Slide 1: AZZ Corporate Presentation July 2014
AZZ incorporated NYSE: AZZ Corporate Presentation July 2014
Slide 2: Forward Looking Statements
2 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 forward- looking statements by terminology such as, “may,” “should
Slide 3: Corporate Overview and Vision
3 AZZ is a global provider of specialty electrical equipment and highly engineered services to the power generation, transmission, distribution and industrial markets as well as a leading provider of hot dip galvanizing services to the North American steel fabrication market Our Vision: To be the in
Slide 4: Focus for Fiscal 2015
4 Expanding Energy segment operating margins through emphasis on international growth a revitalized sales organization operational excellence leveraging fixed costs through top-line growth leveraging our strong NLI sales presence in the Nuclear platform Growing our Galvanizing Services
Slide 5: Total Company: Sales by Segment
5 Total Company: Sales by Segment 59% 41% Actual FY2013 $571 million 45% 55% Actual FY2014 $751 million 41% 59% Projected FY2015 $850 - $900 million Energy Galvanizing Services
Slide 6: Total Company: Sales by Market Segment
6 49% 19% 32% Actual FY2014 $751 million Total Company: Sales by Market Segment 47% 21% 32% Actual FY2013 $571 million Transmission & Distribution Industrial Power Generation
Slide 7: Energy Segment
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Slide 8: Energy: Revenue Mix
8 52% 48% 36% 13% 51% Actual FY2014 $416 million 77% 23% Energy: Revenue Mix 25% 29% 46% Actual FY2013 $234 million 31% 37% 32% Actual FY2012 $189 million 94% 6% Transmission & Distribution Industrial Power Generation Service Product B y M ar ke t B y Ty p e
Slide 9: Power Generation
9 Power Generation Our products power up the world from any generation source. Our services ensure the safety of lives and equipment. Bus Systems Nuclear Solutions Boiler Services Collector Substations for Renewables Power Distribution Centers
Slide 10: Transmission & Distribution
10 Transmission & Distribution Metal Clad Outdoor Switchgear Gas Insulated Bus Duct Portable Substations Power Distribution Centers Relay Panels Utility IPP EPC Co-ops OEM Our T&D products ensure that power is transmitted safely and reliably from generation source to end users.
Slide 11: Industrial and Commercial
11 Industrial and Commercial Mining Switchgear Power Distribution Centers Relay Panels Hazardous Duty Lighting Our products & services serve a broad range of industries, including refining, petrochemical, mining, pipeline, and more. Refining Services
Slide 12: Backlog
12 Backlog FY 2012 FY 2013 FY 2014 FY 2014 FY 2014 FY 2014 FY 2015 Full Year Full Year Q1 Q2 Q3 Q4 Q1 Beginning Backlog 108.4 138.6 221.7 270.6 294.0 290.0 325.0 Acquired Backlog 88.1 51.0 Ending Backlog 138.6 221.7 270.6 294.0 290.0 325.0 309.0 $(millions) Table includes acquired backlog from NLI d
Slide 13: Galvanizing Services
13 Galvanizing Services
Slide 14: Galvanizing Market Opportunity
14 Galvanizing Market Opportunity Includes Galvanized: • Steel Sheet • Tube Steel Global Galvanized Steel Market Post-Fabrication Galvanized Steel Electrical Utility Industrial Petrochemical Bridge & Highway OEM AZZ Served Markets
Slide 15: Galvanizing Services Locations
15 Galvanizing Services Locations Application: “After-fabrication” steel corrosion protection Locations: 36 facilities in 17 states and 3 Canadian Provinces 36th facility acquired 6/30/14
Slide 16: Galvanizing Services
16 Galvanizing Services 39% 11% 30% 8% 12% Actual FY 2013 $337 million Electrical Utility OEM's Industrial Bridge & Highway Petrochemical 35% 12% 35% 5% 13% Actual FY 2014 $336 million
Slide 17: Consolidated Financials
Consolidated Financials
Slide 18: Consolidated Net Sales
18 Consolidated Net Sales ($ in Millions) $381 $469 $571 $752.0 2011 2012 2013 2014 2015(E) Fiscal Year Actual Projected $850-900 est.
Slide 19: Earnings Per Share (Fully Diluted)
19 Earnings Per Share (Fully Diluted) $1.39 $1.61 $2.37 $2.32 $2.40 to $2.80 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 2011 2012 2013 2014 2015(e) Fiscal Year Actual Projected
Slide 20: Operating Margins
20 Operating Margins 16.7% 14.2% 14.7% 11.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% Energy Segment Actual Projected 11-13% 26.1% 26.1% 26.1% 27.4% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Galvanizing Services Actual Projected 26-28%
Slide 21: EBITDA Margins
21 EBITDA Margins ($ in Millions) 11.0% 9.6% 10.4% 16.4% 16.7% 21.2% 23.7% 22.3% 21.4% 24.0% 20.7% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% -$5.0 $95.0 $195.0 $295.0 $395.0 $495.0 $595.0 $695.0 $795.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Fiscal Year Net Sales EBITDA EBITDA Margin
Slide 22: Cash Flow
22 Cash Flow ($ in Millions) 5.00 15.00 35.00 55.00 75.00 95.00 115.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Fiscal Year Cash Pro. By Oper. Free Cash Flow Net Income *Free Cash Flow = (Cash Provided by Operations minus CAPEX ) and includes $12 million for the rebuild of the Joliet G
Slide 23: Total Bank Debt / Long Term Debt to Equity
23 Total Bank Debt / Long Term Debt to Equity ($ in Millions) 0.98 0.60 0.37 0.32 0.16 0.32 0.00 0.53 0.44 0.88 0.81 0.63 1.08 0.00 0.20 0.40 0.60 0.80 1.00 1.20 $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 $350.0 $400.0 $450.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Fiscal
Slide 24: Capital Expenditures / Depreciation & Amortization
24 Capital Expenditures / Depreciation & Amortization ($ in Millions) $16.4 $19.8 $24.9 $43.5 $22.2 $22.6 $29.4 $43.3 $0 $10 $20 $30 $40 $50 2011 2012 2013 2014 2015 est Capital Expenditures D&A Projected CE Projected D&A * $35.0 - $40.0 $45.0 - $50.0 *Includes $12 million for the rebuild of the Jol
Slide 25: AZZ Investment Summary
25 • Strong Historical Performance • FY14 is the 27th consecutive year of profitability • 10 Yr CAGR – Revenues 18.6%, Net Income 30.2% • Significant Operating Margins • Key Growth Drivers • Aging U.S. energy and industrial infrastructure and required investment • Emerging North American energy inde
Slide 26: Reg G Tables
@azz Reg G Tables
Slide 27: GAAP to Non-GAAP EBITDA Reconciliation FY 2004 - FY 2014
27 GAAP to Non-GAAP EBITDA Reconciliation FY 2004 - FY 2014 EBITDA ($000's) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Net Income 4,263 4,812 7,827 21,604 27,688 42,206 37,728 34,963 40,736 60,456 59,597 Depreciation 5,606 5,492 5,535 6,478 7,999 12,921 15,603 18,929 18,855 19,365 25,090
Slide 28: GAAP to Non-GAAP Free Cash Flow Reconciliation FY 2004 - FY 2014
28 GAAP to Non-GAAP Free Cash Flow Reconciliation FY 2004 - FY 2014 Free Cash Flow ($000's) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Cash from Operations 14,963 6,471 12,794 6,928 38,926 60,196 82,588 42,085 64,065 92,738 107,275 Less Capital Spending 3,645 6,649 6,602 10,659 9,926 20,
Slide 29: AZZ incorporated
AZZ incorporated