Owens Corning

Hello everyone and welcome to the Owings Corning Q4 and full year 2023 earnings call. My name is Seb and I will be the operator for your call today. If you would like to ask a question on today's call, you can do so by pressing star 1 on your telephone keypad. I will now hand the floor over to Amber Woolfarth to begin the call. Please go ahead.

Good morning, thank you for taking the time to join us for today's conference call and review of our business results for the fourth quarter and full year 2023. Joining us today are Brian Chambers, Owens Corning's Chair and Chief Executive Officer, and Todd Pfister, our Chief Financial Officer. Following our presentation this morning, we will open this one hour call to your questions. In order to accommodate as many call participants as possible, please limit yourself to one question only. Earlier this morning we issued a news release and file the 10 K that detailed our financial results for the fourth quarter in full year 2023. For the purposes of our discussion today we have prepared presentation slides summarizing our performance in results and will refer to these slides during this call. You can access the earnings press release form 10 K in the presentation slides at our website owens corning.com refer to the investors link under the corporate section of our homepage. A transcript and recording of this call and the supporting slides will be available on our website for future reference. Please reference slide 2 where we offer a couple of reminders. First, today's remarks will include forward-looking statements that are subject to risks, uncertainties, and other factors that could cause our actual results to differ materially. We undertake no obligation to update these statements beyond what is required under applicable securities laws. Please refer to the cautionary statements and the risk factors identified in our SEC filings for more detail. Second, the presentation slides in today's remarks contain non-GAAP financial measures. Explanations and reconciliations of non-GAAP to GAAP measures may be found in our earnings press release and presentation, available on the investor section of our website, owenscorning.com. For those of you following along with our slide presentation, we will begin on slide four. And now, opening remarks from our chair and CEO, Brian Chambers. Brian?

Thanks, Amber. Good morning, everyone, and thank you for joining us today. During our call this morning, I'll begin with an overview of our results for the quarter and full year, including some of the key drivers of our high performance. Next, I'll provide some additional comments on the two transformative moves we announced last week to significantly reshape the company and sharpen our focus on building and construction materials. Todd will then provide more details on our fourth quarter and full year 2023 performance, and I'll come back to discuss what we are seeing in our markets and our outlook for the first quarter. Owens Corning delivered outstanding results in 2023. Our performance demonstrated the strength of our team, the value of our products, and the impact of our enterprise strategy to increase the earnings power of our company in dynamic markets. Through our discipline, commercial, and operational execution, we mitigated slowing demand in some segments amid higher interest rates and ongoing macro headwinds to deliver on our financial targets. I'll begin, as always, with a critical component to our success, safety. We continued to deliver world-class safety performance in 2023. During the fourth quarter, we achieved a recordable incident rate of 0.4, which was our best quarterly performance in over a decade. Our full year 2023 RIR rate was 0.6, which is top quartile performance for the US manufacturing sector. Turning to our financial results, we finished the year strong with fourth quarter revenues up slightly and EBIT and EBITDA margins expanding year over year. For the full year, we delivered outstanding financial performance with revenues of $9.7 billion, adjusted EBIT of $1.8 billion, and adjusted EBITDA of $2.3 billion. Despite slightly lower revenue versus prior year, we were able to expand our adjusted EBIT margins to 19% and increase our adjusted EBITDA margins to 24%, demonstrating the value of our products and improvements in our operating efficiencies. In addition, we maintained our focus on working capital and commitment to shareholder returns, generating significant free cash flow and returning 68% to investors through dividends and share repurchases. In December, the company continued its streak of increasing our quarterly cash dividend, reflecting our continued confidence in strengthening the earnings power of the company and commitment to delivering long-term shareholder value. Through our strategic choices and strong execution of key operating initiatives, we are positioning Owens Corning for long-term success. Over the past couple of years, we have been consistently deploying capital against our three strategic priorities to strengthen our position in core products and markets, to expand its new product adjacencies that leverage our unique material science, market, and manufacturing expertise, and to develop more multi-material and prefabricated construction solutions. The execution of this strategy has led to higher operating margins and cash flows, increased innovation, stronger customer partnerships, and a more focused company. Last week, we announced both the acquisition of Masonite and the strategic review of our glass reinforcements business. representing significant steps forward in strengthening our position in building and construction materials and expanding our portfolio of branded residential products. We are very excited about entering the residential doors category with the acquisition of a market leader in this space. The addition of Masonite expands our leadership position in residential building products in a category that complements our current interior and exterior offering, creates a scalable new growth platform for our company, and enhances our financial profile by growing revenue and earnings, lowering our ongoing capital intensity, and increasing our free cash flow generation. The DOORS segment provides a great opportunity to leverage our unique commercial, operational, and innovation capabilities to build out another market-leading residential building products business, similar to what we've been able to accomplish in our roofing and insulation businesses with a customer base we know well and work with today. We have built a strong operating model within Owens Corning focused on creating value for our customers, driving continuous improvement in our operations, and developing sustainable solutions through material innovation, which has taken each of our businesses and made them significantly better. We intend to utilize this proven model as we enter the doors and door systems category, accelerating Masonite's doors that do more strategy to expand their current base of business and enhance their operating performance. We also announced a review of strategic alternatives for our glass reinforcements business like our decision to acquire masonite. This is a choice consistent with our discipline capital allocation approach and best owner operating philosophy. We believe each of these transformational moves will create a company that generates higher or consistent margins and stronger free cash flows or better positioning us for long term growth. Before turning it over to Todd, I'd like to provide a brief update on two key differentiators for our company, innovation and sustainability. To strengthen our market leadership, we continue to invest in new product and process innovation in our core product platforms to generate additional growth. This included the launch of 39 new or refreshed products in 2023. These innovations focused on increasing the performance and durability of our product offerings, which brings additional value to our customers to help them win and grow in the market. Sustainability, which is core to who we are and how we operate, is another key performance driver for our company and our work continues to be recognized by the market and differentiate us as a company. In December, we earned a place on the Dow Jones Sustainability World Index for the 14th consecutive year. And next month, Owens Corning plans to issue its 18th annual sustainability report. The report will highlight progress toward our 2030 sustainability goals and further demonstrate our commitment to building a sustainable future through material innovation. Following our strong results in 2021 and 2022, our performance in 2023 once again demonstrated that our agility, consistent execution, and commitment to our customers can drive outstanding performance through a variety of market conditions. We believe the actions we are taking to further strengthen our market positions create new growth opportunities, and reshape Owens Corning to a more focused building products company will accelerate our financial performance in 2024 and beyond. With that, I will now turn it over to Todd to discuss our financial results in more detail. Todd?