AZEK : Fourth Quarter 2023 Earnings Presentation

4th Quarter

FY 2023

Earnings

Presentation

November 28, 2023

DISCLAIMER

Important Notice

This presentation contains "forward-looking statements" within the meaning of federal securities laws, including the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this presentation, including statements regarding future operations are forward-looking statements. In some cases, forward looking statements may be identified by words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "could," "would," "expect," "objective," "plan," "potential," "seek," "grow," "target," "if," and similar expressions intended to identify forward-looking statements. Projected financial information, including our future financial and operating performance, growth, liquidity and access to capital, cash flows and margin expansion targets, objectives and goals as well as statements regarding our guidance and outlook, are forward-looking statements. Other forward-looking statements may include, without limitation, market data and other statements about the markets in which we operate, including the economic environment, supply and demand balance and our ability to effectively manage our inventory and inventory in our distribution channels, wood conversion expectations as well as growth of our various markets and our expectations and ability to share in such growth; statements about future pricing for our products or our raw materials and our ability to successfully manage market risk and control or reduce costs; statements with respect to our ability to meet future goals and targets, including the environmental, recycling, social and governance targets we aspire to; statements about our future expansion plans, capital investments, capital allocation priorities and other future strategic initiatives; statements about any stock repurchase plans; statements about potential new products and product innovation; statements about the domestic and global economies, including statements about inflation and interest rates and their impact on us; statements about acquisitions or other strategic transactions; statements about our production levels and our ability to successfully manage such levels; and any other statements about our future business objectives, plans, strategies and initiatives, including our competitive position and prospects. We have based these forward-looking statements on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the section titled "Risk Factors" set forth in our Annual Reports on Form 10-K, and Quarterly Reports on Form 10-Q and in our other filings with the U.S. Securities and Exchange Commission. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this presentation may not occur and actual results may differ materially and adversely from those anticipated or implied in the forward-looking statements. The information and opinions contained in this presentation speak only as of the date identified on the cover page hereof or as of the date specified herein. You should read this presentation with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect. You should not place undue reliance on the forward-looking statements contained in this presentation, and we undertake no obligation to publicly update or revise any forward-looking statements, except as required by law.

Non-GAAP Measures

This presentation (i) contains non-GAAP financial measures, (ii) uses terms that are not generally used in presentations made in accordance with GAAP,

1. uses terms that are not measures of financial condition or profitability and (iv) contains terms which are unlikely to be comparable to similar measures used by other companies in our industry. As a result, these financial measures have limitations as analytical and comparative tools and you should not consider these items in isolation, or as a substitute for analysis of our results as reported under GAAP. For a reconciliation of non-GAAP financial measures used in this presentation to the closest comparable GAAP measure, see the Appendix hereto.

2

I N D U S T R Y - L E A D I N G

O U T D O O R L I V I N G

P O R T F O L I O

Deck, Rail &

Accessories

+	Decking	+	Railing
+	Pergolas	+	Porch
+	Fasteners	+	Lighting

Home Exteriors

+	Trim boards	+	Beadboard
+	Moulding	+	Column Wraps
+	Cladding	+	Board & Batten

• Shingle Siding

Long-Term Strategy Positions AZEK to Continue Delivering Above Market Growth and Margin Expansion

THE INDUSTRY LEADER

IN OUTDOOR LIVING

Market

Product

Multi-Channel

Consumer

Strategic

Conversion

Innovation

Expansion

Journey

M&A

Converting wood and other

Delivering the most

Extending our reach

Providing consumers a

Leveraging acquisitions to

inferior products

beautiful and best

across geographies,

best-in-class experience

expand addressable

performing products

channels and markets

for all their outdoor living

markets and vertically

needs

integrate

AZEK INTEGRATED MANAGEMENT SYSTEM (AIMS) & RECYCLE EXPANSION

Better Today Than Yesterday

4

History of Delivering Strong Net Sales and Adjusted EBITDA Growth

Net Sales

				+13.7% CAGR			$1,356	$1,370
							$187	$147
					$1,179
					$135	$1,169	$1,223
				$899	$1,044
		$794	$128
$633	$682	$139	$771
$140
$131	$655
$502	$542

2017	2018	2019	2020	2021	2022	2023
			Residential Segment		Commercial Segment

+11.6% 10-year Net Sales CAGR Residential business 2

Adjusted EBITDA 1

+14.2% CAGR

$301 $291

$274

$214

$180

$150

$131

2017	2018	2019	2020	2021	2022	2023
20.7%	22.0%	22.6%	23.7%	23.3%	22.2%	21.3%
		Adjusted EBITDA Margin 1

5

Source: Company Financial Statements. (1) Non-GAAP. Refer to Appendix for reconciliations of Adjusted EBITDA and Adjusted EBITDA Margin to the most comparable GAAP financial measures. (2) Ten Year Net Sales compound annual growth rate, or CAGR, refers to the CAGR for the ten years ended September 30, 2023, on a trailing twelve-month basis. Our reported growth over this period reflects the contribution to net sales of acquisitions.

The AZEK Company - Annual Highlights

Fiscal Year 2023

Financial Highlights

• Delivered Residential segment net sales growth of ~5% y-o-y, outperforming the U.S. residential R&R and new single-family housing starts markets in a challenging macro environment
• Second half of fiscal year 2023 Adjusted EBITDA Margin of 26.2% (increasing 450 bps y-o-y) demonstrates potential of the AZEK business model 1
• Strong cash generation driven by working capital improvements; generated $274 million of Free Cash Flow (increasing $339M y-o-y)1
• Returned $115 million to shareholders through share repurchases
• Strong balance sheet with ample capacity; Net Debt to LTM Adj. EBITDA ~1.4x 1

Operational & Business Highlights

• Continued momentum from new products including new LandmarkTM Boardwalk® decking colors, new Classic Composite Series rail colors and expansion of CaptivateTM Prefinished Siding & Trim
• Productivity and material savings accelerated in the back half of the year
• Added over 1,000 pro contractors into our Pro-focused program called "The Board" and continued to see growing consumer engagement including website traffic, leads and samples
• Completed the sale of the Vycom business for gross proceeds of approximately $140 million, simplifying
  AZEK's portfolio to focus on higher growth and margin accretive opportunities

6

Source: Company Financial Statements. (1) Non-GAAP. 2H FY23 net profit margin was 10.0% (increasing 670 bps y-o-y). Refer to Appendix for reconciliations of Adjusted EBITDA Margin, Free

Cash Flow and Net Leverage to the most comparable GAAP financial measures.

The AZEK Company - Quarter Highlights

Fiscal Fourth Quarter 2023

Financial Highlights

• Net Sales, Adjusted EBITDA and Free Cash Flow performance exceed expectations
• Double-digitResidential sell-through growth exceeds market via strong execution against AZEK growth playbook
• Expanded Adj. EBITDA Margin by 600 bps y-o-y to a record fourth quarter of 27.4% 1
• Strong Free Cash Flow generation of $92 million, an $83 million increase y-o-y1
• Returned ~$61 million to shareholders through share repurchases

Operational & Business Highlights

• Continued execution of growth, material savings & productivity initiatives enables ongoing investments in marketing and branding activities
• Channel inventories continue to be conservatively positioned through year-end
• Recognized by U.S. News & World Report 2024 as one of the Best Companies to Work For in the construction and materials category and by the Chicago Tribune Top Workplaces for the 3rd year in a row

7

Source: Company Unaudited Financial Statements. (1) Non-GAAP. Refer to Appendix for reconciliations of Adjusted EBITDA Margin and Free Cash Flow to the most comparable GAAP financial measures.

Q4 2023 Financial Performance Highlights

Net Sales

$388.8

Adjusted EBITDA	Adjusted
& Margin (1)	Diluted EPS (1)
$106.4

Q4 2023 Highlights

▪ Net Sales year-over-year

─ Residential segment net sales

growth driven by AZEK growth

playbook

	$304.6
	4Q'22	4Q'23
	27.6% y/y

$65.1

27.4%

21.4%

4Q'22 4Q'23

+63.4% y/y +600bps y/y

	$0.36
$0.16
4Q'22	4Q'23
+125% y/y

─	Contractor conversion, new
	products, channel expansion,
	shelf space wins, improving the
	customer journey
▪ Adjusted EBITDA year-over-year
─ Record margin expansion driven
	by material savings, improved
	utilization coupled with ongoing
	execution against productivity
	initiatives
─	Sequential improvement in
	margins versus 1H23 and 3Q23

8

Source: Company Unaudited Financial Statements. (1) Non-GAAP. Refer to Appendix for reconciliations of Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Diluted EPS to the most comparable GAAP financial measures.

Q4 2023 Financial Results

GAAP

Non-GAAP

+108.3% y/y

+1,490bps y/y

$149.7

+1,439.8% y/y +1,530bps y/y

$71.9	38.5%
			$64.8
23.6%
					16.7%
		$4.2
			1.4%
4Q'22	4Q'23		4Q'22		4Q'23
Gross Profit &		Operating Profit &
Margin		Margin

$(0.03)	$0.28 per
per Share	Share

+1,260bps y/y

$42.6

11.0%

-1.6%

($4.8)

4Q'22 4Q'23

Net Income &

Margin

+53.1 y/y

+750bps y/y

$174.8

$114.2

45.0%

37.5%

4Q'22 4Q'23

Adjusted Gross Profit & Margin

+63.4% y/y +600bps y/y

$106.4

$65.1

27.4%

21.4%

4Q'22 4Q'23

Adjusted EBITDA

& Margin

$0.16 per	$0.36 per
Share	Share

+118.7% y/y
	$53.5
$24.5
4Q'22	4Q'23

Adjusted Net

Income

9

Source: Company Unaudited Financial Statements. Refer to Appendix for reconciliations of Adj. Gross Profit, Adj. Gross Profit Margin, Adj. EBITDA, Adj. EBITDA Margin, Adj. Diluted EPS and Adj. Net Income to the most comparable GAAP financial measures.

Q4 2023 Segment Results

Residential Segment

			Variance
	4Q'22	4Q'23	y/y
Net Sales	$254.2	$349.6	37.6%
Segment Adj. EBITDA	$64.5	$118.0	82.9%
Segment Adj. EBITDA %	25.4%	33.7%	830bps

Residential Segment Commentary

• Net sales increase driven by strong growth in Deck, Rail & Accessories as well as Exteriors
• Demand remained consistent in the quarter with sell- through growing approximately double-digits
• Channel inventory levels remain conservative versus historical days-on-hand (DOH) levels

Commercial Segment

			Variance
	4Q'22	4Q'23	y/y
Net Sales	$50.4	$39.2	(22.4%)
Segment Adj. EBITDA	$14.6	$9.2	(36.5%)
Segment Adj. EBITDA %	28.9%	23.6%	(530bps)

Commercial Segment Commentary

• Vycom business officially divested on November 1, 2023
• Net sales declined, as expected, primarily driven by channel inventory de-stocking and softer demand
• Scranton Products, our fabrication business, will continue to be reported within Commercial segment and have Vycom serve as a 3rd party supplier

10

Source: Company Unaudited Financial Statements.