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25th April 2018, Toledo, OH

Composites deliver flat revenue at Owens Corning

In Composites, the company expects continued growth in the glass fibre market, driven by global industrial production growth. © Owens CorningOwens Corning has reported consolidated net earnings of US$ 92 million in first-quarter 2018, compared with US$ 101 million during the comparable quarter in 2017. First-quarter 2018 net sales attributable to Owens Corning were US$ 1.7 billion, compared with net sales of US$ 1.5 billion in first-quarter 2017, an increase of 14%.

Composites delivered flat revenue versus a strong prior year comparison. Sales attributable to Composites were US% 511 million, same as in 2017. EBIT was US$ 60 million, compared to US$ 71 million for the same time in 2017.

First-quarter 2018 adjusted earnings were US$ 90 million, compared with US$ 97 million during the same period one year ago. “Owens Corning is on-track to deliver another year of strong financial performance, despite the greater than expected inflation that we have experienced,” said Chairman and CEO Mike Thaman.

“The company grew revenue in the first quarter by 14%, but inflation negatively impacted margins in all three businesses. We had good realisation on our price actions in the quarter and have announced additional pricing actions intended to address our inflation outlook. We are confident in our ability to manage current market conditions and achieve our targets, as the strong fundamentals of the businesses remain unchanged.”

Other results

Reported earnings before interest and taxes (EBIT) for first-quarter 2018 were US$ 131 million, compared with US$ 170 million during the same period in 2017. Adjusted EBIT in first-quarter 2018 was US$ 152 million, down from US$ 171 million in 2017.

In February, the company completed the acquisition of Paroc Group, a leading producer of mineral wool insulation in Europe, further broadening the product portfolio and expanding the geographic footprint of the Insulation business. The company issued US$ 400 million of 30-year notes at 4.4% on 25 January 2018 in association with this transaction.

2018 outlook

The company expects an environment consistent with consensus expectations for US housing starts and global industrial production growth. In Composites, the company expects continued growth in the glass fibre market, driven by global industrial production growth.

Despite higher than anticipated inflation in the first quarter, the company continues to target an EBIT improvement of about US$ 20 million, with the benefit of market growth and improved pricing partly offset by accelerated inflation and higher rebuild costs.

The company estimates an effective tax rate of 26-28%. The company also continues to expect a cash tax rate of 10-12% on adjusted pre-tax earnings. For full-year 2018, the company expects to convert adjusted earnings into free cash flow at about 100%.

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