Dow Inc. · NYSE:DOW
Dow — Q3 2024 Earnings Presentation
26 slides from Dow's earnings presentation, Oct 24, 2024
Slide 1: 3Q 2024 Results
3Q 2024 RESULTS October 24, 2024
Slide 2: Agenda
AGENDA ▪ QUARTERLY RESULTS ▪ OPERATING SEGMENT PERFORMANCE ▪ OPTIMIZING OUR GLOBAL FOOTPRINT ▪ OUTLOOK ▪ ADVANCING OUR LONG-TERM STRATEGY 2
Slide 3: 3Q 2024 Performance Overview
3Q 2024 PERFORMANCE OVERVIEW Delivered 4th Consecutive Quarter of YoY Volume Growth ▪ Net sales of $10.9B, up 1% YoY and flat QoQ $10.9B NET SALES ▪ Volume up 1% YoY and QoQ; excluding H&E, volume up 3% YTD ▪ Operating EBITDA was $1.4B, up 8% YoY Maximizing Cash Generation $641MM O P E R AT I N G E
Slide 4: 3Q 2024 Operating Segment Performance
3Q 2024 OPERATING SEGMENT PERFORMANCE Packaging & Specialty Plastics Ind. Intermediates & Infrastructure Perf. Materials & Coatings 6,0 00 REVENUE ($MM) REVENUE ($MM) REVENUE ($MM) Y-o-Y Y-o-Y 2,4 00 5,5 00 3,2 00 Y-o-Y 2,2 00 5,0 00 Sales ↑ 1% 3,0 00 Sales ↓ 2% Sales ↑ 4% Price ↑ 1% Price Flat Pric
Slide 5: Strategically Optimizing Our Global Footprint
STRATEGICALLY OPTIMIZING OUR GLOBAL FOOTPRINT Multiple Asset Actions Taken Since Early 2023 Asset Actions To Date are Primarily in EMEAI and II&I ▪ Targeted rationalization of our polyols capacity globally, including U.S. & Canada EMEAI assets in Europe, Asia Pacific, and the Americas ▪ Proactively
Slide 6: Pursuing Value-Maximizing Options for Select European Assets
PURSUING VALUE-MAXIMIZING OPTIONS FOR SELECT EUROPEAN ASSETS Current Industry Dynamics Impacting Europe Assessing All Value-Creating Opportunities Latin America ▪ Committed to a best-owner mindset as we evaluate Demand1 U.S. & Canada opportunities Asia Pacific ▪ Review is focused on select European
Slide 7: Demand Remains Muted with Softness in Europe and China
DEMAND REMAINS MUTED WITH SOFTNESS IN EUROPE AND CHINA Market U.S. & Latin Rest of Select Macroeconomic Indicators by Market Vertical Vertical Europe China (% of Revenue1) Canada America World U.S. & Canada industry PE inventories increased for two consecutive months; exports Packaging are robust at
Slide 8: 4Q 2024 Modeling Guidance
4Q 2024 MODELING GUIDANCE Expect Year-Over-Year Earnings Improvement Net Sales ~$10.7B Depreciation & Amortization ~$750MM Quarterly Operational Tax Rate ~22 – 26% Net Interest Expense (Net of Int. Income) ~$175MM Net Income Attrib. to Non-Controlling Int. ~$25MM Average Share Count ~705MM Top-Line
Slide 9: On Track to Deliver >$3B/Year in EBITDA Growth by 2030
ON TRACK TO DELIVER >$3B/YEAR IN EBITDA GROWTH BY 2030 Financial Flexibility to Support Long-Term Strategy Earnings Growth Levers Update Solid Financial Position ▪ ~$13B in liquidity, including ~$3B of cash and cash equivalents Fort Saskatchewan Path2Zero (~$1B of EBITDA/year by 2030) ▪ Strong stabl
Slide 10: A Compelling Long-Term Value Investment
A COMPELLING LONG-TERM VALUE INVESTMENT ▪ Completed >20 asset actions since early 2023, primarily in the Strategically Optimizing EMEAI region and II&I operating segment our Global Footprint ▪ Undertaking an in-depth strategic review of our European footprint, primarily in our Polyurethanes business
Slide 11: Seek Together
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Slide 12: Principal Joint Venture Detail
PRINCIPAL JOINT VENTURE DETAIL Dow’s Proportional Share of Principal JV Financial Results Drivers of Changes in 3Q 2024 2Q 2024 3Q 2023 Equity Earnings Kuwait Thai Kuwait Thai Kuwait Thai ▪ Sadara: YoY primarily from higher $ millions (unaudited) Sadara JVs JVs Sadara JVs JVs Sadara JVs JVs feedstoc
Slide 13: Share Issuance and Repurchase Activity
SHARE ISSUANCE AND REPURCHASE ACTIVITY Share Issuances & Repurchases Comments ▪ Stock Incentive Plans (LTI): Includes 3Q24 3Q23 stock options, restricted stock units, Shares in millions 3Q24 2Q24 3Q23 YTD YTD performance stock units, stock Stock Incentive Plans (LTI) 0.1 0.2 0.2 3.5 4.0 appreciation
Slide 14: Appendix
APPENDIX
Slide 15: Operating Earnings Per Share (EPS) Reconciliation
OPERATING EARNINGS PER SHARE (EPS) RECONCILIATION Significant Items Impacting Results for the Three Months Ended Sep 30, 2024 1 2 3 In millions, except per share amounts (Unaudited) Pretax Net Income EPS Reported results $ 324 $ 214 $ 0.30 Less: Significant items Restructuring, implementation and ef
Slide 16: Operating EPS Reconciliation (Continued)
OPERATING EPS RECONCILIATION (CONTINUED) Significant Items Impacting Results for the Nine Months Ended Sep 30, 2024 In millions, except per share amounts (Unaudited) Pretax 1 Net Income 2 EPS 3 Reported results $ 1,381 $ 1,169 $ 1.65 Less: Significant items Restructuring, implementation and efficien
Slide 17: Operating EPS Reconciliation (Continued)
OPERATING EPS RECONCILIATION (CONTINUED) Significant Items Impacting Results for the Three Months Ended Jun 30, 2024 1 2 3 In millions, except per share amounts (Unaudited) Pretax Net Income EPS Reported results $ 608 $ 439 $ 0.62 Less: Significant items Restructuring, implementation and efficiency
Slide 18: Reconciliation of Net Income (Loss) to Operating EBIT & Operating EBITDA
RECONCILIATION OF NET INCOME (LOSS) TO OPERATING EBIT & OPERATING EBITDA Reconciliation of "Net income (loss)" to "Operating EBIT" Three Months Ended Nine Months Ended and "Operating EBITDA" In millions (Unaudited) Sep 30, 2023 Dec 31, 2023 Mar 31, 2024 Jun 30, 2024 Sep 30, 2024 Sep 30, 2023 Sep 30,
Slide 19: Segment Information
SEGMENT INFORMATION Net Sales by Segment Three Months Ended Nine Months Ended In millions (Unaudited) Sep 30, 2023 Jun 30, 2024 Sep 30, 2024 Sep 30, 2023 Sep 30, 2024 Packaging & Specialty Plastics $ 5,454 $ 5,515 $ 5,516 $ 17,508 $ 16,461 Industrial Intermediates & Infrastructure 3,035 2,951 2,962
Slide 20: Segment Information (Continued)
SEGMENT INFORMATION (CONTINUED) Adjusted Operating EBIT by Segment Three Months Ended Nine Months Ended In millions (Unaudited) Sep 30, 2023 Jun 30, 2024 Sep 30, 2024 Sep 30, 2023 Sep 30, 2024 Packaging & Specialty Plastics $ 426 $ 648 $ 602 $ 1,946 $ 1,830 Industrial Intermediates & Infrastructure
Slide 21: Cash Conversion and Free Cash Flow Reconciliation
CASH CONVERSION AND FREE CASH FLOW RECONCILIATION Reconciliation of Cash Flow Conversion Three Months Ended In millions (Unaudited) Sep 30, 2023 Dec 31, 2023 Mar 31, 2024 Jun 30, 2024 Sep 30, 2024 Cash provided by operating activities - continuing operations (GAAP) $ 1,658 $ 1,628 $ 460 $ 832 $ 800
Slide 22: 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) Sep 30, 2023 Sep 30, 2024 Net income available for Dow Inc. common stockholders (GAAP) $ 302 $ 214 - Significant items, after tax (43) (120) Operating Ne
Slide 23: Reconciliation of Net Debt
RECONCILIATION OF NET DEBT Reconciliation of Net Debt In millions (Unaudited) Dec 31, 2023 Sep 30, 2024 Notes payable $ 62 $ 111 Long-term debt due within one year 117 296 Long-term debt 14,907 16,164 Gross debt (GAAP) $ 15,086 $ 16,571 - Cash and cash equivalents 2,987 2,883 - Marketable securities
Slide 24: General Comments
GENERAL COMMENTS General Comments Unless otherwise specified, all financial measures in this presentation, where applicable, exclude significant items. Trademarks The Dow Diamond, logo and all products, unless otherwise noted, denoted with , ℠ or ® are trademarks, service marks or registered tradema
Slide 25: 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 26: Non-GAAP Financial Measures & Definitions
NON-GAAP FINANCIAL MEASURES & 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 segment