AZZ Raises Outlook as Infrastructure, Data Centers and Acquisitions Drive Growth

AZZ raised its fiscal-year outlook, now projecting sales of $1.8 billion–$1.85 billion, adjusted EBITDA of $375 million–$415 million and adjusted EPS of $6.75–$7.15.

Growth is being supported by infrastructure and electrical-grid investment, data-center construction, reshoring and improving Precoat Metals demand.

The company also acquired Seattle Galvanizing to expand its Pacific Northwest presence and will continue pursuing North American bolt-on acquisitions.

Lower leverage, which fell to 1.4 times debt to EBITDA, is giving AZZ flexibility to invest, raise its dividend by 20%, repurchase shares and support its $125 million Washington, Missouri, facility, expected to contribute to earnings in fiscal 2027.

AZZ NYSE: AZZ outlined its growth strategy, updated financial outlook and acquisition priorities during a Sidoti investor presentation, highlighting demand from infrastructure, electrification, reshoring and selected data-center projects.

Dave Nark, AZZ’s chief marketing, communications and investor relations officer, said the company is North America’s largest independent provider of post-fabrication hot-dip galvanizing and coil coating.

The company operates more than 47 metal-coatings locations, including 43 galvanizing plants, and 14 coil-coating facilities.

Nark said AZZ has approximately 27% market share in Metal Coatings and 23% share in Precoat Metals.

The company’s operations are entirely concentrated in North America, which Nark said positions AZZ as an industrial and infrastructure-focused business.

AZZ reported 39 consecutive years of profitability, with fiscal-year sales of $1.65 billion and a $4.6 billion market capitalization, both records for the company.

AZZ operates through its Metal Coatings segment, centered on hot-dip galvanizing, and its Precoat Metals segment, which provides coil coating.

For the fiscal year ended in February, Metal Coatings revenue rose 14% year over year on a trailing-12-month basis, while Precoat Metals revenue declined 2.3%.

However, Nark said Precoat Metals returned to growth in the first quarter, with revenue up 1.5%. He said the company expects to provide a further update on second-quarter performance in October.

Construction is AZZ’s largest end market and includes commercial, residential and agricultural activity, as well as data centers.

Nark said data centers represent about 4% of the company’s consolidated end-market sales.

Other markets include infrastructure, industrial, transportation, HVAC and appliance, and containers.

Infrastructure represented 13% of end-market sales, according to the presentation.

Nark cited bridge, highway and electrical-infrastructure activity as sources of demand, along with grid resiliency, grid interconnection projects and load growth.

Generational infrastructure investment and electrical-grid expansion

Data-center construction and related steel and pre-painted steel demand

Reshoring of manufacturing in the U.S.

A shift from plastics to aluminum in beverage containers

Nark discussed AZZ’s Washington, Missouri, facility, a $125 million investment that is now operational.

The plant is protected by a seven-year take-or-pay agreement with an anchor customer that covers 75% of planned capacity, or roughly 45,000 to 50,000 tons annually, with contractual escalators.

The remaining 25% of capacity offers additional customer opportunities, he said, while the ancho...