Slide 1: Q2 FY2023 Earnings Release Presentation
AZZ Inc. Q2 FY2023 Earnings Release Presentation October 11, 2022
Slide 2: Safe Harbor Statement
Q2 FY2023 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, including the statements regard
Slide 3: Non-GAAP Disclosure of EBITDA
Q2 FY2023 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 Adjusted EBITDA, which are non-GAAP measures. Management believes that the p
Slide 4: Company Highlights
Q2 FY2023 EARNINGS PRESENTATION Company Highlights AZZ Metal Coatings had another outstanding quarter, including record Sales of $166 million AZZ Precoat Metals completed its first full quarter as part of AZZ with sales of $241 million AZZ Infrastructure Solutions is now reported as discontinu
Slide 5: Sales and Segment Market Highlights (excludes AIS)
Q2 FY2023 EARNINGS PRESENTATION Q2 FY2023 Sales and Segment Market Highlights (excludes AIS) Q2 Fiscal 2023 Consolidated Sales: $407 million Metal Coatings Precoat Metals Segment Segment $165.8M $240.9M +26.2% vs. Q2 FY2022 Segment Market Highlights AZZ Metal Coatings (AMC) AZZ Precoat Metals (APM)
Slide 6: Q2 Fiscal Year 2023 Summary – AZZ Consolidated Results
Q2 FY2023 EARNINGS PRESENTATION Q2 Fiscal Year 2023 Summary – AZZ Consolidated Results In $millions, except percentages and per share amounts Sales EBITDA Net Income Diluted EPS +209.4% (a) +174.4% (a) +89.3% (a) +63.2% $100.5 $35.9 $1.24 $406.7 $19.0 $0.76 $36.6 $131.4 -$17.1 -$33.8 -$1.91 FY2022 F
Slide 7: Segment Results – Metal Coatings
Q2 FY2023 EARNINGS PRESENTATION Q2 FY2023 Segment Results – Metal Coatings In millions $ except percentages Sales Operating Income EBITDA +26% +40% Key Statistics +34% $165.8 $53.0 FY2022 Sales $131.4 $45.0 $131.4 $39.5 Organic $158.8 $32.0 Acquisitions $7.0 27.1% 32.0% 24.4% 30.1% FY2023 Sales $165
Slide 8: Segment Results – Precoat Metals
Q2 FY2023 EARNINGS PRESENTATION Q2 FY2023 Segment Results – Precoat Metals (acquisition date May 13, 2022) In millions $ except percentages Sales Operating Income EBITDA Key Statistics $49.6 $240.9 FY2022 Sales $ 0.0 $36.2 Organic $0.0 15.0% 20.6% Acquisitions $240.9 FY2023 Sales $240.9 FY2023 FY202
Slide 9: Consolidated Results
Q2 FY2023 EARNINGS PRESENTATION Q2 FY2023 Consolidated Results In millions, except for EPS and percentages % Change vs. Q2 FY 2023 Q2 FY 2022 Prior Year Sales $406.7 $131.4 209.4% Gross Profit $101.6 $36.4 178.7% Gross Margin 25.0% 27.7% (270)Bps Operating Profit $64.1 $20.0 221.3% Operating Margin
Slide 10: YTD FY2023 AZZ Consolidated Cash Flow Highlights
Q2 FY2023 EARNINGS PRESENTATION YTD FY2023 AZZ Consolidated Cash Flow Highlights In millions, except for percentages YTD FY 2023 YTD FY 2022 Cash flows from continuing operations provided from operating activities $42.0 $31.3 Less: Capital Expenditures $(18.7) $(10.6) Free Cash Flow $23.3 $20.6 Net
Slide 11: Capital Allocation Focused on Growth
Q2 FY2023 EARNINGS PRESENTATION Capital Allocation Focused on Growth In millions Q2 2023 Capital Deployment • Safety, Health and Environmental • Productivity and capacity initiatives Capital • General maintenance and sustainability Expenditures • $8.0M Precoat Metals incremental • Excludes $2.9M of
Slide 12: Q2 Fiscal Year 2023 – Debt Compliance / Net Leverage
Q2 FY2023 EARNINGS PRESENTATION Q2 Fiscal Year 2023 – Debt Compliance / Net Leverage 7.5x Max Leverage 6.0x 6.25x 5.0x 5.0x 4.5x 4.3x (1) 4.2x 4.3x 3.6x 3.0x 2.4x 1.5x 1.7x 1.5x 1.5x 0.9x 0.0x 2018 2019 2020 2021 2022 Pro Forma Qtr 1 Qtr 2 Leverage FY2023 FY2023 (1) – Current quarter leverage ratio
Slide 13: Key Indicators And Financial Guidance
Key Indicators And Financial Guidance 13
Slide 14: Key Indicators
Q2 FY2023 EARNINGS PRESENTATION Key Indicators Metal Coatings Segment Market activity remains normal as we enter the seasonally slower winter months Fabrication activity remains solid for Q3; some customers experiencing labor shortages Zinc costs in our kettles continue to increase and will
Slide 15: Fiscal Year 2023 – Financial Guidance
Q2 FY2023 EARNINGS PRESENTATION Fiscal Year 2023 – Financial Guidance • We are not issuing Full Year guidance at this time due to the recently completed transactions o Precoat Metals acquisition, which closed on May 13, 2022 o The recent divestiture of 60% stake in AIS which closed on September 30,
Slide 16: Strategic Direction
Q2 FY2023 EARNINGS PRESENTATION Strategic Direction AZZ has taken the actions necessary to become a ‘pure play’ metal coatings leader in North America Our focus is on expanding our leading market positions in both AZZ Metal Coatings as well as recently acquired AZZ Precoat Metals to position the
Slide 17: Q&A
Q&A
Slide 18: Reg "G" Tables
Reg “G” Tables
Slide 19: Non-GAAP Disclosure of Consolidated EBITDA
Q2 FY2023 EARNINGS PRESENTATION Non-GAAP Disclosure of Consolidated EBITDA In millions Consolidated Consolidated Consolidated Consolidated Q2 FY 23 Q2 FY 22 YTD FY 23 YTD FY 22 GAAP Net Income $(57.8) $19.0 $(33.5) $41.3 Adjustments to reconcile GAAP to non- GAAP Financial Measures: Interest Expense
Slide 20: Non-GAAP Segment Disclosure from Continuing Operations
Q2 FY2023 EARNINGS PRESENTATION Non-GAAP Segment Disclosure from Continuing Operations (Metal Coatings and Precoat Metals) In millions Consolidated Consolidated Consolidated Consolidated Q2 FY 23 Q2 FY 22 YTD FY 23 YTD FY 22 GAAP Net Income $25.1 $14.3 $40.5 $25.9 Adjustments to reconcile GAAP to no
Slide 21: Non-GAAP Segment Disclosure from Discontinued Operations
Q2 FY2023 EARNINGS PRESENTATION Non-GAAP Segment Disclosure from Discontinued Operations (Infrastructure Solutions) In millions Consolidated Consolidated Consolidated Consolidated Q2 FY 23 Q2 FY 22 YTD FY 23 YTD FY 22 GAAP Net Income $(82.7) $4.7 $(74.0) $15.4 Adjustments to reconcile GAAP to non- G
Slide 22: Appendix
Appendix
Slide 23: Q2-2023 Earnings Per Share (EPS) Walk
Q2 FY2023 EARNINGS PRESENTATION Q2-2023 Earnings Per Share (EPS) Walk(1) $3.95 $0.09 $1.24 $0.90 EPS, as reported Loss on Sale Transaction Costs Tax Impact EPS, as adjusted -$1.91 (1) – Earnings per share amounts included in the chart above may not sum due to rounding differences. 23
Slide 24: Segment Results – Infrastructure Solutions Segment (AIS)
Q2 FY2023 EARNINGS PRESENTATION Q2 FY2023 Segment Results – Infrastructure Solutions Segment (AIS) In millions $ except percentages Sales Operating Income (1) EBITDA +25.5% Key Statistics $13.1 FY 2022 Sales $85.0 $6.7 $106.7 FY2022 Book to Sales 1.18 to 1 $85.0 FY2023 Sales $106.7 FY2023 Book to Sa