Owens Corning Inc · NYSE:OC

Owens Corning — Non-Deal Roadshow (November 2016)

24 slides from Owens Corning's roadshow presentation, Nov 21, 2016

  1. Slide 1: Owens Corning: Focused on Shareholder Value

    Owens Corning Focused on Shareholder Value Q4 2016 This presentation shared at the following event(s): 11/21/16 OC Roadshow Hosted by Northcoast Research – Ohio Thierry Denis, VP Investor Relations 11/17/16 OC Roadshow Hosted by SunTrust – Baltimore/Philadelphia Mike Thaman, Chief Financial Officer

  2. Slide 2: Forward-Looking Statements and Non-GAAP Measures

    Forward-Looking Statements and Non-GAAP Measures This presentation and the associated remarks and comments contain forward-looking statements. We caution you against relying on these statements as they involve risks and uncertainties that are difficult to predict and the Company’s actual results may

  3. Slide 3: Investment Highlights

    Investment Highlights Composites Roofing Insulation Market-leading business Strong market Progress supports with improving economic position in attractive confidence in return to conditions and higher industry historical profitability utilization rates Three Market-Leading Businesses 3

  4. Slide 4: Strong Portfolio

    Strong Portfolio '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 Insulation Roofing Composites Margin >= 10% 0%<= Margin < 10% Margin < 0% Sources: Owens Corning’s SEC filings since 2006. For comparability purposes, prior years have been provided based on Owen

  5. Slide 5: Insulation Business

    Insulation Business Q3 2016 Highlights $ (in millions) Q3 2016 Q3 2015 YTD YTD 2016 2015  Insulation delivered $38MM of EBIT Net sales* $476 $502 $1,275 $1,332  EBIT declined by $20MM primarily on lower production volumes EBIT $38 $58 $83 $90  Expect 2016 revenue could be down by about 5%, EBIT a

  6. Slide 6: Owens Corning Insulation: Return to Historical Profitability Levels

    Owens Corning Insulation Return to Historical Profitability Levels 30% EBIT Margin Avg EBIT Margin '85-'08 (15%) 20% 10% 0% -10% '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 Historically Delivered 15% EBIT Margins at 1.5 Million Housing Starts; Expect to Average 50% Operating Leve

  7. Slide 7: U.S. and Canada Fiberglass Industry Light Density Network Capacity

    U.S. and Canada Fiberglass Industry Light Density Network Capacity 2005 2015 Capacity Utilization: 100% 73% 85% 90% ( 0.3) Capacity B Lbs ( 0.6) ( 0.2) 4.6 4.3 3.7 3.5 2005 Total Retired 2015 Total Mothballed Operating Cold Lines Operating Lines Capacity Capacity Plants Capacity Capacity 2.1MM 1.1 M

  8. Slide 8: U.S. and Canada Fiberglass Industry Light Density Capacity and Demand

    U.S. and Canada Fiberglass Industry Light Density Capacity and Demand Sustained Early Stage Performance Decline Trough Recovery Improvement OC U.S. New Construction Price Change in Demand/Capacity (Light Density MM Lbs) Indexed to 2006 2006 – 2008 2009 – 2011 2012 – 2015 2016E – 2018E ∆ in Demand ∆

  9. Slide 9: Owens Corning Insulation Profitability

    Owens Corning Insulation Profitability EBIT MM$ & Margins 400 26% 300 200 17% 14% MM$ 100 4% 2% 0 -100 -23% -200 Peak Trough Current (2006) (2009) (2015) U.S. & Canada Residential Fiberglass Building Insulation Engineered Insulation & Other Regions Residential Fiberglass Still Vastly Under Historica

  10. Slide 10: Roofing Business

    Roofing Business Q3 2016 Highlights $ (in millions) Q3 2016 Q3 2015 YTD YTD 2016 2015  Grew EBIT to $146MM, a 42% increase Net sales* $603 $502 $1,711 $1,398  Delivered 24% EBIT margins on higher volume and lower asphalt costs EBIT $146 $103 $388 $213  Expect low-teen market growth for 2016, incl

  11. Slide 11: U.S. Asphalt Shingle Market

    U.S. Asphalt Shingle Market New Construction Age Related/Economic Other Weather Events Major Storms MM Sq. 18 8 7 8 3 2 3 21 22 28 3 27 35 19 30 17 11 34 6 4 32 25 6 6 23 21 24 95 28 31 34 30 23 86 87 81 77 71 75 75 73 65 71 58 60 63 61 59 31 32 34 37 39 35 30 26 17 11 11 11 14 17 18 19 '00 '01 '02

  12. Slide 12: Strong Market Position in Attractive Industry

    Strong Market Position in Attractive Industry  Track record of strong financial performance – Delivered average operating margins of 18% since 2008  New construction and replacement markets are growing, after period of extension of replacement cycle – Housing activity forecasts support demand grow

  13. Slide 13: InterWrap Acquisition

    InterWrap Acquisition Strengthens Position of Roofing Components Business  Acquired leading manufacturer of synthetic roofing underlayment and packaging materials for $450 million on April 21st, 2016  Value contributors: – InterWrap’s established track record of double-digit revenue growth – Benef

  14. Slide 14: Composites Business

    Composites Business Q3 2016 Highlights $ (in millions) Q3 2016 Q3 2015 YTD YTD 2016 2015  Delivered EBIT of $61MM with 12% EBIT margins Net sales* $496 $486 $1,486 $1,457  Price and volume continued to contribute to performance EBIT $61 $61 $199 $188  Anticipate continued growth in the glass fibe

  15. Slide 15: Glass Fiber: A $7.5 Billion Global Market

    Glass Fiber A $7.5 Billion Global Market Building & Transportation Consumer Industrial Power & Markets Construction Energy Size Glass fiber market defined as glass fiber reinforcements and direct conversion products as consumed, excluding yarns. Source: Fiber Economics Bureau, GlassFibreEurope (APFE

  16. Slide 16: Owens Corning Composites: Positioned to Win

    Owens Corning Composites Positioned to Win #1 Position Emerging Position Europe China 28% 27% 23% 12% % Market % OC % Market % OC Revenue Revenue Revenue Revenue #1 Position Americas #1 Position 47% OC glass fiber manufacturing site 33% OC downstream fabrication site Rest of World 17% 13% % Market %

  17. Slide 17: Glass Fiber Industry Estimated Capacity Utilization

    Glass Fiber Industry Estimated Capacity China Emergence Tightening Capacity Supply Tension Capacity Overbuild Price Inflection Improved Returns '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16E '17E '18E 100% 1.7 1.7 90% Estimated Capacity Utilization 90% Threshold 80% Change in global demand (MM T)

  18. Slide 18: Disciplined Capital Allocation Strategy

    Disciplined Capital Allocation Strategy  Drive shareholder returns by enabling organic and inorganic growth and supporting the balance sheet – Maintain investment grade  Capital allocation strategy – Investing in attractive organic growth – Pursuing value-creating acquisitions – Returning excess c

  19. Slide 19: 2016 Corporate Environment & Guidance

    2016 Corporate Environment & Guidance Macro Environment  Environment consistent with consensus U.S. housing starts  Expect moderate global industrial production growth Primary Guidance Other Guidance Items  Corporate expenses at bottom half of $120-  Full-year adjusted EBIT of $700MM or more $13

  20. Slide 20: Appendix A: Q3 2016 Highlights

    Appendix A Q3 2016 Highlights ($ in millions, except per share data) Q3 2016 Q3 2015 YTD 2016 YTD 2015 Net sales $1,518 $1,447 $4,294 $4,053 Net earnings attributable to Owens Corning $112 $112 $307 $221 Diluted earnings per share attributable to Owens $0.97 $0.95 $2.65 $1.87 Corning common stockhol

  21. Slide 21: Appendix A: Q3 2016 Highlights and Outlook

    Appendix A Q3 2016 Highlights and Outlook  Maintained a high level of safety performance  Delivered record third-quarter adjusted EBIT  Insulation produced $38 million of EBIT  Composites delivered EBIT of $61 million with 12% EBIT margins  Roofing grew EBIT to $146 million, a 42% increase  Im

  22. Slide 22: Appendix B: Non-GAAP Reconciliations

    Appendix B Non-GAAP Reconciliations

  23. Slide 23: Appendix B: Non-GAAP Reconciliations

    Appendix B Non-GAAP Reconciliations

  24. Slide 24: Appendix B: Non-GAAP Reconciliations

    Appendix B Non-GAAP Reconciliations

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