Azz Inc. · NYSE:AZZ
Azz — Jefferies Industrial Conference 2023
26 slides from Azz's conference presentation, Sep 6, 2023
Slide 1: Investor Presentation
INVESTOR PRESENTATION INVESTOR PRESENTATION Jefferies Industrial Conference September 6, 2023 (NYSE: AZZ)
Slide 2: Disclaimers
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 Act of 1995, including t
Slide 3: Key Messages
Key Messages: Differentiated, high value-add metal coatings provider with scale, expertise and customer centric technology uniquely positioned to serve the growing North American steel and aluminum market Strong business foundation capable of growing sales and margins at or above market levels, supp
Slide 4: AZZ Snapshot (NYSE: AZZ)
AZZ Snapshot (NYSE: AZZ) FORT WORTH, TEXAS 3,900 Metal Coatings 47 Coil Coating 13 AZZ is North America’s Headquarters: Employees: locations1: Locations: leading independent hot-dip galvanizing & coil coating solutions company with #1 Sales EBITDA3 positions in both markets 43% 45% 57% 55% Precoat M
Slide 5: AZZ's Strategic Journey
AZZ’s Strategic Journey $571 $810 $1,500 $2,000+ Sales, in millions 2023 + Focused Metal Coatings Company 2019-2022 • Investing in our future - New aluminum coil Strategic Transformation – coating facility; on-budget and on–track for full 2013-2018 Positioning for the future production in FY 2026 •
Slide 6: Why Our Focus is Coatings
Why Our Focus is Coatings Strategic acquisition of Precoat Metals creates new capability and U.S. Demand by Product Type allows AZZ to provide coatings solutions to the largest part of the 5% 5% market (flat steel) as well as the growing aluminum market Flat AZZ’s independence provides customers com
Slide 7: Our Leading Segments
Our Leading Segments Operating Production Production Value-Added Market Size and 5-Year Historical Segment Input Route Capabilities Share EBITDA Performance ($ in millions) Hot-Dip Galvanizing $189 187 $2.3B $159 Spin Galvanizing $139 Metal Coatings Batch Powder Coating $115 $123 Processing Plating
Slide 8: Diverse End Market Exposure
Diverse End Market Exposure North American steel shipments by end-market2 5% 8% Total Construction starts are expected to rise by 2% Construction 7% Automotive in 2023, and 6% in 2024 1 43% Machinery 10% Energy Non-building (which includes sectors such as Appliance Other infrastructure) has more pub
Slide 9: Secular Drivers Enhancing Outlook
Infrastructure and Renewables Investment Reshoring Manufacturing Secular Drivers Enhancing Outlook Pre-painted Steel and Aluminum Migration Conversion from Plastics to Aluminum INVESTOR PRESENTATION 9 9
Slide 10: Macro Tailwinds - American Infrastructure Investment and Jobs Act
Macro Tailwinds -American Infrastructure Investment and Jobs Act Roads, Bridges and Clean Energy and Power Water, Airports and Other Major Projects Investment: +$110bn Investment: +$65bn Investment: +$75bn Investment to repair over 45,000 bridges and 1 in 5 miles Investment in clean energy transmiss
Slide 11: Investing in Future Growth
Investing in Future Growth New aluminum coil coating line under construction in Washington, Missouri Compelling Strategic and Financial Investment Enables AZZ to benefit from secular shift to aluminum cans Run-rate sales of $60+ million by FY 2026 at an EBITDA margin above Precoat overall margin ROI
Slide 12: Technology Transformation – A Key Differentiator
Technology Transformation – A Key Differentiator Digital Galvanizing System (DGS) is a distinct competitive advantage - Near elimination of paper with proprietary, state-of-the-art tool linked to Oracle ERP system - Fully integrated; Allows real-time decisions and enhanced customer experience - Prov
Slide 13: Investing in Future Growth: Sustainability
Investing in Future Growth Sustainability We are essential and We are committed to sustainability We recognize that diversity is environmentally friendly initiatives and reporting key to sustainability • Sustainability is intrinsic to hot-dip • Tracking and Reporting on Scope 1 and • We embrace the
Slide 14: Mission-Driven, Experienced Management Team
Mission-Driven, Experienced Management Team Our Mission Create superior value in a culture where people can grow and TRAITS matter. We are diverse, collaborative, and service-minded, operating in a culture of TRAITS…Trust, Respect, Accountability, Integrity, Teamwork, and Sustainability Leadership H
Slide 15: Consistent Top-line Growth and Profitability
Consistent Top-line Growth and Profitability ($ in millions) Sales Adj. EBITDA1 Margin (%)1 21.1% 21.5% 24.2% 23.3% 22.6% $1,507 $341 $1,324 $309 $294 $1,218 $1,060 $1,029 $154 $865 $120 $224 $221 $137 $687 $699 $561 $86 $95 $572 $189 $187 $637 $642 $138 $157 $499 $519 $126 $457 FY20 FY21 FY22 FY23
Slide 16: AZZ - Proven Resilience Through Prior Cycles
AZZ - Proven Resilience Through Prior Cycles Limited exposure to metal prices ($ in millions) Strong Recovery Modest Decline +15% CAGR $169 (9%) CAGR $140 $142 Value-added pricing model $127 $71 $59 $57 $102 $42 $51 Highly variable cost structure with flexible operating model $98 $81 $85 $85 $51 Con
Slide 17: Balance Sheet and Liquidity
Balance Sheet and Liquidity > 3⁄4 turn As of May 31, 2023: reduction in net leverage since Cash $3.9 Available Credit on Revolver $307.1 acquisition 4.25x Total Long-Term Debt $1,040.8 Cash $3.9 Shareholders Equity $871 Total Available Liquidity $311 3.5x 3.0x 3.0x $ in millions: 2.5x • Long term de
Slide 18: Strong Free Cash Flow
Strong Free Cash Flow 1 $ In millions • Focused on the cash conversion cycle FY2023 includes only 42 weeks of • Deploying capital on high ROIC investments results from $273 Precoat • Strong cash flow generation supports near- $252 term deleveraging priorities ULFCF Year FY2023 TTM-May Adjusted EBITD
Slide 19: Our Capital Allocation Priorities
Our Capital Allocation Priorities Deploying Capital Reduce Return Acquisitions on High ROIC Leverage Capital Investments Organic growth At or below 3.0x Committed to Deferred leverage in sustaining Strategic customer calendar 2024 dividends partnerships Productivity INVESTOR PRESENTATION
Slide 20: FY 2024 Guidance (reaffirmed July 10, 2023)
FY 2024 Guidance (reaffirmed July 10, 2023) FY2024 Guidance - Continuing Operations $1,400 - $1,550m Sales(1) Sales Adjusted $300 - $325m EBITDA Adjusted EBITDA Adjusted $3.85 - $4.35 EPS(2) Adjusted EPS Note: FY based on February year-end 1. FY2024 guidance excludes equity income from AZZ’s minorit
Slide 21: Key Messages
Key Messages: Differentiated, high value add metal coatings provider with scale, expertise and customer centric technology uniquely positioned to serve the growing North American steel and aluminum market Strong business foundation capable of growing sales and margins at or above market levels, supp
Slide 22: Appendix
INVESTOR PRESENTATION Appendix 23
Slide 23: Reg "G" Tables
Reg “G” Tables 23
Slide 24: Non-GAAP Disclosure of Continuing Operations Adjusted EBITDA
Non-GAAP Disclosure of Continuing Operations Adjusted EBITDA 24
Slide 25: Continuing Operations Non-GAAP Disclosure
Continuing Operations Non-GAAP Disclosure 25
Slide 26: Non-GAAP Segment Disclosure from Continuing Operations (Metal Coatings and Precoat Metals)
Non-GAAP Segment Disclosure from Continuing Operations (Metal Coatings and Precoat Metals) 26