Owens Corning Inc · NYSE:OC
Owens Corning — Investor Day (November 2021)
16 slides from Owens Corning's investor day presentation, November 2021
Slide 1: Ken Parks, EVP and Chief Financial Officer
Ken Parks EVP and Chief Financial Officer
Slide 2: Compelling Investment Thesis
Compelling Investment Thesis What you will hear today 1 2 3 4 Expanding Executing Reducing Generating addressable to improve the level capital intensity strong free cash markets and of sustainable flow conversion growing through operating margins core capabilities Investing in profitable growth and
Slide 3: Transformed the Financial Profile
Transformed the Financial Profile Revenue ($b) Operating Margin FCF Conversion Return on Capital3 6% CAGR +790 bps $4.3b2 generated >2x 8.4 16.6% 6.7 116% 17.3% 12.5% 107% 5.3 8.7% 10.8% 61% 8.1% 2013-2015 2016-2020 2021 2013-2015 2016-2020 2021 2013-2015 2016-2020 2021 2013-2015 2016-2020 LTM Avera
Slide 4: Growing Revenue to $10B
Growing Revenue to $10B Revenue ($b) Expand addressable market 5x to $200b through organic investments 6% CAGR 10 and acquisitions 8.4 • Leverage secular trends to drive above 6.7 market revenue growth 5.3 • Strengthen core building and construction products • Expand multimaterial solutions 2013-201
Slide 5: Sustaining a Higher Level of Profitability
Sustaining a Higher Level of Profitability Adjusted EBIT ($m) Continued execution sustains higher operating margins 1,400–1,800 • Price offsetting inflation 1,393 • Network optimization and manufacturing excellence to drive productivity 834 459 • Recent acquisitions deliver profitable growth and mor
Slide 6: Reducing Capital Intensity
Reducing Capital Intensity Capex % of Revenue Capital efficiency drivers 7.3% • Total Productive Maintenance maturity 6.4% 5.5% • Furnace life extension 4-5% • Future acquisitions and development of higher value solutions less capital intensive 2013-2015 2016-2020 2021 2024 Consensus* Target * 2021
Slide 7: Generating Strong Free Cash Flow Conversion
Generating Strong Free Cash Flow Conversion FCF Conversion Free cash flow conversion levers • Improved capital efficiency 116% 107% ≥100% • Disciplined working capital management • Management of near-term headwinds: 61% − NOL utilization − Inventory replenishment 2013-2015 2016-2020 2021 2022-2024 C
Slide 8: Investing in Growth and Maintaining an Investment Grade Balance Sheet
Investing in Growth and Maintaining an Investment Grade Balance Sheet Cash Returned to Shareholders Capital deployment priorities ($mm) 516 • Invest in organic growth and value accretive acquisitions 296 435 • Target leverage ratio between 2 to 3 times adjusted EBITDA 204 127 Share Repurchases 82 •
Slide 9: Creating Shareholder Value: 2024 Financial Targets
Creating Shareholder Value: 2024 Financial Targets1,2 Revenue Operating Margin Capital Expenditures FCF Conversion $10b by 2024 Sustained mid-teens Between 4-5% Sales ≥100% over time Return ~50% of FCF to shareholders over time Key Assumptions 1-Continued market strength in our end markets 9 2-M&A a
Slide 10: Appendix
Appendix 10
Slide 11: Appendix: Non-GAAP Reconciliation – Table 1
BUSINESS CONFIDENTIAL Appendix: Non-GAAP Reconciliation – Table 1 11
Slide 12: Appendix: Non-GAAP Reconciliation – Table 2
BUSINESS CONFIDENTIAL Appendix: Non-GAAP Reconciliation – Table 2 12
Slide 13: Appendix: Non-GAAP Reconciliation – Table 3
BUSINESS CONFIDENTIAL Appendix: Non-GAAP Reconciliation – Table 3 13
Slide 14: Appendix: Non-GAAP Reconciliation – Table 4
BUSINESS CONFIDENTIAL Appendix: Non-GAAP Reconciliation – Table 4 14
Slide 15: Appendix: Non-GAAP Reconciliation – Table 5
BUSINESS CONFIDENTIAL Appendix: Non-GAAP Reconciliation – Table 5 15
Slide 16: Appendix: Non-GAAP Reconciliation – Table 6
BUSINESS CONFIDENTIAL Appendix: Non-GAAP Reconciliation – Table 6 16