Resilient Cash Generation,
      Enduring Value,
Three Powerful Businesses




       March 18, 2009
Forward-Looking Statements and
            Non-GAAP Measures

This presentation contains forward-looking statements within...
Owens Corning’s Key Themes
• Delivered strong operating results in 2008
       – $290 million Adjusted EBIT, D&A of $331 m...
Owens Corning At A Glance
                                        • Founded in 1938, an industry leader in glass
         ...
Strong Performance in 2008

• Exceeded our initial guidance and targets: Adjusted EBIT of $290 million
    – Composites
  ...
Strong Liquidity within Existing Facilities; Comfortable
             Position with Respect to Covenants & Refinancing

• ...
Three Powerful Businesses,
 Three Valuable Franchises



       Composites

    Roofing and Asphalt

    Insulating Systems
This is a “Composite”
An engineered material system…

                                                  +         Other Ma...
Composites
       Global Leadership in a high-growth industry

• High-growth markets driving glass fiber demand 1.5 to 2x ...
Composites
                           Global Glass Fiber Demand History

                                      Long term g...
Composites
                     Acquisition synergies
                                                                    ...
Composites EBIT Margin
                                                                                                   ...
Roofing: “Top of the House” Solutions


                        Hip & Ridge Shingles




                        VentSure®...
Roofing and Asphalt
                      U.S. Industry Consolidation
                       70s                          ...
Roofing and Asphalt
                           U. S. Asphalt Shingle Market Demand
                                       ...
Roofing and Asphalt
           Delivering Sustained Margin Performance

• Enduring improvements to our cost position
     ...
Our Insulating Products

• Residential Insulating Batt – used in wall cavities of newly
  constructed and existing homes

...
Insulation EBIT Margin


                                                                                                 ...
Insulation
                    A proven long-term franchise

    • The leading market position in North America residentia...
2009 American Recovery and Reinvestment Act:
         Key Energy Efficiency & Green Energy Provisions

                   ...
Owens Corning through-the-cycle EBITDA
                          Owens Corning’s core franchises are capable of through-th...
In Summary:
       Owens Corning’s Business Portfolio

• Three valuable business franchises with market-leading
  position...
Owens Corning’s 2009 Market Outlook


• Free cash flow positive

• Aggressive management of costs, headcount, capacity and...
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OWENS CORNING 8EA84942-8DD6-469D-A9B1-F349E79E297D_InvestorPresMarch18_2009

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OWENS CORNING 8EA84942-8DD6-469D-A9B1-F349E79E297D_InvestorPresMarch18_2009

  1. 1. Resilient Cash Generation, Enduring Value, Three Powerful Businesses March 18, 2009
  2. 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. Forward-looking statements present our current forecasts and estimates of future events. 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: economic and political conditions, including new legislation or other governmental actions; levels of residential and commercial construction activity; competitive factors; pricing pressures; weather conditions; our level of indebtedness; industry and economic conditions that adversely affect the market and operating conditions of our customers, suppliers or lenders; availability and cost of energy and materials; availability and cost of credit; interest rate movements; issues involving implementation of acquisitions, divestitures and joint ventures; our ability to use our net operating loss carryforwards; achievement of expected synergies, cost reductions and/or productivity improvements; issues involving implementation of new business systems; foreign exchange fluctuations; the success of research and development activities; difficulties in managing production capacity; labor disputes; 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 March 18, 2009 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 February 18, 2009. 2
  3. 3. Owens Corning’s Key Themes • Delivered strong operating results in 2008 – $290 million Adjusted EBIT, D&A of $331 million ($621 million Adjusted EBITDA) – Generated $34 million positive free cash flow* – Significantly better performance vs. last recession (2002) • 2002**: 1.7 million housing starts – Adj. EBIT $300 million and D&A of $205 million • 2008: 900,000 housing starts – Adj. EBIT $290 million and D&A of $331 million – Completed successful integration of Composites acquisition • Aggressively managing the business through the down cycle – Expect to have positive free cash flow in 2009 – Positioning the company for strong post-recession performance • Three valuable business franchises: Composites, Insulation, Roofing and Asphalt – All have leading positions in their respective markets – Capable of combined through-the-cycle EBITDA of $1 billion-plus performance – Provides excellent diversification in end-use markets, with global presence Resilient cash generation and enduring value built on three powerful businesses * Change in net debt plus cash used for stock repurchases 3 * * 2002 financial information provided as filed in 2004 10-K
  4. 4. Owens Corning At A Glance • Founded in 1938, an industry leader in glass fiber insulation, roofing and asphalt and glass fiber reinforcements • 2008 sales: $5.8 billion • 17,000 employees in 26 countries • Senior debt ratings: BBB- and Ba1 • FORTUNE 500 company for 54 consecutive years Global Leading North American Leader Market Positions • • Composites Residential Insulation • Commercial & Industrial Insulation • Manufactured Stone Veneer • Residential Shingles • Roofing Asphalts THE PINK PANTHER™ © 1964-2009 Metro-Goldwyn-Mayer Studios Inc. All Rights Reserved. 4 The color PINK is a registered trademark of Owens Corning. © 2009 Owens Corning.
  5. 5. Strong Performance in 2008 • Exceeded our initial guidance and targets: Adjusted EBIT of $290 million – Composites • Integrated acquisition • Maintained share and generated synergies of $50 million • Delivered 10% EBIT margin for the first nine months of 2008 – Roofing and Asphalt • Delivered record earnings • Achieved gains through streamlined asset base, manufacturing efficiencies and pricing actions that outpaced inflation – Insulation • Delivered positive earnings in historically weak housing market • Took aggressive actions to reduce production capacity and align cost structure to market demand • Delivered $100 million in cost savings in advance of the global economic downturn – Reduced active number of employees by 2,300 since end of 2007 • Reduced precious metal lease exposure by $300 million through operational improvements – Acquired lease portfolio expected to be reduced to zero by March 2009 5 – Further operational improvements will be delivered in the next 12-18 months
  6. 6. Strong Liquidity within Existing Facilities; Comfortable Position with Respect to Covenants & Refinancing • Plenty of “head-room” with respect to covenants for senior revolving credit facility Leverage Ratio 43.5% * 65% As of Dec. 31, 2008 Maximum Allowed Interest Expense 4.9x* for 2008 2.0x Coverage Ratio Minimum Required • Ample liquidity to meet financial obligations and support global growth strategy – $615 million available in senior revolving credit facility with $236 million cash on hand, at year-end 2008 – Cash coupled with future cash flows and other sources of liquidity expected to provide sufficient liquidity to meet cash requirements – No significant debt maturities until Q4 2011 6 * Company calculations for compliance certificate
  7. 7. Three Powerful Businesses, Three Valuable Franchises Composites Roofing and Asphalt Insulating Systems
  8. 8. This 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 8 Source: Owens Corning
  9. 9. Composites Global Leadership in a high-growth industry • High-growth markets driving glass fiber demand 1.5 to 2x global GDP growth • Global asset base serves as a platform for growth to meet the needs of our customers • Global product offerings that sustain a premium price in many markets • Resources to deliver innovation and create new opportunities for growth • Will deliver sustained EBIT margin performance in the low teens 9
  10. 10. Composites Global Glass Fiber Demand History Long term growth of 5%+ = 1.5 – 2x global GDP -9% 4,000 +7% CAGR +4% CAGR +5% CAGR Anticipated Downturns -7% 3,000 0% Asia -2% Demand (kt) 2,000 ROW 1,000 Growth Drivers: Shingles Pipe RTP/Lam Shingle/China Key Innovation: Pipe RTP/Lam Shingle Wind Blades 0 1981 1986 1991 1996 2001 2006 • Previous downturns less than 24 mos., followed by mid-single digit growth • Application innovation & emerging markets drive growth 10 Source: Industry publications and Owens Corning estimates
  11. 11. Composites Acquisition synergies Innovation Operating Expenses: 30% Manufacturing Cost: • Eliminating redundancies 50% • Advantex • Best practices Supply Chain: 20% • Product rationalization • Reducing shipping costs 120 100 80 $MM 60 100 100 + 40 75 50 20 0 2008 2009 2010 2011 Accelerating acquisition synergies to achieve target one-year early 11 Source: Management estimates
  12. 12. Composites EBIT Margin Acquisition of Vetrotex 15% 10 year average (9%) 12% * 4% EBIT Margin 9% 14% 6% 10% 10% 10% 10% 9% 9% 9% 8% 7% 3% 3% 0% ** 99 00 01 02 03 04 05 06 07 08 in 19 20 20 20 20 20 20 20 20 20 g ar M g Av T L- We will deliver low-teen EBIT margins * 4% increase in EBIT margin resulting from acquisition synergies ($100MM on $2.5B revenue) ** 10-year average + acquisition synergies 12 Source: Company SEC Filings and management estimates, comparability may differ over time
  13. 13. Roofing: “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 13
  14. 14. Roofing and Asphalt U.S. Industry Consolidation 70s 80s 90s Current FRY/OC OC OC OC GAF/ELK GAF GAF GAF ELK ELK ELK CERTAINTEED CERTAINTEED CERTAINTEED CERTAINTEED TAMKO TAMKO TAMKO TAMKO CELOTEX CELOTEX MANVILLE MANVILLE IKO IKO IKO IKO GLOBE GLOBE BIRD BIRD ATLAS ATLAS ATLAS ATLAS GEORGIA PACIFIC GEORGIA PACIFIC GEORGIA PACIFIC FLINTKOTE FLINTKOTE GENSTAR (Flintkote) PABCO PABCO PABCO PABCO MALARKEY MALARKEY MALARKEY MALARKEY LUNDAY THAGARD LUNDAY THAGARD BIG CHIEF BEAR REGIONAL1 REGIONAL2 REGIONAL3 90% 16 13 9 4 Total 21 16 11 8 A favorable industry structure for the future 14 Source: Management estimates and industry sources and publications
  15. 15. Roofing and Asphalt U. S. Asphalt Shingle Market Demand New Const. (19%) Florida, Gulf Carolina Carry-over storm Coast hurricanes New Const. (5%) New Construction (25%) hurricanes demand No major storms Low storm demand Tex. & Tenn. hail storms MM Sqs 170 18 New Construction (31%) 8 Hvy storm demand 7 Re-roof New Constr Major Storms 9 5 5 5 2 3 3 5 11 3 2 41 40 5 36 37 3 5 36 36 32 32 34 33 23 33 30 31 30 27 27 24 9 19 12 114 113 111 110 110 109 109 108 107 107 106 104 103 103 102 101 99 92 92 0 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09P '10E '11E '12E '13E Total Mkt 134 144 137 144 143 136 143 145 154 161 173 154 129 133 113 130 146 150 152 % Change 2 7 -5 5 -1 -5 5 1 6 5 7 -11 -16 3 -15 15 12 3 1 Laminates 27 37 42 49 56 59 67 76 87 100 111 103 90 93 79 95 111 119 125 % Lams 20 26 31 34 39 43 47 52 56 62 64 67 70 70 70 73 76 79 82 15 Source: ARMA data, Moody’s Economy.com and Owens Corning management estimates
  16. 16. Roofing and Asphalt Delivering Sustained Margin Performance • Enduring improvements to our cost position – Sold underperforming assets – Redesigned the shingle for significantly lower cost – Improved energy efficiency and manufacturing productivity • Effective price discipline throughout 2008 – Price increases offset asphalt inflation by end of Q3 – Margins increased in Q4 • Mix improvement to enhance average margin – Increased sales of premium Duration shingles – Greater focus on roofing accessories • Double-digit EBIT margins are sustainable – Favorable industry structure – OC margins have now matched and exceeded competitors’ levels* – Asphalt prices remain higher than historic averages * Management estimates 16
  17. 17. 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 17
  18. 18. Insulation EBIT Margin 25% 2.50 24 yr. avg. EBIT margin 20% EBIT Margin % Starts (mil) 2.00 15% 1.50 10% 1.00 5% 0.50 0% '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 Starts (single, multi, and mfg housing) EBIT % • 20% EBIT margins demonstrated during periods of strong housing demand • 15% EBIT average over 24-year period 18 Source: Management estimates, company filings and U.S. Census Bureau. Comparability may differ over time.
  19. 19. Insulation A proven long-term franchise • The leading market position in North America residential and commercial and industrial fiberglass insulation – Three producers represent about 80% of market • Positive demographics and energy-efficiency policy will drive market recovery • Our customer and channel diversity provides us an advantage, in all market conditions • Energy efficiency and U.S. stimulus will increase demand – Buildings are #1 user of energy in U.S. – Stricter building codes will drive improved efficiency and demand – Nearly 80 million homes in U.S. under-insulated Source: Management estimates 19
  20. 20. 2009 American Recovery and Reinvestment Act: Key Energy Efficiency & Green Energy Provisions Owens Corning Actions Provision • Existing Home Tax Credit Aggressive marketing campaign – 30% credit up to $1,500 Increased training for installers – Requires compliance with IECC 2009 codes Coordinated promotions with retailers • Low Income Weatherization Develop public/private state programs – $5 billion through October 1, 2010 Engage 900 Community Agencies – Expands eligibility to 200% of poverty level Promote attic insulation as first thing to do Introduce wall solution • Wind Energy Development Continued technological innovation – Extended production tax credit Maintain leading market share – Investment tax credit introduced Continue to develop specialty applications – Credits can be redeemed at U.S. Treasury for cash Owens Corning is positioned to benefit from the provisions of this legislation 20
  21. 21. Owens Corning through-the-cycle EBITDA Owens Corning’s core franchises are capable of through-the-cycle EBITDA of $1B+ Normalized EBIT Margin Range Revenue EBIT (MM) Description • Improved industry structure Roofing – Top 4 producers supply about 90% of demand 8% $160 • About 75% of demand from repair & remodel x = • Sustainable business improvements $2.0B 10% 200 – Manufacturing gains 12% 240 – Improved product mix Insulation • Long-term EBIT margins average 15% 12% $240 • Limited new industry capacity and significant barriers to entry x = 15% 300 $2.0B • Top 3 producers supply about 80% of North 20% 400 America fiberglass demand • “Green” initiatives and stimulus plan will improve demand Composites • Exposure to higher growth markets: 1.5 – 2.0x global GDP growth $250 10% • Market consolidation and product innovation x = 300 $2.5B 12% leading to double-digit margins 350 • Synergies from acquisition drive EBIT 14% margins to low teens Other (1) EBITDA Total $6.5B + $350 - $400 = $1.0B to 1.4B $650 - $990 (1) Includes Depreciation & Amortization, Other Building Materials & Services and Corporate Expenses Assumes return to projected normal / mid-cycle demand environment 21 Source: Management estimates
  22. 22. In Summary: Owens Corning’s Business Portfolio • Three valuable business franchises with market-leading positions in their respective industries • All three franchises are well positioned for strong earnings growth when the business cycle turns up • OC is actively driving, and is positioned to benefit from, world- wide energy policy initiatives • OC has a balanced business portfolio with limited exposure to any one market and is capable of generating cash in today’s severe market conditions Capable of through-the-cycle EBITDA of $1 billion + 22
  23. 23. Owens Corning’s 2009 Market Outlook • Free cash flow positive • Aggressive management of costs, headcount, capacity and capital • Favorable momentum in roofing business continues • Prolonged weakness in insulation business • Weak start for Composites, with improvement through the year 23

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