Slide 1: Dow 3Q 2021 Results
Dow 3Q 2021 Results October 21, 2021 1
Slide 2: Agenda
AGENDA 1. Quarterly Highlights 2. Operating Segment Performance Disciplined Value 3. Outlook 4. Growth 2
Slide 3: 3Q 2021 Highlights
3Q | 2021 HIGHLIGHTS Achieved top- and bottom-line growth, both YoY and QoQ Net Sales up YoY Team Dow delivered safely despite hurricane-driven supply disruptions Net Sales up 53% YoY and 7% QoQ, with gains in all operating segments 53% and regions Price increased 50% YoY and 5% QoQ with gai
Slide 4: 3Q21 Operating Segment Performance
3Q21 OPERATING SEGMENT PERFORMANCE REVENUE ($MM) Sales ↑ 69%; Volume ↑ 5%; Price ↑ 63% Op. EBIT ($MM) & Op. EBIT Margin % Op. EBIT ↑ 202%; Margin ↑ 1,110 bps Specialty Plastics Y-o-Y Y-o-Y 2,014 1,954 8,0 00 Price gains in both businesses and all regions; Price gains in both businesses and all regio
Slide 5: 4Q21 Modeling Guidance
4Q21 MODELING GUIDANCE Capturing Robust Consumer and Industrial Demand Despite Higher Energy Costs and Logistical Constraints Net Sales ~$14.0 – $14.5B Depreciation & Amortization ~$715MM Quarterly Operational Tax Rate ~20 – 24% Net Interest Expense (Net of Int. Income) ~$165MM Net Income Attrib. to
Slide 6: Economic Growth to Remain Strong with Extended Recovery
ECONOMIC GROWTH TO REMAIN STRONG WITH EXTENDED RECOVERY Robust GDP Growth Expected as Economic Recovery Continues 5.7% 6.5% 4.5% 4.3% 4.5% 4.5% Economic recovery expected to extend into 4.0% 3.3% 2022 with prolonged reopening due to Delta variant and supply chain constraints 2022 GDP growth fore
Slide 7: 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 by post-pandemic consumer and $14 .5 $12B $0.7 – 1.2B industrial demand Total $12 .5 $0.8 – 1.0B $0.9 – 1.1B $3
Slide 8: Lower-Risk Growth Investments Enhance Near-Term Earnings Profile
LOWER-RISK GROWTH INVESTMENTS ENHANCE NEAR-TERM EARNINGS PROFILE Growth from Capital Investments Growth from Operating Investments EBITDA Run-Rate Segment ~$0.9 – 1.1B EBITDA1 ~$0.8 – 1.0B EBITDA1 C2/PE and Functional Polymers capacity Capabilities to enhance mix Packaging & Specialty Plastics Enhan
Slide 9: Clear Path to Decarbonize Our Footprint and Grow Earnings
CLEAR PATH TO DECARBONIZE OUR FOOTPRINT AND GROW EARNINGS Reducing CO2 Emissions by 30% by Best-in-Class TX-9 is Solid Foundation Alberta Project Delivers ~$1B 2030 while Growing the Enterprise for Footprint Decarbonization Lower-Risk Earnings Growth Capital Intensity ($/MT) >20% advantage Dow Crack
Slide 10: Attractive Growth While Maintaining Discipline & CapEx at ≤ D&A
ATTRACTIVE GROWTH WHILE MAINTAINING DISCIPLINE & CAPEX AT ≤ D&A Lower Cash Commitments Increase Optionality Going Forward Disciplined CapEx ≤ D&A Delivers Near-Term Growth at ROIC >13% Increased Earnings & Large Project Lower Cash Commitments Investments Provide Optionality Avg. ~$4B Share Macro- Re
Slide 11: 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 12: Seek Together
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Slide 13: Appendix
Appendix
Slide 14: 3Q 2021 Financial Highlights
3Q 2021 FINANCIAL HIGHLIGHTS YoY Operating EPS Reconciliation Key Drivers in the Quarter YoY $2.75 • Price gains in all operating segments, businesses and regions • Improved equity earnings at $0.50 Sadara and Kuwait joint ventures 3Q20 Margin Expansion & Turnarounds USGC Hurricanes Tax Rate Equity
Slide 15: Principal Joint Venture Detail
PRINCIPAL JOINT VENTURE DETAIL Dow’s Proportional Share of Principal JV Financial Results Drivers of 3Q 2021 3Q 2020 2Q 2021 JV Performance $ millions (unaudited) Kuwait Thai Kuwait Thai Kuwait Thai Sadara: Margin expansion in Sadara JVs JVs Sadara JVs JVs Sadara JVs JVs Polyurethanes, Industrial
Slide 16: Operating Earnings (Loss) Per Share (EPS) Reconciliation
OPERATING EARNINGS (LOSS) PER SHARE (EPS) RECONCILIATION Significant Items Impacting Results for the Three Months Ended Sep 30, 2021 Pretax 1 2 3 In millions, except per share amounts (Unaudited) Net Income EPS Reported results $ 2,248 $ 1,683 $ 2.23 Less: Significant items Digitalization program co
Slide 17: Operating (EPS) Reconciliation (Continued)
OPERATING (EPS) RECONCILIATION (CONTINUED) Significant Items Impacting Results for the Nine Months Ended Sep 30, 2021 1 2 3 In millions, except per share amounts (Unaudited) Pretax Net Income EPS Reported results $ 6,027 $ 4,575 $ 6.06 Less: Significant items Digitalization program costs (121) (94)
Slide 18: Operating (EPS) Reconciliation (Continued)
OPERATING (EPS) RECONCILIATION (CONTINUED) Significant Items Impacting Results for the Three Months Ended Jun 30, 2021 In millions, except per share amounts (Unaudited) Pretax 1 Net Income 2 EPS 3 Reported results $ 2,456 $ 1,901 $ 2.51 Less: Significant items Digitalization program costs (48) (37)
Slide 19: 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, 2020 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 Sep 30, 2021 Sep 30, 2021 Sep 30,
Slide 20: Segment Information
SEGMENT INFORMATION Net Sales by Segment Three Months Three Months Ended Nine Months Ended Ended In millions (Unaudited) Jun 30, 2021 Sep 30, 2021 Sep 30, 2020 Sep 30, 2021 Sep 30, 2020 Packaging & Specialty Plastics $ 7,121 $ 7,736 $ 4,565 $ 20,939 $ 13,175 Industrial Intermediates & Infrastructure
Slide 21: Segment Information (Continued)
SEGMENT INFORMATION (CONTINUED) Adjusted Operating EBIT by Segment Three Months Three Months Ended Nine Months Ended Ended In millions (Unaudited) Jun 30, 2021 Sep 30, 2021 Sep 30, 2020 Sep 30, 2021 Sep 30, 2020 Packaging & Specialty Plastics $ 1,884 $ 1,830 $ 576 $ 4,836 $ 1,449 Industrial Intermed
Slide 22: Cash Conversion and Free Cash Flow Reconciliation
CASH CONVERSION AND FREE CASH FLOW RECONCILIATION Reconciliation of Cash Flow Conversion Three Months Ended In millions Sep 30, 2020 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 Sep 30, 2021 Cash provided by (used for) operating activities - continuing operations (GAAP) $ 1,761 $ 1,656 $ (228) $ 2,021 $ 2
Slide 23: Reconciliation of Net Debt
RECONCILIATION OF NET DEBT Reconciliation of Net Debt In millions (Unaudited) Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Sep 30, 2021 Notes payable $ 298 $ 586 $ 156 $ 270 Long-term debt due within one year 338 435 460 291 Long-term debt 19,253 15,975 16,491 14,027 Gross debt (GAAP) $ 19,889 $ 16,996 $
Slide 24: General Comments
GENERAL COMMENTS Background On April 1, 2019, DowDuPont completed the separation of its materials science business and Dow Inc. became the direct parent company of TDCC, owning all of the outstanding common shares of TDCC. For filings related to the period commencing April 1, 2019 and thereafter, TD
Slide 25: Safe Harbor
SAFE HARBOR Cautionary Statement about Forward-Looking Statements Certain statements in this report 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 Act of 1
Slide 26: Non-GAAP & Definitions
NON-GAAP & DEFINITIONS 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, including a