Dow Inc. · NYSE:DOW
Dow — The Dow Chemical Company — Citi Basic Materials Symposium 2011
20 slides from Dow's conference presentation, Nov 29, 2011
Slide 1: The Dow Chemical Company - Citi Basic Materials Symposium
The Dow Chemical Company Citi Basic Materials Symposium Bill Weideman Executive Vice President & Chief Financial Officer November 29, 2011 1
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
Slide 3: Question #1
Question #1 Do you believe Dow’s transformation to a specialty chemical and advanced materials company is complete? Are there any areas of the portfolio where you want to add or subtract? 3
Slide 4: A Transformed Company…A New Level of Performance
A Transformed Company…A New Level of Performance Historical Volatility in EBITDA* Resilient Structure Heritage Dow ~3 Improved cost structure Enhanced financial flexibility Rohm and Haas ~1.5 U.S. shale gas advantage TRN >10 Stair-step increase in equity Reduced earnings Volatility Optimal >
Slide 5: An Integrated Portfolio Designed for Growth
An Integrated Portfolio Designed for Growth Feedstocks Feedstocks Sustainable & Energy & Energy Growth Advantaged feedstocks Highly differentiated, market-driven, to support and advance technology-rich businesses focused on downstream growth addressing megatrends and key end-markets − Packaging
Slide 6: High-Growth, High-Margin Portfolio Delivering Its Potential
High-Growth, High-Margin Portfolio Delivering Its Potential Normalized Revenue Normalized EBITDA Trailing 12 Months Operating Segment Growth Target Margin Target EBITDA Margin Electronic & Functional 2x GDP ~25% 25% Materials Coatings & Infrastructure 1.5x GDP 20-25% 17% Solutions 15% Agricultural S
Slide 7: Question #2
Question #2 How are your Advanced Materials businesses performing in terms of market share? How does your propylene position impact the coatings business? What are the most exciting technologies in your R&D portfolio? 7
Slide 8: Dow Advanced Materials
Dow Advanced Materials Coatings & Electronic & Infrastructure Solutions Functional Materials Sales by Business Unit Achievements To-Date Strong growth in Dow Electronic Materials, driven by leadership in core businesses and new growth platforms in Dow Coating display technologies and advanced chip
Slide 9: PDH Investments Drive Margin Expansion
PDH Investments Drive Margin Expansion Two world-scale PDH units will provide Dow’s Sources of Propylene upstream integration 100% Drive lower costs and lower earnings volatility 80% Integration investments expected to contribute up to $500MM/year in 60% earnings power 40% Dow’s Uses of Propyl
Slide 10: Delivering On Our Innovation Agenda
Delivering On Our Innovation Agenda Advanced Materials & Agricultural Sciences Showcase Hallmark Innovation Advanced Materials Agricultural Sciences Launched Launched Abrasive free copper bulk CMP process REFUGE ADVANCED® registrations approved Launched Introduced EcoSmooth™ satin conditioning p
Slide 11: Question #3
Question #3 Can you review the recent progress of SmartStax®? Can you discuss the Enlist™ system, its launch plan and your expectations for future licensing opportunities? SmartStax® multi-event technology developed by Monsanto and Dow AgroSciences LLC. SmartStax® and the SmartStax logo are trad
Slide 12: SmartStax Delivers Growth in 2011 and Beyond
SmartStax® Delivers Growth in 2011 and Beyond Building a Strong Foundation for the Future SmartStax® is outperforming competitive technologies, particularly in areas of heavy insect pressure Germplasm continues to improve year-on- year Current order book is significantly higher than last year
Slide 13: ENLIST Weed Control System
ENLIST™ Weed Control System The Solution for Superweeds Enlist Provides a System Solution to Improve Weed Control System Crop Region Traits Chemistry U.S. Canada Brazil Argentina Investing in cross-platform solution Commercialization plans on track* Global offering, builds on seeds and custome
Slide 14: Question #4
Question #4 How has the shale gas phenomenon transformed Dow's EBITDA potential since 2009? What role would Dow play in bringing incremental NGLs to the Gulf Coast and building new ethylene capacity? 14
Slide 15: Dow Well-Positioned In Feedstock-Advantaged Regions
Dow Well-Positioned In Feedstock-Advantaged Regions Not all feedstocks are equal… …Dow is positioned to benefit 2011 Global Ethylene Cash Cost Curve U.S. cash costs 1,650 ~$300/MT advantaged 1,450 versus high-cost Asia and 1,250 Europe capacity today U.S. Dollars Per Metric Ton Western Europe Avg
Slide 16: Dow's Strategy to Seize the Shale Gas Opportunity
Dow’s Strategy to Seize the Shale Gas Opportunity Shale gas reserves drive U.S. competiveness U.S. gas reserves are vast and economically recoverable Ethane supply driven higher by 20% expansion in fractionation capacity over next several years Dow benefits from lower ethane cost position Our
Slide 17: Feedstock Dynamics To Deliver More Upside In USGC Position
Feedstock Dynamics To Deliver More Upside In USGC Position Excess Ethane Supply Will Continue to Grow Dow’s Actions 1,400 400 Signed MOU with Range Resources Corp. to access Ethane Supply/Demand (thousand bpd) 1,200 additional ethane supply 300 Restart ethylene cracker in Excess Ethane Supply 1,
Slide 18: Question #5
Question #5 You have made debt reduction a top priority. How much free cash flow do you expect to generate in the near term? What are your priorities for uses of cash? How are you thinking about shareholder remuneration going forward? 18
Slide 19: Clear Capital Allocation Priorities
Clear Capital Allocation Priorities Cash Flow from Operations Uses of Cash Deleveraging – Reduced gross debt ~$4B in 1H11 Shareholder Remuneration $8 Billion – Raised dividend 67% – 400th consecutive dividend Invest for Growth – Partnerships – R&D – De-bottleneck/Reliability 2009 2010 2011 201
Slide 20: Dow Integration + Insight + Ingenuity = Growth
Dow Integration + Insight + Ingenuity = Growth 20
The Dow Chemical Company — Citi Basic Materials Symposium 2011 on 6ix