AZZ (AZZ) Noble Capital Markets Virtual Equity Conference summary

Business overview and strategy

• Operates in North America through two segments: metal coatings (hot-dip galvanizing) and coil coating (Precoat Metals), both showing sales and margin growth with strong secular drivers and ESG focus.

• FY2024 sales reached $1.5 billion with $334 million Adjusted EBITDA and a 21.7% margin, across 48 metal coatings and 13 coil coating locations.

• Underwent strategic transformation since FY2019, including divestitures and the $1.2 billion Precoat Metals acquisition, reducing leverage from 4.2x to 2.8x.

• Capital allocation prioritizes debt reduction, high ROIC investments, and consistent dividend payments.

• Management team is experienced, with key leaders from both legacy and acquired businesses.

Market position and growth drivers

• Construction is the largest end market (55% of FY2024 sales), followed by industrial, transportation, consumer, and electrical sectors.

• Benefits from infrastructure and renewables investment, reshoring of manufacturing, and consumer shift to aluminum products.

• Holds #1 market share in both metal coatings (27% share, 2x nearest competitor) and coil coating (20% share), both in fragmented industries.

• Insulated from steel/aluminum price volatility as it does not purchase raw materials, focusing on value-added services.

• Technology investments (Digital Galvanizing System, CoilZone) enhance customer service and operational efficiency.

Investments, financials, and outlook

• Investing $125 million in a new aluminum coil coating facility in Missouri, backed by a $50 million/year, seven-year contract covering 75% of capacity.

• Guidance for FY2025: sales of $1.525–$1.625 billion, Adjusted EBITDA of $310–$360 million, and EPS of $4.50–$5.

• Normalized annual CapEx expected at $60 million post-facility completion, supporting strong free cash flow.

• Actively seeking bolt-on acquisitions in core segments, targeting accretive deals with returns above WACC and ROIC targets.

• New Missouri facility expected to drive Precoat Metals segment margins to the high end of the 17–22% range.