Dow Inc. · NYSE:DOW
Dow — Investor Day (May 2024)
110 slides from Dow's investor day presentation, May 16, 2024
Slide 1: Investor Day 2024
Investor Day 2024
Slide 2: Dow 2024 Investor Day Agenda
Dow 2024 Investor Day Agenda Clear Financial Advancing Value Executing Dow’s Path2Zero Priorities to Advance Growth Strategic Vision Value Growth Presentation Presentations Panel Discussion Presentation Jim Fitterling Packaging & Specialty Plastics Jim Fitterling Jeff Tate Chair and CEO Karen S. Car
Slide 3: Advancing Value Growth
Advancing Value Growth Jim Fitterling
Slide 4: What You Will See and Hear Today
What You Will See and Hear Today ▪ Delivering on our commitments while driving industry leadership ▪ Leveraging our advantaged portfolio for growth in attractive market verticals ▪ Maintaining our disciplined and balanced capital allocation priorities to maximize value growth ▪ Driving underlying ea
Slide 5: Driving Sustainable Growth and Enhancing Shareholder Value
Driving Sustainable Growth and Enhancing Shareholder Value ✓ Delivering on Our Commitments ▪ Leveraging Our Advantaged Portfolio for Growth ▪ Maintaining Our Disciplined and Balanced Capital Allocation ▪ Driving Underlying Earnings Growth ▪ Advancing Our Ambition Profitably
Slide 6: Delivering on Our Commitments Since Spin
Delivering on Our Commitments Since Spin Cumulative FCF1 generation; average FCF Industry-leading cash flow generation ~$22B yield is >2x the dividend yield since Spin2 Average CapEx as a percent of D&A; in Our Commitments: Disciplined and balanced capital allocation ~65% line with our target to kee
Slide 7: A Proven Playbook Across the Macroeconomic Cycle
A Proven Playbook Across the Macroeconomic Cycle Operational and Financial Discipline Robust Cash Generation Through the Cycle Investment-grade credit profile; ~$13B of Maintain strong financial flexibility committed liquidity including cash Operating $12.4 EBITDA2 ($B) Maximize cash flow ~80% cash
Slide 8: Driving Sustainable Growth and Enhancing Enterprise Value
Driving Sustainable Growth and Enhancing Enterprise Value ▪ Delivering on Our Commitments ✓ Leveraging Our Advantaged Portfolio for Growth ▪ Maintaining Our Disciplined and Balanced Capital Allocation ▪ Driving Underlying Earnings Growth ▪ Advancing Our Ambition Profitably
Slide 9: Industry Trends Enable >$800B Addressable Market by Mid-Decade
Industry Trends Enable >$800B Addressable Market by Mid-Decade Packaging Infrastructure PE Demand Growing ~1.2-1.4x GDP Global Infrastructure and Construction Spend to Leading Positions Market Verticals1 with Recycled Demand >2x GDP Increase ~$2T by 2030 Actual Forecast ~3% 250-300 Transportation $0
Slide 10: Global Scale in Attractive Market Verticals
Global Scale in Attractive Market Verticals Reporting Segments & Business Units 2023 Net Sales by Area1 Key Differentiators ▪ Diverse product portfolio enables full-system solutions and unique go-to-market strategy Packaging & Specialty Plastics ~$23.1B ▪ Proprietary technologies enable tailored sol
Slide 11: Strategically Advantaged Feedstocks
Strategically Advantaged Feedstocks % of Dow Global Production The Americas Capacity $/BoE USGC Feedstock Optimization Oil-to-Gas Key Measure of Spread Dow’s Feedstock Advantage Max Ethane & Propane Capabilities ▪ Dow’s portfolio of ethane-based crackers is 100% Dow advantaged vs. global naphtha-bas
Slide 12: Driving Sustainable Growth and Enhancing Enterprise Value
Driving Sustainable Growth and Enhancing Enterprise Value ▪ Delivering on Our Commitments ▪ Leveraging Our Advantaged Portfolio for Growth ✓ Maintaining Our Disciplined and Balanced Capital Allocation ▪ Driving Underlying Earnings Growth ▪ Advancing Our Ambition Profitably
Slide 13: Capital Allocation Priorities Drive Financial Flexibility
Capital Allocation Priorities Drive Financial Flexibility Capital Allocation Priorities Remain Consistent Enhanced Financial Flexibility ▪ Reduced net debt and pension liabilities by ~$9B Safely and reliably run our operations since Spin Organic investments with CapEx ≤D&A and ▪ No substantive debt
Slide 14: Disciplined Organic Growth Investments
Disciplined Organic Growth Investments Implementing Pipeline of High-Value Organic Growth Projects Focused Investments Across Our Portfolio ▪ On track to deliver >$3B/year in incremental earnings by 2030 and reduce Scope 1 & 2 emissions by ~15% vs. 2020 ▪ Near-term growth investments since 2021 have
Slide 15: Driving Sustainable Growth and Enhancing Enterprise Value
Driving Sustainable Growth and Enhancing Enterprise Value ▪ Delivering on Our Commitments ▪ Leveraging Our Advantaged Portfolio for Growth ▪ Maintaining Our Disciplined and Balanced Capital Allocation ✓ Driving Underlying Earnings Growth ▪ Advancing Our Ambition Profitably
Slide 16: Dow’s Path2Zero Project Drives Profitable Growth and Decarbonization
Dow’s Path2Zero Project Drives Profitable Growth and Decarbonization Organic Growth Investments 45 Aligned with Decarbonization Roadmap 2005-2020 Dow ▪ Deliver higher-return, lower-risk, faster-payback growth CO2e 15% | Volume ~30% Current 40 projects across our portfolio Emissions Today ▪ Inves
Slide 17: Fort Saskatchewan Path2Zero Project Execution
Fort Saskatchewan Path2Zero Project Execution World’s First Cracker and Derivatives Complex with Net-Zero Emissions1 ▪ Fort Saskatchewan Path2Zero project CapEx of ~$6.5B; net cash deployment of ~$5B including ✓ 1Q23 Fluor - FEED partner cash and tax incentives 2Q23 Linde - Industrial gas partner ▪
Slide 18: Driving Value Growth by Transforming Plastic Waste
Driving Value Growth by Transforming Plastic Waste Competitive Innovations and Technologies Value Chain Collaborations Differentiated Solutions Waste Collection Advanced and Mechanical Recycling Design for Recyclability and Bio-Based Feedstocks Collaborative global platform with customers and brand
Slide 19: Our Earnings Growth Levers
Our Earnings Growth Levers Incremental Earnings Enabled by On Track to Deliver Increased Underlying EBITDA1 by >$3B/year by 2030 Growth Investments ▪ Since 2021, our growth investments have added Peak ~$15B ~$800MM/year of incremental mid-cycle EBITDA ▪ Near-term growth investments expected to deliv
Slide 20: Driving Sustainable Growth and Enhancing Enterprise Value
Driving Sustainable Growth and Enhancing Enterprise Value ▪ Delivering on Our Commitments ▪ Leveraging Our Advantaged Portfolio for Growth ▪ Maintaining Our Disciplined and Balanced Capital Allocation ▪ Driving Underlying Earnings Growth ✓ Advancing Our Ambition Profitably
Slide 21: Dow’s Ambition Unlocks Value
Dow’s Ambition Unlocks Value AMBITION To be the most innovative, customer-centric, inclusive and sustainable materials science company in the world OUR AMBITION IN ACTION INNOVATIVE CUSTOMER-CENTRIC INCLUSIVE SUSTAINABLE Great Place To Work® and FORTUNE Over 90% of Dow R&D Innovation Commercialized
Slide 22: Dow: A Compelling Investment Opportunity
Dow: A Compelling Investment Opportunity INCREASING SHAREHOLDER DISCIPLINED CAPITAL INDUSTRY- LEADING CASH ATTRACTIVE SHAREHOLDER ... SUSTAINABILITY- DRIVEN VALUE VALUE ALLOCATION GENERATION REMUNERATION CREATION Strategically Maintain our assets to Returned ~90% of Reducing Scope 1 & 2 Top-quartile
Slide 23: Packaging & Specialty Plastics
Packaging & Specialty Plastics Karen S. Carter
Slide 24: Packaging & Specialty Plastics
P&SP consistently delivers strong financial results across the cycle, driven by our competitive advantages The market is growing while shifting toward circular and low-emission Packaging & Specialty solutions, creating an opportunity for value growth Plastics A Formidable Franchise Driving Our strat
Slide 25: Packaging & Specialty Plastics – Business Overview
Packaging & Specialty Plastics – Business Overview Track Record of Strong Financial Performance 2023 Financials and 3-Year Range Key Competitive Advantage Key Market Drivers $23.1B ▪ Diverse portfolio of ~$23.1B Net Sales ~$29.3B differentiated solutions >$350B Addressable Market ~1.3-1.5x GDP Growt
Slide 26: A Strong Foundation of Competitive Advantage
A Strong Foundation of Competitive Advantage Low-Cost ▪ Global scale serving local markets ▪ Integrated sites maximizing productivity and operational excellence ▪ Cost-advantaged feedstocks Geographically Cost Advantaged1 Our cost advantage vs. geographic averages allow us to win globally Dow Positi
Slide 27: A Strong Foundation of Competitive Advantage
A Strong Foundation of Competitive Advantage Low-Cost Flexible ▪ Global scale serving local markets ▪ Feedstock flexibility ▪ Integrated sites maximizing ▪ Innovative technology across our broad productivity and operational excellence process portfolio ▪ Cost advantaged feedstocks ▪ Proprietary Solu
Slide 28: A Strong Foundation of Competitive Advantage
A Strong Foundation of Competitive Advantage Low-Cost Flexible Differentiated ▪ Global scale serving local markets ▪ Feedstock flexibility ▪ Product and catalyst innovation ▪ Integrated sites maximizing ▪ Innovative technology across our broad ▪ Deep industry, market and application productivity and
Slide 29: A Strong Foundation of Competitive Advantage
A Strong Foundation of Competitive Advantage Low-Cost Flexible Differentiated ▪ Global scale serving local markets ▪ Feedstock flexibility ▪ Product and catalyst innovation ▪ Integrated sites maximizing ▪ Innovative technology across our broad ▪ Deep industry, market and application productivity and
Slide 30: Positioning for Growth in High-Value End Markets
Positioning for Growth in High-Value End Markets Key End Markets Driving Growth1 Global Polyethylene Demand (MM MT) Packaging 3-6% ~3% Actual Forecast 250-300 200-250 Hygiene & Medical 3-6% ~4% 150-175 Consumer & 3-6% 130-135 Durable Goods ~120 Infrastructure 4-6% Mobility 3-5% 2023 2025 2030 2040 2
Slide 31: Growth Shifting to Circular and Low-Emission Solutions
Growth Shifting to Circular and Low-Emission Solutions Global Polyethylene Demand (MM MT) Emerging Trends ~3% Actual Forecast 250-300 Circular Solutions New and Evolving Regulations 200-250 ~4% Low GHG Changing Consumer Preferences 150-175 Emissions and Brand Commitments 130-135 ~120 Waste as an Alt
Slide 32: Maximizing Value Through Key Strategic Actions
Maximizing Value Through Key Strategic Actions Strategic Actions 01 02 03 04 Deliver Invest to Transform the Decarbonize Breakthrough Grow Waste Innovation
Slide 33: 1. Invest to Grow: Maximizing Returns Through the Cycle
1. INVEST TO GROW: Maximizing Returns Through the Cycle Focus Areas Key Actions Invest to Grow ▪ Increase feedstock flexibility to strengthen our low-cost advantage, Feedstock ▪ Expand LPG in Europe to enhance enabling profitable growth Flexibility feedstock flexibility, reducing cost ▪ Upgrade our
Slide 34: 2. Decarbonize: World’s First Net-Zero Scope 1 & 2 Emissions Complex
2. DECARBONIZE: World’s First Net-Zero Scope 1 & 2 Emissions Complex Leading the Industry in Decarbonization, with a First-Mover Advantage Invest to Grow Top Brand CO2 Commitments1 Market Drivers Value Levers Decarbonize 25% 100% Expands ethylene Growing Global and PE capacity 40% 100% Demand ▪ Fort
Slide 35: 3. Transform the Waste: 3MM MTA of Circular and Renewable Solutions
3. TRANSFORM THE WASTE: 3MM MTA of Circular and Renewable Solutions Combining Strengths to Accelerate Impact Invest to Grow Top Brand Recycled Plastic Partnership Spotlight Content Commitments1 Decarbonize 25% 50% Transform the Waste 25% 50% Forming End-to-End Circularity Partnership 25% Access to w
Slide 36: 4. Deliver Breakthrough Innovation: Enabling Our Competitive Advantage
4. DELIVER BREAKTHROUGH INNOVATION: Enabling Our Competitive Advantage Innovating to Meet the Value Chain’s Evolving Demands Invest to Grow Strategic Actions Highlights Decarbonize INNATE high- performance resins Transform the Waste Invest to increase PCR Grow incorporation and design Deliver Breakt
Slide 37: P&SP – A Formidable Franchise Driving Value Growth
P&SP – A Formidable Franchise Driving Value Growth Our Strategic Actions Will Deliver >$2B/year Incremental EBITDA by 2030 P&SP consistently delivers strong Implemented Growth financial results across the cycle, Investments Added Peak >$10B driven by our competitive ~$0.4B/year1 (2021-2023) advantag
Slide 38: Industrial Intermediates & Infrastructure
II&I is a diverse and innovative derivatives portfolio that benefits from leading positions and global reach It is poised to take full advantage of the energy transition with more sustainable and efficient products Industrial Intermediates across end markets & Infrastructure A Diverse, Higher-Value
Slide 39: II&I – A Diverse and Higher-Value Derivatives Portfolio
II&I – A Diverse and Higher-Value Derivatives Portfolio Value Creation Through Integration and Market Participation II&I Segment Highlights ~$200B Addressable Market ~1.3-1.5x GDP Growth 2023 Financials and 3-Year Range Alkoxylates #1 Energy Americas $12.5B ~$12.5B Net Sales ~$16.9B Amines #1 Pharma
Slide 40: Industrial Solutions
Industrial Solutions Pankaj Gupta
Slide 41: Industrial Solutions
Cost-advantaged and integrated portfolio upgrades and further diversifies ethylene footprint Serving attractive end markets with growth driven by energy transition, Industrial Solutions sustainability and digitalization Well-Positioned to Capture Growth Higher-return, lower-risk growth investments t
Slide 42: Industrial Solutions – Business Overview
Industrial Solutions – Business Overview 2023 Financials and 3-Year Range Well-Positioned to Capture Growth $4.2B ▪ World-leading producer of purified ethylene oxide ~$4.2B Net Sales ~$5.7B and derivatives ▪ Cost-advantaged and integrated portfolio $0.3B / 6% ▪ Strong customer relationships and ~$0.
Slide 43: Cost-Advantaged and Integrated Portfolio Upgrades and Further Diversifies Ethylene Footprint
Cost-Advantaged and Integrated Portfolio Upgrades and Further Diversifies Ethylene Footprint Higher Returns Advantaged Portfolio Attractive Applications ▪ Purified EO derivatives margins remain ▪ Cost-advantaged portfolio tilted to ▪ Market participation requires strong resilient; no significant add
Slide 44: Energy Transition, Sustainability and Digitalization Drive Earnings Growth
Energy Transition, Sustainability and Digitalization Drive Earnings Growth Emerging trends in end-markets growing faster than GDP Data Center ~$15B market by 2027 EV Batteries ~$1B addressable Carbon Capture ~$3B carbon capture Cooling driven by AI, 5G and cloud market driven by localizing solvents
Slide 45: Key Growth Initiatives
Higher Return Investments to Deliver $175MM/Year of Mid-Cycle EBITDA by Mid-Decade Increasing Alkoxylation Capacity by 70% Since Spin Through High-Value Investments Recovery ▪ Increased supply ~750 KTA 2H24 Plaquemine EO Restart: availability and operating By end of 2Q24 rates in 2H24 ~550 KTA ~425
Slide 46: Industrial Solutions – Well-Positioned to Capture Growth
Industrial Solutions – Well-Positioned to Capture Growth Cost-advantaged and integrated portfolio upgrades and further diversifies ethylene footprint Serving attractive end markets with growth driven by energy transition, sustainability and digitalization Higher-return, lower-risk growth investments
Slide 47: Polyurethanes & Construction Chemicals
Polyurethanes & Construction Chemicals Jane Palmieri
Slide 48: Polyurethanes & Construction Chemicals
Relentless pursuit of efficiency and productivity Targeted capital investments in downstream capabilities for margin resiliency Polyurethanes & Innovation for sustainability as PU chemistries remain essential to the energy Construction Chemicals: transition and decarbonization Focused Prioritization
Slide 49: Polyurethanes & Construction Chemicals – Business Overview
Polyurethanes & Construction Chemicals – Business Overview Attractive End-Market Exposure Growing Greater than GDP 2023 Financials and 3-Year Range $8.3B Application Highlight Why Dow Wins ~$11.7B Appliances Higher energy label ratings ~$8.3B Net Sales Consumer Innovative Solutions for Attractive Ve
Slide 50: Relentless Pursuit of Efficiency, Productivity and Improved Reliability
Relentless Pursuit of Efficiency, Productivity and Improved Reliability Optimizing Footprint Improving Efficiency ▪ Focusing participation on highest-returning PO derivatives across the globe - Reducing high-cost global PO capacity by ~25% through Recent cost out Working capital enhancements shutdow
Slide 51: Targeted Capital Investments in Downstream Capabilities for Margin Resiliency
Targeted Capital Investments in Downstream Capabilities for Margin Resiliency Positioning Dow for growth when the recovery emerges across markets Improved MDI position with a more efficient world-scale distillation asset in Freeport, enabling exit from our LaPorte site Start-up Mid-2023 Strengthenin
Slide 52: PU Innovation Remains Essential to Decarbonization
PU Innovation Remains Essential to Decarbonization Mobility Consumer Construction Chemicals Automotive >$650MM 80 KTA $2B Food and Fragrance Roof Coatings Foam Systems addressable market total market in 2030 global liquid-applied technology market, growing >75% circularity on polyol ~$330MM at 4% CA
Slide 53: Well-Positioned to Capture Recovery in Durables and Construction Demand
Well-Positioned to Capture Recovery in Durables and Construction Demand Inflation YoY 30Y Mortgage Rates and Home % Payments % Income 10 Global 9 30 Past Recoveries Indicate Likely Coiled Spring U.S. Home Payments % Income 7.3 28 8 8 26 30Y Mortgage Rate 7 24 5.6 ▪ Positive early demand signals in 2
Slide 54: II&I – A Diverse and Higher-Value Derivatives Portfolio
II&I – A Diverse and Higher-Value Derivatives Portfolio Positioned for Growth and Near-Term Cycle Upside II&I is a diverse and innovative derivatives portfolio that benefits from leading positions Implemented Growth and global reach with the following areas Investments Added ~$150MM/year1 of strateg
Slide 55: Performance Materials & Coatings
World’s leading silicones and acrylics coatings franchises with cost- advantaged upstream integration Focused on attractive markets growing above GDP linked to secular trends in Performance Materials & mobility, electronics and sustainability Coatings Strategically Advantaged for Growth Structural a
Slide 56: PM&C – Strategically Advantaged for Growth
PM&C – Strategically Advantaged for Growth 2023 Financials and 3-Year Range Performance Materials & Coatings Segment $8.5B ~$8.5B Net Sales ~$10.8B $0.2B / 3% ~$0.2B ~$1.3B ~3% Op. EBIT/Op. EBIT (%) ~12% $1B / 12% ~$1.0B ~$2.1B ~12% Op. EBITDA/Op. EBITDA (%) ~20% Asia Pacific EMEAI Net >1.5X GDP Gro
Slide 57: Coatings & Performance Monomers
Coatings & Performance Monomers Joanne Sekella
Slide 58: Coatings & Performance Monomers
Leading global positions in acrylic binders and waterborne additives Commercial and operational excellence through capital discipline and Coatings & Performance purposeful asset management Monomers Industry-leading Acrylic Coatings Franchise Well-positioned to grow earnings as housing market recover
Slide 59: Coatings & Performance Monomers – Business Overview
Coatings & Performance Monomers – Business Overview 2023 Financials and 3-Year Range Key Market Drivers Why Dow Wins $3.3B Enabling Growth 1-1.5X Global GDP ~70% captive Global footprint in monomers demand target markets ~$3.3B Net Sales ~$4.1B ▪ Existing home sales, new home builds $0.1B / 2% ▪ Low
Slide 60: Architectural Coatings Leadership, Cost Discipline Accelerate Growth
Architectural Coatings Leadership, Cost Discipline Accelerate Growth Paint Solutions = ~2/3 of Business Partnerships with Leading Brands Evolving Market Landscape Water AkzoNobel Asian Paints ▪ Supply of existing home sales and new home builds Pigment and Behr primary drivers for paint demand Benjam
Slide 61: Targeted Innovation and Capital Investment for Growth
Targeted Innovation and Capital Investment for Growth Pavement Markings Paper Packaging Industry Trends Driver safety and Autonomous vehicle compatibility RHOBARR Barrier Paper 99% regulatory compliance Fiber Coatings Recovery ▪ 65-70% thinner water- Easy application/quick-dry Durability based barri
Slide 62: Industry-Leading Acrylic Coatings Franchise
Industry-Leading Acrylic Coatings Franchise Strategic Targeted Commercial and Operational Sustainable Chemistries Relationships Innovation Excellence Leveraging partnerships with Broad suite of sustainable Capital and cost discipline leading global brand owners to chemistries to meet and purposeful
Slide 63: Consumer Solutions
Consumer Solutions Brendy Lange
Slide 64: Consumer Solutions
Industry-leading scale and integration combined with a best-in-class downstream portfolio drive customer- centered innovation Increasing demand for silicones as Consumer Solutions essential materials in attractive end markets growing above 1.5X GDP World-Leading Silicones Franchise Well-Positioned f
Slide 65: Consumer Solutions – Business Overview
Consumer Solutions – Business Overview 2023 Financials and 3-Year Range Why Dow Wins $5.2B ~$5.2B Net Sales ~$6.7B Si World-class silicones franchise Global footprint in target markets $0.1B / 3% In-depth market and industry ~$0.1B ~$1.1B Captive sustainable silicon metal ~3% Op. EBIT/Op. EBIT (%) e
Slide 66: Competitively Advantaged for Sustainable Earnings Growth
Competitively Advantaged for Sustainable Earnings Growth Largest Silicones Producer1 with Global Reach and Seat at the Design Table Industry-Leading Back-Integration ▪ Low cost and supply ▪ The only producer with ▪ Averages ~2 new product launches per week reliability world-scale siloxanes facilitie
Slide 67: Broad Portfolio to Meet Increasing Demand for Silicones in Light Vehicles
Broad Portfolio to Meet Increasing Demand for Silicones in Light Vehicles Increased Silicone Value in Industry Trends Global Light Vehicle Production Our Value Proposition Light Vehicle Applications Light Vehicle Production Silicone Value in Outgrowing Light Lightweight CAGR 1.3% Light Vehicle Appli
Slide 68: Expanding Growth Through Innovation for a Connected World
Expanding Growth Through Innovation for a Connected World Industry Trends Data Centers and AR/VR Driving Electronics Recovery Our Value Proposition Growth Driven by Innovation and Performance STABLE Silicone Thermal Soaring high-speed computing Enhanced 9% Product Management Materials to dissipate (
Slide 69: Capturing Silicone Demand Driven by Sustainability in Building & Infrastructure
Capturing Silicone Demand Driven by Sustainability in Building & Infrastructure Increased Silicone Value in Industry Trends Zero-Carbon Buildings Our Value Proposition Construction Market Global Construction Spending Specialty Silicone Zero-Carbon Buildings to Reach 16%-25% CAGR 6% Use Outgrowing of
Slide 70: Focused Capital Investment Unlocking High-Value Downstream Growth
Focused Capital Investment Unlocking High-Value Downstream Growth Higher-Return, Faster-Payback Growth Capital Projects Fast-Growing Markets 2021-2023 2024-2026 $10B $12B $10B >2X GDP Building & >2X GDP Consumer & >2.5X GDP Mobility Infrastructure Electronics ~$300 MM Richer Product Mix ~$230 MM ~$2
Slide 71: PM&C – Strategically Advantaged for Growth
PM&C – Strategically Advantaged for Growth Strategic Areas of Focus Earnings at Cycle Bottom, Returning to Growth Trajectory Implemented Growth Investments Added ~$250MM/year1 Peak ~$2.4B (2021-2023) Focus on Attractive Capitalize on ~$500MM Peak ~$2.1B Markets and Higher-Return Growth ~$300MM Mid-c
Slide 72: MobilityScience
MobilityScience™ Jon Penrice
Slide 73: Mobility Is an Attractive Growth Opportunity
Mobility Is an Attractive Growth Opportunity Key Trends Global Light Vehicle Production Driving Change in Mobility 100 90 Electrification 80 Up to 300% increase 70 22% in Dow product demand 60 In Millions Automotive OEM Back for BEV and Hybrid 50 Integration 40 6% 30 20 $75B Total Market Addressable
Slide 74: Dow’s Path2Zero
Dow’s Path2Zero Jim Fitterling, Dan Futter, John Sampson
Slide 75: Growing Earnings and Navigating the Climate and Energy Transition
Growing Earnings and Navigating the Climate and Energy Transition ▪ Enables a high-value portfolio of low- Uniquely emissions products at differentiated pricing Positioned to ▪ Deepens partnerships with customers to Our Approach to Decarbonize & Grow Win with support their decarbonization journey Di
Slide 76: Ft. Saskatchewan Path2Zero Builds on TX-9’s World-Class Performance
Ft. Saskatchewan Path2Zero Builds on TX-9’s World-Class Performance Performance Comparison of Global Cracker P2Z Project Enhances Our Cost-Advantaged Footprint and New Builds 2017-2022 Adds Zero-Emissions1 Capacity ▪ Demonstrated ~20% lower capital cost per ton and >65% lower Dow’s Ethylene Footprin
Slide 77: Low-Emissions Market Opportunities and Supply/Demand Dynamics
Low-Emissions Market Opportunities and Supply/Demand Dynamics Market Relative Consumption Volume Willingness to Pay Per Tonne of Emissions by Market Opportunity Pilots and Business Models >$100/T >$100/ton $50-100/T $50-100/ton <$50/T <$50/ton ▪ 60% of largest 100 Consumer Goods customers have Initi
Slide 78: A Strategic Investment with Key Value Drivers
A Strategic Investment with Key Value Drivers Driving Efficiency in Construction and The Alberta Feedstock Advantage Engineering to Derisk Investment ▪ Lower capital intensity vs. TX-9 including ✓ 1Q23 Fluor - FEED partner decarbonization assets Industry Cash Cost ($/MT) ▪ Leveraging 3rd party inves
Slide 79: Clear Financial Priorities to Advance Value Growth
Clear Financial Priorities to Advance Value Growth Jeff Tate
Slide 80: Clear Financial Priorities to Advance Value Growth
Clear Financial Priorities to Advance Value Growth Demonstrate Execute Growth Maintain the Continued Levers and Increase Financial Flexibility Operational and Shareholder We Have Built Financial Discipline Returns
Slide 81: Clear Financial Priorities to Advance Value Growth
Clear Financial Priorities to Advance Value Growth Demonstrate Execute Growth Maintain the Continued Levers and Increase Financial Flexibility Operational and Shareholder We Have Built Financial Discipline Returns
Slide 82: Capital Allocation Framework Remains Consistent
Capital Allocation Framework Remains Consistent Safely and Reliably Running Our Operations Credit Profile Organic Investments Dividend Policy Share Repurchases ▪ Maintain strong ▪ Maintain CapEx ≤D&A ▪ Long-term dividend ▪ Share repurchases and investment-grade credit over the economic cycle payout
Slide 83: Disciplined Delivery on the Targets We Outlined at 2021 Investor Day
Disciplined Delivery on the Targets We Outlined at 2021 Investor Day Disciplined and Balanced Capital Allocation ✓ Returned ~83% of operating net income1 to shareholders Target returns of 65% of operating net income ✓ Strongest balance sheet in four decades ✓ Added ~$0.8B mid-cycle EBITDA since 2021
Slide 84: Strong Balance Sheet and Credit Profile
Strong Balance Sheet and Credit Profile No Substantive Debt Maturities Until 2027 Strategic Actions to Strengthen Credit Profile $1.2B ▪ Strong investment-grade profile (Baa1, BBB+, BBB) $0.7B $0.5B ▪ ~99% of all long-term debt at a fixed rate; average $0.1B $0.1B cost of debt of ~5.2% 2024 2025 202
Slide 85: Clear Financial Priorities to Advance Value Growth
Clear Financial Priorities to Advance Value Growth Demonstrate Execute Growth Maintain the Continued Levers and Increase Financial Flexibility Operational and Shareholder We Have Built Financial Discipline Returns
Slide 86: Maintaining a Disciplined Low Cost-to-Serve Mindset
Maintaining a Disciplined Low Cost-to-Serve Mindset Lowering Our Cost Structure Digitally Enabled Operational Improvements ▪ Increase in sales via digital channels: from 20% at 2023 SG&A + R&D (% of Sales) the beginning of 2020 to 39% at the end of 2023 ▪ Customer order touches reduced by >20% Peer
Slide 87: Disciplined Capital Investments to Drive Improved Returns
Disciplined Capital Investments to Drive Improved Returns CapEx Expected to Ramp to ~$3B in 2024 and Exceed D&A in 2024-2027 Cash and Tax <$50MM >$100MM/year >$300MM/year ▪ Net CapEx of ~$5B, including benefit Incentives Ft. Saskatchewan of >$1.5B in cash and tax incentives Net CapEx Path2Zero ▪ Exp
Slide 88: Enhancing Our Financial Position Through Focused Cash Flow Generation
Enhancing Our Financial Position Through Focused Cash Flow Generation Top-Quartile Cash Conversion in the Industry Maintaining Strong Cash Conversion Across the Cycle 2019-2023 Cash Flow Conversion (% of EBITDA)1 82% CFFO to ~82% avg. EBITDA (%) conversion1 Peer 1 DOW Peer 2 Peer 3 Peer 4 Peer 5 Pee
Slide 89: Clear Financial Priorities to Advance Value Growth
Clear Financial Priorities to Advance Value Growth Demonstrate Execute Growth Maintain the Continued Levers and Increase Financial Flexibility Operational and Shareholder We Have Built Financial Discipline Returns
Slide 90: Near-Term Growth Investments to Deliver Higher Returns Over the Cycle
Near-Term Growth Investments to Deliver Higher Returns Over the Cycle Investing in Higher-Return, Lower-Risk Projects … and Executing Actions that Maximize Returns 28% Return (%) 27% Silicones Growth Coatings Capacity 26% FS-1 Expansion 2023 Amines Growth Expansion Adding ~$2B/year in mid-cycle EBIT
Slide 91: Fort Saskatchewan Path2Zero Project to Add $1B/Year in Mid-Term EBITDA
Fort Saskatchewan Path2Zero Project to Add $1B/Year in Mid-Term EBITDA World’s First Cracker and Derivatives Complex with Net-Zero Emissions1 ▪ Fort Saskatchewan Path2Zero project CapEx of ~$6.5B; net cash deployment of ~$5B including cash and tax incentives ✓ 1Q23 Fluor - FEED partner ▪ Expect to a
Slide 92: Circular Innovations to Grow Long-Term EBITDA >$500MM/Year by 2030
Circular Innovations to Grow Long-Term EBITDA >$500MM/Year by 2030 Value Chain Collaborations On Track to Commercialize ~3MM MTA of Circular Solutions by 2030 Waste Collection Advanced and Mechanical Recycling and Bio-Based Feedstocks MM MTA Mechanical Recycling Advanced Recycling Bio-Based Solution
Slide 93: On Track to Deliver >$3B/Year in Underlying EBITDA Growth by 2030
On Track to Deliver >$3B/Year in Underlying EBITDA Growth by 2030 High-Value Growth Investments Drive Incremental Earnings Peak ~$15B Growth Levers Mitigating Structural Macro Headwinds ▪ Implemented ~$800MM/year of Peak >$12B >$0.5B Mid-cycle ~$1.0B growth investments since 2021 Implemented Growth
Slide 94: Financial Flexibility to Drive Leading Shareholder Returns
Financial Flexibility to Drive Leading Shareholder Returns Cash Generation Drives Increased Shareholder Returns Growth, Enabled by Strong Balance Additional Sheet and Liquidity Shareholder Value ▪ Grow the dividend as earnings and FCF expands Share Repurchases ▪ Execute share repurchases as earnings
Slide 95: Dow: A Compelling Investment Opportunity
Dow: A Compelling Investment Opportunity Our Financial Targets Proven Operational Playbook ▪ Deliver >$3B/year in underlying EBITDA growth by 2030 ▪ Maintain industry-leading cash generation Demonstrate Execute Growth ▪ Operating ROIC target >13% across the cycle Maintain the Continued Levers and In
Slide 96: Investor Day 2024
Investor Day 2024
Slide 97: Appendix
APPENDIX
Slide 98: Reconciliation of Net Income to Operating EBIT and Operating EBITDA
Reconciliation of Net Income to Operating EBIT and Operating EBITDA Reconciliation of "Net income" to "Operating EBIT" and Twelve Months Ended "Operating EBITDA" In millions (Unaudited) Dec 31, 2020 Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Net income $ 1,294 $ 6,405 $ 4,640 $ 660 + Provision (credit)
Slide 99: Reconciliation of Loss from Continuing Operations to Pro Forma Operating EBIT
Reconciliation of "Loss from Continuing Operations, net of tax" to "Pro Forma Operating EBIT" and "Pro Forma Operating EBITDA" Reconciliation of "Loss from Continuing Operations, net of tax" to "Pro Forma Operating EBIT" Twelve Months and "Pro Forma Operating EBITDA" Ended In millions (Unaudited) De
Slide 100: Segment Information
Segment Information Net Sales by Segment Twelve Months Ended In millions (Unaudited) Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Packaging & Specialty Plastics $ 23,149 $ 29,260 $ 28,128 Industrial Intermediates & Infrastructure 12,538 16,606 16,851 Performance Materials & Coatings 8,497 10,764 9,672 Cor
Slide 101: Segment Information (continued)
Segment Information (continued) Operating EBITDA by Segment Twelve Months Ended In millions (Unaudited) Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Packaging & Specialty Plastics $ 3,985 $ 5,506 $ 7,996 Industrial Intermediates & Infrastructure 648 1,968 2,894 Performance Materials & Coatings 997 2,117 1
Slide 102: Cash Conversion and Free Cash Flow Reconciliation
Cash Conversion and Free Cash Flow Reconciliation Reconciliation of Cash Flow Conversion Three Months Ended Twelve Months Ended In millions (Unaudited) Mar 31, 2019 Jun 30, 2019 Sep 30, 2019 Dec 31, 2019 Mar 31, 2024 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Cash provided by o
Slide 103: Cash Conversion and Free Cash Flow Reconciliation (continued)
Cash Conversion and Free Cash Flow Reconciliation (continued) Reconciliation of Cash Flow Conversion Three Months Ended In millions (Unaudited) Mar 31, 2022 Mar 31, 2023 Mar 31, 2024 Cash provided by operating activities - continuing operations (GAAP) $ 1,612 $ 531 $ 460 Cash provided by operating a
Slide 104: Reconciliation of Operating Return on Capital (ROC)
Reconciliation of Operating Return on Capital (ROC) Reconciliation of Operating Return on Capital (ROC) Three Months Ended In millions (Unaudited) Mar 31, 2024 Dec 31, 2023 Mar 31, 2023 Mar 31, 2022 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Net income (loss) available for Dow Inc. common s
Slide 105: Reconciliation of Net Debt
Reconciliation of Net Debt Reconciliation of Net Debt In millions (Unaudited) Mar 31, 2024 Dec 31, 2023 Dec 31, 2021 Mar 31, 2019 Notes payable $ 55 $ 62 $ 161 $ 295 Long-term debt due within one year 118 117 231 2,367 Long-term debt 16,170 14,907 14,280 17,158 Gross debt (GAAP) $ 16,343 $ 15,086 $
Slide 106: Operating Net Income Returned to Shareholders
Operating Net Income Returned to Shareholders Operating Net Income Returned to Shareholders Three Months Ended Twelve Months Ended In millions (Unaudited) Jun 30, 2019 Sep 30, 2019 Dec 31, 2019 Mar 31, 2024 Dec 31, 2020 Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Net income (loss) available for Dow Inc.
Slide 107: Operating Net Income Returned to Shareholders (continued)
Operating Net Income Returned to Shareholders (continued) Operating Net Income Returned to Shareholders Three Months Ended In millions (Unaudited) Mar 31, 2022 Mar 31, 2023 Mar 31, 2024 Net income (loss) available for Dow Inc. common stockholders (GAAP) $ 1,569 $ (93) $ 516 - Significant items, afte
Slide 108: General Comments
General Comments Background On April 1, 2019, DowDuPont completed the separation of its materials science business and Dow Inc. became the direct parent company of TDCC, owning all of the outstanding common shares of TDCC. For filings related to the period commencing April 1, 2019 and thereafter, TD
Slide 109: Safe Harbor
Safe Harbor Cautionary Statement about Forward-Looking Statements Certain statements in this presentation are “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Ac
Slide 110: Non-GAAP & Definitions
Non-GAAP & Definitions Non-GAAP Financial Measures This presentation includes information that does not conform to GAAP and are considered non-GAAP measures. Management uses these measures internally for planning, forecasting and evaluating the performance of the Company's segments, including alloca