Owens Corning Inc · NYSE:OC

Owens Corning — Zelman Housing Summit – Boston 2016

22 slides from Owens Corning's conference presentation, Sep 23, 2016

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

    Owens Corning Focused on Shareholder Value Q3 2016 This presentation shared at the following event(s): 9/23/16 Zelman Housing Summit – Boston Mike Thaman, Chief Executive Officer

  2. 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

  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: Q2 2016 Highlights and Outlook

    Q2 2016 Highlights and Outlook  Maintained a high level of safety performance in Q2 2016  Delivered adjusted EBIT of $253 million  Insulation achieved 20th consecutive quarter of EBIT growth  Composites delivered record EBIT with 14% EBIT margins  Roofing grew EBIT by $79 million; delivered 25%

  5. Slide 5: 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

  6. Slide 6: Insulation Business

    Insulation Business Q2 2016 Highlights $ (in millions) Q2 2016 Q2 2015 1H 2016 1H 2015  Delivered 20th consecutive quarter of EBIT growth Net sales* $414 $451 $799 $830  Grew EBIT by $7 million, primarily on improved customer mix and deflation EBIT $32 $25 $45 $32 EBIT as % of 8% 6% 6% 4% sales D&

  7. Slide 7: 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

  8. Slide 8: U.S. and Canada Fiberglass Industry

    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

  9. Slide 9: U.S. and Canada Fiberglass Industry

    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 ∆

  10. Slide 10: 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

  11. Slide 11: Roofing Business

    Roofing Business Q2 2016 Highlights $ (in millions) Q2 Q2 1H 2016 1H 2015 2016 2015  Grew EBIT by $79 million for the quarter Net sales* $679 $503 $1,108 $896  Delivered 25% EBIT margins on higher volume and lower asphalt costs EBIT $169 $90 $242 $110 EBIT as % of 25% 18% 22% 12% sales D&A $11 $10

  12. Slide 12: 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

  13. Slide 13: 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

  14. Slide 14: 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

  15. Slide 15: Composites Business

    Composites Business Q2 2016 Highlights $ (in millions) Q2 Q2 1H 2016 1H 2015 2016 2015  Delivered $74 million EBIT and 14% EBIT margins Net sales* $517 $497 $990 $971  Continued price and volume momentum  Anticipate continued growth in the glass fiber EBIT $74 $67 $138 $127 market driven by moder

  16. Slide 16: 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

  17. Slide 17: 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 %

  18. Slide 18: 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)

  19. Slide 19: 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

  20. Slide 20: Appendix A: Non-GAAP Reconciliations

    Appendix A Non-GAAP Reconciliations

  21. Slide 21: Appendix A: Non-GAAP Reconciliations

    Appendix A Non-GAAP Reconciliations

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

    Appendix A Non-GAAP Reconciliations

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