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OWENS CORNING  OC_Q108
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OWENS CORNING OC_Q108

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  • 1. First Quarter 2008 Business Results Performance Marked by Global Growth in Composites Mike Thaman, Chairman & CEO Duncan Palmer, CFO May 7, 2008
  • 2. Forward-Looking Statements and Non-GAAP Measures This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those projected in these statements. Such factors include competitive factors, pricing pressures, availability and cost of energy and materials, acquisitions and achievement of expected synergies therefrom, general economic conditions and factors detailed from time to time in the Company’s Securities and Exchange Commission filings. The information in this presentation speaks as of the date May 7, 2008 and is subject to change. The Company does not undertake any duty to update or revise forward- looking statements. Any distribution of this presentation after that date is not intended and will not be construed as updating or confirming such information. Additional Company information is available on the Owens Corning Web site: www.owenscorning.com. Certain data included within this presentation contains quot;non-GAAP financial measuresquot; as defined by the Securities and Exchange Commission. A reconciliation of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles can be found in our Current Report on Form 8-K filed with the Securities and Exchange Commission on May 7, 2008. 2
  • 3. First Quarter 2008 Business Results Today’s Presentation • The Quarter in Review Mike Thaman • Q1 2008 Financial Results Duncan Palmer • Questions & Discussion All • Closing Remarks Mike Thaman 3
  • 4. Q1 ’08 Results Consistent with Expectations • Actions taken – Reduced accidents by 52% – Fully implemented $100 million cost-reduction program – Completed divestitures in Europe – Composite margins approaching 10% – On track to achieve $30 million in synergies in Composites – Programs in place to reduce our leased precious metals • Confident in adjusted EBIT of $240 million in 2008 • Building materials – Insulation business made money; expected to be profitable in ’08 – Energy efficiency is a near- and long-term opportunity – Roofing & Asphalt will return to profitability in Q2 on improved selling prices, storm demand and productivity • We are focused on profitable growth at Owens Corning 4
  • 5. Key Financial Data (in millions, except per share data) Q1-2008 Q1-2007 Net sales 1,353 1,124 Net earnings (loss) (15) 1 Earnings (loss) from continuing operations (15) - Earnings from discontinued operations - 1 Reported EPS (diluted) from continuing operations (0.12) - Reported EPS (diluted) from discontinued operations - 0.01 EBIT from continuing operations 19 32 Adjusted EBIT from continuing operations 54 59 Adjusted EPS from continuing operations 0.07 0.13 Adjusted EBIT as a % of sales 4% 5% Marketing and administrative expenses 142 127 D&A from continuing operations 77 77 Debt, net of cash 2,065 1,970 5
  • 6. Adjusted EBIT ($MM) 0 5 10 15 20 25 30 35 40 45 50 55 60 65 Q 1 In 20 su 07 la tin g $59 Sy st em s B us in e ss $(37) Ro o f in g & As Co m ph al po t si te $(9) So lu tio O ns th e Bu rB si n ui ld es s in g M $39 at er ia ls & Se rv i ce s $(7) Co rp o ra te $9 Q1 2007 Compared with Q1 2008 Q 1 20 08 Adjusted EBIT by Business Segment $54 6
  • 7. Q1 2008 Reconciliation from Reported to Adjusted EBIT 60 $7 $54 55 $4 50 $12 45 40 $10 35 EBIT ($MM) 30 $2 25 $19 20 15 10 5 0 sts T st s T t BI y BI e uit en ns o Co dE dE rC pe Eq irm te on rt e the x pa e j us ct i eE nc o &O t Im ep as ge sa Ad e r R e ra n ing ss me 08 lL 08 t ur 20 dA n/T e ta 20 eE Q1 c io n Q1 tM ye tru e la rat pl o Ne es irk eg R nt Em B nI & ice tio tt i uis Ba cq A 7
  • 8. Composite Solutions ($in Millions) Q1 2008 Q1 2007 % Change Q1 2008 Highlights Net sales 666 366 82% • Sales up 82% and EBIT up 156% year-over-year, primarily due to acquisition EBIT 64 25 156% • Volume & selling prices up, improved productivity EBIT as % of 10% 7% sales • Currency translation favorable EBIT as % of 107% 34% all segments • Inflation not fully offset by higher prices D&A 30 27 11% Q1 2008 Revenue by End Market Four-year and LTM Financial Performance* Sales EBIT Margin as % of Sales U.S. & Canada Commercial $2,100 12% & Industrial $1,800 20% $1,500 8% International $1,200 U.S. & Canada 74% Residential $900 Construction 4% $600 6% $300 $0 0% 8 2004 2005 2006 2007 LTM Company estimates *Includes gains from the sale of metal ($45 million in 2006, $7 million in 2005) 2004 is not recast for the effect of discontinued operations
  • 9. Insulating Systems ($in Millions) Q1 2008 Q1 2007 % Change Q1 2008 Highlights Net sales 373 419 (11)% • Profitable in a difficult U.S. housing market; sales down 11% year-over-year EBIT 16 53 (70)% • Two-thirds of decline due to lower volume and EBIT as % of 4% 13% mix, one-third due to price erosion sales EBIT as % of 26% 72% • EBIT declines due to lower selling prices, all segments idle facility cost, inflation and lower volumes D&A 30 30 N/C • Commercial & industrial demand holding Q1 2008 Revenue by End Market Four-year and LTM Financial Performance International Sales EBIT Margin as % of Sales 11% $2,500 25% U.S. & Canada New Residential $2,000 20% Construction 38% U.S. & Canada $1,500 15% Commercial & Industrial $1,000 10% 28% $500 5% U.S. & Canada Residential Repair $0 0% & Remodeling 9 Company estimates 2004 2005 2006 2007 LTM 23%
  • 10. Roofing & Asphalt ($in Millions) Q1 2008 Q1 2007 % Change Q1 2008 Highlights Net sales 306 306 N/C • Sales year-over-year unchanged EBIT (17) (8) (113)% • Asphalt prices escalating, leading to greater year-over-year EBIT loss EBIT as % of (6)% (3)% sales • Selling price increases announced, which will EBIT as % of (28)% (11)% benefit Q2 performance all segments D&A 10 10 N/C • Spring storms add to demand in Q2 Q1 2008 Revenue by End Market Four-Year and LTM Financial Performance U.S. & Canada Sales EBIT Margin as % of Sales Commercial & Industrial $2,000 10% 11% 8% $1,500 6% U.S. & Canada $1,000 Residential Repair U.S. & Canada 4% & Remodeling New Residential 64% Construction $500 2% 25% $0 0% 10 Company estimates 2004 2005 2006 2007 LTM
  • 11. Other Building Materials & Services ($in Millions) Q1 2008 Q1 2007 % Change Q1 2008 Highlights Net sales 53 69 (23)% •Masonry products facing weak construction- EBIT (3) 4 (175)% related demand EBIT as % of (6)% 6% sales • Basement finishing and SunSuites™ demand EBIT as % of (5)% 5% down due to weak consumer credit markets all segments and decline in home values D&A 3 2 50% Q1 2008 Revenue by End Market Four-Year and LTM Financial Performance* Sales EBIT Margin as % of Sales International 10% $1,200 10% U.S. & Canada 8% Commercial $900 U.S. & Canada & Industrial New Residential 6% 19% Construction $600 52% 4% $300 2% U.S. & Canada Residential Repair $0 0% & Remodeling 2004 2005 2006 2007 LTM 11 19% Company estimates * 2004 not recast for the effect of discontinued operations
  • 12. Other Items: Share Repurchase, Taxes & Liquidity • Board of directors authorization for repurchase of up to 5 percent of Company’s stock remains in place – none repurchased through Q1 2008 • Taxes – U.S. cash tax rate will be less than 2 percent – Overall cash taxes paid in 2008 will be less than $40 million paid in 2007 – Effective tax rate for U.S. operations will be about 35 percent – Effective tax rate for non-U.S. will be less than 25 percent – Blended rate may vary quarter to quarter • Our liquidity position remains strong 12
  • 13. Questions & Discussion Mike Thaman, Chairman & CEO Duncan Palmer, CFO May 7, 2008

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