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OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
OWENS CORNINGImperialConference
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OWENS CORNINGImperialConference

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  • 1. Differentiate, Perform, Grow Q3 Results Based on Strong Global Composites & Roofing Performance Duncan Palmer Chief Financial Officer November 18, 2008 Imperial Capital Conference
  • 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, without limitation, competitive factors, pricing pressures, availability and cost of energy and materials, acquisitions and achievement of expected synergies therefrom, general economic conditions, the effect of industry and economic conditions on the market and operating conditions of our customers 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 October 29, 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 October 29, 2008. 2
  • 3. Owens Corning At A Glance • Founded in 1938, an industry leader in glass fiber insulation, roofing and asphalt, and glass fiber reinforcements • 2007 sales: $5 billion • 18,000 employees in 26 countries • 127.4 million diluted shares outstanding at September 30, 2008 • Senior debt ratings: BBB- and Ba1 • FORTUNE 500 company for 54 consecutive years. Leading North American Global Leader Market Positions • • Glass Fiber Reinforcement Residential Insulation Materials for Composites • Commercial & Industrial Insulation • Manufactured Stone Veneer • Residential Shingles • Roofing Asphalts The Pink Panther™ © 1964-2008 Metro-Goldwyn-Mayer Studios Inc. All Rights Reserved. 3 The color PINK is a registered trademark of Owens Corning. ©2008 Owens Corning.
  • 4. Business Segment Overview Nine Months 2008 YTD EBIT: Nine Months 2008 YTD Revenue: $316 million(2) $4.7 billion(1) Other Building Other Building Materials Materials and and Services Services -3% 4% Roofing Roofing and and Asphalt Asphalt 30% 36% Composite Insulating Solutions Composite Insulating Systems 41% Solutions Systems 7% 25% 60% (1) Percentages by segment based on revenue of $4.7B before corporate eliminations (2) Percentages based on segment results before restructuring costs and other credits, general corporate expenses, 4 Income taxes and interest expense.
  • 5. Composites Group
  • 6. What is a “Composite”? An engineered material system… + Other Materials Reinforcements • Resins • Additives Glass Other 95%* • Filler …resulting in unique attributes replacing traditional materials High Strength Light Weight Non-Conductive Durable Up to 50% Lighter Longer Blades Non-Corrosive Safety Than Steel 6 Source: Owens Corning
  • 7. Composites Q3 2008 Highlights ($ in millions) Q3 2008 Q3 2007 % Change Net sales* 589 397 48% • Sales up 48% and EBIT up 108% year-over- year, primarily due to acquisition EBIT 54 26 108% • About two-thirds of earnings increase due to EBIT as % of 9% 7% sales acquisition, net of the divestiture EBIT as % of 37 % 29 % • Improved manufacturing productivity all segments • Inflation not fully offset by higher prices D&A 33 20 65% *Net sales before inter-segment eliminations Four-Year and LTM Financial Performance* Q3 2008 YTD Revenue by End Market Sales EBIT as % of Sales U.S. & Canada $3,000 30% Commercial & Industrial 20% $2,500 25% $2,000 20% U.S. & Canada Residential $1,500 15% Construction $1,000 10% 9% International 71% $500 5% $0 0% 2004 2005 2006 2007 LTM Company estimates *2004 is not recast for the effect of discontinued operations 7
  • 8. Greater Value through Synergy Attainment Successful Acquisition Market Position Innovation Composition of Synergies Operating Expenses: • Eliminating redundancies 30% Technology: 50% • Upgrading to Advantex® 20% Supply Chain: • Reconfiguring plants • Fewer ocean shipments At least $100 million of total synergies by 2011 8 Source: Owens Corning
  • 9. Demand for Glass Reinforcements is Growing Successful Acquisition Market Position Innovation Trends Driving Growth • Emerging economies 1.5 to 2X Global GDP $8 B • Global energy demand 5% to 7% CAGR • Green solutions … in glass fibers Owens Corning is #1 … in technical fabrics … in specialty glass mats 9 Source: U.S. Fiber Economic Bureau, APFE, Owens Corning
  • 10. Attractive End-Use Market Growth Successful Acquisition Market Position Innovation Power & Aerospace Water Distribution & Defense Transportation Housing Industrial Consumer Energy 1,000 Glass Reinforcements (kt) Growth CAGR ’08-’13 Market Size for >10% ~5% 0 Owens Corning has played a major role in the development of these markets 10 Source: Owens Corning
  • 11. Wind Power • The world will spend $11 trillion on power infrastructure through 2030 • By 2015, spending on renewable energy will reach $300 billion a year • Wind power is growing 20% per year, consuming 200,000 tons of glass reinforcements annually Owens Corning is the leading supplier of glass reinforcements for wind power today Source: International Energy Agency; Morgan Stanley Clean Energy Report, May 2008; BTM Consultant ApS – March 2008; Owens Corning11
  • 12. Building Materials Group
  • 13. Residential and Commercial Building Materials • Attractive building materials segments: – Insulating Systems – Roofing and Asphalt – Other Building Materials and Services • Leading market shares • Powerful brand • Broad distribution • Used in virtually every home built in America 13
  • 14. Roofing and Asphalt
  • 15. Asphalt Roofing Industry is Attractive • More than $7 billion market representing 75% of all residential roofing installed • 75% – 80% re-roof; 20% – 25% new construction • Market growth driven by aging of existing housing stock, new construction and storm activity • Four national producers service more than 90% of the market 15
  • 16. Roofing and Asphalt ($ in millions) Q3 2008 Q3 2007 % Change Q3 2008 Highlights • Sales up 63% on higher selling prices due to Net sales* 616 379 63% raw material and delivery costs EBIT 95 15 533% • EBIT up on improved productivity, higher selling EBIT as % of 15 % 4% sales prices and improved mix EBIT as % of • Selling price increases offset inflation for first 65 % 17 % all segments nine months of the year D&A 11 10 10% • Storm-related demand expected to continue into Net sales before inter-segment eliminations 2009 Q3 2008 YTD Revenue by End Market Four-Year and LTM Financial Performance Sales EBIT as % of Sales U.S. & Canada Commercial & Industrial $2,000 8% 11% U.S. & Canada Residential Repair $1,500 6% & Remodeling U.S. & Canada 64% New Residential $1,000 4% Construction 25% $500 2% $0 0% Company estimates 2004 2005 2006 2007 LTM 16
  • 17. Strategic Priorities • Manage price to recover cost inflation • Innovation fuels our customers’ success – Duration® Series Shingle – Roofing accessories – Reinsulation opportunity • Margin improvement – Enhance product mix – Increase roofing accessory sales – Relentless about cost reduction Improved operating margin and return on invested capital 17
  • 18. Providing “Top of the House” Solutions Hip & Ridge Shingles VentSure® Ventilation Products Owens Corning Felt Underlayment Products Owens Corning Shingles Owens Corning Starter Shingle Products WeatherLock® Self-Sealing Ice & Water Barrier Products RapidFlowTM Gutter Drainage Protection raft-R-mate® Attic Rafter Vent Undereave Ventilation Products AttiCat® Expanding Blown-In Pink FiberglasTM Insulation 18
  • 19. Insulating Systems
  • 20. Our Insulating Products • Residential Insulating Batt – used in wall cavities of newly constructed and existing homes • Foam Insulation – used in above- and below-grade construction applications • Flexible Duct Media – insulated duct used in new and existing homes as a more energy-efficient HVAC solution than metal ducts • Metal Building Insulation – insulation used in commercial and industrial metal buildings • Commercial and Industrial Pipe Insulation – fiberglass insulated pipe used in hot and cold industrial applications 20
  • 21. Insulating Systems Strategic Priorities • Remain profitable in a weak market • Responsive capacity management • Focus on operational execution • Commercialize innovation supporting energy efficiency Customer focus, cycle management and innovation are key to our success 21
  • 22. Insulating Systems ($ in millions) Q3 2008 Q3 2007 % Change Q3 2008 Highlights Net sales* 412 462 (11)% • Reached breakeven profitability in very weak U.S. EBIT 0 42 (100)% housing market EBIT as % of 0% 9% • Sales down on lower volumes sales EBIT as % of • About 70% of EBIT decline due to lower selling prices 0% 46 % all segments and inflation D&A 31 33 (6)% *Net sales before inter-segment eliminations Q3 2008 YTD Revenue by End Market Four-Year and LTM Financial Performance International Sales EBIT as % of Sales 13% $2,500 25% U.S. & Canada New Residential $2,000 20% Construction 39% U.S. & Canada $1,500 15% Commercial & Industrial $1,000 10% 27% $500 5% U.S. & Canada Residential Repair $0 0% & Remodeling 2004 2005 2006 2007 LTM Company estimates 21% 22
  • 23. The Reinsulation Market Opportunity • 40% of all energy in the United States is used in buildings – More than industry and more than transportation • Concern for energy efficiency and the environment is front-page news around the world • In 2008, Oil and natural gas prices reached historic highs • Insulation is the single-most cost-effective solution in the world to reduce greenhouse gases* Nearly 80 million homes in United States are under insulated 23 *Source: McKinsey & Company
  • 24. Owens Corning Financial Strategies • Financial performance and discipline – Strong operating cash flow to support growth and innovation – Continual focus on return on net assets in excess of cost of capital • Balanced use of free cash flow – Maintain strong balance sheet and ample liquidity – Disciplined capital investment to maintain the core business and to grow through international opportunities – Support shareholder returns 24
  • 25. Differentiate, Perform, Grow Questions & Discussion Duncan Palmer Chief Financial Officer November 18, 2008 Imperial Capital Conference
  • 26. Appendix
  • 27. Key Financial Data Q3 YTD Q3 YTD ($ in millions, except per share data) Q3-2008 Q3-2007 2008 2007 Net sales 1,629 1,268 4,556 3,674 Net earnings (loss)* (810) 112 (794) 142 Earnings (loss) from continuing operations* (810) 38 (794) 67 Earnings from discontinued operations - 74 - 75 EPS (diluted) from continuing operations* (6.36) 0.30 (6.17) 0.52 EPS (diluted) from discontinued operations - 0.57 - 0.58 EBIT from continuing operations 98 83 181 191 Adjusted EBIT from continuing operations 111 102 242 253 Adjusted EPS (diluted) from continuing 0.72 0.42 1.06 0.89 operations Adjusted EBIT as a % of sales 7% 8% 5% 7% Marketing and administrative expenses 151 102 458 365 D&A from continuing operations 84 83 240 234 Debt, net of cash 2,014 1,915 2,014 1,915 *Includes Impact of Income Tax Valuation Allowance of $899 million 27
  • 28. Q3 2008 Reconciliation from Adjusted EBIT to EBIT 150 $(20) $16 $111 120 $(6) $(2) $(1) $98 EBIT ($MM) 90 60 30 0 st s r ts IT e e he IT ns ns os EB Co Ot EB pe pe rC d n d 08 x x ste the o an ct i yE eE 20 dju uit ets dO sa as Q3 n s e A q an ra As lL eE 08 n/T et a ing of 20 nc r io e les Q3 sM ct u rat rg Sa me iou tru te g n ec s E n so Re nI ee Pr loy ain tio et i N p uis G Em cq A 28
  • 29. Adjusted EBIT ($MM) 0 50 100 150 200 Q 2 20 08 Ro $77 o f in g an d A Co sp m h po al t si te $58 So lu tio ns Bu si In n su es s la tin g $(17) Sy st O em th s e B rB us in ui ld e in ss g M $(7) at er ia ls & Se rv ic es $2 Co r po ra Q3 2008 Compared with Q2 2008 te $(2) Adjusted EBIT by Business Segment Q 3 20 08 $111 29
  • 30. Other Building Materials & Services Q3 2008 Highlights ($ in millions) Q3 2008 Q3 2007 % Change • Masonry products continued to face weak Net sales* 67 78 (14)% construction-related demand leading to EBIT (3) 7 (143)% majority of the sales and EBIT decline EBIT as % of (4) % 9% • Basement finishing and SunSuites™ sales sales down due to weak consumer credit markets EBIT as % of (2) % 8% and impact on home remodeling all segments D&A 3 4 (25)% *Net sales before inter-segment eliminations Q3 2008 YTD Revenue by End Market Four-Year and LTM Financial Performance* Sales EBIT as % of Sales International 15% $1,600 8% U.S. & Canada $1,200 4% Commercial & U.S. & Canada Industrial New Residential 18% $800 0% Construction 50% $400 -4% U.S. & Canada $0 -8% Residential Repair 2004 2005 2006 2007 LTM & Remodeling 17% Company estimates *2004 is not recast for the effect of discontinued operations 30
  • 31. Other Items • Energy used in manufacturing – Represents about 10% of cost of sales – About 60% natural gas, 30% electricity, 10% other • Capital expenditures estimated to be somewhat higher than $350 million in 2008 • Liquidity position remains strong • Net Debt is currently expected to be at or close to last year’s level of $1.9 billion at year’s end 31
  • 32. Share Buy-Back Program • Announced a share buy-back program in the first quarter of 2007 • Authorized to repurchase up to 5%, approximately 6.5 million shares, of Owens Corning outstanding stock • During Q3 Owens Corning repurchased 1.9 million shares of the Company’s common stock at an average price paid of $22.23 • Through September 2008, Owens Corning repurchased approximately 2.9 million shares of the Company’s common stock at an average price of $22.70 per share • As of September 30, 2008, the company has about 3.6 million shares remaining available for repurchase under the current authorization 32

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