Lux Research Presentation - FINAL

Business Confidential

Innovating for our Next 75 Years

Lux Executive Summit: Finding the Next Growth Networks

April 24, 2013

John Hillenbrand

VP & Chief Innovation Officer

Owens Corning:

Copyright © 2013 Owens Corning. All Rights Reserved.


• Background – a Heritage of Innovation

• Owens Corning Today

• Interdependence of Sustainability and (Open) Innovation

• Recent Examples – EcoTouch® Insulation and

EnergyComplete® Sealant

• Lessons Learned

Preview

2


Failed Experiment Leads to Glass Fiber Insulation

• 1930s – a tough time for all glass makers.

• Owens-Illinois began experimenting to find

new uses for glass, including glass block.

• In 1932, while developing a way to bond and seal the glass block, O-I engineers Slayter, Thomas and Kleist produced truly attenuated, fine, and long glass fibers.

• O-I CEO William Levis was a staunch supporter of the glass fiber project in the pioneering years.

• 1935 – O-I enters joint development with Corning Glass.

Games

Slayter Jack

Thomas

Dale

Kleist

3

Owens-Illinois

Founded 1938

Our Brand Today

OC COMPANY CONFIDENTIAL – DO NOT DISTRIBUTE 4


A Heritage of Innovation

1940s, bomber

insulation

1960s, beta yarn

for space suits

2000s, wind blade

energy

1970s, cold-top

electric melter

1980s, fiberglass

mat for shingles

2010s, EcoTouch® insulation,

EnergyComplete® sealant

1990s, Advantex®

glass fibers

1950s, fiberglass

and Corvette

1930s, continuous

glass fibers

5


• Background – A Heritage of Innovation





• Lessons Learned

Outline

6


2013 – Owens Corning At A Glance • Founded in 1938, an industry leader in glass

fiber insulation, roofing and glass fiber

reinforcements

• 2012 sales: $5.2 billion

• 15,000 employees in 27 countries

• Fortune® 500 company for 58 consecutive

years

• Component of Dow Jones Sustainability

World Index

• Three powerful businesses, three valuable

franchises

• Insulation

• Roofing

• Composites


7

Business Confidential Composite Solutions Composite Solutions

An engineered material system …

… resulting in unique attributes replacing traditional materials

+ Other Materials

• Resins

• Additives

• Filler

* Source: Owens Corning

Reinforcements

High Strength Lightweight Durable Non-Conductive

Non-Corrosive Longer Blades Up to 50% Lighter

than Steel Safety

Glass 95%*

Other

OC COMPANY CONFIDENTIAL – DO NOT DISTRIBUTE

What is a Composite?

Business Confidential 9

Composites – Essential to Everyday Life

Glass Melting

Fiberizing

Sizing Chemistry

Mixing

Batch

Drying

Curing

Chopped

Fibers

Continuous

Fibers

Mats

Fabrics


Our materials science, processes and products that customers turn into composite parts

Business Confidential Building Materials The color PINK is a registered trademark of Owens Corning.


Solutions for Homes and

Commercial Buildings

Delivering benefits in energy efficiency, acoustics, and comfort

The color PINK is a registered trademark of Owens Corning.








• Lessons Learned

Outline

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Sustainability – Macro Trends

• Massive opportunities in our markets

– Soaring interest in energy efficiency – public and private

– Consumer desire to achieve personal sustainability

– Green building and renewables demand

• Pink is Green® – key element of our business strategy

Population Growth

and Consumption

Climate Consciousness Energy / Water Use

and Availability

Scalable solutions needed to address these global challenges

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Creating Competitive Advantage through

Sustainability and Innovation

• Sustainability – Meeting the needs of the present without

compromising the world that we leave to the future

• Innovation – Turning knowledge into value for our customers

and Owens Corning

• Open Innovation – Turning others’ knowledge into value for

our customers and Owens Corning

Source: Adapted from the U.N. World Commission on Environment and Development,

in its final document - generally known as the Brundtland Report (1983-1987)

The interdependency of sustainability and innovation

presents a significant value creation opportunity

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Sustainability – Our Strategy

1. Greening our operations

2. Greening our products

3. Accelerating energy efficiency and renewables

penetration in the built environment

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Becoming an Innovation Powerhouse Driving a Growth Premium and a Margin Premium for our Company

Strengthen and Renew our CORE BUSINESSES

Create New GROWTH PLATFORMS

Starts with TOP INNOVATION TALENT who love

to create and apply building science and

materials science with imagination and teamwork

that help our customers win

Be the preferred GROWTH PARTNER where our customers consider Owens Corning to be

the CLEAR INNOVATION LEADER in Building Materials & Composites

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• Lessons Learned

Outline

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EcoTouch® Insulation with PureFiber® Technology

19 19


Green Without Compromise

Saves energy

58% recycled content (36% post consumer)1

99% natural materials (minerals & plant-based)2

Formaldehyde free

Multi-attribute environmentally preferable

Green is well defined, science based, and 3rd party certified 1 Certified by Scientific Certifications Systems to have a minimum of 58% recycled content with at least 36% post-consumer

recycled and the balance of pre-consumer recycled content.

2 Made with a minimum of 99.4% by weight natural materials consisting of minerals and plant-based compounds. 20

http://www.fm-arch.com/images/GBC_logo.gif


EcoTouch® Insulation commercial


Accelerating Energy Efficiency and

Renewables Penetration in Buildings

41% Buildings

28% Transportation

31% Industrial

22% Residential

19% Commercial

Energy consumption by end-use sector

Source: Whole House Air Infiltration Study by

Dr. Gren Yuill, Penn State University 22

Today’s homebuyers

are looking for

comfort and energy

efficiency. Give

them both with

EnergyComplete®

flexible air sealant.

23



– Building Science Expertise

Trouble spots for air leakage*: Owens Corning has identified the most

important areas to seal – including three

where creating a gasket is key:

EnergyComplete® sealant forms a gasket

in these areas, reducing air leakage.

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Source: Whole House Air Infiltration Study by Dr. Gren Yuill, Penn State University



– Machine

•Easy to maneuver

•Easy to set up

•Easy to clean

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– Simple Applicator

•Ergonomically designed

•Wide range of settings

•Lays down perfect bead

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– RESULT$

Blower door measurements were evaluated

for 800 homes of a top builder. For each

home, the target was:

98% of homes with EnergyComplete® sealant

passed, compared to 80% of homes sealed

with conventional caulk.

5 BASED ON THIS

STUDY, CONVENTIONAL

CAULK PRODUCTS ARE

MORE LIKELY TO FAIL A

BLOWER DOOR TEST THAN

ENERGYCOMPLETE®

10x ACH50

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• Lessons Learned

Outline


• When you engage and enroll your customers early and often,

you just might learn something.

• You can never know too much about your customers, the value

chain, and the competitive landscape.

• Listening to your customers is necessary but not sufficient; you

bring power to the relationship through an imaginative

understanding of their needs.

• And when it comes to being regarded as an industry leader,

the only voices that really matter are those of your customers.

Lessons Learned – Customers


• Partnerships are about access, not control.

• A thoughtful and well-written Joint Development Agreement may

be worth the effort versus a simple Confidentiality Agreement.

• Your initial attraction to a partner might be their unique technology

or channel access, but lasting partnerships are built on a

foundation of mutual trust and cultural compatibility.

• Find partners who can contribute to multiple growth opportunities.

• For truly business-critical initiatives, demand a dedicated team

and dedicated leader (a.k.a. supervising executive) – and ensure

your partner(s) is/are equally committed and resourced.

Lessons Learned – Partnerships


• If you’re not the first to market, you’d better commit to be the best.

• Know your limitations and face reality.

• Open Innovation is neither free nor easy – and don’t expect it to

take only one big success for everyone to “get it.”

• To maximize the impact of an innovation, there’s no substitute for

real science – particularly science that has IP protection.

• Don’t underestimate the challenges of bringing a new-to-the-world

solution to the market.

• If you believe you’re a commodity, you’re right. There are plenty

of opportunities to innovate and differentiate versus competition,

even in the category you created 75 years ago.

Lessons Learned – Organization



Thank you

The Pink Panther™ © 1964-2013 Metro-Goldwyn-Mayer Studios Inc. All Rights Reserved. The color PINK is a registered trademark of Owens Corning. ©2013 Owens Corning. All Rights Reserved.

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Lux Research Presentation - FINAL