Owens Corning Inc · NYSE:OC
Owens Corning — Non-Deal Roadshow (September 2021)
42 slides from Owens Corning's roadshow presentation, Sep 10, 2021
Slide 1: Focused on Shareholder Value
Q3 2021 FOCUSED ON This presentation shared at the following events: SHAREHOLDER VALUE 09/10/21 OC (Virtual) Roadshow Hosted by Wolfe Research Ken Parks, Chief Financial Officer 09/08/21 OC (Virtual) Roadshow Hosted by Barclays Marcio Sandri, President, Composites 08/09/21 OC (Virtual) Roadshow Host
Slide 2: Forward-Looking Statements and Non-GAAP Measures
FORWARD-LOOKING STATEMENTS AND NON-GAAP MEASURES This presentation and the associated remarks 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 differ mater
Slide 3: Agenda
AGENDA 1 Investment highlights 2 ESG at Owens Corning 3 Three strong businesses 4 Additional financial information 3
Slide 4: Owens Corning at a Glance
OWENS CORNING AT A GLANCE 67 19,000 COUNTRIES WHERE CONSECUTIVE YEARS 2020 REVENUE EMPLOYEES WE OPERATE AS A FORTUNE® 500 COMPANY Serving residential, commercial, and industrial markets INSULATION | ROOFING | COMPOSITES Note: Data as of 2020 Form 10-K 4
Slide 5: Compelling Investment Thesis
COMPELLING INVESTMENT THESIS We are a global building and industrial materials leader that capitalizes on market-leading positions and innovative technologies to deliver substantial free cash flow and sustainable shareholder value MARKET-LEADING POSITIONS STRONG CASH FLOW GENERATION INNOVATIVE PRODU
Slide 6: Global Businesses in Attractive End Markets
GLOBAL BUSINESSES IN ATTRACTIVE END MARKETS Owens Corning revenue by end market 2020 revenue by end market Insulation Roofing Composites $5.4B $7.1B 4% 2% 17% 33% 5% 7% 12% 17% 26% 18% 41% 33% 59% 27% 10% 36% 23% 84% 33% 13% 2006 2020 U.S. residential new U.S residential repair U.S. commercial and I
Slide 7: Improved and Sustainable Margin Performance
IMPROVED AND SUSTAINABLE MARGIN PERFORMANCE Management actions Enterprise improvement Operating priorities Implemented sustainable cost 2016 - 2020 Accelerate organic reductions across businesses growth 2013 - 2015 2006 - 2012 Invested in process and 13% Drive improved product technologies to fuel o
Slide 8: Investment Highlights
INVESTMENT HIGHLIGHTS
Slide 9: Three Market-Leading Businesses
THREE MARKET-LEADING BUSINESSES OWENS CORNING $7,055 $878 12% 2020 ADJ EBIT / EBIT 2020 NET SALES 2020 ADJ EBIT / EBIT AS % OF NET SALES #1 in North American residential fiberglass Insulation A leader in technical insulation growth $2,607 $250 10% markets #2 in attractive industry generating strong
Slide 10: Well-Positioned to Capture Growth from Key Secular Trends
WELL-POSITIONED TO CAPTURE GROWTH FROM KEY SECULAR TRENDS U.S. Residential Renovation & Energy Efficiency Renewable Energy New Construction Product Sustainability & Circular Economy Investment in Infrastructure Rising Labor Costs & Worker Shortage 10
Slide 11: Innovative Product & Process Technologies Delivering Revenue Growth
INNOVATIVE PRODUCT & PROCESS TECHNOLOGIES DELIVERING REVENUE GROWTH, IMPROVED MARGINS, AND CAPITAL EFFICIENCY DURATION® SPECIALTY GLASS RESIDENTIAL FIBERGLASS SHINGLES NON-WOVENS INSULATION Unique SureNail® Industry-leading Glass material technology product designs science Sustainable high Highly-sp
Slide 12: Leveraging Enterprise Capabilities
LEVERAGING ENTERPRISE CAPABILITIES Commercial strength Material science innovation ROOFING COMPOSITES Manufacturing technologies Global footprint and scale INSULATION Safety and sustainability 12
Slide 13: Free Cash Flow Conversion Outperforms Peer Group
FREE CASH FLOW CONVERSION OUTPERFORMS PEER GROUP Average 2016-2020 free cash flow conversion 125% Strong earnings performance 100% 75% Purposeful working capital management 50% 25% Focused on operating and capital efficiency 0% Dow Jones U.S. Construction Owens Corning & Materials Index Free cash fl
Slide 14: Focused on Key Drivers of Shareholder Value Creation
FOCUSED ON KEY DRIVERS OF SHAREHOLDER VALUE CREATION Revenue ($mm) Adjusted EBIT margin $7,057 $7,160 $7,055 13.1% 13.4% $6,384 12.2% 12.4% 11.6% $5,677 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Free cash flow ($mm) Return on capital $828 11.9% 12.2% $679 10.2% 10.7% $570 $590 9.1% $266 2016
Slide 15: Capital Allocation Strategy Focuses on Increasing TSR
CAPITAL ALLOCATION STRATEGY FOCUSES ON INCREASING TSR 2016-2020: RETURNED ~$1.5B OF CASH AND OVER 50% OF FREE CASH FLOW TO SHAREHOLDERS Capital allocation strategy Capital allocation targets over time Maintain investment grade balance sheet 2-3X debt/EBITDA leverage with flexibility to support growt
Slide 16: ESG at Owens Corning
ESG AT OWENS CORNING 16
Slide 17: Our People and Products Make the World a Better Place
OUR PEOPLE AND PRODUCTS MAKE THE WORLD A BETTER PLACE BEYOND TODAY, SHAPING TOMORROW An evolving view of sustainability Net positive company aspiration CE/Embodied Carbon Double the Halve the negative positive impact of impact of our Inclusion & Diversity our PRODUCTS OPERATIONS Wellness Eliminate I
Slide 18: Reducing Our Environmental Footprint & Expanding Our Product Handprint
REDUCING OUR ENVIRONMENTAL FOOTPRINT & EXPANDING OUR PRODUCT HANDPRINT INDUSTRY-LEADING SUSTAINABILITY INCREASING THE POSITIVE IMPACTS OUR PRODUCTS HAVE ON THE WORLD FOAMULAR® PAROC® RESIDENTIAL OWENS CORNING WINDSTRAND® NGX™ NATURA™ FIBERGLASS COOL ROOF COMPOSITES INSULATION INSULATION INSULATION C
Slide 19: Progress on Our 2020 Sustainability Targets
PROGRESS ON OUR 2020 SUSTAINABILITY TARGETS PRIMARY ENERGY GREENHOUSE PARTICULATE MATTER 2.5 TOXIC AIR EMMISSIONS WASTE-TO- Through our actions, we have: GASES LANDFILL WATER - • Reduced absolute greenhouse gas emissions from operations by 60% (10) since peak year (20) (15) (20) • Saved 4
Slide 20: Significant Recognition for Our Leadership
SIGNIFICANT RECOGNITION FOR OUR LEADERSHIP Ranked Industry Leader 8 Included in CDP’s Ranked 1st among Earned “Gold Class” years consecutively in the “A List” for climate 100 Best Corporate score in 2021 for the Earned the following Building Products Group change and water for Citizens for three 8th
Slide 21: Three Strong Businesses
THREE STRONG BUSINESSES
Slide 22: Insulation Business
INSULATION BUSINESS Five-year financial performance Strong market in the North $3,000 15% American residential fiberglass insulation business $2,500 12% $2,000 Broad technical insulation 9% $1,500 offering serving residential 6% and non-residential markets $1,000 $500 3% Improved competitive $0 0% a
Slide 23: Increased Earnings Potential in Insulation
INCREASED EARNINGS POTENTIAL IN INSULATION Insulation EBITDA and margins North American residential fiberglass insulation 400 Technical and other building insulation NORTH AMERICAN RESIDENTIAL FIBERGLASS INSULATION Investments in productivity and process 300 technology have created a more flexible 2
Slide 24: Technical & Other Insulation 2020 Revenues by End Market
TECHNICAL & OTHER INSULATION 2020 REVENUES BY END MARKET 2020 INSULATION REVENUE NON-RESIDENTIAL U.S. Non- U.S. RESIDENTIAL U.S. Non-U.S. Technical & other building: non-residential Technical & other building: residential North American residential fiberglass Source: Owens Corning management estimat
Slide 25: Roofing Business
ROOFING BUSINESS Five-year financial performance $3,500 30% Track record of strong $3,000 25% operating performance $2,500 20% Roofing is a resilient business $2,000 driven by remodeling activity 15% $1,500 10% Components business has $1,000 grown above market with 5% $500 attractive margins $0 0% 2
Slide 26: Drivers for U.S. Asphalt Roofing Demand
DRIVERS FOR U.S. ASPHALT ROOFING DEMAND Major storms & Remodeling New construction weather events Aging housing stock ~40mm square Housing activity average storm market provides growth Economic factors: in last 10 years opportunity existing home sales, home equity, Weather events drive consumer inco
Slide 27: Remodeling & New Construction Markets Have Been Growing
REMODELING & NEW CONSTRUCTION MARKETS HAVE BEEN GROWING U.S. asphalt shingle market in mm squares New construction Remodeling Weather events Major storms 18 15 12 15 13 25 19 11 4 34 24 26 6 6 30 24 31 34 30 23 79 84 74 77 65 68 59 58 60 61 17 18 19 20 21 22 22 24 11 14 2011 2012 2013 2014 2015 2016
Slide 28: Composites Business
COMPOSITES BUSINESS Five-year financial performance $2,500 15% Investing to grow in higher- value, downstream applications $2,000 12% in building & construction, wind energy, and infrastructure $1,500 9% Leveraging low-cost $1,000 6% manufacturing network $500 3% Well-positioned to capture market gr
Slide 29: Glass Fiber – An $8B Market with Favorable Exposure
GLASS FIBER – AN $8B MARKET WITH FAVORABLE EXPOSURE Building & Consumer Industrial Power & Energy Transportation Construction Market Size OC vs. Market Overweight Underweight Underweight Sector weight Overweight Glass fiber market defined as glass fiber reinforcements and direct conversion products
Slide 30: Positioned to Compete Anywhere in the World
POSITIONED TO COMPETE ANYWHERE IN THE WORLD #1 Position Emerging position Europe 27% China 23% 29% #1 Position 13% Americas % Market % OC 48% Revenue Revenue % Market % OC 31% Revenue Revenue % Market % OC Revenue Revenue #1 Position Rest of World 17% 12% % Market % OC Glass Non-Wovens Revenue Reven
Slide 31: Additional Financial Information
ADDITIONAL FINANCIAL INFORMATION
Slide 32: Appendix A: Key Financial Data – Corporate
APPENDIX A: KEY FINANCIAL DATA – CORPORATE ($ in millions, except per share data) Q2 2021 Q2 2020 YTD 2021 YTD 2020 Net sales 2,239 1,625 4,154 3,226 Net earnings (loss) attributable to Owens Corning 298 96 508 (821) Diluted earnings (loss) per common share (EPS) $2.82 $0.88 $4.80 ($7.55) attributab
Slide 33: Appendix A: Key Financial Data – Business
APPENDIX A: KEY FINANCIAL DATA – BUSINESS Insulation Roofing Composites ($ in millions) Q2 2021 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Q2 2020 Net sales 806 595 917 677 583 398 EBIT 112 32 234 148 98 6 EBIT as % of net sales 14% 5% 26% 22% 17% 2% D&A 53 49 14 15 39 39 Insulation Roofing Composites ($ in mi
Slide 34: Appendix A: Key Financial Data – Disaggregated Revenue
APPENDIX A: KEY FINANCIAL DATA – DISAGGREGATED REVENUE Three Months Ended June 30, 2021 Reportable Segments ($ in millions) Disaggregation Categories Composites Insulation Roofing Eliminations Consolidated U.S. residential $ 83 $ 285 $ 847 $ (66) $ 1,149 U.S. commercial and industrial 162 177 33 - 3
Slide 35: Appendix B: Non-GAAP Reconciliation – Table 1
APPENDIX B: NON-GAAP RECONCILIATION – TABLE 1 35
Slide 36: Appendix B: Non-GAAP Reconciliation – Table 2
APPENDIX B: NON-GAAP RECONCILIATION – TABLE 2 36
Slide 37: Appendix B: Non-GAAP Reconciliation – Table 3
APPENDIX B: NON-GAAP RECONCILIATION – TABLE 3 37
Slide 38: Appendix B: Non-GAAP Reconciliation – Table 4
APPENDIX B: NON-GAAP RECONCILIATION – TABLE 4 38
Slide 39: Appendix B: Non-GAAP Reconciliation – Table 5
APPENDIX B: NON-GAAP RECONCILIATION – TABLE 5 39
Slide 40: Appendix B: Non-GAAP Reconciliation – Table 6
APPENDIX B: NON-GAAP RECONCILIATION – TABLE 6 40
Slide 41: Appendix B: Non-GAAP Reconciliation – Table 7
APPENDIX B: NON-GAAP RECONCILIATION – TABLE 7 41
Slide 42: Appendix B: Non-GAAP Reconciliation – Table 8
APPENDIX B: NON-GAAP RECONCILIATION – TABLE 8 42