AZZ : Fiscal Year 2023 Third Quarter Earnings Presentation

AZZ Inc.

Q3 FY2023 Earnings Release Presentation

January 10, 2023

Q3 FY2023 EARNINGS 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 Act of 1995, including the statements regarding our strategic and financial initiatives. You can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "intends," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. Such forward-looking statements are based on currently available competitive, financial and economic data and management's views and assumptions regarding future events. Such forward-looking statements are inherently uncertain, and investors must recognize that actual results may differ from those expressed or implied in the forward-looking statements. Certain factors could affect the outcome of the matters described herein. This presentation may contain forward-looking statements that involve risks and uncertainties including, but not limited to, changes in customer demand for our products and services, including demand by the power generation markets, electrical transmission and distribution markets, the industrial markets, and the metal coatings markets. In addition, within each of the markets we serve, our customers and our operations could potentially continue to be adversely impacted by the ongoing COVID-19 pandemic, including governmental mandates regarding the same. We also continue to experience additional increases in labor costs, components, and raw materials including zinc and natural gas which are used in the hot-dip galvanizing process; supply-chain vendor delays; customer requested delays of our products or services; delays in additional acquisition or disposition opportunities; currency exchange rates; availability of experienced management and employees to implement the Company's growth strategy; a downturn in market conditions in any industry relating to the products we inventory or sell or the services that we provide; economic volatility or changes in the political stability in the United States and other foreign markets in which we operate; acts of war or terrorism inside the United States or abroad; and other changes in economic and financial conditions. The Company has provided additional information regarding risks associated with the business in the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 2022, and other filings with the Securities and Exchange Commission ("SEC"), available for viewing on the Company's website at www.azz.comand on the SEC's website at www.sec.gov.You are urged to consider these factors carefully in evaluating the forward- looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. These statements are based on information as of the date hereof and the Company's assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

Non-GAAP- Regulation G Disclosures - 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 presentation of these measures provides investors with a greater transparency comparison of operating results across a broad spectrum of companies, which provides a more complete understanding of AZZ's financial performance, competitive position and prospects for the future. Management also believes that investors regularly rely on non-GAAP financial measures, such as

EBITDA and Adjusted EBITDA, to assess operating performance and that such measures may highlight trends in the Company's business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP.

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Q3 FY2023 EARNINGS PRESENTATION

Q3 FY2023 Company Highlights

Q3 Fiscal 2023 Sales $373 million(1)

Metal Coatings	Precoat Metals
Segment	Segment
$158.3M	$215.0M

+17.2% vs. Q3 FY2022

+14.8% vs. Comparable Q3 FY2022

Key Accomplishments in the Quarter

• Completed the divestiture of a 60% majority stake in the Infrastructure Solutions Segment(2) on September 30, 2022
• Debt decrease of $230.3 million, resulting in net leverage of 3.4x LTM Adjusted EBITDA at end of Q3

1. Reflect Sales from Continuing Operations
2. Divestiture excluded AZZ Crowley Tubing

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Q3 FY2023 EARNINGS PRESENTATION

Q3 Fiscal Year 2023 Summary - AZZ Consolidated Results

In $millions, except percentages and per share amounts

Sales		EBITDA		Net Income		Diluted EPS
+176%		(34%) / (a) +79%		(214%) / (a) +4%		(214%) / (a) +4%

	$373.3
$135.1
FY2022	FY2023

$71.2

$39.8

$26.2

FY2022 FY2023 FY2023 (a)

$21.1		$22.0
	-$24.1
FY2022	FY2023	FY2023(a)

$0.85	$0.88
	-$0.97

FY2022 FY2023 FY2023(a)

• Solid third quarter sales	• Flow through from higher sales,
performance across both segments	particularly AMC
driven by value-pricing initiatives and
higher volume
• Excludes AIS sales of $42.3 million
(reflected in discontinued
operations)

1. Adjusted (Non-GAAP measure. See slides 20 and 21 for reconciliation of GAAP to Non-GAAP)

• Continued strong operational performance across the Segments
• Adjusted Net Income Q3 FY23 reflects impact of non-cash add- backs

• Write down on disposal of discontinued operation ($40.1) million, net of tax
• Q3 adjusted EPS includes $1.85 of EPS add-backs

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Q3 FY2023 EARNINGS PRESENTATION

Q3 FY2023 Segment Results - Metal Coatings Segment

In millions $ except percentages

Key Statistics

		$135.1
	FY2022 Sales
		$17.3
	Organic
		$5.9
	Acquisitions
	FY2023 Sales	$158.3

Sales
+17%
	$158.3
$135.1
FY2022	FY2023

Operating Income

+1%

$33.1	$33.5
24.5%	21.2%
FY2022	FY2023

EBITDA(1)

+3%

$40.7	$41.9
30.2%	26.5%
FY2022	FY2023

AZZ Metal Coating Segment (AMC) Summary:

• Strong total segment sales growth during the quarter, driven by an increase in galvanizing volumes and price realization
• Operating margin of 21.2% for the current quarter, primarily due to peak cost of zinc flowing through the majority of our kettles and mix
• Outlook for the 4th quarter of the year remains good but with normal winter impact on construction activity
• Improved customer responsiveness and productivity through continued investment in our Digital Galvanizing System (DGS)

1. Non-GAAPmeasure. See slides 20 and 2` for reconciliation of GAAP to non-GAAP

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