Dow Inc. · NYSE:DOW
Dow — Investor Day (October 2021)
119 slides from Dow's investor day presentation, Oct 6, 2021
Slide 1: Disciplined Value Growth with a Clear Path to Zero-Carbon Emissions
Disciplined Value Growth with a Clear Path to Zero-Carbon Emissions Dow Inc. 2021 Investor Day October 6, 2021
Slide 2: Dow 2021 Investor Day Agenda
DOW 2021 INVESTOR DAY AGENDA Disciplined Path to Disciplined Value Growth Market-Led Zero-Carbon Value Growth with a Clear Path to Growth Drivers Zero-Carbon Emissions Emissions with Clear Financial Priorities Presentation Presentations & Panel Discussion Presentation Jim Fitterling, Panel Discussio
Slide 3: Disciplined Value Growth with a Clear Path to Zero-Carbon Emissions
Disciplined Value Growth with a Clear Path to Zero-Carbon Emissions Jim Fitterling | Chairman and Chief Executive Officer October 6, 2021
Slide 4: What You Will See and Hear Today
WHAT YOU WILL SEE AND HEAR TODAY Focused approach to deliver value growth with a clear path to zero-carbon emissions Drive sustainable growth in attractive markets where Dow is positioned to win Financial discipline with strong cash generation and balanced capital allocation Best-owner minds
Slide 5: A Compelling Investment Opportunity
A COMPELLING INVESTMENT OPPORTUNITY Growing enterprise value while driving to zero-carbon emissions ► Attractive end-market participation with industry-leading portfolio and cost positions OUR FINANCIAL TARGETS ► Growth from sustainability-driven solutions and circularity Across the economic cycle:
Slide 6: Advancing Our Growth Strategy
ADVANCING OUR GROWTH STRATEGY Delivering on Our 2018 Commitments A COMPELLING INVESTMENT Capturing Market Growth Growing enterprise value • Attractive end-market participation • Sustainability-driven solutions Our Path to Zero-Carbon Emissions • High-return, low-risk investments Cash flow
Slide 7: Delivering on Our 2018 Commitments: Progress Since Spin
DELIVERING ON OUR 2018 COMMITMENTS: PROGRESS SINCE SPIN Commitments at Spin Performance since Spin Low-risk profitable growth $2B Improvement of underlying earnings by removing structural cost and delivering on growth investments Continued Industry-leading cash Cash flow from operations generated wi
Slide 8: Advancing Our Growth Strategy
ADVANCING OUR GROWTH STRATEGY Delivering on Our 2018 Commitments A COMPELLING INVESTMENT Capturing Market Growth Growing enterprise value • Attractive end-market participation • Sustainability-driven solutions Our Path to Zero-Carbon Emissions • High-return, low-risk investments Cash flow
Slide 9: World-Leading Portfolio with Attractive Market Verticals
WORLD-LEADING PORTFOLIO WITH ATTRACTIVE MARKET VERTICALS PACKAGING & SPECIALTY PLASTICS LAA #1 Total Ethylene and PE Attractive Verticals, Net Sales avg 2019-2020 Packaging ~25% Global Scale and Leading Positions, Net Sales Differentiated Position #1 Purified Ethylene Oxide Feedstock and Site Integr
Slide 10: Industry Trends and Sustainability Enable >$800B Addressable Market
INDUSTRY TRENDS AND SUSTAINABILITY ENABLE >$800B ADDRESSABLE MARKET Market Verticals Key Growth Drivers Dow Participation Highlights Circular & renewable Packaging to enable Packaging solutions Packaging Societal food waste reduction freshness enroute and on the shelf made with bio- Downgaugin
Slide 11: Growth and Efficiency Levers Drive Earnings
GROWTH AND EFFICIENCY LEVERS DRIVE EARNINGS Additional Opportunities In-Flight Actions Increase Underlying EBITDA by >$3B Supporting Earnings Trajectory $15B Faster economic recovery led $14 .5 by post-pandemic consumer $12B $0.7 – 1.2B and industrial demand $12 .5 $0.8 – 1.0B Total Tighter near
Slide 12: Advancing Our Growth Strategy
ADVANCING OUR GROWTH STRATEGY Delivering on Our 2018 Commitments A COMPELLING INVESTMENT Capturing Market Growth Growing enterprise value • Attractive end-market participation • Sustainability-driven solutions Our Path to Zero-Carbon Emissions • High-return, low-risk investments Cash flow
Slide 13: Clear Path to Zero-Carbon Emissions While Driving Growth
CLEAR PATH TO ZERO-CARBON EMISSIONS WHILE DRIVING GROWTH Phased Strategy to Decarbonize and Grow Dow 2005 – 2020 CO2 15% | Volume ~30%1 Replace end-of-life capacity with higher-efficiency capex Current 40 Emissions and opex assets while lowering emissions (e.g. TX-9) 2020 – 2030 35 Capture v
Slide 14: TX-9's World-Class Performance Serves as a Foundation for Path to 2030
TX-9’S WORLD-CLASS PERFORMANCE SERVES AS A FOUNDATION FOR PATH TO 2030 TX-9 is Delivering Attractive Returns and Next Steps to Reduce Carbon Emissions by Best-in-Class Emissions 1 Additional ~5MM mta and Capture Attractive Growth 4 TX-9 Lowest Carbon Intensity Procure more renewable energy at mult
Slide 15: Public Policies Are Critical to a Zero-Carbon Emissions Path
PUBLIC POLICIES ARE CRITICAL TO A ZERO-CARBON EMISSIONS PATH Technologies Ready to Scale with Supportive Policy Advancing Industry Climate Progress Adopt transparent, revenue- H2 neutral, market-based carbon price signals Circular / Blue Carbon Capture, Modular Nuclear Hydrogen Utilization and Sto
Slide 16: Advancing Our Growth Strategy
ADVANCING OUR GROWTH STRATEGY Delivering on Our 2018 Commitments A COMPELLING INVESTMENT Capturing Market Growth Growing enterprise value • Attractive end-market participation • Sustainability-driven solutions Our Path to Zero-Carbon Emissions • High-return, low-risk investments Cash flow
Slide 17: Disciplined Approach to Investing for ROIC Growth
DISCIPLINED APPROACH TO INVESTING FOR ROIC GROWTH Capex Allocation Disciplined Approach Targeting ROIC >13% Fund path by transitioning end-of-life olefins/energy Decarbonize assets to new, lower-cost, zero-carbon emissions D&A core and grow Expand capacity in attractive growth opportunities ~$2.
Slide 18: Maintain Operational and Financial Discipline
MAINTAIN OPERATIONAL AND FINANCIAL DISCIPLINE Continue to drive external and Earnings Growth and Discipline Lead CULTURE OF internal accountability to Strong Free Cash Flow Yield BENCHMARKING Conduct at all levels with a Dow Average Industry strong bias for action Free Cash Flow Yield Cash Flow Yiel
Slide 19: Advancing Our Growth Strategy
ADVANCING OUR GROWTH STRATEGY Delivering on Our 2018 Commitments A COMPELLING INVESTMENT Capturing Market Growth Growing enterprise value • Attractive end-market participation • Sustainability-driven solutions Our Path to Zero-Carbon Emissions • High-return, low-risk investments Cash flow
Slide 20: Advancing Our Ambition
ADVANCING OUR AMBITION DOW Advanced process technologies for New Dow.com product catalog with Refreshed board with diverse expertise; New sustainability targets focused on circularity and emissions reduction, ~10,000 solutions searchable by industry 55% are women or U.S. ethnic minority circ
Slide 21: CEO Priorities Remain Consistent
CEO PRIORITIES REMAIN CONSISTENT DISCIPLINED LOW-COST PROFITABLE BEST-OWNER CAPITAL OPERATING ESG LEADERSHIP GROWTH MINDSET ALLOCATION MODEL Decarbonize assets to Prioritize lower-risk, Maintain and grow Maintain top-quartile Maintain culture of zero-carbon emissions faster-payback projects, leaders
Slide 22: Our Board of Directors
OUR BOARD OF DIRECTORS Jim Fitterling Richard K. Davis Chairman and Chief Executive Lead Director, Dow; President and Officer, Dow Chief Executive Officer, Make-A-Wish America; Former Chairman and Chief Executive Officer, U.S. Bancorp Samuel R. Allen Gaurdie Banister Jr. Wesley G. Bush Former Chairm
Slide 23: Our Leadership Team
OUR LEADERSHIP TEAM Jim Fitterling Howard Ungerleider Jack Broodo Chairman and President and President, Feedstocks & Energy Chief Executive Officer Chief Financial Officer Neil Carr Karen S. Carter Diego Donoso President, Europe, Middle East, Chief Human Resources Officer and President, Packaging &
Slide 24: What You Will See and Hear Today
WHAT YOU WILL SEE AND HEAR TODAY Disciplined Path to Disciplined Value Growth Market-Led Zero-Carbon Value Growth with a Clear Path to Growth Drivers Zero-Carbon Emissions Emissions with Clear Financial Priorities Presentation Presentations & Panel Discussion Presentation Jim Fitterling, Panel Discu
Slide 25: Packaging
Packaging Diego Donoso | President, Packaging & Specialty Plastics October 6, 2021
Slide 26: Growth Levers Enabled by Attractive End-Market Participation: Packaging
GROWTH LEVERS ENABLED BY ATTRACTIVE END-MARKET PARTICIPATION Dow’s Participation in Packaging Key Offerings: Packaging LDPE/LLDPE/HDPE Key Topics $250B ~1.3-1.5x GDP Licensing & Catalysts Laminating Adhesives Addressable Market Growth Rate Market Overview and Food Packaging Consumer Health & h
Slide 27: Packaging Market Overview: Polyethylene Demand Per Capita
PACKAGING Market Overview Key Market Drivers Population growth & urbanization in developed economies PE Op. Rates Forecasted to Growing middle class and healthy living equity in emerging Increase through 2026 geographies resulting in increased PE use per capita 2,000 100% The move towards ligh
Slide 28: Dow Well-Positioned to Lead a Sustainable Future
DOW WELL-POSITIONED TO LEAD A SUSTAINABLE FUTURE Increasing Margins AND Benchmarking Confirms Growing Volume Differentiation 25 Average volume growth of ~1.6x GDP while 0.30 Dow’s purpose-built integrated PE portfolio consistently Polyethylene Volume (Billion lbs) Op. EBITDA Per Pound (USD/lb) incre
Slide 29: Polymers with Purpose Capture Value in Packaging and Beyond
“POLYMERS WITH PURPOSE” CAPTURE VALUE IN PACKAGING AND BEYOND Low Circular Societal Carbon Accelerators and New Value Pools Wellbeing Low-carbon footprint, circular and renewable materials capture differentiated prices Bio-based Footwear Made 100% Recyclable PE Package Reduced Food Waste & Healthi
Slide 30: Go-to-Market Differentiation Drives Value Growth in Packaging
GO-TO-MARKET DIFFERENTIATION DRIVES VALUE GROWTH IN PACKAGING Research & Development Application Development Ecosystem Low Carbon Material Science Global Converter Footprint Expert network: internally and High Equipment Brand Owner externally Throughput Manufacturer Genome Dow engages the Lab entire
Slide 31: Plastics Are One of the Most Sustainable Packaging Solutions
PLASTICS ARE ONE OF THE MOST SUSTAINABLE PACKAGING SOLUTIONS Plastics have 4x Lower Environmental Impact1 Leading with Tangible Actions across the Ecosystem $650 Stop the Waste Environmental Impact ($B) $550 Ocean Damage End of Life Management $450 Transport 1MMBymta 2030, Dow willPlastic Target: ST
Slide 32: Uniquely Delivering Circularity While Lowering Value Chain CO2 Emissions
UNIQUELY DELIVERING CIRCULARITY WHILE LOWERING VALUE CHAIN CO2 EMISSIONS Mechanical & Enabling Fully Incorporating Advanced Recyclable Bio-Based Decarbonization of Comprehensive Assets Recycling Packaging Feedstocks approach to reducing carbon footprint and increasing circularity $5B opens a $5B att
Slide 33: Design for Recyclability Actions Expand Our Market Opportunity
DESIGN FOR RECYCLABILITY ACTIONS EXPAND OUR MARKET OPPORTUNITY Dow Materials Dow Materials Non-Dow Materials Non-Dow Materials MDO NEW: FULLY RECYCLABLE PACKAGE PREVIOUS: UNRECYCLABLE PACKAGE ~30% expanded addressable market We are enabling brands to achieve their 100% recyclable packaging targets b
Slide 34: Recycling Commitments Becoming an Earnings Growth Reality
RECYCLING COMMITMENTS BECOMING AN EARNINGS GROWTH REALITY Executing Strategy to Secure Both Supply and Demand Clear Path to 2030 Stop The Waste Commitment Supply Demand 1MM mta Target: Plastic waste collected, reused, recycled Strategy Multi-generation plan Collaborating and securing commitments con
Slide 35: Closing the Innovation Loop Across the Value Chain
CLOSING THE INNOVATION LOOP ACROSS THE VALUE CHAIN Comprehensive Value Chain Collaborations Enable Lowest CO2 Footprint with Highest Circularity Mechanical Recycling & Compounding Dow Unique Capabilities Virgin Feedstocks +Additives Industry-leading portfolio of PE resins and compatibilizers In-
Slide 36: Solutions Enable Customer Carbon Footprint Reduction
SOLUTIONS ENABLE CUSTOMER CARBON FOOTPRINT REDUCTION Industry Sustainability Trends Our Value Proposition Dow Sustainable Innovations ACCELERATE SUSTAINABLE GROWTH Bio-based materials Growing demand for Hot Melt Adhesives used in sealing cartons, cases, and food packaging using sustainably-sourced b
Slide 37: Packaging Market Highlights
GROWTH LEVERS ENABLED BY ATTRACTIVE END-MARKET PARTICIPATION Packaging Market Highlights Packaging is critical to serving emerging middle-class needs and Packaging growing global population Key Topics Expect favorable PE supply-demand dynamics through 2026 $250B ~1.3-1.5x GDP PE lowers CO2 emi
Slide 38: Infrastructure
Infrastructure Jane Palmieri | President, Industrial Intermediates & Infrastructure October 6, 2021
Slide 39: Dow's Participation in Infrastructure
GROWTH LEVERS ENABLED BY ATTRACTIVE END-MARKET PARTICIPATION Dow’s Participation in Infrastructure Key Offerings: Polyurethanes Key Topics Packaging Specialty solvents and surfactants Market Overview and Exterior Interior Power transmission, Buildings Buildings Telecom & 5G Silicone adhesives
Slide 40: Infrastructure Market Overview
INFRASTRUCTURE Market Overview Key Market Drivers Globalization/Urbanization increasing the adoption Constructive Industry Conditions of new products for Growth Energy and construction efficiency through improved quality and durability MDI Operating Rate Outlook 16,000 100% Lower carbon footpr
Slide 41: Well-Positioned to Lead a Sustainable Future
WELL-POSITIONED TO LEAD A SUSTAINABLE FUTURE Full Suite of Offerings to Advance Infrastructure Market Why Dow Wins Next Generation Infrastructure Perf. Materials 2025 Projected Annual Investment Need ($B) Broadest Toolkit: Focused Innovation: & Coatings Distinctive and Based on current and Roads, Br
Slide 42: Lower Carbon Footprint
LOWER CARBON FOOTPRINT
Slide 43: Renewable Energy Transition Through Sustainable Oil Recovery
RENEWABLE ENERGY TRANSITION THROUGH SUSTAINABLE OIL RECOVERY Driving Decarbonization and Efficiency in Oil & Gas Our Value Proposition EOR Driving Sustainability Dow surfactants boost production at oil wells ACCELERATE GROWTH Enables customers to improve Increased use of surfactants in Enhanced
Slide 44: More Sustainable Fabric Dyeing Infrastructure with ECOFAST Pure
MORE SUSTAINABLE FABRIC DYEING INFRASTRUCTURE WITH ECOFAST™ PURE Powering Ralph Lauren’s Color on Demand Platform Our Value Proposition and Recently Featured in their 2020 Team USA Collection ACCELERATE GROWTH ECOFAST™ Pure represents new value pool for high-performing sustainable textiles with a $2
Slide 45: Green Buildings
GREEN BUILDINGS
Slide 46: Advancing Building Science with a Broad Chemistry Toolkit
ADVANCING BUILDING SCIENCE WITH A BROAD CHEMISTRY TOOLKIT $50B+ Green Building market growing at ~6% CAGR Our Value DEPTH OF OFFERINGS INNOVATION Dow’s solutions utilize full suite Dow’s innovation expertise and hybrid technologies Proposition of chemistry sets provide more sustainable offerings to
Slide 47: Low-Carbon Silicone Sealants for Building Facades
LOW-CARBON SILICONE SEALANTS FOR BUILDING FACADES Industry Sustainability Trends Our Value Proposition Sustainability benefits ACCELERATE GROWTH Reduce footprint Demand growth in adhesives and sealants for high performance Enable creative design with high (energy & CO2 emissions) building solution
Slide 48: Drymix Additives Enable Carbon Reduction in Building & Construction
DRYMIX ADDITIVES ENABLE CARBON REDUCTION IN BUILDING & CONSTRUCTION Industry Sustainability Trends 70% of GHG emissions CO2 originate from infrastructure Dow’s additives reduce CO2 impact of cement and address efficiency, resource scarcity and carbon intensity Our Value Proposition Sustainability Be
Slide 49: Cool Roof Reflective Coatings Reduce Building Energy Needs
COOL ROOF REFLECTIVE COATINGS REDUCE BUILDING ENERGY NEEDS Sustainability Benefits Up to 20% reduced energy needs for cooling Prolonged roof system life through easy refurbishment Long-lasting reflectivity from tailored solutions Our Value Proposition Dow offers a variety of advanced materials for e
Slide 50: Smart Infrastructure
SMART INFRASTRUCTURE
Slide 51: FASTRACK Enables Autonomous Mobility Infrastructure
FASTRACK™ ENABLES AUTONOMOUS MOBILITY INFRASTRUCTURE Industry Trends The Road Ahead Our Solution: FASTRACK™ Road-Marking Resins Driver safety and regulatory compliance $4B Global addressable market for road markings LOWER ENVIRONMENTAL IMPACT Sustainability / VOC reduction Waterborne polymer technol
Slide 52: Low-Carbon Footprint Power Cable Systems with Dow Endurance
LOW-CARBON FOOTPRINT POWER CABLE SYSTEMS WITH DOW ENDURANCE™ Our Value Proposition Our Solution DOW ENDURANCE™ ACCELERATE GROWTH EHV and HVDC Compounds1 Dow’s compounds for cable systems offer long-lasting protection for power connections Reduces Degassing Time Investment in electricity transmission
Slide 53: Asia Pacific Infrastructure & Growth Platform
ASIA PACIFIC INFRASTRUCTURE & GROWTH PLATFORM
Slide 54: Collaborating for Circularity in Rubberized Sport Surfaces
COLLABORATING FOR CIRCULARITY IN RUBBERIZED SPORT SURFACES Our Value Proposition Sustainability Benefits ECOGROUND™ Binder is a more environmentally-friendly Low odor, low-VOC solution, and higher-performing alternative to solvent-based systems featuring China for rubberized running surfaces for pla
Slide 55: Supporting Rubber Recycling Processes with VORAMER Binders
SUPPORTING RUBBER RECYCLING PROCESSES WITH VORAMER™ BINDERS Our Value Proposition Sustainability Benefits DURABILITY MANUFACTURING ENABLEMENT Extended lifetime of Tailor made solutions for production optimization end-products DIFFERENTIATED TECHNOLOGIES MECHANICAL RECYCLING Innovative and complement
Slide 56: Specialties Hub Investment Accelerates Growth in Asia Pacific
SPECIALTIES HUB INVESTMENT ACCELERATES GROWTH IN ASIA PACIFIC Targeted Site Location: Zhanjiang, South China Enhancing Asia Pacific Customers’ Local Access to Innovative Material Science Solutions Signed Memorandum of Understanding (MoU) with Zhangjiang Economic and Technological Development Zone
Slide 57: Infrastructure Market Highlights
GROWTH LEVERS ENABLED BY ATTRACTIVE END-MARKET PARTICIPATION Infrastructure Market Highlights Next generation of infrastructure spending supported by lower- carbon footprint, energy efficiency and smart infrastructure Key Topics Packaging Rising middle class and population growth drive high infr
Slide 58: Consumer
Consumer Mauro Gregorio | President, Performance Materials & Coatings October 6, 2021
Slide 59: Dow Participation in Consumer
GROWTH LEVERS ENABLED BY ATTRACTIVE END-MARKET PARTICIPATION Dow Participation in Consumer Key Offerings: Silicone polymers Key Topics Packaging adhesives & gels Processing agents Coatings Electronics Personal Care Market Overview Acrylic emulsions and Value Growth Surfactants Highlights Inf
Slide 60: Consumer Market Overview
CONSUMER Market Overview Key Market Drivers Growth of the middle-class population and increased spending per capita trends New Value Pools Smart technologies and connectivity driving growth of +25 billion devices by 2025 Environmentally-conscious consumers demanding more sustainable products
Slide 61: Dow Well-Positioned to Lead a Sustainable Future
DOW WELL-POSITIONED TO LEAD A SUSTAINABLE FUTURE Consumer Market Why Dow Wins Investing for Growth Perf. Materials Packaging & World-class Global footprint in PM&C segment expected to contribute $0.5-0.6B & Coatings Specialty Si silicones franchise target markets of Operating EBITDA/year from grow
Slide 62: Lower Carbon Footprint and Sustainable Materials
LOWER CARBON FOOTPRINT AND SUSTAINABLE MATERIALS
Slide 63: Skincare Solutions for a Sustainable Future
SKINCARE SOLUTIONS FOR A SUSTAINABLE FUTURE Industry Sustainability Trends Our Value Proposition Award-Winning Innovations Bio-based ACCELERATE SUSTAINABLE GROWTH Investing in sensorial and safe skincare with near-term Total Addressable Market of ~$4B; Global CAGR ~5% More with less: CUSTOMER CENTRI
Slide 64: Cleaning Science Platform: Sustainability Through Sensational Science
CLEANING SCIENCE PLATFORM: SUSTAINABILITY THROUGH SENSATIONAL SCIENCE Industry Sustainability Trends Our Value Proposition Award-Winning Innovations ACCELERATE GROWTH ACUSOL™ Prime 1 – Dow’s first Lower carbon footprint Invest in sustainable, effective and affordable solutions high-performing biodeg
Slide 65: Emulsions for Durable Water-Repellency
EMULSIONS FOR DURABLE WATER-REPELLENCY Industry Sustainability Trends Our Value Proposition Award-Winning Innovations ACCELERATE GROWTH Silicone-based durable water- Comfort & performance Penetration into PFC-free durable water-repellant market repellent finishing emulsion for fabrics with a near-te
Slide 66: Bio-Plastics of the Future
BIO-PLASTICS OF THE FUTURE Industry Sustainability Trends Our Value Proposition Competitive Advantage LEAD FOR VALUE Lower carbon footprint Lower carbon footprint offering for customers looking to move away from fossil fuels Portfolio/ Broader bio channel- feed than Bio-origin saves fossil DIFFERENT
Slide 67: Circularity
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Slide 68: Sustainable Paper Coatings with Improved Recyclability
SUSTAINABLE PAPER COATINGS WITH IMPROVED RECYCLABILITY Industry Sustainability Trends Industry Trends Award-Winning Solution: RHOBARR™ Dispersions Recyclability >$1.7B Invested in flexible paper mills since 2017 IMPROVED RECYCLABILITY Up to 99% fiber recovery for coated paper products Sustainability
Slide 69: Thermal Conductive Silicone Gel for High-Performing Electronics
THERMAL CONDUCTIVE SILICONE GEL FOR HIGH-PERFORMING ELECTRONICS Industry Sustainability Trends Our Value Proposition Sustainability Benefits Reuse/recycle/repair of electronic ACCELERATE GROWTH components High performance Accelerate growth in Consumer Electronics market with near-term Total Addres
Slide 70: RENUVA Mattress Recycling Program
RENUVA™ MATTRESS RECYCLING PROGRAM Industry Sustainability Trends Our Value Proposition Circularity of Mattresses Circularity of consumer LEAD FOR VALUE goods Dow drives circularity for Polyurethanes and identifies new value pools with Total Addressable Market of ~$5B DIFFERENTIATE Less waste Innova
Slide 71: Connectivity and Wellbeing
CONNECTIVITY AND WELLBEING
Slide 72: Supporting Next Generation Technology for the 5G Ecosystem
SUPPORTING NEXT GENERATION TECHNOLOGY FOR THE 5G ECOSYSTEM Industry Sustainability Trends Our Value Proposition Sustainability Benefits Reduced energy consumption with More reliable and higher DRIVE TRANFORMATIONAL GROWTH room temperature curing data speeds / bandwidth Significant sales growth fro
Slide 73: DOWSIL Silicone Adhesive for Foldable Displays
DOWSIL™ SILICONE ADHESIVE FOR FOLDABLE DISPLAYS Industry Sustainability Trends Our Value Proposition Sustainability Benefits ACCESS NEW MARKET Improved technology: Enable new Design flexibility Penetrate high growth foldable display market form-factor of foldable display with with near-term Total
Slide 74: Advancing the Journey Toward Sustainable Paints & Coatings
ADVANCING THE JOURNEY TOWARD SUSTAINABLE PAINTS & COATINGS Industry Trends Our Sustainable Solutions STRONG INNOVATION LEGACY CAPITALIZING SUSTAINABILITY-DRIVEN GROWTH TiO2 Reduction Binders for Indoor Air Quality Bio-Renewable Binders OPPORTUNITY OPPORTUNITY OPPORTUNITY $ $1B addressable market $ $
Slide 75: Consumer Market Highlights
GROWTH LEVERS ENABLED BY ATTRACTIVE END-MARKET PARTICIPATION Consumer Market Highlights Increased need for consumer products and solutions to support growing global middle class Key Topics Packaging Rapid adoption of technology advancements require fast-paced and flexible innovation pipeline I
Slide 76: Mobility
Mobility Tim Boven | MobilityScience™ Director October 6, 2021
Slide 77: Dow's Participation in Mobility
GROWTH LEVERS ENABLED BY ATTRACTIVE END-MARKET PARTICIPATION Dow’s Participation in Mobility Key Offerings: Adhesives & Key Topics Packaging sealants Foams Electronics Lighting Acoustics Elastomers Market Overview and Thermoplastics Dow’s Participation Thermosets Infrastructure Market Vert
Slide 78: Multiple Chemistries and Materials Across Broad Application Space
MULTIPLE CHEMISTRIES AND MATERIALS ACROSS BROAD APPLICATION SPACE Electric & Autonomous Vehicles Power Electronics Battery Systems Advance Driver- Interior & Exterior Assistance Systems Displays & Noise, Vibration & Communications Harshness Cables & Connectors Safety Systems Lighting Systems Powertr
Slide 79: Dow Mobility Is on the Move
DOW MOBILITY IS ON THE MOVE Market Overview Key Market Drivers Growing middle class in developing economies increases demand for mobility, particularly in APAC Lighter-weight designs to increase fuel and battery efficiency EV & Hybrid Take Share, Benefit Dow Lower CO2 footprint accelerates ele
Slide 80: Lower Environmental Impact EPDM with Dow NORDEL
LOWER ENVIRONMENTAL IMPACT EPDM WITH DOW NORDEL™ Industry Sustainability Trends Our Value Proposition Sustainability Benefits1 DOW MATERIALS SCIENCE NORDEL™ EPDM production by Advanced Molecular Catalyst (AMC) 24% Less cumulative energy technology has a significantly lower environmental impact 3
Slide 81: Process and Energy Savings with Radical Cure Technology
PROCESS AND ENERGY SAVINGS WITH RADICAL CURE TECHNOLOGY™ Industry Sustainability Trends Our Value Proposition Benefits Improved performance due to E-mobility DOW MATERIALS SCIENCE compatibility with diverse substrates Versatility and adhesion strength for automotive and other electronics applicati
Slide 82: Energy Savings and Longevity Increase with DOWSIL Adhesive
ENERGY SAVINGS AND LONGEVITY INCREASE WITH DOWSIL™ ADHESIVE Industry Sustainability Trends Our Value Proposition Sustainability Benefits Energy & equipment E-mobility DOW MATERIALS SCIENCE savings with room Leverage Dow core expertise to multiply temperature cure vs. product functionality 125C-150
Slide 83: Increased Circularity with SPECFLEX & VORANOL Polyurethanes
INCREASED CIRCULARITY WITH SPECFLEX™ & VORANOL™ POLYURETHANES Industry Sustainability Trends Our Value Proposition Benefits Lightweighting DOW MATERIALS SCIENCE Circular feedstock using recycled Leading solutions provider with proven stream from mobility sector material technology 10% CO2 reduct
Slide 84: Improved Reliability with DOWSIL Thermal Conductive Gap Filler
IMPROVED RELIABILITY WITH DOWSIL™ THERMAL CONDUCTIVE GAP FILLER Industry Sustainability Trends Our Value Proposition Sustainability Benefits DOW MATERIALS SCIENCE High reliability with resistance to Leverage Dow core expertise for superior temperature (150C) and thermal industry applications shock
Slide 85: Mobility Market Highlights
GROWTH LEVERS ENABLED BY ATTRACTIVE END-MARKET PARTICIPATION Mobility Market Highlights Low-carbon mobility is essential to reducing the world’s emissions and requires participation across all aspects of the vehicle lifecycle Key Topics Packaging Dynamic mobility value chain with new players and
Slide 86: Path to Zero-Carbon Emissions
Path to Zero-Carbon Emissions Panel discussion led by Jim Fitterling | Chairman and Chief Executive Officer October 6, 2021
Slide 87: Clear Path to Zero-Carbon Emissions While Driving Growth
CLEAR PATH TO ZERO-CARBON EMISSIONS WHILE DRIVING GROWTH Phased Strategy to Decarbonize and Grow Dow 2005 – 2020 CO2 15% | Volume ~30%1 Replace end-of-life capacity with higher-efficiency capex Current 40 Emissions and opex assets while lowering emissions (e.g. TX-9) 2020 – 2030 35 Capture v
Slide 88: TX-9: World-Class Investment Across Key Dimensions
TX-9: WORLD-CLASS INVESTMENT ACROSS KEY DIMENSIONS Industry-Leading Exceeding Operational Advantaged Carbon-Intensity Execution & Capital Efficiency Design Capability & Conversion Cost Built faster than other similar USGC projects Consistently running >110% of expanded Emits 60% less CO2 per p
Slide 89: Path to Zero-CO2 Emissions Includes Scope 1, 2, and 3 Actions
PATH TO ZERO-CO2 EMISSIONS INCLUDES SCOPE 1, 2, AND 3 ACTIONS Roadmap to Reduce >90% of Scope 1 & 2 Carbon Emissions Scope 3 Emissions Reduction Dow’s Current Working with suppliers on upstream Emissions decarbonization opportunities, aligned ~35MM mta with our Supplier Code of Conduct Target of
Slide 90: Announcing World's First Net-Zero Carbon Emissions Site in Alberta, Canada
ANNOUNCING WORLD’S FIRST NET-ZERO CARBON EMISSIONS SITE IN ALBERTA, CANADA Ft. Saskatchewan, Alberta Project Enables Net-Zero Carbon Emissions with Lower Capital Intensity Decarbonize & Grow to Produce ~3MM mta of Certifiable Low- to Zero-Carbon Emissions C2 Derivatives Carbon Intensity (Mt CO2/ Mt
Slide 91: Winning Technologies to Decarbonize the Industry at Lower Capital Intensity
WINNING TECHNOLOGIES TO DECARBONIZE THE INDUSTRY AT LOWER CAPITAL INTENSITY High-Efficiency Platform Dramatically Reduces Capital and Energy Requirements, Expands Licensing Opportunities Propylene Ethylene (20%) (20%) reduction reduction CAPITAL - ADVANTAGED estimated savings per kt of monomer UNIFI
Slide 92: Cutting Edge, Low-Carbon Emissions E-Cracking Technology
CUTTING EDGE, LOW-CARBON EMISSIONS E-CRACKING TECHNOLOGY Current: Conventional Cracker Future: Electric Cracker Fuel Shift to Clean Power Preliminary Future investments • Zero-carbon emissions with a clean-power portfolio Initial investment Potential based on technology, collaboration decision for s
Slide 93: Leading with Commitment to Transparency and Accountability
LEADING WITH COMMITMENT TO TRANSPARENCY AND ACCOUNTABILITY Long-Time Leader in Reporting Transparency and Climate Disclosure Actions to Prepare for Advanced Early adopter of GRI Comprehensive and Consolidated Reporting Reporting option Combined ESG priorities into one holistic, transparent and com
Slide 94: Growing Earnings While Advancing Our Zero-Carbon Emissions Future
GROWING EARNINGS WHILE ADVANCING OUR ZERO-CARBON EMISSIONS FUTURE Differentiated, Low-Carbon Emissions Portfolio Enables a high-value portfolio of low-carbon footprint products for customers By 2030 at differentiated pricing Dow Uniquely Positioned to Win Additional 5MM mta reduction Deepens par
Slide 95: Disciplined Value Growth with Clear Financial Priorities
Disciplined Value Growth with Clear Financial Priorities Howard Ungerleider | President and Chief Financial Officer October 6, 2021
Slide 96: Delivering on Our Commitments Since Spin
DELIVERING ON OUR COMMITMENTS SINCE SPIN Financial Goals from 2018 Investor Day • Avg. capex ~55% of D&A; funding low-risk, high-return growth projects Disciplined capital allocation and strong • >$4.5B net debt reduction; >$2B lower Sadara guarantees credit profile across the cycle • 88% of operati
Slide 97: Top-Quartile Performance
TOP-QUARTILE PERFORMANCE Cash Flow Conversion (% of EBITDA)1 SG&A + R&D (% of Sales) Average 2Q19 through 2Q21 Average 2Q19 through 2Q21 95% 5% Peer 1 DOW Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 1 DOW Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Net Debt Change ($B) Dividends + Share Repurchases
Slide 98: Our Financial Goals
OUR FINANCIAL GOALS Disciplined capital allocation and strong LEADERSHIP COMPENSATION credit profile across the economic cycle METRICS Management Short-Term Execute on our earnings growth levers incentives • Operating EBIT • Free Cash Flow squarely • ESG • Customer Experience aligned with • World Le
Slide 99: Dow's Disciplined Capital Allocation Framework Remains Consistent
DOW’S DISCIPLINED CAPITAL ALLOCATION FRAMEWORK REMAINS CONSISTENT SAFELY & RELIABLY RUNNING OUR OPERATIONS CREDIT ORGANIC DIVIDEND SHARE PROFILE INVESTMENTS POLICY REPURCHASES • Strong investment-grade • Maintain total capex ≤ D&A • Long-term dividend payout • Share repurchases in addition credit pr
Slide 100: Robust Liquidity and Manageable Debt Towers
ROBUST LIQUIDITY AND MANAGEABLE DEBT TOWERS Financial Strength with Ample Liquidity Proactive Liability Management ~$13B Provides Financial Flexibility Cash & Cash Equivalents Revolver $3.5B $5B $0.4B $0.3B Committed $0.2B A/R $0.1B Securitization $1.3B 2022 2023 2024 2025 Committed Bilateral Lines
Slide 101: Our Financial Goals
OUR FINANCIAL GOALS Disciplined capital allocation and strong LEADERSHIP COMPENSATION credit profile across the economic cycle METRICS Management Short-Term Execute on our earnings growth levers incentives • Operating EBIT • Free Cash Flow squarely • ESG • Customer Experience aligned with • World Le
Slide 102: Growth and Efficiency Levers Drive Earnings
GROWTH AND EFFICIENCY LEVERS DRIVE EARNINGS Additional Opportunities In-Flight Actions Increase Underlying EBITDA by >$3B Supporting Earnings Trajectory $15B Faster economic recovery led $14 .5 by post-pandemic consumer $12B $0.7 – 1.2B and industrial demand $12 .5 $0.8 – 1.0B Total Tighter near
Slide 103: Digital Growth and Restructuring Programs on Track
DIGITAL GROWTH AND RESTRUCTURING PROGRAMS ON TRACK Delivering Streamlined Cost Structure Advancing Our Digital Investments Faster materials science Frictionless Real-time manufacturing innovation & e-commerce buying insights & operational Maintaining competitive Rationalizing smaller-scale, commerci
Slide 104: Growth Investments to Deliver Enhanced Earnings Profile
GROWTH INVESTMENTS TO DELIVER ENHANCED EARNINGS PROFILE Near-Term Earnings Growth from Capital Investments Growth from Operating Investments Growth of ~$1.7 – 2.1B1 ~$0.9 – 1.1B EBITDA1 ~$0.8 – 1.0B EBITDA1 Incremental expansions in PE and Functional Polymers • Accelerate shift to higher-margin prod
Slide 105: Market Fundamentals Remain Constructive
MARKET FUNDAMENTALS REMAIN CONSTRUCTIVE Packaging & Specialty Plastics Ind. Intermediates & Infrastructure Perf. Materials & Coatings Polyethylene MDI 6,000 Siloxane 100% 250,000 100% 16,000 100% 90% 90% 90% 5,000 200,000 80% 80% 12,000 80% 70% 70% 4,000 150,000 60% 60% 70% 8,000 50% 3,000 50% 100,0
Slide 106: Our Financial Goals
OUR FINANCIAL GOALS Disciplined capital allocation and strong LEADERSHIP COMPENSATION credit profile across the economic cycle METRICS Management Short-Term Execute on our earnings growth levers incentives • Operating EBIT • Free Cash Flow squarely • ESG • Customer Experience aligned with • World Le
Slide 107: Disciplined Actions to Drive Further ROIC Improvements
DISCIPLINED ACTIONS TO DRIVE FURTHER ROIC IMPROVEMENTS Maintain Spending Discipline while Further Improving ROIC ROIC Performance Improved Relative to Peer Benchmark1,2 Keep capex ≤ D&A across the economic cycle Maintain track record of best-in-class project execution and engineering capabilitie
Slide 108: A Strong Focus on Cash Flow Generation
A STRONG FOCUS ON CASH FLOW GENERATION Robust Cash Flow Yield across the Economic Cycle Dow Average Industry Maintaining Strong Free Cash Flow Yield Free Cash Flow Yield1 Cash Flow from Operations (CFFO) Generation 12.0% 11.0% 9.0% $12B 6.8% 3.9% 4.4% $14 .0 $13 .0 $9B $12 .0 2 CFFO $11 .0 2019 2020
Slide 109: Disciplined Capital Allocation and Value Creation Focus
DISCIPLINED CAPITAL ALLOCATION AND VALUE CREATION FOCUS Uses of Cash Since Spin Near-Term Focus • Reduced net debt by >$4.5B • Target rating agency adj. debt to EBITDA of • Completed $1B elective Credit pension contribution 2.0x –2.5x to increase Use of Cash Profile financial flexibility • Reduced i
Slide 110: A Compelling Investment Opportunity
A COMPELLING INVESTMENT OPPORTUNITY Growing enterprise value while driving to zero-carbon emissions ► Attractive end-market participation with industry-leading portfolio and cost positions OUR FINANCIAL TARGETS ► Growth from sustainability-driven solutions and circularity Across the economic cycle:
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Slide 112: Appendix
APPENDIX
Slide 113: 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 114: Non-GAAP & General Comments
NON-GAAP & GENERAL COMMENTS Non-GAAP Financial Measures This presentation includes information that does not conform to U.S. GAAP and are considered non-GAAP measures. Management uses these measures internally for planning, forecasting and evaluating the performance of the Company's segments, includ
Slide 115: Reconciliation of Net Income (Loss) to Operating EBIT & Operating EBITDA
RECONCILIATION OF NET INCOME (LOSS) TO OPERATING EBIT & OPERATING EBITDA In millions 1Q19 2Q19 3Q19 4Q19 2019 1Q20 2Q20 3Q20 4Q20 2020 1Q21 2Q21 2021 Pro Forma As As As Pro Forma As As As As As As As As Net Income (Loss) Attributable to Dow Inc. (GAAP) $ 556 $ 75 $ 333 $ (2,323) $ (1,359) $ 239 $ (2
Slide 116: Reconciliation of Non-GAAP Cash Flow Measures
RECONCILIATION OF NON-GAAP CASH FLOW MEASURES In millions 1Q19 2Q19 3Q19 4Q19 2019 1Q20 2Q20 3Q20 4Q20 2020 1Q21 2Q21 2021 Cash provided by (used for) operating activities - continuing operations (GAAP) $ 1,043 $ 960 $ 1,790 $ 1,920 $ 5,713 $ 1,236 $ 1,599 $ 1,761 $ 1,656 $ 6,252 $ (228) $ 2,021 $ 1
Slide 117: Reconciliation of Net Debt
RECONCILIATION OF NET DEBT Dollar amounts in millions 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 Notes payable $ 295 $ 544 $ 517 $ 586 $ 1,490 $ 853 $ 329 $ 156 $ 152 $ 203 Long-term debt due within one year 2,367 297 378 435 384 451 347 460 492 445 Long-Term Debt 17,158 17,155 17,213 15,975
Slide 118: Reconciliation of Return on Invested Capital
RECONCILIATION OF RETURN ON INVESTED CAPITAL 2017 2018 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 Dollar amounts in millions Pro Forma Pro Forma Pro Forma As Reported As Reported As Reported As Reported As Reported As Reported As Reported As Reported As Reported Operating net income (loss) fr
Slide 119: Reconciliation of Return on Invested Capital
RECONCILIATION OF RETURN ON INVESTED CAPITAL Dollar amounts in millions 2013 2014 2015 2016 Operating net income (loss) from continuing operations available for Dow Inc. common stockholders (non-GAAP)1 $ 2,981 $ 3,709 $ 4,054 $ 4,221 Preferred stock dividends 340 340 340 340 Net income attributable