Slide 1: 2Q 2024 Results
2Q 2024 RESULTS July 25, 2024
Slide 2: Agenda
AGENDA ▪ QUARTERLY RESULTS ▪ OPERATING SEGMENT PERFORMANCE ▪ OUTLOOK ▪ ADVANCING OUR PROVEN PLAYBOOK ▪ DELIVERING ON OUR LONG-TERM GROWTH LEVERS
Slide 3: 2Q 2024 Performance Overview
2Q 2024 PERFORMANCE OVERVIEW Delivered 3rd Consecutive Quarter of YoY Volume Growth $10.9B ▪ Net sales of $10.9B, down 4% YoY and up 1% QoQ NET SALES ▪ Volume up 1% YoY and QoQ; ex-H&E, volume up 4% YoY and 2% QoQ ▪ Operating EBITDA was $1.5B, down $33MM YoY and up $107MM QoQ $819MM Maintaining Oper
Slide 4: 2Q 2024 Operating Segment Performance
2Q 2024 OPERATING SEGMENT PERFORMANCE Packaging & Specialty Plastics Ind. Intermediates & Infrastructure Perf. Materials & Coatings 6,5 00 REVENUE ($MM) REVENUE ($MM) REVENUE ($MM) Y-o-Y Y-o-Y Y-o-Y 2,4 00 6,0 00 3,4 00 2,2 00 5,5 00 Sales ↓ 7% 3,2 00 Sales ↓ 7% Sales ↑ 2% Price ↓ 4% Price ↓ 7% 2,0
Slide 5: Supply/Demand Dynamics Remain Largely Unchanged
SUPPLY / DEMAND DYNAMICS REMAIN LARGELY UNCHANGED Market Rest of Vertical NAA LAA EMEAI China Select Macroeconomic Indicators by Market Vertical (% of Revenue1) World NAA industry domestic demand for PE growing by 4% YTD through June; exports are Packaging robust and represent >45% of industry produ
Slide 6: 3Q 2024 Modeling Guidance
3Q 2024 MODELING GUIDANCE Further Improvement With Largely Unchanged Market Conditions Net Sales ~$11.1B Depreciation & Amortization ~$700MM Quarterly Operational Tax Rate ~22 – 26% Net Interest Expense (Net of Int. Income) ~$150MM Net Income Attrib. to Non-Controlling Int. ~$25MM Average Share Coun
Slide 7: A Proven Playbook Across the Cycle
A PROVEN PLAYBOOK ACROSS THE CYCLE Asset Footprint Delivers Industry Leading Value Robust Financial Flexibility Enables Value Growth Continued Focus on Cash Generation and Cost Discipline: Europe ▪ Industry leading cash flow conversion, ~500 bps advantaged versus peer LPG advantage average1 across t
Slide 8: Macro Recovery Provides Significant Earnings Upside
MACRO RECOVERY PROVIDES SIGNIFICANT EARNINGS UPSIDE Positive Top-Line Momentum Recovery to Mid-Cycle Outlook1 Sales volume improved YoY Packaging & Specialty Plastics – ~$2.0B/yr of Mid-Cycle Upside YoY Change (%) for the last three consecutive quarters ▪ New PE capacity in NA has been fully absorbe
Slide 9: Delivering on Our Long-Term Earnings Growth Levers
DELIVERING ON OUR LONG-TERM EARNINGS GROWTH LEVERS Near-Term Growth Investments Fort Saskatchewan Path2Zero Transform the Waste Pipeline of organic, high-value World’s First Cracker and Derivatives Commercialize 3MM mta of circular and growth projects Complex with Net Zero Emissions renewable soluti
Slide 10: Dow: A Compelling Investment Opportunity
DOW: A COMPELLING INVESTMENT OPPORTUNITY ▪ Global industrial growth remains largely unchanged, hampered by Supply/Demand weaker building & construction and durable goods end-markets Dynamics Remain ▪ Regional demand remains resilient in the U.S.; China is experiencing Largely Unchanged a slow recove
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Slide 12: Principal Joint Venture Detail
PRINCIPAL JOINT VENTURE DETAIL Dow’s Proportional Share of Principal JV Financial Results Drivers of Changes in 2Q 2024 1Q 2024 2Q 2023 Equity Earnings Kuwait Thai Kuwait Thai Kuwait Thai ▪ Sadara: YoY improved supply $ millions (unaudited) Sadara JVs JVs Sadara JVs JVs Sadara JVs JVs availability d
Slide 13: FY 2024 Modeling Considerations
FY 2024 MODELING CONSIDERATIONS [BETTER / WORSE SINCE LAST UPDATE] Operating EBIT Drivers vs. FY23 Year-Over-Year Market Drivers Equity Earnings Up ~$75-125MM YoY Higher oil price and oil-gas spreads, softer landing for US Potential Upside Pension and Defined economy, stable energy markets in Europe
Slide 14: Appendix
APPENDIX
Slide 15: Operating Earnings Per Share (EPS) Reconciliation
OPERATING EARNINGS PER SHARE (EPS) RECONCILIATION Significant Items Impacting Results for the Three Months Ended Jun 30, 2024 1 2 3 In millions, except per share amounts (Unaudited) Pretax Net Income EPS Reported results $ 608 $ 439 $ 0.62 Less: Significant items Restructuring, implementation and ef
Slide 16: Operating EPS Reconciliation (Continued)
OPERATING EPS RECONCILIATION (CONTINUED) Significant Items Impacting Results for the Six Months Ended Jun 30, 2024 In millions, except per share amounts (Unaudited) Pretax 1 Net Income 2 EPS 3 Reported results $ 1,057 $ 955 $ 1.35 Less: Significant items Restructuring, implementation and efficiency
Slide 17: Operating EPS Reconciliation (Continued)
OPERATING EPS RECONCILIATION (CONTINUED) Significant Items Impacting Results for the Three Months Ended Mar 31, 2024 In millions, except per share amounts (Unaudited) Pretax 1 Net Income 2 EPS 3 Reported results $ 449 $ 516 $ 0.73 Less: Significant items Restructuring, implementation and efficiency
Slide 18: 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 Six Months Ended and "Operating EBITDA" In millions (Unaudited) Jun 30, 2023 Sep 30, 2023 Dec 31, 2023 Mar 31, 2024 Jun 30, 2024 Jun 30, 2023 Jun 30,
Slide 19: Segment Information
SEGMENT INFORMATION Net Sales by Segment Three Months Ended Six Months Ended In millions (Unaudited) Jun 30, 2023 Mar 31, 2024 Jun 30, 2024 Jun 30, 2023 Jun 30, 2024 Packaging & Specialty Plastics $ 5,940 $ 5,430 $ 5,515 $ 12,054 $ 10,945 Industrial Intermediates & Infrastructure 3,177 3,008 2,951 6
Slide 20: Segment Information (Continued)
SEGMENT INFORMATION (CONTINUED) Adjusted Operating EBIT by Segment Three Months Ended Six Months Ended In millions (Unaudited) Jun 30, 2023 Mar 31, 2024 Jun 30, 2024 Jun 30, 2023 Jun 30, 2024 Packaging & Specialty Plastics $ 899 $ 580 $ 648 $ 1,520 $ 1,228 Industrial Intermediates & Infrastructure 4
Slide 21: Cash Conversion and Free Cash Flow Reconciliation
CASH CONVERSION AND FREE CASH FLOW RECONCILIATION Reconciliation of Cash Flow Conversion Three Months Ended In millions (Unaudited) Jun 30, 2023 Sep 30, 2023 Dec 31, 2023 Mar 31, 2024 Jun 30, 2024 Cash provided by operating activities - continuing operations (GAAP) $ 1,347 $ 1,658 $ 1,628 $ 460 $ 83
Slide 22: Reconciliation of Operating Return on Capital (ROC)
RECONCILIATION OF OPERATING RETURN ON CAPITAL (ROC) Reconciliation of Operating Return on Capital (ROC) Three Months Ended In millions (Unaudited) Jun 30, 2023 Jun 30, 2024 Net income available for Dow Inc. common stockholders (GAAP) $ 485 $ 439 - Significant items, after tax (52) (43) Operating Net
Slide 23: Reconciliation of Net Debt
RECONCILIATION OF NET DEBT Reconciliation of Net Debt In millions (Unaudited) Dec 31, 2023 Jun 30, 2024 Notes payable $ 62 $ 114 Long-term debt due within one year 117 238 Long-term debt 14,907 16,016 Gross debt (GAAP) $ 15,086 $ 16,368 - Cash and cash equivalents 2,987 3,341 - Marketable securities
Slide 24: General Comments
GENERAL COMMENTS General Comments Unless otherwise specified, all financial measures in this presentation, where applicable, exclude significant items. Trademarks The Dow Diamond, logo and all products, unless otherwise noted, denoted with , ℠ or ® are trademarks, service marks or registered tradema
Slide 25: 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 26: Non-GAAP Financial Measures & Definitions
NON-GAAP FINANCIAL MEASURES & DEFINITIONS Non-GAAP Financial Measures This presentation includes information that does not conform to GAAP and are considered non-GAAP measures. Management uses these measures internally for planning, forecasting and evaluating the performance of the Company's segment