Owens Corning Inc · NYSE:OC
Owens Corning — Wolfe Research (Virtual) Real Estate Conference and OC (Virtual) Roadshow Hosted by J.P. M (March 2022)
40 slides from Owens Corning's conference presentation, Mar 9, 2022
Slide 1: Focused on Shareholder Value
Q1 2022 FOCUSED ON This presentation shared at the following events: SHAREHOLDER VALUE 03/09/22 OC (Virtual) Roadshow Hosted by J.P. Morgan Ken Parks, Chief Financial Officer 03/04/22 OC (Virtual) Roadshow Hosted by Loop Capital Ken Parks, Chief Financial Officer 03/01/22 Wolfe Research (Virtual) Re
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 Owens Corning Overview 2 Innovation creates differentiated value 3 Sustainability is core to who we are and what we do 4 Integrated businesses drive growth and performance 5 Additional financial information 3
Slide 4: Owens Corning at a Glance
OUR OWENS CORNING AT A GLANCE MISSION A GLOBAL BUILDING AND CONSTRUCTION MATERIALS LEADER Building a sustainable future through $8.5B material innovation 20,000 OUR 2021 Revenue Employees Countries where Manufacturing PURPOSE we operate sites Our people and products make the ROOFING INSULATION COMPO
Slide 5: A Compelling Investment Thesis
A COMPELLING INVESTMENT THESIS INVESTING IN PROFITABLE GROWTH AND CREATING VALUE FOR SHAREHOLDERS Growing Sustaining Reducing Generating revenues through core operating margins at a capital intensity through strong free cash flow capabilities and higher level by making productivity and conversion th
Slide 6: Expanding Addressable Market
ENTERPRISE STRATEGY TO GROW OUR COMPANY REDEFINING WHERE WE PLAY TO EXPAND OUR ADDRESSABLE MARKETS 5X Strategic Priorities $200B Prefabricated Expanding Addressable Market STRENGTHEN Solutions position in core building & construction products Multimaterial Systems EXPAND multimaterial systems Core B
Slide 7: Uniquely Positioned to Capitalize on Secular Trends
UNIQUELY POSITIONED TO CAPITALIZE ON SECULAR TRENDS BUILDING A SUSTAINABLE FUTURE THROUGH MATERIAL INNOVATION Strengthen position in core Expand multimaterial Develop prefabricated building & construction products systems solutions KEY SECULAR TRENDS RESULTING IN Insulation Increased Premium on Long
Slide 8: Transformed the Financial Profile
TRANSFORMED THE FINANCIAL PROFILE FOCUSED ON KEY DRIVERS OF SHAREHOLDER VALUE CREATION Revenue ($b) Operating Margin FCF Conversion Return on Capital 6% CAGR +800 bps $4.5b1 generated + >2x 8.5 16.7% 18.1% 6.7 116% 112% 12.5% 5.3 8.7% 10.8% 61% 8.1% 2013-2015 2016-2020 2021 2013-2015 2016-2020 2021
Slide 9: Capital Allocation Strategy Focuses on Increasing TSR
CAPITAL ALLOCATION STRATEGY FOCUSES ON INCREASING TSR 2019-2021: RETURNED ~$1.2B OF CASH AND 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 growth and
Slide 10: Innovation Creates Differentiated Value
INNOVATION CREATES DIFFERENTIATED VALUE
Slide 11: Accelerating Innovation to Help Customers Win in the Market
ACCELERATING INNOVATION TO HELP CUSTOMERS WIN IN THE MARKET TRACK RECORD OF MATERIAL INNOVATION AND CONVERSION Material Innovation Investing for Growth • Innovative product and process technologies delivering significant value Duration® Flex FOAMULAR® NGX™ Windstrand® Pink Next Gen™ • Accelerated ne
Slide 12: Transformative Material and Process Innovation
TRANSFORMATIVE MATERIAL AND PROCESS INNOVATION Asphalt Coating Technology Material science + • Innovative performance features and benefits in vertical integration = shingles, underlayments, and specialty asphalt cost and performance • Improved network cost and supply advantages competitive advantag
Slide 13: Customer-Centered Product Innovation Leader
CUSTOMER-CENTERED PRODUCT INNOVATION LEADER FOAMULAR® NGX New materials + • Low Global Warming Potential blowing agent delivers process change = Our material >80% reduction in embodied carbon of the product1 1st to market with a innovations start by • Excellent market response with strong momentum c
Slide 14: Sustainability Is Core to Who We Are and What We Do
SUSTAINABILITY IS CORE TO WHO WE ARE AND WHAT WE DO
Slide 15: Owens Corning Is a Global Leader in Sustainability
OWENS CORNING IS A GLOBAL LEADER IN SUSTAINABILITY MISSION: TO BUILD A SUSTAINABLE FUTURE THROUGH MATERIAL INNOVATION Net-Positive Aspiration 2030 Guiding Aspirations Purpose: Our people and Double the Halve the negative positive impact of impact of our products make the world our PRODUCTS OPERATION
Slide 16: Track Record of Impact
TRACK RECORD OF IMPACT 20 YEARS OF SUBSTANTIAL GLOBAL PROGRESS GHG reduced by Fiberglass insulation contains Significant progress Fiberglass insulation saves Composites WindStrand® 60% since peak year 53-73% recycled content - 1.3b lbs. in waste diversion to 12x as much energy in 1st enables larger
Slide 17: Receiving Significant Recognition for Our Leadership
RECEIVING SIGNIFICANT RECOGNITION FOR OUR LEADERSHIP Obtained a perfect Earned placement on DJSI- Included in CDP’s Ranked 1st among Earned “Gold Class” Earned the following score on Corporate World for the 12th year in a “A List” for water for 100 Best Corporate score in 2021 for the ISS scores in
Slide 18: Integrated Businesses Drive Growth & Performance
INTEGRATED BUSINESSES DRIVE GROWTH & PERFORMANCE
Slide 19: Leveraging the Power of the Enterprise
LEVERAGING THE POWER OF THE ENTERPRISE CREATING UNIQUE VALUE FOR OUR CUSTOMERS AND SHAREHOLDERS Integrated Material Solutions COMPOSITES Fiber Nonwovens Asphalt Technology Shingles ROOFING Materials Manufacturing & Technology Expertise Manufacturing Markets Advanced Modeling Furnace Design Glass Mel
Slide 20: Global Businesses in Attractive End Markets
GLOBAL BUSINESSES IN ATTRACTIVE END MARKETS Owens Corning revenue by end market 2021 revenue by end market Insulation Roofing Composites 19% $8.5B 58% $3.2B $3.2B $2.3B 23% Residential Construction Commercial and Other Industrial and Other Materials Construction Materials Consolidated figures elimin
Slide 21: Insulation Business
INSULATION BUSINESS 2021 Revenue Five-year financial performance $3,500 15% $2,800 12% Residential Construction $2,100 9% Materials $3.2B $1,400 6% Commercial and Other $700 3% Construction Materials $0 0% Industrial and Other 2017 2018 2019 2020 2021 Net sales in millions EBIT as % of net sales Abo
Slide 22: Increased Earnings Performance in Insulation
INCREASED EARNINGS PERFORMANCE IN INSULATION A BALANCED PORTFOLIO WITH AN INDUSTRY-LEADING MARGIN STRUCTURE North American Residential Insulation Technical & Global Insulation EBITDA (mm) EBITDA (mm) $500 $500 $400 $400 $300 $300 $200 $200 $100 $100 $- $- 2006 (peak) 2019 2021 2006 2019 2021 EBITDA
Slide 23: Technical & Global Insulation 2021 Revenues by End Market
TECHNICAL & GLOBAL INSULATION 2021 REVENUES BY END MARKET 2021 TECHNICAL AND GLOBAL RESIDENTIAL INSULATION REVENUE COMMERCIAL Residential Construction Materials INDUSTRIAL & OTHER Commercial and Other Construction Materials Industrial and Other Source: Owens Corning management estimates; estimated e
Slide 24: Positioned to Win in a More Sustainable Future
POSITIONED TO WIN IN A MORE SUSTAINABLE FUTURE FIBERGLASS MINERAL WOOL XPS CELLULAR GLASS NEW SOLUTIONS • Highest recycled • High recycled • Low GWP • Long service life • Aerogel – used content1 content in U.S. formulation in electric vehicle (NGX™) • 80+ years of applications • Made with 100% • Lon
Slide 25: Roofing Business
ROOFING BUSINESS 2021 Revenue $3,500 Five-year financial performance 25% $2,800 20% Residential Construction $2,100 15% Materials $3.2B $1,400 10% Commercial and Other $700 5% Construction Materials $0 0% Industrial and Other 2017 2018 2019 2020 2021 Net sales in millions EBIT as % of net sales Indu
Slide 26: Roofing Market Driven by Repair & Remodeling
ROOFING MARKET DRIVEN BY REPAIR & REMODELING U.S. asphalt shingle market in mm squares Repair and Remodeling (R & R) New construction R&R Weather events Major storms Aging housing stock Economic factors: existing home sales, 11 home equity, consumer income 18 15 12 29 13 25 34 24 26 Major storms & w
Slide 27: Continuing to Expand Our Multimaterial Roofing System
CONTINUING TO EXPAND OUR MULTIMATERIAL ROOFING SYSTEM THE TOTAL PROTECTION ROOFING SYSTEM® IS A LEADING SELLING STORY FOR OUR CONTRACTORS Hip & Ridge Ventilation • Expanding our multimaterial system offering positions Roofing Roof Covering for future growth Underlayment • Functionality innovation cr
Slide 28: Composites Business
COMPOSITES BUSINESS 2021 Revenue Five-year financial performance $2,500 18% $2,000 15% Residential Construction 12% $1,500 Materials 9% $2.3B $1,000 6% Commercial and Other $500 3% Construction Materials $0 0% Industrial and Other 2017 2018 2019 2020 2021 Net sales in millions EBIT as % of net sales
Slide 29: Composites 2021 Revenues by Key End Markets
COMPOSITES 2021 REVENUES BY KEY END MARKETS 2021 REVENUE BUILDING & CONSTRUCTION Key Trends How We Win Unique Solutions • Light-weighting and • Integrated scale • Leveraging Owens prefabrication production Corning Channels OTHER • Sustainable construction • Coating and surfacing • Power of the OC Br
Slide 30: Increasing Value Through Integrated Material Solutions
INCREASING VALUE THROUGH INTEGRATED MATERIAL SOLUTIONS Core products Glass Production Window Production Installer Glass Production Nonwoven Production Ceiling Tile Production Installer Glass Production Rebar Production Contractor Integrated material solutions Glass Production Nonwoven Production Shi
Slide 31: Local Supply Chain Model
LOCAL SUPPLY CHAIN MODEL #1 Position Europe China 28% 22% 31% #1 Position 10% Americas % Market % OC 49% Revenue Revenue % Market % OC 30% Revenue Revenue #1 Position % Market % OC India Revenue Revenue 4% 7% % Market % OC Rest of World Revenue Revenue 13% 6% % Market % OC Revenue Revenue Glass Non-
Slide 32: Additional Financial Information
ADDITIONAL FINANCIAL INFORMATION
Slide 33: Appendix A: Key Financial Data – Business
APPENDIX A: KEY FINANCIAL DATA – BUSINESS Owens Corning Insulation Roofing Composites ($ in millions) Q4 2021 Q4 2020 Q4 2021 Q4 2020 Q4 2021 Q4 2020 Q4 2021 Q4 2020 Net sales 2,131 1,925 863 728 712 702 608 547 EBIT* 325 306 128 106 151 183 98 60 EBIT* as % of net sales 15% 16% 15% 15% 21% 26% 16%
Slide 34: Appendix A: Key Financial Data – Disaggregated Revenue
APPENDIX A: KEY FINANCIAL DATA – DISAGGREGATED REVENUE Three Months Ended December 31, 2021 Reportable Segments ($ in millions) Disaggregation Categories Composites Insulation Roofing Eliminations Consolidated U.S. residential $ 71 $ 334 $ 656 $ (49) $ 1,012 U.S. commercial and industrial 166 185 27
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