Slide 1: Investor Presentation
INVESTOR PRESENTATION INVESTOR PRESENTATION November 8, 2022
Slide 2: Disclaimers
2INVESTOR 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 Litigation Reform A
Slide 3: AZZ Snapshot
INVESTOR PRESENTATION 3 58% 42% 45% 55% 3 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 Coatings Note: Fin
Slide 4: AZZ Provides Technologically Advanced Metal Coatings and Value-Added Services
INVESTOR PRESENTATION 4 ` AZZ Provides Technologically Advanced Metal Coatings and Related Value-Added Services 3 POST-FAB METAL COATINGS Protects and extends the life of fabricated steel structures and components from the effects of corrosion, lasting decades Advanced application of protective and
Slide 5: Investment Thesis
INVESTOR PRESENTATION 5 Investment Thesis North America’s largest independent hot-dip galvanizing and coil coating company Value-added tolling business model protects margins, limits metal commodity exposure, and minimizes NWC intensity 2 Diversified and resilient end markets with secular growth tai
Slide 6: Portfolio Transformation Creates a Focused Market Leader
INVESTOR PRESENTATION 6 45% 55% Pre-Fab Coil Coatings Post-Fab Metal Coatings 31% 69% AZZ Infrastructure Solutions Post-Fab Metal Coatings Portfolio Transformation Creates a Focused Market Leader in Protective Coating Solutions with High Margins AZZ in 20191 AZZ Today2 24.1% Adj. EBITDA Margin3 ~$34
Slide 7: #1 in Hot-Dip Galvanizing and Coil Coating Across Large Served Markets
INVESTOR PRESENTATION 7 20% 80% AZZ Competitors #1 in Hot-Dip Galvanizing and Coil Coating Businesses Across Large and Diverse Served Markets Market Position Addressable Market POST-FAB METAL COATINGS PRE-FAB COIL COATING ~$2.1 billion ~$3.7 billion Capabilities Galvanizing, powder coatings, plating
Slide 8: North America's Largest Independent Hot-Dip Galvanizing and Coil Coating Company
INVESTOR PRESENTATION 8 Post-Fab Metal Coatings Locations (46) Pre-Fab Coil Coatings Locations (13) North America’s Largest Independent Hot-Dip Galvanizing and Coil Coating Company Scale and Proximity to Customers Drives Significant Cost and Service Advantages
Slide 9: Trusted Long-Term Partner to Large, Blue Chip Customer Base
INVESTOR PRESENTATION 9 Trusted Long-Term Partner to Large, Blue Chip Customer Base Growing Base of Over 3,000+ Customers Diverse Customer Profile, No Single Customer >5% of Sales 85%+ of Top 25 Customers’ Relationships Span 10+ Years Construction & Building Products 6 HVAC and Appliances Transmissi
Slide 10: Diverse and Balanced End Market Exposure
INVESTOR PRESENTATION 10 Diverse and Balanced End Market Exposure Infrastructure Machinery / Trans.Industrial Renewable/Utility Bridge and HwyHVACResidential Construction Appliance Agriculture Commercial Construction
Slide 11: Secular Drivers Enhancing Outlook
INVESTOR PRESENTATION 11 Secular Drivers Enhancing Outlook INFRASTRUCTURE AND RENEWABLES INVESTMENT RESHORING MANUFACTURING PREPAINTED STEEL AND ALUMINUM MIGRATION CONVERSION FROM PLASTICS TO ALUMINUM
Slide 12: Limited Metal Commodity Exposure
INVESTOR PRESENTATION 12 0 50 100 150 200 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 Zinc ($/ton) Sales ($mm) Limited exposure to metal price Value-added pricing model Highly variable cost structure with flexible operating model Consistent strong earnings and cash flow 60 70 80
Slide 13: Both Businesses Have Delivered Robust Top-line Growth and Profitability
INVESTOR PRESENTATION 13 $138 $126 $157 $187 $86 $95 $137 $150 $224 $221 $294 $337 21.1% 21.5% 24.2% 24.1% FY20 FY21 FY22 LTM Both Businesses Have Delivered Robust Top-line Growth and Profitability 7 Pro Forma Sales Pro Forma Adj. EBITDA1 $499 $457 $519 $594 $561 $572 $699 $804 $1,060 $1,029 $1,218
Slide 14: Leadership Team and Mission
INVESTOR PRESENTATION 14 14 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 Vice President
Slide 15: Sustainability & ESG
INVESTOR PRESENTATION 15 Sustainability & ESG Environmental Social Governance Tracking energy, emissions, water usage and intensity Actively recycling zinc, aluminum and steel ~53% of our employee base is diverse Safety culture and training reduces workplace incidents through continuous improvement
Slide 16: Financial Overview
INVESTOR PRESENTATION Financial Overview 16
Slide 17: Premier Margin and Cash Flow Profile
INVESTOR PRESENTATION 17 77% 63% 79% 62% AZZ Coatings Service Centers Steel Mills Premier Margin and Cash Flow Profile 7 3-Year Median EBITDA Margin3 3-Year Median FCF Conversion (EBITDA less Capex / EBITDA) ✔ Differentiated solutions command strong gross margins ✔ Flexible, efficient operating mode
Slide 18: Proven Resilience Through Challenging Cycles
INVESTOR PRESENTATION 18 Proven Resilience Through Challenging Cycles ~25% ~75% Fixed Variable 7 Highly Variable Cost Structure Diverse End Market Exposure Performed Well Through Global Financial Crisis Post-Fab Metal Coatings EBITDA Pre-Fab Coil Coating EBITDA $51 $81 $85 $85 $98 $51 $59 $42 $57 $7
Slide 19: Rapid Deleveraging Profile
INVESTOR PRESENTATION 19 4.25x 3.6x 3.0x 3.0x 2.5x At Close Current By February 2024 Capital structure with no maturities until 2027 Strong cash flow generation supports near-term deleveraging priority Business expected to generate ~$200mm in free cash flow in first year post-close Transaction tax a
Slide 20: Our Capital Allocation Priorities
20INVESTOR 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 3.0x leverage by
Slide 21: Precoat Sales Seasonality
21INVESTOR PRESENTATION 22% 27% 27% 24% Calendar Year Precoat Sales Seasonality Based on AZZ Fiscal Year Note: FY based on February year-end. Includes last five fiscal and calendar years ending 2023 including forecast from September 2022 to February 2023. Excludes 2020 due to COVID-19 impact on seas
Slide 22: Fiscal Year 2023 Guidance
INVESTOR PRESENTATION 22 Fiscal Year 2023 Guidance 7 FY 2023 Adjusted EPS2 Sales Note: FY based on February year-end (1) Includes full-year impact of Precoat as if transaction closed March 1, 2022 (2) Adjusted earnings and earnings per share include post-tax cash impact of Precoat amortization $3.80
Slide 23: Current Strategy
INVESTOR PRESENTATION 23 Current Strategy Drive Organic Growth 1 • Continued emphasis on customer service and quality • Invest in capacity to support specific customer demand Sustain Target EBITDA Range2 • Metal Coatings EBITDA 25-27% • Precoat Metals EBITDA 20-22% Rapidly De-lever and De-risk4 Stro
Slide 24: Appendix
INVESTOR PRESENTATION Appendix 24
Slide 25: Q2 and YTD FY23 Adjusted Earnings Per Share
INVESTOR PRESENTATION 25 Q2 and YTD FY23 Adjusted Earnings Per Share (EPS) 7 (1) Earnings per share amounts included in the table above may not sum due to rounding differences (2) Includes expenses related to the Precoat acquisition as well as the divestiture of the AZZ Infrastructure Solutions busi
Slide 26: Divestiture of AZZ Infrastructure Solutions
26INVESTOR PRESENTATION Divested legacy AZZ Infrastructure Solutions Segment (“AIS”) Sold to Fernweh Group LLC, a PE firm founded by McKinsey alums AIS moved to Discontinued Operations FY2023 financials reflect as realized results Equity income under GAAP accounting [but to be excluded fro