Slide 1: Dow FY21 Benchmarking Update
DOW FY21 BENCHMARKING UPDATE April 21, 2022
Slide 2: Dow Remains a Compelling Investment Opportunity
DOW REMAINS A COMPELLING INVESTMENT OPPORTUNITY Leading Cash Flow Generation Current Valuation Across the Economic Cycle Industry-leader and well-positioned to unlock additional value by 2019-2021 Avg. EV / NTM EBITDA vs. Peers1 capturing fast-growing demand for sustainable solutions Annual Free Cas
Slide 3: Benchmarking Peers
BENCHMARKING PEERS Total Dow P&SP Olefins & Polyolefins Chemicals Corporate Polyolefins II&I Intermediates & Derivatives Corporate Corporate Corporate PM&C Silicones Acetyl Chain Solutions & Corporate Functional Specialties1 Materials1 Benchmarking conducted against segment level peers if sufficient
Slide 4: Total Dow Benchmarking: Summary of Observations
TOTAL DOW BENCHMARKING: SUMMARY OF OBSERVATIONS Benchmarking: Strengths & Gaps FY21 YoY Adj. Op. EBITDA growth exceeded the peer median as Dow capitalized on the economic recovery, achieving record sales and earnings performance with gains in all operating segments FY21 Adj. Op. EBITDA margin am
Slide 5: Total Dow Benchmarking Snapshot
TOTAL DOW BENCHMARKING SNAPSHOT (1,2,3,4) CORE STRENGTHS FY21 UPDATE & FY20 FOCUS AREAS Adj. Op. EBITDA Adj. Op. EBITDA SG&A + R&D • Hallmark safety Cash Flow Conversion • Execute on ‘Decarbonize Growth Margin (as a % of Sales) performance and FY21 vs. FY20 vs. FY21 FY20 FY21 FY20 FY21 FY20 and Grow
Slide 6: Top Quartile Performance
TOP QUARTILE PERFORMANCE Operating Return on Capital (%) Free Cash Flow Yield (%) 2019-2021 Annual Average 2019-2021 Annual Average 12% 13% Median Median Excl. Dow Excl. Dow ~10% ~8% Peer 1 DOW Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 DOW Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Net Debt Ch
Slide 7: Culture of Benchmarking: Summary of Observations
CULTURE OF BENCHMARKING: SUMMARY OF OBSERVATIONS Segment Benchmarking: Strengths & Gaps YoY Adj. Op. EBITDA growth trailed the peer median due to lost volumes from higher than normal planned and unplanned outages; peers more heavily impacted by pandemic experienced higher earnings recovery in 2021
Slide 8: Packaging & Specialty Plastics Benchmarking Snapshot
PACKAGING & SPECIALTY PLASTICS BENCHMARKING SNAPSHOT (1,2,3,4,5) CORE STRENGTHS FY21 UPDATE & FY20 FOCUS AREAS Adj. Op. EBITDA Adj. Op. EBITDA SG&A + R&D • World-class packaging Free Cash Conversion • Execute on ‘Decarbonize Growth Margin (as a % of Sales) and Grow’ Strategy to franchise with leadin
Slide 9: Differentiated P&SP Portfolio Delivering Results
DIFFERENTIATED P&SP PORTFOLIO DELIVERING RESULTS Dow’s P&SP Returns Continue to Expand vs. Peers Generating Higher and More Resilient Margins vs. Peers Op. EBITDA Per Pound 30% Dow P&SP 5-Yr Avg. Polyolefins Capacity1 (cpp) 25% Peer Median (Excl. Dow) ~22%. 5-Yr Avg. Advantage over Peers 21 ~16%. 25
Slide 10: Industrial Intermediates & Infrastructure Benchmarking Snapshot
INDUSTRIAL INTERMEDIATES & INFRASTRUCTURE BENCHMARKING SNAPSHOT (1,2,3,4,5) CORE STRENGTHS FY21 UPDATE & FY20 FOCUS AREAS • #1 global producer by Adj. Op. EBITDA Adj. Op. EBITDA SG&A + R&D Free Cash Conversion • Execute on capacity of Purified Growth Margin (as a % of Sales) Ethylene Oxide, Ethylene
Slide 11: Performance Materials & Coatings Benchmarking Snapshot
PERFORMANCE MATERIALS & COATINGS BENCHMARKING SNAPSHOT (1,2,3,4,5) CORE STRENGTHS FY21 UPDATE & FY20 FOCUS AREAS Adj. Op. EBITDA Adj. Op. EBITDA SG&A + R&D • #1 global producer by Free Cash Conversion • Execute on ‘Decarbonize capacity of Siloxanes & Growth Margin (as a % of Sales) and Grow’ Strateg
Slide 12: Dow Also Delivering Strong Performance vs. Select S&P Companies
DOW ALSO DELIVERING STRONG PERFORMANCE VS. SELECT S&P 500 COMPANIES TRADING AT ~8-10X MULTIPLES Dow vs. ~8-10x EV/EBITDA Multiple Companies in S&P 5001 Dow is delivering strong financial performance when compared to ROIC FCF Growth a broad set of S&P 500 companies trading in the ~8-10x 3-Year Averag
Slide 13: 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 14: 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 15: 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
Slide 16: Thank You
ZO THANK YOU