
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION 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 continued ino
Slide 16: Q&A
Q&A
Slide 17: Q4 FY20 Segment Revenue and Market Drivers
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION Q4 FY20 Segment Revenue and Market Drivers Total Q4 FY2020 Revenue: $245.4 Million Metal Coatings Energy Segment Segment $122.8 $122.6 +21.3% vs. prior year +21.0% vs. prior year Market Drivers • Slightly higher hot-dip galvanizing volume • Continued shi
Slide 18: Q4 FY20 Segment Results – Metal Coatings
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION Q4 FY 20 Segment Results – Metal Coatings In millions $ except percentages Revenue Operating Income Operating Margin +21.3% +25.5% +60 bps Key Statistics $122.8 FY2019 Revenue $101.3 $101.3 $22.6 $7.9 $18.0 18.4% Organic 17.8% Acquisitions $13.6 FY2020 R
Slide 19: Q4 FY20 Segment Results – Energy
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION Q4 FY20 Segment Results – Energy In millions $ except percentages Revenue Operating Income Operating Margin +21.0% -124.9% Reported/39.3% Adjusted -660 bps Reported/+110 bps Adjusted Key Statistics $122.6 FY19 Revenue $101.3 $101.3 $7.8 FY19 Book to Ship
Slide 20: Q4 FY20 Summary - Consolidated
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION Q4 FY20 Summary - Consolidated In $millions, except per share amounts Revenue Net Income Diluted EPS +21.1% -220.2% Reported / +39.3 Adjusted -220.6% Reported / +38.2% Adjusted $245.4 $0.47 $202.5 $12.4 $8.9 $0.34 -$10.6 -$0.41 FY2019 FY2020 Reported FY2
Slide 21: Reg G Tables
Reg G Tables
Slide 22: Non-GAAP Disclosure of EBITDA
Q4 AND FULL YEAR FY2020 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 other financial metrics, which are non-GAAP measures. Manag
Slide 23: Non-GAAP Disclosure of Consolidated EBITDA
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION 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 Intere
Slide 24: Non-GAAP Disclosure of Metal Coatings and Energy EBITDA
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION 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 Measures
Slide 25: Non-GAAP Disclosure of Consolidated Adjustments
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION 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 1061.8 Reven
Slide 26: Non-GAAP Disclosure of Energy Adjustments
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION 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 122.6 122.6 Gross
Slide 27: Non-GAAP Disclosure of Consolidated “Adjusted” EBITDA
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION 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 $3.0 N
Slide 28: Non-GAAP Disclosure of Energy “Adjusted” EBITDA
Q4 AND FULL YEAR FY2020 EARNINGS PRESENTATION 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) Inter