Dow Inc. · NYSE:DOW

Dow — Investor Day (December 2012)

21 slides from Dow's investor day presentation, Dec 3, 2012

  1. Slide 1: Andrew N. Liveris, Chairman & Chief Executive Officer

    Andrew N. Liveris Chairman & Chief Executive Officer December 3, 2012

  2. Slide 2: Agenda

    Agenda  Driving Value Growth through Key Catalysts  Commitment to ROC, Prioritized Growth and Strong Cash Flow Generation  Priorities

  3. Slide 3: Dow's Earnings Trajectory

    Dow’s Earnings Trajectory Interventions Adjusted EBITDA(1) - $B $10.0 Margin / Growth Ethylene Cycle $8.4 $7.5 $7.4 Innovation $5.5 2009 2010 2011 Trailing Near 12 Months (2) Term (1) Adjusted EBITDA is defined as earnings (i.e., “Net Income”) before interest, income taxes, depreciation and amortiza

  4. Slide 4: Dow's Earnings Trajectory

    Dow’s Earnings Trajectory • Funding technologies in sectors where innovation is rewarded Innovation • Fueled by customer Interventions intimacy Adjusted EBITDA(1) - $B • Investments perfectly positioned, well-timed Ethylene Cycle • Industry-leading feedstock strength Organic Growth • World-class por

  5. Slide 5: Dow's Earnings Trajectory

    Dow’s Earnings Trajectory Sadara USGC Innovation Margin / Growth Interventions Adjusted EBITDA(1) - $B $15.0 $10.0 Margin / Growth Ethylene Cycle $8.4 $7.5 $7.4 Innovation $5.5 2009 2010 2011 Trailing Near Earnings 12 Months (2) Term Power (1) Adjusted EBITDA is defined as earnings (i.e., “Net Incom

  6. Slide 6: Driving Value Through Organic Growth, ROTC

    Driving Value Through Organic Growth, ROTC Normalized Normalized Trailing 4 Quarters Operating Segment Revenue EBITDA Adjusted EBITDA ROTC(2) Value Driver Growth Target Margin Target Margin(1) Grow Electronic & Functional Materials 2x GDP ~25% 24% Coatings & Infrastructure Solutions 1.5x GDP 20-25%

  7. Slide 7: Prioritizing Growth Investments

    Prioritizing Growth Investments Intelligent Interventions High Our Preserving growth while reducing risk Focus  Reduced growth spending by $100MM  Long horizon projects halted Market Opportunity  Adjusting to reflect new market outlooks: - Diesel Particulate Filters - Dow Kokam - Etc… Comprehensi

  8. Slide 8: Driving Near-Term Innovation in Key Sectors

    Driving Near-Term Innovation in Key Sectors Electronic Materials Enabling faster processors, brighter Risk Adjusted NPV ($B) displays, smaller components $7.0 +$200MM vs. 2011 Functional Materials $3.9 Facilitating differentiated products in pharma, food, energy, personal care $2.1 Agricultural Scie

  9. Slide 9: Performance Plastics

    Performance Plastics Delivering Growth Via Strong Technology Position, Feedstock Advantage Differentiation  42 new products delivered YTD in Performance Packaging Earnings  NORDEL™ Elastomers continued Power Revenue Growth expansion off several years of success  INFUSE™ OBC receives 2012 Innovati

  10. Slide 10: Ethylene Operating Rates Are Poised to Rise

    Ethylene Operating Rates Are Poised to Rise Industry Operating Rates Feedstock Advantage Rising demand in 2013 and beyond  Even in slow-to-normal growth and low - 94 multiplier scenario, rising demand expected Pricing Power 92  With all announced capacity online, demand expected to exceed supply 9

  11. Slide 11: Strategic Investments Enhance Feedstock Strength

    Strategic Investments Enhance Feedstock Strength Creating Foundation for Global Growth for Years to Come USGC Investments ‫صدارة‬ Sadara

  12. Slide 12: USGC Investments

    USGC Investments Advantaged Feedstocks, Volume Support Derivative Growth Needs USGC Investments  On track to restart SCO cracker YE2012; $150MM EBITDA benefit in 2013  Ethane flexibility project in Louisiana continues  PDH investment advancing; on track for 2015 start-up  Investments enhance nea

  13. Slide 13: Sadara

    Sadara On Track to Deliver Growth in Attractive, High Growth Regions & Sectors Performance-Focused Product Slate Sadara – ‫صدارة‬  Front-end engineering design complete ‫صدارة‬  Product marketing, licensing Sadarain place agreement  Engineering and construction on schedule  First production slat

  14. Slide 14: Sadara

    Sadara On Track to Deliver Growth in Attractive, High Growth Regions & Sectors Well-Positioned to Serve Emerging Regions

  15. Slide 15: Driving Value by Improving Return on Capital

    Driving Value by Improving Return on Capital Long Term Plan  Increase feedstock advantage – USGC, Sadara investments  Disciplined portfolio optimization Immediate Actions  Coatings & Infrastructure Solutions − Adjusting mix away from commodity products and reducing structural costs  Performance

  16. Slide 16: Multi-Pronged Approach to Drive Interventions

    Multi-Pronged Approach to Drive Interventions Accelerating Interventions Total Levers: $2.5B Total Target Savings $1.75B $1,000 Cost Interventions (Run Rate) $1B $900 Cash Interventions (Cumulative) Decrease $800 CapEx & Growth $700 Spending $600 $MM $500 $750MM $400 Execute Cost $300 Reduction $200

  17. Slide 17: Agenda

    Agenda  Driving Value Growth through Key Catalysts  Commitment to ROC, Prioritized Growth and Strong Cash Flow Generation  Priorities

  18. Slide 18: Strong Cash Generation & Shareholder Remuneration

    Strong Cash Generation & Shareholder Remuneration  Deleveraging: Reduced over $1B of gross debt through 3Q12  Shareholder Remuneration: Raised dividend  Invest for Growth: Prudent investments for organic growth  K-Dow Arbitration Award: Will accelerate priorities for uses of cash Operating Cash

  19. Slide 19: Agenda

    Agenda  Driving Value Growth through Key Catalysts  Commitment to ROC, Prioritized Growth and Strong Cash Flow Generation  Priorities

  20. Slide 20: Priorities

    Priorities  Aggressively reduce costs, increase cash  Prioritize growth investments  Drive disciplined portfolio management  Deliver against financial targets  Continue rewarding shareholders

  21. Slide 21: Slide 21

Dow — Investor Day (December 2012) on 6ix