Dow Inc. · NYSE:DOW

Dow — The Dow Chemical Company — Goldman Sachs Basic Materials Conference 2012

16 slides from Dow's conference presentation, May 23, 2012

  1. Slide 1: Goldman Sachs Basic Materials Conference

    Goldman Sachs Basic Materials Conference The Dow Chemical Company William H. Weideman Chief Financial Officer May 23, 2012 January 4, 2012

  2. Slide 2: SEC Disclosure Rules

    SEC Disclosure Rules Some of our comments today include statements about our expectations for the future. Those expectations involve risks and uncertainties. Dow cannot guarantee the accuracy of any forecasts or estimates, and we do not plan to update any forward-looking statements if our expectatio

  3. Slide 3: Agenda

    Agenda  1Q 2012 Overview  Drivers to Deliver Shareholder Value − Feedstock Advantage − Integrated Portfolio − Innovation Agenda − Operating and Capital Efficiency  Outlook 3

  4. Slide 4: Dow Delivers Adjusted EPS of $0.61 Per Share

    Dow Delivers Adjusted EPS of $0.61 Per Share 10th Consecutive Quarter of Y-O-Y Top-line Growth; Record Ag Performance  Reported EPS of $0.35, or adjusted EPS of $0.61 – Certain items included a restructuring-related charge of $0.25 per share  Sales of $14.7B, adjusted sales up 4% – Volume grew 3%;

  5. Slide 5: Agenda

    Agenda  1Q 2012 Overview  Drivers to Deliver Shareholder Value − Feedstock Advantage − Integrated Portfolio − Innovation Agenda − Operating and Capital Efficiency  Outlook 5

  6. Slide 6: Clear Drivers to Deliver Shareholder Value

    Clear Drivers to Deliver Shareholder Value  Largest, most flexible and experienced ethylene producer Feedstock  70% of ethylene production in cost-advantaged regions Advantage  Shale gas dynamics & USGC investments drive EBITDA upside of ~$2B/year in 2017  Strategically aligned with key end-mark

  7. Slide 7: Ethylene Industry Dynamics Remain Strong

    Ethylene Industry Dynamics Remain Strong Dow EBITDA Growth from Ethylene Derivatives Drivers Persistently Favorable Oil-to- Naphtha-to-Ethane Ratio Gas Ratio  Crude oil $105+…leading to high naphtha costs  Upward pressure on ethylene derivative prices  Nat gas forecast ~$4/mmbtu Structurally long

  8. Slide 8: Feedstock Advantage Bolsters Downstream Profitability

    Feedstock Advantage Bolsters Downstream Profitability Key Future Investments Feedstocks & Energy  Driven by downstream needs Performance Plastics – St. Charles cracker: YE 2012  Performance – PDH in Texas: 2015 Packaging Ethylene  Dow Elastomers – New cracker in Freeport: 2017  Dow Electrical &

  9. Slide 9: Dow's Portfolio Can Pivot to Optimize Returns

    Dow’s Portfolio Can Pivot to Optimize Returns Shorter-Term Integration Value Drivers Ability to arbitrage within and across multiple value Optimization of chains price and volume Geographic Breadth Exposure to fastest growing markets; Investments address growing middle-class Energy Longer-Term Indus

  10. Slide 10: Monetizing Dow's Innovation Pipeline

    Monetizing Dow’s Innovation Pipeline Products Launched in 2011 Addressing Global Megatrends CONSUMER & AGRICULTURAL INFRASTRUCTURE & ENERGY LIFESTYLE SOLUTIONS TRANSPORTATION • DOW POWERHOUSE™ Solar Shingle • EVOQUE™ Pre-Composite Polymer Technology • ENLIGHT™ Photovoltaic Encapsulant Films • EcoSmo

  11. Slide 11: On Track to Achieve Efficiency and Cost Targets

    On Track to Achieve Efficiency and Cost Targets Total Levers $2.5B Interventions Underway $1B  On track to deliver $250MM of Actively Manage $1.5B cost reductions in 2012 CapEx & Growth Additional Spending Levers – Announced selective downsizing / shutdown of assets to reduce Poised to structural c

  12. Slide 12: Strong Cash Flow Generation and Clear Uses of Cash

    Strong Cash Flow Generation and Clear Uses of Cash  Shareholder Remuneration: Raised dividend 28%  Deleveraging: Reduced >$1B of debt in 1Q12  Invest for Growth: Prudent investments for organic growth Cash Flow from Operations Dividend Payout Ratio* 100% 80% Average Payout Ratio 60% $8 Billion 40

  13. Slide 13: Agenda

    Agenda  1Q 2012 Overview  Drivers to Deliver Shareholder Value − Feedstock Advantage − Integrated Portfolio − Innovation Agenda − Operating and Capital Efficiency  Outlook 13

  14. Slide 14: Macroeconomic Outlook

    Macroeconomic Outlook  United States demand is strengthening – Improvement in consumer confidence – Tailwinds from abundant access to low-cost natural gas – Healthy indicators across a variety of sectors  Asia demand is moderating – Solid demand growth in South East Asia – Post-tsunami recovery in

  15. Slide 15: Earnings Growth Trajectory Remains Intact

    Earnings Growth Trajectory Remains Intact Feedstock Advantage Margin Expansion / Organic Growth Integrated Portfolio Efficiency for Growth Innovation ~$1.5B of $10B incremental EBITDA $8.4B $7.5B $5.5B Near 2009(1) 2010 2011 Term (1) Pro forma, reflecting the combination of historical information of

  16. Slide 16: 16

    16

The Dow Chemical Company — Goldman Sachs Basic Materials Conference 2012 on 6ix