Owens Corning Inc · NYSE:OC
Owens Corning — Investor Day (May 2007)
173 slides from Owens Corning's investor day presentation, May 16, 2007
Slide 1: Owens Corning Investor Day
Owens Corning Investor Day Dave Brown, President and CEO Exhibit 99.1
Slide 2: Forward-looking Statement and Non-GAAP Measures
Forward-looking Statement and Non-GAAP Measures This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to risks
Slide 3: The Foundation for Today's Discussion
The Foundation for Today’s Discussion • “The Owens Corning House”
Slide 4: The Foundation for Today's Discussion
The Foundation for Today’s Discussion • “The Owens Corning House” • Build awareness of Owens Corning and our business segments
Slide 5: The Foundation for Today's Discussion
The Foundation for Today’s Discussion • “The Owens Corning House” • Build awareness of Owens Corning and our business segments • Introduce you to the leaders of Owens Corning
Slide 6: The Foundation for Today's Discussion
The Foundation for Today’s Discussion • “The Owens Corning House” • Build awareness of Owens Corning and our business segments • Introduce you to the leaders of Owens Corning • Inform, while learning from you
Slide 7: Owens Corning At A Glance
Owens Corning At A Glance • Founded in 1938, an industry leader in glass fiber insulation, roofing and asphalt, and glass fiber composite solutions
Slide 8: Owens Corning At A Glance
Owens Corning At A Glance • Founded in 1938, an industry leader in glass fiber insulation, roofing and asphalt, and glass fiber composite solutions • Sales: $6.5 billion
Slide 9: Owens Corning At A Glance
Owens Corning At A Glance • Founded in 1938, an industry leader in glass fiber insulation, roofing and asphalt, and glass fiber composite solutions • Sales: $6.5 billion • 18,500 employees in 26 countries
Slide 10: Owens Corning At A Glance
Owens Corning At A Glance • Founded in 1938, an industry leader in glass fiber insulation, roofing and asphalt, and glass fiber composite solutions • Sales: $6.5 billion • 18,500 employees in 26 countries • Market capitalization: $4.2 billion
Slide 11: Owens Corning At A Glance
Owens Corning At A Glance • Founded in 1938, an industry leader in glass fiber insulation, roofing and asphalt, and glass fiber composite solutions • Sales: $6.5 billion • 18,500 employees in 26 countries • Market capitalization: $4.2 billion • Diluted shares outstanding: 131.1 million
Slide 12: Owens Corning At A Glance
Owens Corning At A Glance • Founded in 1938, an industry leader in glass fiber insulation, roofing and asphalt, and glass fiber composite solutions • Sales: $6.5 billion • 18,500 employees in 26 countries • Market capitalization: $4.2 billion • Diluted shares outstanding: 131.1 million • Senior debt
Slide 13: Owens Corning At A Glance
Owens Corning At A Glance • Founded in 1938, an industry leader in glass fiber insulation, roofing and asphalt, and glass fiber composite solutions • Sales: $6.5 billion • 18,500 employees in 26 countries • Market capitalization: $4.2 billion • Diluted shares outstanding: 131.1 million • Senior debt
Slide 14: Owens Corning At A Glance
Owens Corning At A Glance • Founded in 1938, an industry leader in glass fiber insulation, roofing and asphalt, and glass fiber composite solutions • Sales: $6.5 billion • 18,500 employees in 26 countries • Market capitalization: $4.2 billion • Diluted shares outstanding: 131.1 million • Senior debt
Slide 15: Owens Corning Highlights
Owens Corning Highlights • Market leader • Long-standing, successful customer relationships • Multiple channels to diverse end markets • Strong financial position and cash-flow generation • Cost-competitive asset base • Management team with a proven record • Strong and recognizable brand equity
Slide 16: Market Leadership & Strong Brand Equity
Market Leadership & Strong Brand Equity Leading North American Market Positions • Residential Insulation • Commercial & Industrial Insulation • Manufactured Stone Veneer • Residential Shingles • Roofing Asphalts Global Leader • Glass Fiber Reinforcement Materials for Composites
Slide 17: Balanced Portfolio of Varied End-Use Markets
Balanced Portfolio of Varied End-Use Markets International 12% U.S. & Canada Commercial & Industrial 18% U.S. & Canada Residential Repair & Remodeling 34% U.S. & Canada Residential Construction 36% Source: Management Estimates Revenue by End Market 2006 Revenue: $6.5 billion
Slide 18: Business Segment Overview
Business Segment Overview (1) Percentages by segment based on revenue of $6.6B before corporate eliminations (2) Percentages based on segment results before Chapter 11-related reorganization Items, asbestos litigation, restructuring costs and other credits, impact of Fresh Start Accounting, general
Slide 19: A Global Company Where Market-Leading Businesses Are Built
A Global Company Where Market-Leading Businesses Are Built Diversified Business Mix Strong Corporate Governance Experienced Management Team Engaged and Committed Workforce Focus on Strong Financial Performance (Cash generation, taxes, pension & product liability) Unsurpassed Brand Strength Leading M
Slide 20: Let's Get Started
Owens Corning Investor Day Let’s Get Started… THE PINK PANTHER™ & © 1964-2007 Metro-Goldwyn-Mayer Studios Inc. All Rights Reserved. The color PINK is a registered trademark of Owens Corning. © 2007 Owens Corning
Slide 21: Composite Solutions
Owens Corning Investor Day Composite Solutions Chuck Dana President, Composite Solutions
Slide 22: Forward-looking Statement and Non-GAAP Measures
Forward-looking Statement and Non-GAAP Measures This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to risks
Slide 23: What is a Composite?
Today, 95% of composite materials use glass reinforcement fibers What is a “Composite”? • An engineered material system… • combining reinforcement fibers… – glass, carbon, aramid • with another material… – e.g., thermoset or thermoplastic resins, gypsum, ceramic • resulting in unique, high performan
Slide 24: Owens Corning in Composites
Owens Corning is the leading global supplier of glass reinforcements to the composites industry Owens Corning in Composites • Commercialized glass fibers in 1938 • Pioneered the use of glass as a reinforcement in composites • Instrumental in converting applications to composites • Continues our lega
Slide 25: We are Number One In Share Around The World
We are Number One In Share Around The World Owens Corning is the Global Leader in Glass Fiber Reinforcements Source: U.S. Fiber Economic Bureau, APFE, Owens Corning Global Industry Database We are Number One In Share Around The World
Slide 26: Manufacturing Glass Reinforcements
Manufacturing Glass Reinforcements Batch House Raw Materials Furnace Channel Forehearth Forming, Coating & Winding Bushing
Slide 27: Making a Glass Fiber
The heart and soul of our technology Making a Glass Fiber Glass fiber flowing through a bushing
Slide 28: We Create Products for Customers in Numerous Markets
Chopped Fibers Fabrics Continuous Fibers Mats We Create Products for Customers in Numerous Markets Chopped Fibers Fabrics Continuous Fibers Mats
Slide 29: OC Chopped Fibers
OC ® Chopped Fibers Primary Markets • Transportation • Automotive • Electronics • Appliances
Slide 30: OC Continuous Fibers
OC ® Continuous Fibers Primary Markets • Infrastructure • Fabrics
Slide 31: OC Fabrics
OC ® Fabrics Primary Markets • Energy • Defense • Aerospace • Recreational
Slide 32: OC Mats
OC ® Mats Primary Market • Construction
Slide 33: A World of Opportunities for Composites
Wood A World of Opportunities for Composites Source: E-Composites, Owens Corning Steel Plastics Aluminum Composites 1.5% Global Materials Market by Volume
Slide 34: A Fast Growing Business Environment
Global Demand - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 A Fast Growing Business Environment Driven by key macro trends: • Globalization/emerging economies • Green solutions • Energy consumption • Style/functionality 5% CAGR Source: U.S. Fiber Economic Bureau, APFE, Owens Corning Global I
Slide 35: Composite Materials is an Attractive Industry
There has never been a more exciting time to be in composites Unique Attributes Fast Growing and Global Diverse Markets and Applications Composite Materials is an Attractive Industry
Slide 36: Composite Materials Have Unique Attributes
Composites provide solutions to meet the needs of the materials market Composite Materials Have Unique Attributes That Align To The Current Market Needs High Strength Lightweight Durable Design Flexibility Power pole installation with out cranes Sulfuric acid flue gas scrubber Injection molded part
Slide 37: Diverse Industry Markets
Diverse Industry Markets Key drivers in major markets: • Low cost, lightweight transportation • High strength and durable infrastructure • Affordable and renewable energy • Smaller, more functional electronics • Aesthetically pleasing, low-maintenance housing Source: Owens Corning 2005 Global Market
Slide 38: Large, Stable Companies Are a Major Part of Our Customer Base
Large, Stable Companies Are a Major Part of Our Customer Base in the Composites Value Chain
Slide 39: A Global Market Base
Growth Rates 2003-2007 A Global Market Base Composite Consumption per capita • North America: 12.3 kg • Western Europe: 6.5 kg • Japan: 6.3 kg • Rest of world: 1.7 kg Source: Owens Corning Global Market Analysis, Industry Structure Database; U.S. Fiber Economic Bureau; APFE, Global Insight 1Q World
Slide 40: It Is An Exciting Time for Composite Solutions Business
29 plants and 5,000 people serving customers in more than 75 countries It Is An Exciting Time for Owens Corning’s Composite Solutions Business (CSB) • Global revenues of $1.6 billion • Growing at a CAGR of 7% • Market leading supplier of glass reinforcements, fabrics and mats • More than 2,000 custo
Slide 41: Global facilities map
He World Headquarters © Automotive (W=Warehouse) 1D Research & Development JEN Fabwel (WW=Warehouse) } Application Development Center @p MAT (W=Warehouse) D> Soint Venture @> Veil (W=Warehouse) {EE Reinforcements & Fabrications Gd Offices
Slide 42: CSB's Strategy
Strategic Themes Key Actions CSB’s Strategy • Manage a global business regionally • Drive returns on existing assets • Increase supply from emerging countries • Grow through innovation • Close to customers • Asahi acquisition in Japan • Saint Gobain JV in Mexico • 25% increase in plant throughput si
Slide 43: Composite Solutions Financial Performance
Composite Solutions 2006 Revenue by End Market U.S. & Canada Commercial & Industrial 36% U.S. & Canada Residential Repair & Remodeling 13% U.S. & Canada New Residential Construction 4% International 47% 1,250 1,300 1,350 1,400 1,450 1,500 1,550 1,600 1,650 LTM- 3/31/07 0% 4% 8% 12% Financial Perform
Slide 44: Productivity Has Offset Inflationary Pressure
Improvements in productivity have offset inflation for the past two years Productivity Has Offset Inflationary Pressure Source: Owens Corning CSB 2006 Global Cost Report Productivity $MM Inflation $0 $10 $20 $30 $40 $50
Slide 45: Opportunity: Gypsum Wallboard
Opportunity: Gypsum Wallboard • Owens Corning has partnered with Georgia-Pacific to develop mold-resistant interior and exterior wallboard • The U.S. drywall market is $6 billion with this product only penetrating 1% of the market Atlantic Station Project (Atlanta) Source: Freedonia, 2004
Slide 46: Opportunity: Renewable Energy
Source: BTM World Market Update 2006 Opportunity: Renewable Energy Wind Energy • Wind energy accounts for less than 1% of the world’s electricity • $150 million of glass fibers in 2007 • Wind energy expected to grow an average 16% annually over next decade 16% CAGR Growth in Wind Energy New Megawatt
Slide 47: Adapting to Industry Challenges
Adapting to Industry Challenges Challenges Our Solution Chinese Competition Expanding emerging country supply Market leading products Innovation Inflation Advantex ® formulation Advanced glass melting technology Capital Efficiency Leveraging existing assets
Slide 48: Composite Materials is an Attractive Industry
There has never been a more exciting time to be in composites Unique Attributes Fast Growing and Global Diverse Markets and Applications Composite Materials is an Attractive Industry
Slide 49: Questions & Discussion
Questions & Discussion THE PINK PANTHER™ & © 1964-2007 Metro-Goldwyn-Mayer Studios Inc. All Rights Reserved. The color PINK is a registered trademark of Owens Corning. ©2007 Owens Corning
Slide 50: Insulating Systems
Owens Corning Investor Day Insulating Systems Roy Dean President, Insulating Systems
Slide 51: Forward-looking Statement and Non-GAAP Measures
Forward-looking Statement and Non-GAAP Measures This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to risks
Slide 52: Energy Efficiency: A never-ending concern
Energy Efficiency: A never-ending concern, a never - ending opportunity • Worries of World War II • Owens Corning successfully commercializes the fiber glass process and opens for business
Slide 53: Energy Efficiency: Oil Embargo
• Worries about the Oil Embargo • Owens Corning begins expanding nationally… insulation is cheaper than oil Energy Efficiency: A never-ending concern, a never - ending opportunity
Slide 54: Energy Efficiency: Political Instability
Energy Efficiency: A never-ending concern, a never - ending opportunity • Fears of political instability when Iraq invades Kuwait • Owens Corning continues to expand and innovate to meet ever increasing customer needs
Slide 55: Energy Efficiency: Energy Security
Energy Efficiency: A never-ending concern, a never - ending opportunity • Collective fears about energy security, depleting resources, carbon emissions and climate change from a “whisper” to “every day news”
Slide 56: Total U.S. Energy Use
Total U.S. Energy Use* Buildings are the #1 user of energy in the U.S. Homes and Commercial Buildings 39% Industry 33% Transportation 28% *Source: Department of Energy
Slide 57: Insulation Has Never Been More Relevant
Insulation Has Never Been More Relevant • “Checking home insulation is one of the fastest and most cost-efficient ways to use a whole-house approach to reduce energy waste and make the most of energy dollars.” – U.S. Department of Energy, 2005 • “Insulation is the single most cost-effective greenhou
Slide 58: How Our Products are Used in the Home
How Our Products are Used in the Home Insulation in existing homes saves 48% of the energy that otherwise would have been consumed Attic/Flat Ceilings Cathedral Ceilings Interior/ Exterior Walls Ductwork Rigid Foam Insulated Concrete Forms Under Floor Water Resistant Membrane Foam Sheathing House Wr
Slide 59: How Our Products are Used Commercially
How Our Products are Used Commercially Insulation in existing commercial buildings saves at least 30% of the total U.S. commercial energy consumption Insulation for Noise Control And Thermal Protection in Interior & Exterior Walls Owens Corning Duct Solutions Pipe Insulation Metal Building Insulatio
Slide 60: How Our Products are Used
How Our Products are Used Oven Door Insulation Oven Cavity Insulation Oven Bottom Insulation Duct Board* Fiberglass Duct Systems alone, are estimated to be 75% more energy efficient than uninsulated unsealed sheet metal ducts. Pipe Insulation
Slide 61: The Markets We Serve
The Markets We Serve 2006 Insulating Systems Revenue by End Market U.S. & Canada New Residential Construction 60% U.S. & Canada Repair & Remodeling 13% U.S. & Canada Commercial & Industrial 19% International 8% Owens Corning has majority share of the North American fiberglass insulation market
Slide 62: Our Customers and Our Channels
United Subcontractor Inc. Our Customers and Our Channels L&W Supply Retail/Big Box Pro-Dealers Contractors Distributors Commercial Distributors
Slide 63: The Glass Insulation Manufacturing Process
The Glass Insulation Manufacturing Process
Slide 64: Our Global Business Platform
Our Global Business Platform 5,400 Employees 29 Manufacturing Facilities
Slide 65: Insulating Systems Business Team
Insulating Systems Business Team • President 26 years • VP & GM Residential Insulation 20 years • VP & GM Commercial & Industrial 18 years • GM Foam 11 years • VP Sales National Accounts 31 years • VP Manufacturing 28 years • VP Technology 14 years • VP Latin America 10 years • VP Asia Pacific 29 ye
Slide 66: Insulating Systems Financial Overview
Insulating Systems Financial Overview Sales EBIT% 1,000 1,500 2,000 $2,500 LTM- 3/31/07 0% 5% 10% 15% 20% 25%
Slide 67: Strategies for Success
Strategies for Success • Leading through the cycle • Grow the North American market • Global expansion
Slide 68: Strategies for Success
Strategies for Success • Leading through the cycle – Responsive capacity management • Delay greenfield construction • Shutter high-cost capacity • Extend maintenance downtimes • Reduce production rates – Focus on operational execution • Optimize logistics • Manage working capital • Adjust overhead a
Slide 69: Strategies for Success
Strategies for Success • Grow the North American market – 55 percent of attics in existing homes in the U.S. are under insulated* (69MM) – 90 percent of consumers will pay up to $5,000 for a more energy efficient home † – 98 percent of consumers want to reduce America’s dependence on foreign oil ‡ –
Slide 70: Strategies for Success
Strategies for Success • Grow the North American market – Focus on thermal upgrades in new and existing homes • Drive new construction upgrades • Grow retrofit opportunities • Accelerate building code upgrades and compliance • Promote U.S. Energy Policy Act and enhance green marketing initiatives –
Slide 71: A Never-Ending Opportunity
A Never-Ending Opportunity Opportunities for the AttiCat ™ System • 55% of attics in existing homes in the U.S. are under insulated* (69MM) • The most cost-effective way to enhance energy efficiency is to insulate the attic • Lightweight and consumer friendly *According to the International Energy C
Slide 72: Strategies for Success
Strategies for Success • Grow the North American market – Focus on thermal upgrades in new and existing homes • Drive new construction thermal upgrades • Grow retrofit opportunities • Accelerate building code upgrades and compliance • Promote US Energy Policy Act and enhance green marketing initiati
Slide 73: Strategies for Success
Strategies for Success • Global expansion – Grow our existing footprint with product innovations • Extend core product penetration • Customize products to meet regional needs – Expand presence in emerging markets • Greenfield • Mergers and Acquisitions • Joint Ventures
Slide 74: Engineered Exterior Solution for the China Market
Engineered Exterior Solution for the China Market • FEWEIS (Foam Exterior Wall Exterior Insulation System) combines foam, scrim and exterior surface material • Provides thermal and aesthetic benefits
Slide 75: Strategies for Success
Strategies for Success • Global expansion – Grow our existing footprint with product innovations • Extend core product penetration • Customize products to meet regional needs – Expand presence in emerging markets • Greenfield • Mergers and Acquisitions • Joint Ventures
Slide 76: A Never Ending Opportunity
THE PINK PANTHER™ & © 1964-2007 Metro-Goldwyn-Mayer Studios Inc. All Rights Reserved. The color PINK is a registered trademark of Owens Corning. ©2007 Owens Corning A Never Ending Opportunity • Winning customers • Powerful brand • Innovative products • Talented team • Great business
Slide 77: Questions & Discussion
Questions & Discussion THE PINK PANTHER™ & © 1964-2007 Metro-Goldwyn-Mayer Studios Inc. All Rights Reserved. The color PINK is a registered trademark of Owens Corning. ©2007 Owens Corning
Slide 78: Building the Owens Corning Brand
Owens Corning Investor Day Building the Owens Corning Brand Christian Nolte Strategic Marketing Director
Slide 79: Forward-looking Statement and Non-GAAP Measures
Forward-looking Statement and Non-GAAP Measures This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to risks
Slide 80: The Owens Corning Brand is Most Recognized
The Owens Corning Brand is Most Recognized
Slide 81: We're the #1 Recognized Brand of Shingles in America
We’re the #1 Recognized Brand of Shingles in America
Slide 82: We're the #1 Recognized Brand in Asphalt
We’re the #1 Recognized Brand in Asphalt
Slide 83: Nobody Knows Basements Better
Nobody Knows Basements Better™ *drywall not included
Slide 84: We're the Preferred Name in Manufactured Stone Veneer
We’re the Preferred Name in Manufactured Stone Veneer
Slide 85: We're the #1 Brand of Commercial and Industrial Insulation
We’re the #1 Brand of Commercial and Industrial Insulation
Slide 86: We're the #1 Brand of Residential Insulation
We’re the #1 Brand of Residential Insulation
Slide 87: The Owens Corning Brand Today
Owens Corning brand essence • Energy • Comfort • Aesthetics Owens Corning brand reputation • Known and trusted • Innovation • Education around energy efficiency The Owens Corning Brand Today
Slide 88: An Industry is Born
An Industry is Born
Slide 89: The Power of PINK Emerges
The Power of PINK Emerges
Slide 90: The Evolution of Our Leadership Around Energy Efficiency
The Evolution of Our Leadership Around Energy Efficiency
Slide 91: Video
Video
Slide 92: Video
Video
Slide 93: The Pink Panther and PINK Join Forces
The Pink Panther™ and PINK Join Forces
Slide 94: Video
Video
Slide 95: Video
Video
Slide 96: Our Aesthetic Story Broadens
Our Aesthetic Story Broadens
Slide 97: Our Energy Efficiency Positioning Takes Center Stage
Our Energy Efficiency Positioning Takes Center Stage
Slide 98: The Owens Corning Brand: Driving Customer Value
Warren McGrew, Academy Roofing, Atlanta • Brand sells itself • Consumers know Owens Corning • With Owens Corning, Academy gets the job The Owens Corning Brand: Driving Customer Value
Slide 99: The Owens Corning Brand: Driving Customer Value
The Owens Corning Brand: Driving Customer Value Dan Bawabe, Bay State, Boston • Owens Corning brand builds confidence with consumers – It’s a name they know and trust • Make more money by reducing marketing costs and increasing response rates Gary Fanelli, Basement Finishing System of Pennsylvania,
Slide 100: The Pink Panther Re-signs
The Pink Panther™ Re-signs Pink Panther™ contract extended to 2021 • Global • Endearing • 94% of Americans ages 39-49 are familiar
Slide 101: Invigorating Our Brand
Invigorating Our Brand Before After
Slide 102: Improving the Homeowner Shopping Experience
Before After Improving the Homeowner Shopping Experience
Slide 103: Improving the Homeowner Shopping Experience
• Simplifies shingle selection process by reducing error and increasing comfort level • Presents materials in an inviting way by highlighting performance and aesthetic features • Builds consumer confidence that they have the right products Improving the Homeowner Shopping Experience
Slide 104: Changing the Conversation
Changing the Conversation • Community-by-community • House-by-house
Slide 105: Responding to Trends
Responding to Trends
Slide 106: Responding to Trends
Responding to Trends
Slide 107: Responding to Trends
Responding to Trends
Slide 108: Owens Corning is Everywhere
Owens Corning is Everywhere • Product placement • Email marketing • POD casts • VOD casts • Social media
Slide 109: Owens Corning is Everywhere
Owens Corning is Everywhere • Product placement • Email marketing • POD casts • VOD casts • Social media
Slide 110: Questions & Discussion
Questions & Discussion THE PINK PANTHER™ & © 1964-2007 Metro-Goldwyn-Mayer Studios Inc. All Rights Reserved. The color PINK is a registered trademark of Owens Corning. ©2007 Owens Corning
Slide 111: Roofing & Asphalt
Owens Corning Investor Day Roofing & Asphalt Sheree Bargabos President, Roofing and Asphalt
Slide 112: Forward-looking Statement and Non-GAAP Measures
Forward-looking Statement and Non-GAAP Measures This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to risks
Slide 113: A History of Innovation
A History of Innovation • 1947 – Developed fiber glass shingle - lower cost, higher performing, Class A fire-rated versus organic • 1959 – Began commercial production • 1977 – Acquired Fry Roofing Company/ Trumbull ® Asphalt subsidiary – National producer – Converted the industry to Fiberglas ® mat
Slide 114: We're the #1 Recognized Brand of Shingles in America
We’re the #1 Recognized Brand of Shingles in America Source: Study conducted by MAI Research, 2006
Slide 115: We're the #1 Recognized Brand in Processed Asphalt
We’re the #1 Recognized Brand in Processed Asphalt Source: Asphalt Institute Data and Management Estimates
Slide 116: Asphalt Shingles are the product of choice
Asphalt Shingles are the product of choice $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000 Installed Cost of a Roof Asphalt Metal Tile Steep Slope Roofing Asphalt Shingle Tile Concrete Slate Wood Metal (1) The Freedonia Group, Inc. (2) Owens Corning Management Estimate
Slide 117: Asphalt Shingle Industry
Aesthetics, performance and cost drive value • $6 billion+ market • 80% reroof and 20% new construction • Market growth primarily driven by aging of existing housing stock • Market volatility driven by storm activity and fluctuations in new construction • Eight producers with 50+ roofing plants and
Slide 118: Asphalt Shingle Market Demand
Trend line growth of 2% Asphalt Shingle Market Demand Market Size (Million Squares) (1) Based on Owens Corning management estimates and ARMA data 40% 50% 60% 70% 80% 90% 100% 110%
Slide 119: Asphalt Shingle Product Trend
Aesthetics and performance are driving the upgrade to premium asphalt shingles Asphalt Shingle Product Trend 2007E 2008E 2009E 2010E HVY LAMS LAMINATES STRIP Market Size (Million Squares)
Slide 120: Asphalt Shingle Cost Drivers
Materials are the primary cost components Asphalt Shingle Cost Drivers Mineral surface granules Fiberglas ® mat Backdusting Headlap & Weathering-grade filled asphalt
Slide 121: Asphalt Industry Overview
• Asphalt is a refining byproduct • Approximately 3% of a barrel of oil is asphalt • Paving represents 74% of all asphalt sold • OC Trumbull ® is the market leader in processed asphalts • Products include coatings for shingles, bulk and packaged asphalt for commercial roofs, and industrial and speci
Slide 122: Our Markets
Our Markets 2006 R&A Revenue by End Market U.S. & Canada Commercial & Industrial 11% U.S. & Canada New Residential Construction 25% U.S. & Canada Residential Repair & Remodeling 64%
Slide 123: Our Customers
Our Customers Distributors Shingle Manufacturers Industrial/Specialty
Slide 124: Roofing and Asphalt – Our Products
Roofing and Asphalt – Our Products • Shingle coating • Commercial roofing • Waterproofing • Industrial and specialty applications • Hip & ridge shingles • Ventilation products • WeatherLock ® underlayment • Starter strip shingles • Strips • Laminates • Heavyweight laminates
Slide 125: Roofing and Asphalt – Our Facilities
Roofing and Asphalt – Our Facilities • Approx 2,000 employees in 32 facilities • Export sales to Canada, Latin America, Europe • Asia Pacific – plants in China and Korea Portland Compton Denver Irving Houston Minneapolis Kearny Savannah Jacksonville Detroit Ennis Morehead City Oklahoma City Summit M
Slide 126: Our Shingle Manufacturing Process
Our Shingle Manufacturing Process
Slide 127: Our Asphalt Manufacturing Process
Our Asphalt Manufacturing Process
Slide 128: Strategic Priorities
A market-leading business Strategic Priorities • Growth through innovation – Aesthetics, ease of application, performance • Margin enhancement – Product mix – Productivity • Return on invested capital – Laminate shingles – Accessories
Slide 129: Bringing value to our customers
Bringing value to our customers 2001-2007 1977-2000 SureNail ® Technology WOODCREST ® Oakridge PRO ® Series WeatherLock ® Granular Duration ™ WOODMOOR ® Double Shadow Line Prominence ® ACC Asphalt BERKSHIRE ® COLLECTION VentSure ® Algae Resistant Shingles WeatherLock ® G Squared WeatherGuard ® Low f
Slide 130: Beauty, Performance and Profits for All
* Source: Feedback from Owens Corning preferred contractors Beauty, Performance and Profits for All Duration ™ Series Shingles with SureNail ® Technology • Value for homeowners – Choice of bold, vibrant colors – Lays flat right from the start – Up to 130 mph wind resistance & limited lifetime warran
Slide 131: Connecting the Homeowner and the Contractor
Connecting the Homeowner and the Contractor • Software allows Owens Corning Preferred Contractors to show customers how their home will look after installation
Slide 132: Sales and EBIT performance expected to improve through 2007
Sales and EBIT performance expected to improve through 2007 Our Financials Financial performance ($MM) Sales EBIT Margin 1,000 1,500 2,000 LTM - 3/31/07 0% 2% 4% 6% 8% 10%
Slide 133: Near-Term Market Outlook
Market expected to improve year over year in second half Near-Term Market Outlook • 2007 Total demand projected down: – Lower storm-related demand compared to record first-half 2006 – Softness in new residential construction – First quarter inventory correction in the channel • Demand for aesthetics
Slide 134: Questions & Discussion
Questions & Discussion THE PINK PANTHER™ & © 1964-2007 Metro-Goldwyn-Mayer Studios Inc. All Rights Reserved. The color PINK is a registered trademark of Owens Corning. ©2007 Owens Corning
Slide 135: Manufactured Stone Veneer
Owens Corning Investor Day Manufactured Stone Veneer Chuck Stein President, Cultured Stone®
Slide 136: Forward-looking Statement and Non-GAAP Measures
Forward-looking Statement and Non-GAAP Measures This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to risks
Slide 137: We Focus On:
We Focus On: • Growing demand – U.S. and globally • Increasing margins • Product and system innovation
Slide 138: Global market share and brand leader
Global market share and brand leader Cultured Stone ® Industry Leadership & Profitable Growth • Ranked #1 by independent industry surveys by a factor of 3:1 • Broadest choice of high-quality products • Continuous double-digit, top-line growth • Global expansion sustains revenue and profit growth • O
Slide 139: Manufactured Stone Veneer (MSV) Process
Manufactured Stone Veneer (MSV) Process • Select stone for “master copies” • Create molds of master set • Design coloring of materials to replicate look of natural stone Copy Natural Stone Manufactured Stone Packaging & Distribution Installation • Applied with mortar over lathe and weather barrier o
Slide 140: ) ‘Owens
) ‘Owens [CORNING NOUATIONS FoR UNG
Slide 141: MSV Category Growth
MSV Category Growth Taking Share of Exterior Wall Covering We Create and Grow Markets • Cultured Stone ® has led MSV’s growth in share of exterior wall cladding products to more than 10% CAGR, and there is still ample room for growth Our Customers Prosper • In a recent independent study (2) homeowne
Slide 142: Cultured Stone: An Emerging Global Business
Cultured Stone ® An Emerging Global Business
Slide 143: Supply Chain
Supply Chain • Ability to produce all products at all facilities enables flexibility with demand • Hardware and software enhancements enable information access to maintain best in market service levels • Global capacity enables speed to all markets and sourcing leverage • Logistics optimization and
Slide 144: Customer Engagement
Customer Engagement • A national network of loyal, independent distribution with average tenure > 15 years • Global coverage with representation in more than 25 countries • 80%+ of distributors are exclusive sellers of Cultured Stone ® branded products • Introduction of Owens Corning products into U
Slide 145: Future Growth
Future Growth • Global expansion – Global growth rates continue to exceed those in the U.S. – China expansion • Market development – From materials to lifestyle solutions – Architectural representation • Product offering – Colors and textures – Accessories
Slide 146: Strategic Intent
Strategic Intent • A growth business • An outstanding product • A preferred brand • On an improved cost platform • Operating an efficient supply chain • To an engaged customer base
Slide 147: Questions & Discussion
Questions & Discussion THE PINK PANTHER™ & © 1964-2007 Metro-Goldwyn-Mayer Studios Inc. All Rights Reserved. The color PINK is a registered trademark of Owens Corning. ©2007 Owens Corning
Slide 148: Innovation & Sustainability
Owens Corning Investor Day Innovation & Sustainability Frank O’Brien-Bernini Vice President, Chief Research & Development and Sustainability Officer
Slide 149: Forward-looking Statement and Non-GAAP Measures
Forward-looking Statement and Non-GAAP Measures This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to risks
Slide 150: Innovation at Owens Corning
Ranked #2 in innovation for our industry by FORTUNE’s “America's Most Admired Companies 2007” Innovation at Owens Corning • Market-leading products and waste-free processes – 24% of sales from products launched in the last four years • Margin sweetening… plus five points • Sales growth…one-half from
Slide 151: Sustainability at Owens Corning
Delivering Solutions… Transforming Markets… Enhancing Lives Sustainability at Owens Corning Amplifying our net-positive impact… • Products – Creating demand for energy efficiency and renewables solutions • Processes – Profitably reducing our environmental footprint • People – Driving to zero injurie
Slide 152: Global capabilities…local product innovation
Global capabilities…local product innovation S&T Center Granville, OH Tallmadge, OH Battice, Belgium Apeldoorn, The Netherlands Summit, IL Novi, MI Rio Claro, Brazil Mexico City, Mexico Shanghai, China Science & Technology: Global Innovation Ibaraki, Japan
Slide 153: External
External Today Tomorrow Internal GHG PM VOC Water Waste to Landfill NOx 2002 Base Year 2012 Goal Energy
Slide 154: Residential Energy Efficiency: Innovation Opportunity
Code to U. S. Energy Policy Act 2005 to Net Zero Practical energy retrofit Residential Energy Efficiency: Innovation Opportunity New Home (1) Existing Home (1) Windows Walls Attic Foundation Infiltration Lighting Gains Solar Gains Windows Solar Gains Walls Attic Foundation Infiltration Lighting Gain
Slide 155: Demand Creation in Energy Efficiency
Demand Creation in Energy Efficiency: AttiCat ™ PINK Fiberglas ™ Insulation Attributes of AttiCat ™ System • Light-weight machine fits in an SUV • Insulation is super-compact (18x) • Most convenient do-it-yourself installation • Half-day project
Slide 156: Aesthetic and Application Leadership: Duration
Aesthetic and Application Leadership: Duration ™ Shingles with SureNail ® Technology Attributes of SureNail ® • Aesthetic colors and textures • 10-20% faster installation • Superior wind performance • Fewer call backs SureNail ® wider nailing area Extra adhesive power Supersealing action
Slide 157: Products for Sustainable Returns: HiPer-tex Reinforcements
Products for Sustainable Returns: HiPer-tex ™ Reinforcements Attributes of HiPer-tex ™ Cost High Low High HiPer-tex™ Advantex® Fiber Steel Aluminum Carbon Fiber Low Breakthrough WindStrand™
Slide 158: Sustainability: Profitably Reducing Our Environmental Footprint
Achieving significant footprint reductions, while setting more aggressive goals Intensity Reduction Goals GHG 30% PM 20% VOC 25% Water 15% Landfill 35% NOx 25% Energy 25% Sustainability: Profitably Reducing Our Environmental Footprint GHG PM VOC Water Waste to Landfill NOx Energy 2002 Base Year 2012
Slide 159: NOUATIONS FoR UNG
a NOUATIONS FoR UNG
Slide 160: Smart Melting Technology
Smart Melting Technology Profitable source reduction • Energy, GHG, PM, NOx reduction • Manufacturing cost reduction • Capacity increase • Longer asset life GHG PM VOC Water Waste to Landfill NOx Energy
Slide 161: Innovation Space
VOC Water Waste to Landfill NOx External Today Tomorrow Internal Innovation Space: • Energy and CO reduction in new and existing buildings • Renewables… wind, solar, bio • Light-weight vehicles • Aesthetics • Application ease / speed • China, India, Latin America building systems • Cradle-to-Cradle…
Slide 162: Innovation and Sustainability Outlook
Delivering Solutions… Transforming Markets… Enhancing Lives Innovation and Sustainability Outlook • Commercialize market-leading products – 30% sales from new products with sweet margins – Amplify our net-positive impact • Drive down unit cost and environmental footprint – Source reduction – Eco-eff
Slide 163: Questions & Discussion
Questions & Discussion THE PINK PANTHER™ & © 1964-2007 Metro-Goldwyn- Mayer Studios Inc. All Rights Reserved. The color PINK is a registered trademark of Owens Corning. ©2007 Owens Corning
Slide 164: Financial Strategy
Owens Corning Investor Day Financial Strategy Mike Thaman Chairman of the Board and CFO
Slide 165: Forward-looking Statement and Non-GAAP Measures
Forward-looking Statement and Non-GAAP Measures This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to risks
Slide 166: Reconciliation of 2006 Adjusted to Reported EBIT
Reconciliation of 2006 Adjusted to Reported EBIT ($MM) 2006 Earnings Before Interest & Taxes (EBIT) $433 Adjustments to remove items impacting comparability Provision for Asbestos Litigation ($13) C-11 Related Reorganization Items $55 Other Items $94 Total Adjustments $136 2006 Adjusted EBIT $569 De
Slide 167: Owens Corning Annual Sales 1987 -
Owens Corning Annual Sales 1987 - Year
Slide 168: Cash Flow Impact From Working Capital
Cash Flow Impact From Working Capital Five-Year Average -200 -150 -100 -50 Q1 Q2 Q3 Q4 -159 -40 -1
Slide 169: Reconciliation of Q1 2007 Adjusted to Reported EBIT
Reconciliation of Q1 2007 Adjusted to Reported EBIT ($MM) Q1 2007 EBIT $33 Adjustments to remove items impacting comparability Chapter 11 related reorganization items $3 Restructuring credits and other credits ($2) Employee emergence equity program $8 OCV Reinforcements joint venture transaction cos
Slide 170: Balance Sheet Snapshot and Credit Statistics
Balance Sheet Snapshot and Credit Statistics 35% 36% Debt/Total Capitalization 2.30 2.54 Debt/ Adjusted LTM EBITDA 1,058 Total Liquidity (2) 5,632 5,775 Total Capitalization 3,686 3,712 Shareholder Equity 1,946 2,063 Total Debt $ 282 $ 93 Cash December 31, (1) March 31, (MM) Owens Corning (1) Decemb
Slide 171: Debt Maturity Schedule
Debt Maturity Schedule $110 MM Revolver Debt $600MM Term Loan $650MM 10yr Bonds $550MM 30yr Bonds Other Debt
Slide 172: Estimated 2007 Housing Starts
0.65 1.45 0.20 0.25 0.30 0.35 0.40 0.45 1Q 2Q 3Q 4Q Not Seasonally Adjusted Not Seasonally Adjusted-1Q Lag Seasonally Adjusted Estimated 2007 Housing Starts: Seasonally and Not Seasonally Adjusted 1.45
Slide 173: Questions & Discussion
Questions & Discussion THE PINK PANTHER™ & © 1964-2007 Metro-Goldwyn-Mayer Studios Inc. All Rights Reserved. The color PINK is a registered trademark of Owens Corning. ©2007 Owens Corning