Azz Inc. · NYSE:AZZ
Azz — Non-Deal Roadshow (October 2024)
34 slides from Azz's roadshow presentation, October 2024
Slide 1: Investor Presentation
ROADSHOW PRESENTATION Investor Presentation October 2024 (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. You can iden
Slide 3: Why Invest in AZZ?
Why Invest in AZZ? 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 markets Strong business foundation capable of growing sales and margins at or above market levels
Slide 4: AZZ Snapshot (NYSE: AZZ)
AZZ Snapshot (NYSE: AZZ) AZZ is North America’s FORT WORTH, TEXAS 3,873 Metal Coatings 47 Coil Coating 13 Headquarter: Employees: locations1: Locations2: leading independent post- fabrication hot-dip galvanizing & coil coating Segment Sales3 Segment Adj. EBITDA3 solutions company with #1 positions i
Slide 5: AZZ's Strategic Journey
AZZ’s Strategic Journey $571 $810 $903 $1,538 $2,0001 Sales, in millions 2025 -2028 Strengthen the Core; 2023 -2024 Invest in the Future Focused Metal Coatings • Commitment to continuous process 2019-2022 improvement initiatives across the segments Company • Capture opportunities associated with lon
Slide 6: Achievements Against Stated Commitments
Achievements Against Stated Commitments Commitments Achievements to Date Target Leverage • Reduce Net Leverage from 5.0x to 3.0x by FYE 2024 • Total Net Leverage as of August 2024 2.7x • Preliminary FY24E Adj. EBITDA1 guidance of $300 - $325 • TTM Adjusted EBITDA1 of $346 million as of Cash Flow G
Slide 7: Mission-Driven, Experienced Management Team
Mission-Driven, Experienced Management Team Our Mission Create superior value in a culture where people can grow and TRAITS matter. We are diverse, collaborative, and service-minded, operating in a culture of TRAITS…Trust, Respect, Accountability, Integrity, Teamwork, and Sustainability Leadership H
Slide 8: End Markets & Drivers
End Markets & Drivers 1 57% 9% 9% 8% 9% (1) Based on AZZ Q2 FY2025 financial results INVESTOR PRESENTATION 8 8
Slide 9: Uniquely Positioned to Capitalize on Generational Infrastructure Investment in U.S.
Uniquely Positioned to Capitalize on Generational Infrastructure Investment in U.S. Source: American Infrastructure Investment and Jobs Act INVESTOR PRESENTATION 9 9
Slide 10: Our Leading Segments (#1 Market Position in Each Segment)
Our Leading Segments (#1 Market Position in Each Segment) Operating Production Production Value-Added Market Size and Historical Adjusted Segment Input Route Capabilities Share2 EBITDA Performance3 ($ in millions) Hot-Dip Galvanizing $2.5B Metal Coatings Batch Spin Galvanizing $157 $189 $197 $202 $1
Slide 11: Strategic Value Proposition Built on Common Business Models
Strategic Value Proposition Built on Common Business Models Standout Market Leaders with Best-in-Class Financial Profiles Metal Coatings Tolling Based Businesses with Minimal Commodity and Inventory Risk Proprietary Systems Driving Efficiencies in Operations, Procurement, Supply Chain, IT and Back O
Slide 12: Metal Coatings Value Proposition
Metal Coatings Value Proposition Key Value Propositions Technology: Digital Galvanizing System (DGS) provides customers with near real-time updates and operational efficiencies Embracing Complexity: Quick turns on special projects to meet demanding customer schedules Value-Added Services: Over 3
Slide 13: Metal Coatings Footprint Well-Positioned to Serve Key End-Markets
Metal Coatings Footprint Well-Positioned to Serve Key End-Markets State-of-the-Art Facilities Across North America1 Superior Capabilities Enable Leading Position Across All End-Markets2 Other 23% Construction 27% Electrical 18% Industrial Transportation 21% 11% Key Technologies Hot-Dip Galvanizing S
Slide 14: Metal Coatings Historical Financials
Metal Coatings Historical Financials ($ in millions) Historical Performance Sales $637 $656 $667 $499 $458 $519 FY20 FY21 FY22 FY23 FY24 TTM 8/24 % Margin 27.7% 27.6% 30.3% 29.7% 30.0% 30.3% Adjusted $189 $197 $202 $138 $157 EBITDA1 $126 FY20 FY21 FY22 FY23 FY24 TTM 8/24 (1) Adjusted EBITDA prior to
Slide 15: Precoat Metals Value Proposition
Precoat Metals Value Proposition Key Value Propositions Technology: Coilzone provides customers with near real-time access to inventory, production and shipping information generating operational efficiencies Embracing Complexity: Quickly accommodate customer needs by offering quick turns on spe
Slide 16: Precoat Metals Footprint Well-Positioned to Serve Key End-Markets
Precoat Metals Footprint Well-Positioned to Serve Key End-Markets State-of-the-Art Facilities Across North America1 Critical Service Provider to Diverse End-Markets2 Construction (79%) Appliance (7%) HVAC (3%) Container (3%) Transportation (3%) Key Technologies Existing Facility New Facility Coil Co
Slide 17: Precoat Metals Historical Financials
Precoat Metals Historical Financials ($ in millions) Historical Performance $882 $881 $904 Sales $710 $587 $605 FY20 1 FY21 1 FY22 1 FY232 FY24 TTM 8/24 % Margin 17.5% 18.9% 21.8% 18.7% 19.0% 19.4% $165 $168 $176 Adjusted $115 $155 $103 EBITDA3 FY20 4 FY21 4 FY22 4 FY23 2 FY24 TTM 8/24 Note: FY base
Slide 18: 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 contracted sales of $50+ million exiting FY 2026 at an EBITDA margin above Precoat ov
Slide 19: Technology Transformation – A Key Differentiator
Technology Transformation – A Key Differentiator Digital Galvanizing System (DGS) is a distinct competitive advantage - Near elimination of paper with proprietary, state-of-the-art tool linked to Oracle ERP system - Fully integrated; Allows real-time decisions and enhanced customer experience - Prov
Slide 20: Investing in Future Growth: Sustainability
Investing in Future Growth Sustainability We are essential and We are committed to sustainability We recognize that diversity is environmentally friendly initiatives and reporting key to sustainability • Sustainability is intrinsic to our products as • Tracking and Reporting on Scope 1 and • We embr
Slide 21: Consistent Top-Line Growth and Profitability
Consistent Top-Line Growth and Profitability ($ in millions) $1,519 $1,538 $1,570 $1,229 $1,086 $1,062 $882 $881 $904 $710 1 Sales $587 1 $605 1 $499 $519 $637 $656 $667 $458 FY20 FY21 FY22 FY23 2 FY24 TTM 8/24 COVID Year % Margin 22.2% 22.7% 25.4% 23.3% 23.7% 24.1% Segment $312 $354 $364 $378 Adjus
Slide 22: AZZ's Attractive Financial Metrics Relative to Related Industrial Companies
AZZ’s Attractive Financial Metrics Relative to Related Industrial Companies CY21A – CY23A Revenue Growth 12.3% 7.5% 4.7% 1.0% (1.3%) AZZ Coatings Building Products Service Centers Steel Mills (FY22 – FY24) CY23A EBITDA Margin1 21.7% 20.7% 19.5% 15.9% 11.4% AZZ Coatings Building Products Service Cent
Slide 23: Impactful Deleveraging Post Transformational Acquisition
Impactful Deleveraging Post Transformational Acquisition Net Leverage Since Precoat Metals Acquisition1 Net Debt / • Strong free cash flow Adjusted EBITDA 4.3x generation (incl. preferred) (1.6x) • ~$115M debt 3.6x 2.7x reduction in fiscal year Net Debt / 2024 Adjusted EBITDA (excl. preferred) • Ful
Slide 24: Our Capital Allocation Priorities
Our Capital Allocation Priorities Strategic M&A High ROIC Investments Bolt-on acquisitions, and/or strategic M&A that Organic growth, Strategic customer partnerships & aligns with our platforms Productivity Improvements Manage Leverage Return Capital Net Leverage target range of 2.0x - 3.0x Committe
Slide 25: Revised FY 2025 Guidance
Revised FY 2025 Guidance(1) Sales Adjusted EBITDA EPS Range $1.525 - $1.625 billion $320 - $360 million $4.70 - $5.10 1. Revised as of October 9, 2024 INVESTOR PRESENTATION 25
Slide 26: Why Invest in AZZ?
Why Invest in AZZ? 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 markets Strong business foundation capable of growing sales and margins at or above market levels
Slide 27: Appendix
ROADSHOW PRESENTATION Appendix
Slide 28: Net Leverage Calculations
Net Leverage Calculations The table presented above is an excerpt from the Company’s FY2025 Q2 results found in the Company’s 10Q filed 10/09/2024 INVESTOR PRESENTATION 28
Slide 29: Reg "G" Tables
Reg “G” Tables
Slide 30: Non-GAAP Disclosure of Continuing Operations Adjusted EBITDA
Non-GAAP Disclosure of Continuing Operations Adjusted EBITDA The table presented above is an excerpt from the Company’s FY2025 Q2 results found in the Company’s 10Q filed with the SEC on 10/09/2024 30
Slide 31: Continuing Operations Non-GAAP Disclosure
Continuing Operations Non-GAAP Disclosure The table presented above is an excerpt from the Company’s FY2025 Q2 results found in the Company’s 10Q filed with the SEC on 10/09/2024 31
Slide 32: Non-GAAP Segment Disclosure from Continuing Operations (Metal Coatings and Precoat Metals)
Non-GAAP Segment Disclosure from Continuing Operations (Metal Coatings and Precoat Metals) The tables presented above are an excerpt from the Company’s FY2025 Q2 results found in the Company’s 10Q filed with the SEC on 10/09/2024 32
Slide 33: Non-GAAP Segment Disclosure from Continuing Operations (Metal Coatings and Precoat Metals)
Non-GAAP Segment Disclosure from Continuing Operations (Metal Coatings and Precoat Metals) The table presented above is an excerpt from the Company’s FY2025 Q2 results found in the Company’s 10Q filed with the SEC on 10/09/2024 33
Slide 34: Non-GAAP Disclosure of Free Cash Flow and Free Cash Flow Conversion Reconciliation
Non-GAAP Disclosure of Free Cash Flow and Free Cash Flow Conversion Reconciliation Three Months Ended August 31 2024 2023 Cash Flow from Operations $ 119,430 $ 118,341 Less: Capital Expenditures $ (32,105) $ (25,690) Free Cash Flow $ 87,325 $ 92,651 Net Income from Continuing Operations available to