Slide 1: Owens Corning Positioned for Growth
Owens Corning Positioned for Growth Q1 2015 This presentation shared at the following events: 3/17/15 Owens Corning Roadshow – New York Thierry Denis, Vice President Investor Relations 3/12/15 OC Roadshow Hosted by Longbow – Boston Brian Chambers, President Roofing & Asphalt Business 2/26/15 Barclay
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures This presentation consists of this slide deck and the associated remarks and comments, all of which are integrally related and are intended to be presented and understood together. This presentation contains forward-looking statements within the meani
Slide 3: Owens Corning at a Glance
Owens Corning at a Glance Founded in 1938, an industry leader in glass fiber insulation, roofing and glass fiber reinforcements 2014 net sales: $5.3 billion 14,000 employees in 25 countries Fortune 500 company for 60 consecutive years Component of Dow Jones Sustainability World Index for five conse
Slide 4: Investment Highlights
Investment Highlights Composites Roofing Insulation Market-leading business Strong market Progress supports with improving economic position in confidence in return to conditions and higher consolidated industry historical profitability utilization rates Three Market-Leading Businesses 4
Slide 5: Full-Year 2014 Highlights and Outlook
Full-Year 2014 Highlights and Outlook Maintained a very high level of safety performance in 2014 Board declared 6% dividend increase Delivered adjusted EBIT of $412 million Insulation delivered 14th consecutive quarter of EBIT growth; increased full-year EBIT by $68 million Composites delivered 6th
Slide 6: Strong Portfolio
Strong Portfolio Positioned for Growth ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 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 pro
Slide 7: Insulation Business
Insulation Business Q4 & Full-Year 2014 Highlights $ (in millions) Q4 2014 Q4 2013 2014 2013 Delivered full-year EBIT of $108 million, a $68 million increase versus last year Net sales* $490 $466 $1,746 $1,642 Achieved operating leverage of over 50% in 2014 EBIT $46 $39 $108 $40 Expect 2015 results
Slide 8: Owens Corning Insulation EBIT Progress
Owens Corning Insulation EBIT Progress Q1 Q2 Q3 Q4 43 47 39 $40 $20 18 18 EBIT in Millions of Dollars 9 1 4 3 0 $0 -$20 -16 -12 -21 -$40 -34 -38 -47 -$60 -$80 2011 Actual 2012 Actual 2013 Actual 2014 Actual Consistent Quarterly EBIT Progression Since 2011 Source: Owens Corning quarterly and annual S
Slide 9: Well Positioned to Return to Historical Margins
Owens Corning Insulation Well Positioned to Return to Historical Margins 30% EBIT Margin Avg EBIT Margin '85-'08 (15%) 20% 10% 0% -10% '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 Historically Delivered 15% EBIT Margins at 1.5 Million Housing Starts Source: Owens Corning managemen
Slide 10: Insulation Industry
Insulation Industry North American Fiberglass 100% 2015 Industry Capacity Utilization 90% 80% 80% 70% 60% 40% 20% 0% Total Capacity Operating Plants Operating Lines Capacity Utilization Tightening as U.S. Housing Recovers Source: Owens Corning management estimates as of February 2015 rounded to near
Slide 11: North American Fiberglass Network
Owens Corning Insulation North American Fiberglass Network Edmonton Candiac Toronto Delmar Mt. Vernon Kansas City Newark Nephi Santa Clara Eloy Fairburn 2015 Estimated Average Utilization: Waxahachie Near full capacity Below full capacity Lakeland Not in operation Continued Discipline in OC Capacity
Slide 12: Positioned to Grow with Our Markets
Positioned to Grow with Our Markets Insulation End-Use Expected Market Markets Mid-Term Growth % of Full-Year 2014 Revenue Growth Drivers U.S. and Canada Housing starts Residential New Construction Building energy code adoption 40% Household formation U.S. and Canada Aging housing stock Repair and R
Slide 13: Roofing Business
Roofing Business Q4 & Full-Year 2014 Highlights $ (in millions) Q4 2014 Q4 2013 2014 2013 Full-year margins declined 7% on lower volumes and prices Net sales* $340 $381 $1,748 $1,967 Achieved commercial objectives for the second EBIT $32 $55 $232 $386 half EBIT as % of Market dynamics in the first h
Slide 14: U.S. Asphalt Shingle Industry
U.S. Asphalt Shingle Industry Consolidation ’70s ’80s ’90s Current OC OC OC OC FRY GAF GAF GAF/ELK GAF ELK ELK CERTAINTEED ELK CERTAINTEED CERTAINTEED TAMKO CERTAINTEED TAMKO TAMKO TAMKO CELOTEX CELOTEX CELOTEX MANVILLE IKO MANVILLE IKO ATLAS IKO IKO BIRD GEORGIA PACIFIC ATLAS BIRD ATLAS GS ROOFING
Slide 15: U.S. Asphalt Shingle Market
U.S. Asphalt Shingle Market MM Sq. Major Storms MM 180 Re-roof Demand 18 7.5 Total Existing Home Sales New construction 8 8 7 3 3 2 3 22 3 19 17 11 6 6 6 116 116 110 113 112 107 109 103 100 96 93 91 93 94 88 83 33 32 34 37 39 35 30 31 26 17 11 11 14 17 18 11 0 0.0 '99 '00 '01 '02 '03 '04 '05 '06 '07
Slide 16: Strong Market Position in Consolidated Industry
Strong Market Position in Consolidated Industry Track record of strong financial performance – Delivered average operating margins in excess of 20% during 2009-2013 period Re-roof demand over the last few years has been sluggish – Housing activity forecasts support some demand growth – Glass fiber m
Slide 17: Composites Business
Composites Business Q4 & Full-Year 2014 Highlights $ (in millions) Q4 2014 Q4 2013 2014 2013 Achieved $149 million of EBIT in 2014; grew earnings by 50% versus last year Net sales* $464 $461 $1,935 $1,845 Delivered $32 million of price benefit in 2014, with EBIT $53 $36 $149 $98 six consecutive quar
Slide 18: Glass Fiber: A $7.5 Billion Global Market
Glass Fiber A $7.5 Billion Global Market • Appliances • Residential • Electronics Wind • Commercial 9% • Recreation • Water transportation & storage Consumer 16% Construction 34% Industrial 13% Transportation 28% • Factories • Cars • Mining • Trucks, buses, trains • Offshore platforms • Marine A Key
Slide 19: Owens Corning Composites
Owens Corning Composites Global megatrends, continued growth in industrial production, Cost Leadership and material substitution support glass fiber market growth at a Price Realization 5-7% CAGR Strategic focus on core building Product Leadership material markets with sustainable solutions Capital
Slide 20: Positioned to Win
Owens Corning Composites Positioned to Win #1 Position Emerging Position Europe China 30% 26% 25% 10% % Market % OC % Market % OC Revenue Revenue Revenue Revenue #1 Position Americas #1 Position 46% OC glass fiber manufacturing site 34% OC downstream fabrication site Rest of World 15% 14% % Market %
Slide 21: Glass Fiber Market Demand
Glass Fiber Market Demand 5,000 Glass Fiber Demand Has Grown at 1.6 Multiple of Industrial Production Growth 4,000 Glass Fiber K Tons 3,000 2,000 1,000 - 1981 1992 2003 2014 Historical Glass Fiber Market Growth Averaging 5% Glass fiber market demand excludes E-glass yarns Sources: Fiber Economics Bu
Slide 22: Glass Fiber Industry
Glass Fiber Industry Estimated Capacity China Emergence Macro Adjustment Supply Tension Capacity Overbuild Excess Inventory Improved Returns 2004 2006 2008 2010 2012 2014 2016 100% 1.7 Estimated Capacity Utilization 90% 90% Threshold 1.1 80% Change in global demand (MM T) 0.8 70% Change in global ca
Slide 23: Focused on Creating Shareholder Value
Owens Corning Composites Focused on Creating Shareholder Value Significant actions, including capital and cash restructuring, to achieve goal of 75% low-delivered cost – Extensive restructuring of high-cost assets in Europe, Japan and Canada – Successful sale and closure of a high-cost facility in C
Slide 24: Sustaining a Strong Balance Sheet
Sustaining a Strong Balance Sheet Maintaining investment-grade financial strength is a pillar of Owens Corning’s strategy Maintained investment-grade credit ratings from Standard & Poor's and Fitch $800 million revolving credit facility maturing in 2018 $250 million accounts receivable securitizatio
Slide 25: Tax Position is a Significant Asset
Tax Position is a Significant Asset Benefit from $2.2 billion NOL with estimated present value of approximately $5 per share Delivering cash tax savings of about $60 million per year Expect long-term book tax rate of 30% to 32% based on geographic mix of earnings and tax planning Cash tax rate of 10
Slide 26: Disciplined Capital Allocation Strategy
Disciplined Capital Allocation Strategy Drive shareholder returns by enabling organic and inorganic growth and supporting the balance sheet – Maintain investment grade Capital allocation strategy – Investing in attractive organic growth – Returning excess cash to shareholders – Pursuing value-creati
Slide 27: Key Financial Data
Key Financial Data ($ in millions, except per share data) 2014 2013 Q4 2014 Q4 2013 Net sales $5,276 $5,295 $1,261 $1,278 Net earnings attributable to Owens Corning $226 $204 $33 $82 Diluted earnings per share attributable to Owens $1.91 $1.71 $0.28 $0.69 Corning common stockholders Earnings before
Slide 28: 2015 Corporate Environment & Guidance
2015 Corporate Environment & Guidance Macro Environment Continued growth in U.S. housing starts; generally forecasted in 1,100,000-1,200,000 range Moderate global industrial production growth Primary Guidance Other Guidance Items Insulation: should continue to benefit from Corporate expenses of $120
Slide 29: Appendix A: Non-GAAP Reconciliations
Appendix A Non-GAAP Reconciliations 29
Slide 30: Appendix A: Non-GAAP Reconciliations
Appendix A Non-GAAP Reconciliations 30